[Federal Register Volume 85, Number 93 (Wednesday, May 13, 2020)]
[Proposed Rules]
[Pages 28802-28828]
[FR Doc No: 2020-08159]

Vol. 85

Wednesday,

No. 93

May 13, 2020

Part V

Department of Homeland Security

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Coast Guard

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33 CFR Parts 135, 138, and 153

 Financial Responsibility--Vessels; Superseded Pollution Funds;
Proposed Rule

Federal Register / Vol. 85 , No. 93 / Wednesday, May 13, 2020 /
Proposed Rules

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DEPARTMENT OF HOMELAND SECURITY

Coast Guard

33 CFR Parts 135, 138, and 153

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

Financial Responsibility--Vessels; Superseded Pollution Funds

AGENCY: Coast Guard, DHS.

ACTION: Notice of proposed rulemaking.

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

DATES: Comments and related material must be received by the Coast
Guard on or before August 11, 2020. Comments sent to the Office of
Management and Budget (OMB) on collection of information must reach OMB
on or before July 13, 2020.

ADDRESSES: You may submit comments identified by docket number USCG-
2017-0788 using the Federal eRulemaking Portal at https://www.regulations.gov. See the ``Public Participation and Request for
Comments'' portion of the SUPPLEMENTARY INFORMATION section for further
instructions on submitting comments.
    Collection of information. Submit comments on the collection of
information discussed in section V.D of this preamble both to the Coast
Guard's online docket and to the Office of Information and Regulatory
Affairs (OIRA) in the White House Office of Management and Budget using
one of the following two methods:
     Email<EMAIL_ADDRESS>     Mail: OIRA, 725 17th Street NW, Washington, DC 20503,
attention Desk Officer for the Coast Guard.

FOR FURTHER INFORMATION CONTACT: For information about this document
call or email Benjamin White, National Pollution Funds Center, Coast
Guard; telephone<PHONE_NUMBER>, email<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

Table of Contents for Preamble

I. Public Participation and Request for Comments
II. Abbreviations
III. Basis and Purpose and Regulatory Background
    A. Purpose of the Certificate of Financial Responsibility (COFR)
Regulations
    B. History of COFR Regulations
    C. History of 33 CFR Part 135 and Subpart D of Part 153
IV. Discussion of Proposed Rule
    A. Overview of Proposed Amendments to COFR Regulations
    B. Discussion of Proposed COFR Regulation Revisions
    C. Proposed Removal of 33 CFR 138.90(f)
    D. Proposed Removal of 33 CFR Part 135 and Subpart D of 33 CFR
Part 153
V. Regulatory Analyses
    A. Regulatory Planning and Review
    B. Small Entities
    C. Assistance for Small Entities
    D. Collection of Information
    E. Federalism
    F. Unfunded Mandates Reform Act
    G. Taking of Private Property
    H. Civil Justice Reform
    I. Protection of Children
    J. Indian Tribal Governments
    K. Energy Effects
    L. Technical Standards
    M. Environment

I. Public Participation and Request for Comments

    The Coast Guard views public participation as essential to
effective rulemaking, and will consider all comments and material
received during the comment period. Your comment can help shape the
outcome of this rulemaking. If you submit a comment, please include the
docket number for this rulemaking, indicate the specific section of
this document to which each comment applies, and provide a reason for
each suggestion or recommendation.
    We encourage you to submit comments through the Federal eRulemaking
Portal at https://www.regulations.gov. If you cannot submit your
material by using https://www.regulations.gov, contact the person in
the FOR FURTHER INFORMATION CONTACT section of this proposed rule for
alternate instructions. Documents mentioned in this proposed rule, and
all public comments, will be available in our online docket at https://www.regulations.gov, and can be viewed by following that website's
instructions. Additionally, if you visit the online docket and sign up
for email alerts, you will be notified when comments are posted or a
final rule is published.
    We accept anonymous comments. All comments received will be posted
without change to https://www.regulations.gov and will include any
personal information you have provided. For more about privacy and
submissions in response to this document, see DHS's eRulemaking System
of Records notice (85 FR 14226, March 11, 2020).
    We do not plan to hold a public meeting but we will consider doing
so if public comments indicate that a meeting would be helpful. We
would issue a separate Federal Register notice to announce the date,
time, and location of such a meeting.

II. Abbreviations

311(k) Fund The fund established by Section 311(k) of the Federal
Water Pollution Control Act
CERCLA Comprehensive Environmental Response, Compensation, and
Liability Act of 1980
COFR Certificate of Financial Responsibility
CFR Code of Federal Regulations
CIMS Contract Information Management System
DHS Department of Homeland Security
eCOFR Electronic Certificate of Financial Responsibility
EEZ Exclusive Economic Zone
FOSC Federal on-scene coordinator
FWPCA Federal Water Pollution Control Act
MISLE Marine Information for Safety and Law Enforcement
NAICS North American Industry Classification System
NPFC National Pollution Funds Center
NPRM Notice of proposed rulemaking
OCSLA Fund Offshore Oil Pollution Compensation Fund
OCSLAA Title III of the Outer Continental Shelf Lands Act Amendments
of 1978
OMB Office of Management and Budget
OPA 90 Oil Pollution Act of 1990
OSLTF or Fund Oil Spill Liability Trust Fund
SBA Small Business Administration
U.S.C. United States Code
Sec.  Section

III. Basis and Purpose, and Regulatory History

    The Oil Pollution Act of 1990 (OPA 90) (specifically, 33 U.S.C.
2716) and the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980 (CERCLA) (specifically, 42 U.S.C. 9608), require
responsible parties for certain vessels to establish and maintain
evidence of financial responsibility. The evidence of financial
responsibility must meet the maximum amount of liability under 33
U.S.C. 2704(a) or (d). Violators of those requirements are subject to
various penalties under 33 U.S.C. 2716a and 42 U.S.C. 9609.
    The 2010 Coast Guard Authorization Act (Pub. L. 111-281, 124 Stat.
2988

(October 15, 2010)) amended OPA 90 by expanding the population of
vessels subject to the evidence of financial responsibility
requirements. By statute, that population now includes any tank vessel
greater than 100 gross tons but less than or equal to 300 gross tons
using any place subject to the jurisdiction of the United States. The
Coast Guard proposes to amend the Code of Federal Regulations (CFR) to
reflect that statutory change. The Coast Guard had previously issued
Certificate of Financial Responsibility (COFR) regulations at 33 CFR
part 138, subpart A, which apply to vessels over 300 gross tons, as
well as certain other vessels depending on how and where they are
operated. In the time since the Coast Guard promulgated those
regulations, the Coast Guard has modernized and simplified its COFR
program. The Coast Guard has also identified certain aspects of the
COFR program where it could improve compliance, particularly in the
current COFR requirements for reporting changes in vessel operation,
ownership, or evidence of financial responsibility that affect the
basis of the Coast Guard's decision to issue a COFR. Finally, the
structure of the current COFR regulations and some of their provisions,
including the rules for applying vessel gross tonnage, are out of date
and difficult to understand.

A. Purpose of COFR Regulations

    Generally, under OPA 90, the responsible parties (owners,
operators, and demise charters) for a vessel from which oil is
discharged, or poses the substantial threat of a discharge of oil, into
or upon the navigable waters or adjoining shorelines or the exclusive
economic zone (EEZ), are liable for the removal costs and damages
specified from such an incident (33 U.S.C. 2702(a)). Embodying the
``polluter pays'' principle, this liability is strict, joint, and
several. In addition, 42 U.S.C. 9607 also states that the responsible
parties for a vessel from which a hazardous substance is released, or
which poses a threat of a release of a hazardous substance, are
similarly strictly liable, jointly and severally, for the resulting
response costs and damages.
    Under OPA 90 and CERCLA, the responsible parties for certain
categories of vessels must establish and maintain evidence of financial
responsibility in accordance with regulations promulgated by the
Secretary. The purpose of this requirement is to ensure that, in
advance of an oil pollution incident or a hazardous substance release,
the responsible parties for the vessels in the specified categories
have the financial ability to meet their potential liabilities under
OPA 90 and CERCLA up to the applicable limits of liability.
    Under 33 U.S.C. 2716 evidence of financial responsibility is
required for the following categories:
    (1) Vessels greater than 300 gross tons.
    (2) Vessels using the EEZ to transship or lighter oil destined for
a place subject to the jurisdiction of the United States.
    (3) Tank vessels greater than 100 gross tons.

B. History of COFR Regulations

    Initially, the Coast Guard established COFR regulations in 33 CFR
part 138 with an interim rule published July 1, 1994 (59 FR 34210)
followed by a final rule published March 7, 1996 (61 FR 9264). In 2008
the Coast Guard amended the COFR regulations and placed them in a newly
created subpart A of part 138 (73 FR 53691, September 17, 2008).\1\ In
addition to making several other changes, that final rule removed a
requirement that responsible parties carry an original or authorized
copy of the current COFR aboard each covered vessel, because improved
technology enabled the Coast Guard to view vessel COFRs electronically.
This rule proposes further changes to part 138, subpart A, including
changes to the management of electronic documents.
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    \1\ That rule expanded part 138's heading to ``Financial
Responsibility for Water Pollution (Vessels) and OPA 90 Limits of
Liability (Vessels and Deepwater Ports)'' and dedicated subpart B to
the last half of the revised heading--limits of liability for
vessels and deepwater ports under OPA 90.
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C. History of 33 CFR Part 135 and Subpart D of 33 CFR Part 153

    The Coast Guard added part 135, titled ``Offshore Oil Pollution
Compensation Fund,'' to 33 CFR in 1979 (44 FR 16868, March 19, 1979)
and it added subpart D, titled ``Administration of the Pollution
Fund,'' to 33 CFR part 153 in 1971 (36 FR 7010, April 13, 1971). This
proposed rule would remove 33 CFR part 135 and subpart D of 33 CFR part
153, which concern management of two pollution funds for which OPA 90
repealed the authorities. The two defunct funds are the Offshore Oil
Pollution Compensation Fund (OSCLA Fund) in 33 CFR part 135 and the
Federal Water Pollution Control Act (FWPCA) Section 311(k) Fund (311(k)
Fund) in subpart D of 33 CFR part 153.
    On November 1, 2011, the Coast Guard published a notice of inquiry
(76 FR 67386) soliciting public comment on whether to remove 33 CFR
part 135. We received no adverse comments; there were three comments
supporting the removal of part 135.

IV. Discussion of Proposed Rule

    The Coast Guard proposes amending 33 CFR part 138, subpart A, and
removing the superseded regulations in 33 CFR parts 135 and 153. We
explain our specific proposed changes below.

A. Overview of Proposed Changes to COFR Regulations

    Following is an overview of proposed revisions to 33 CFR part 138,
subpart A:
    (1) Evidence of financial responsibility for tank vessels greater
than 100 gross tons but less than or equal to 300 gross tons. As
required by 33 U.S.C. 2716(a)(3), we propose extending the regulatory
requirement to establish and maintain evidence of financial
responsibility to any tank vessel greater than 100 gross tons but less
than or equal to 300 gross tons using any place subject to the
jurisdiction of the United States.
    (2) Reporting requirements. We also propose reorganizing,
clarifying, and updating the reporting requirements for submitting an
Application. Examples of new requirements include documenting evidence
of financial responsibility submitted in support of an Application or a
request for COFR renewal, and adding into regulatory text the current
practice of guarantor notification.
    This set of proposed changes--including Sec.  138.150, which is
dedicated to reporting requirements and expressly links those
requirements to enforcement provisions--aims to address instances in
which COFR Operators fail to report changes to their status, as is
currently required by 33 CFR 138.90(e). These failures include failing
to report a vessel's financial changes in a timely manner, failing to
report a vessel transfer to a new owner, and failing to secure a
guaranty and apply for a new COFR--and have resulted in compliance
gaps. These gaps compromise emergency responses where an inability to
confirm financial responsibility has caused untimely responses to oil
spills and undermined the COFR program.
    Lastly, these proposed revisions are intended to ensure that the
Director receives the most current and accurate information when
issuing a COFR. These revisions would improve the Coast Guard's ability
to verify vessel compliance with COFR regulations. For example, if an
owner sells a vessel while it is located in a place subject to U.S.
jurisdiction, the new responsible party becomes immediately subject to
the COFR program. However, enforcing compliance with the COFR program's
requirements depends on the Coast Guard knowing about the vessel

transfer. The proposed regulatory revisions mitigate the risk of
uninsured responsible parties and derelict vessels.
    (3) Revise COFR regulations to incorporate improved management
practices and technological advancements. We also propose to amend the
COFR regulations to reflect changes in the NPFC's management of the
COFR program. The proposed revisions include the following:
     New regulatory text expressly authorizing COFR Operators,
guarantors, and agents for service of process to submit signed scanned
documents;
     Permitting COFR Operators submitting Applications or
requests for COFR renewal by email or fax to pay the COFR Application
and certification fees up to 21 days after submission. This method
would replace the current rule's requirement to pay certification fees
before the NPFC issues the COFR;
     Updating and simplifying the provisions that detail how to
apply gross tonnage assigned under different measurement systems. This
reflects changes in the law since OPA 90's initial legislation and
conforms the regulatory text to the Coast Guard's ``Measurement of
Vessels'' final rule (81 FR 18701, March 31, 2016), which amended the
U.S. tonnage regulations in 46 CFR part 69;
     Adding new provisions describing the COFR program's
current procedures for determining the acceptability of COFR
guarantors; and
     Modifying past technical amendments to implement the
Electronic COFR (eCOFR). These regulatory changes are necessary to
manage the COFR program more effectively, reduce the burden to the
public, and accommodate the frequent changes in vessel operation during
the normal course of maritime commerce.
    (4) Clarifying terminology. We propose clarifying and simplifying
the terminology in COFR regulations for consistency with law and COFR
program business practices. These changes include using terms of art
consistently and simplifying terminology.

B. Discussion of Specific Proposed Changes to COFR Regulations

    Table 1 provides a section-number crosswalk between the current
COFR regulations and our proposed COFR regulations. The crosswalk will
assist the reader in comparing the current regulations with those in
this proposed rule. Following table 1 is a discussion of substantive
changes, which include either new requirements or updates to the rule
to match current Coast Guard practice. The narrative discussion does
not address every proposed change: for example, the crosswalk shows
that part of current Sec.  138.30 is proposed to relocate to Sec.
138.40, but we omitted narrative discussion because proposed Sec.
138.40 contains no substantive change to requirements. When we applied
plain language doctrine required by E.O. 13563 to make these
regulations easier to understand but did not make substantive changes
we did not discuss those changes.

       Table 1--Crosswalk of Current and Proposed COFR Regulations
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        Current COFR regulations            Proposed COFR regulations
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Part 138--Financial Responsibility for   Part 138--Evidence of Financial
 Water Pollution (Vessels) and OPA 90     Responsibility for Water
 Limits of Liability (Vessels,            Pollution (Vessels) and OPA 90
 Deepwater Ports and Onshore              Limits of Liability (Vessels,
 Facilities).                             Deepwater Ports and Onshore
                                          Facilities).
Subpart A--Financial Responsibility for  Subpart A--Evidence of
 Water Pollution (Vessels).               Financial Responsibility for
                                          Water Pollution (Vessels).
Sec.   138.10 Scope....................  Sec.   138.10 Scope and
                                          purpose.
Sec.   138.15 Applicability............  Sec.   138.20 Applicability.
Sec.   138.20 Definitions..............  Sec.   138.30 Definitions.
Sec.   138.30 General..................  Sec.   138.40 General
                                          requirements.
Sec.   138.30(c) through (f)...........  Sec.   138.50 How to apply
                                          vessel gross tonnages.
Sec.   138.40 Forms....................  Sec.   138.60 Forms and
                                          submissions; ensuring
                                          submission timeliness.
Sec.   138.45 Where to apply for and     Sec.   138.60 Forms and
 renew Certificates.                      submissions; ensuring
                                          submission timeliness.
Sec.   138.50 Time to apply............  Sec.   138.80 Applying for
                                          COFR.
Sec.   138.60 Applications, general      Sec.   138.80 Applying for
 instructions.                            COFR.
Sec.   138.65 Issuance of Certificates.  Sec.   138.70 Issuance and
                                          renewal of COFR.
Sec.   138.70 Renewal of Certificates..  Sec.   138.90 Renewing COFR.
Sec.   138.80 Financial responsibility,  Sec.   138.110 How to establish
 how established.                         and maintain evidence of
                                          financial responsibility.
Sec.  Sec.   138.80(f) [untitled] and    Sec.   138.100 How to calculate
 138.85 Implementation schedule for       a total applicable amount.
 amendments to applicable amounts by
 regulation.
Sec.   138.90(a)-(c) Individual and      Sec.   138.80 Applying for
 Fleet Certificates.                      COFR.
Sec.   138.90(d) and (e), untitled.....  Sec.   138.150 Reporting
                                          requirements.
Sec.   138.100 Non-owning operator's     Sec.   138.160 Non-owning COFR
 responsibility for identification.       Operator's responsibility for
                                          identification.
Sec.   138.110 Master Certificates.....  Sec.   138.80 Applying for
                                          COFR.
Sec.   138.120 Certificates, denial or   Sec.   138.140 Application
 revocation.                              withdrawals, COFR denials and
                                          revocations.
Sec.   138.130 Fees....................  Sec.   138.120 Fees.
Sec.   138.140 Enforcement.............  Sec.   138.170 Enforcement.
Sec.   138.150 Service of process......  Sec.   138.130 Designating
                                          agents for service of process.
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Proposed Sec.  138.10 Scope and Purpose
    Proposed Sec.  138.10(a)(2) states that the standards and
procedures the Coast Guard uses to determine guarantor acceptability
would be included within the scope of subpart A. In addition, we
propose in Sec.  138.10(a)(3) that the reporting requirements for
guarantors would be included within the scope of subpart A. These
proposed changes for submitting evidence of financial responsibility on
behalf of the COFR Operator reflects current practice.
Proposed Sec.  138.20 Applicability
    Proposed Sec.  138.20(a)(1) would extend, as required by statute,
the applicability of the rule to include tank vessels greater than 100
gross tons but less than or equal to 300 gross tons, regardless of
whether it is transshipping or lightering oil. This provision expands
the

population of vessels under 300 gross tons that are required to
establish and maintain evidence of financial responsibility under 33
U.S.C. 2716. The current regulation includes any tank vessel using the
waters of the EEZ to transship or lighter oil destined for a place
subject to the jurisdiction of the United States, but if a tank vessel
is not engaged in transshipping or lightering, the current regulation
has an exception for those that are 300 gross tons or less.
    In Sec.  138.20(a)(2) through (a)(4), we propose extending the
applicability of the rule to include guarantors, responsible parties
other than the COFR Operator, and agents of process. This proposed
action would be in accordance with current practice.
Proposed Sec.  138.30 Definitions
    We propose to cross-reference additional statutory and regulatory
definitions, add new regulatory definitions, amend regulatory
definitions in the current COFR regulations, and remove definitions
that are not used.
    The following definitions reflect substantive changes from the
current rule:
    Applicant and certificant: We propose replacing the confusing terms
``applicant'' and ``certificant'' with the term ``COFR Operator''
throughout the rule. This action would promote consistency with the
COFR program's business practice that authorizes the COFR Operator
designated in the ``Application'' to represent the responsible parties
for purposes of compliance with the COFR program.
    COFR Operator: We propose to redefine ``COFR Operator'' to clarify
when we are referring to the operator who is liable in the event of an
incident or a release. We also propose replacing the current term
``Operator'' with the term ``responsible party.'' This rule defines the
term ``responsible party,'' for purposes of OPA 90 and CERCLA evidence
of responsibility, by cross-reference to the relevant statute, and
includes all of those persons who meet the definition. This replacement
of the term ``operator'' with the newly-defined terms ``responsible
party'' and ``COFR Operator'' makes clear that the designation of a
``COFR Operator'' to act on behalf of the responsible parties for
purposes of the COFR program does not limit or preclude other
responsible parties from being operators within the meaning of OPA 90
or CERCLA. We are also expressly clarifying that, when there is more
than one responsible party, the COFR Operator is the operator
designated and authorized by all the vessel's responsible parties to
act on their behalf to comply with the COFR program.
    Fleet Certificate and Individual Certificate: We propose a new
definition for the term ``Fleet Certificate'' to parallel the
definition of ``Master Certificate,'' and a new definition for the term
``Individual Certificate,'' so that COFR regulations will include
definitions for all three types of Certificates issued by the Director.
    Financial guarantor: We propose to revise the definition to make
clear that a financial guarantor cannot also be a self-insurer of a
vessel, but that it is possible for the self-insurer of one vessel to
be the financial guarantor for a different vessel.
    Owner: We propose removing the current regulatory definition of
``owner.'' It does not accurately reflect current law, and it is not
clear that a separate regulatory definition of ``owner'' is needed or
helpful, as both OPA 90 and CERCLA define the term ``owner'' and we
cross-reference those definitions.
    Tank vessel: We propose removing the regulatory definition of
``tank vessel,'' cross-referencing the OPA 90 statutory definition in
proposed Sec.  138.30(a), and moving the exceptions to applicability
that are embedded in the current regulatory definition of ``tank
vessel'' to proposed Sec.  138.20(d)(3).
    Vessel: We propose removing the regulatory definition of ``vessel''
and cross-referencing in Sec.  138.30(a) the statutory definitions that
appear in OPA 90 and CERCLA. This is because there are slight
differences in the OPA 90 and CERCLA definitions, specifically in the
reference to public vessels in OPA 90. Therefore, although other
provisions of the current COFR regulations resolve these differences,
we believe the better way to resolve the wording differences is to
cross-reference the statutory definitions. This approach ensures that
COFR-regulation definitions will always be consistent with OPA 90 and
CERCLA.
Proposed Sec.  138.50 How To Apply Vessel Gross Tonnages
    The current COFR regulations provide instructions to apply
different gross tonnage measurements for three different purposes: (1)
To determine whether a tonnage threshold applies; (2) to calculate a
vessel's OPA 90 and CERCLA applicable amounts of financial
responsibility; and (3) to determine the vessel's OPA 90 and COFR
limits of liability. However, these provisions are complex, and have
been difficult to apply, in part because they were developed and
established prior to the full coming into force of the International
Convention on Tonnage Measurement of Ships (June 23, 1969) on July 18,
1994. Furthermore, the 2010 Coast Guard Authorization Act included
amendments that updated, clarified, and eliminated inconsistencies in
the tonnage measurement law. The Coast Guard implemented these
amendments in the 2016 rule,\2\ which also incorporated changes to help
provide a suitable framework for tonnage-based regulations, allowing
the Coast Guard to specify tonnage thresholds more clearly. This
proposed rule maintains the purposes of applying gross tonnage
measurements explained in the current COFR regulations.
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    \2\ ``Measurement of Vessels'' final rule (81 FR 18701, March
31, 2016).
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    This proposed rule separates provisions for applying vessel gross
tonnage in proposed Sec.  138.50, and clarifies and simplifies the
current language while conforming with the 2016 amendments to the U.S.
tonnage regulations. We added a table to illustrate use of gross
tonnages assigned under the two overarching tonnage measurement systems
provided for by U.S. law.\3\
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    \3\ These systems are under the Convention Measurement System,
which expresses gross tonnage as ``GT ITC,'' and the Regulatory
Measurement System, which expresses gross tonnage as ``GRT.''
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    As proposed in Sec.  138.50(f), regardless of the tonnage reported
on the Application, the appropriate tonnage-certifying document as
provided for under the U.S. tonnage regulations, such as a tonnage
certificate or completed Simplified measurement application, governs in
determining the evidence of financial responsibility applicable
amounts, except when the responsible parties or guarantors knew or
should have known that the applicable tonnage certificate was
incorrect. In the event of an oil pollution incident or hazardous
substance release, the tonnage-certifying document governs the
applicable limit of liability. This information is vital to the COFR
program because the guaranty is to the certified tonnage at the time of
the incident, and addresses what happens if a vessel undergoes a
modification that affects the tonnage after a COFR Operator submits an
Application. This approach also creates certainty by removing the
implication that a tonnage re-measurement at the time of an incident
can supersede liability and financial responsibility as reflected on
the tonnage-certifying document.
    The addition proposed in Sec.  138.50(g) also requires COFR
Operators to submit, upon request, the original or a copy of

the tonnage certifying document(s). The proposed rule would capture the
fact that, in some circumstances, vessels may be assigned tonnage under
both measurement systems.
Proposed Sec.  138.60 Forms and Submissions; Ensuring Submission
Timeliness
    To remain consistent with current practice, proposed Sec.
138.60(a) notes that forms can be completed online or downloaded. This
is the Coast Guard's preference for submitting eCOFR Applications. If
you submit electronic images, please note that, currently, our system
only accepts the following imaging programs: PDF, JPEG, and TIFF.
Because of delays associated with mail processing and security,
submission of forms by mail is discouraged.
    Proposed Sec.  138.60(c)(2) also removes the option for hand-
delivering submissions because of the prohibition of hand delivery
under U.S. Government mail security restrictions. Also, Sec.  138.60(e)
makes clear that the timeliness of submissions is solely the
responsibility of the person making the submission.
Proposed Sec.  138.70 Issuance and Renewal of COFR
    Proposed Sec.  138.70(b) removes the express requirement to pay
fees before the issuance of a COFR. This would reflect the NPFC's
current business practice when the COFR Operator submits the
application via fax or email.
    The proposed Sec.  138.70(e) states that certain tonnage
information will be posted to the NPFC's COFR website, including the
measurement system(s) used, which under proposed Sec.  138.80(a)(1),
the applicant is required to provide.
Proposed Sec.  138.80 Applying for COFRs
    Proposed Sec.  138.80 reflects the removal of a requirement to pay
fees before the issuance of a COFR when Applications are submitted by
email or fax, by cross-referencing Sec.  138.120. Section 138.120's new
paragraph (a)(3)(i) allows payment to be made within 21 days of the
Application. This allows flexibility for the Director to issue COFRs
when the Application is complete and evidence of financial
responsibility has been established, and before the NPFC receives
payment. The COFR Operator must, however, ensure the fees are paid
within 21 days of submission of the Application to avoid adverse
consequences specified in Sec.  138.120(a)(4).
    Proposed Sec.  138.80(a)(1)(i)(C) also clarifies that Master
Certificates do not name any specific vessel, but do state the maximum
tonnages for the largest vessel for which the COFR Operator may be
responsible. Without that requirement, we would not have a record of
coverage if an incident occurs in the intervening period between the
Application and the first periodic report of covered vessels.
    Proposed Sec.  138.80(a)(1)(iv) requires the COFR Operator to
include a report with the Application providing information on the
vessels covered by the Master Certificate. The proposed rule would also
explain what information the COFR Operator must provide to the Director
if a vessel has been assigned tonnages under both measurement systems.
The inclusion of both assigned tonnages for vessels with more than one
should avoid delay of the application process and the effective date of
the guaranty.
    Additionally, proposed Sec.  138.80(a)(1)(iv)(B) adds a new
requirement that certain Master Certificate application information be
updated, including a listing of vessels that are no longer covered.
This would establish the termination of the guaranty date. Finally, to
assist in keeping this information up to date, if during a 6-month
reporting period a vessel is transferred to another responsible party,
the updated report must list the date and place of transfer and the
contact information of the responsible party to whom the vessel was
transferred.
    Unlike the current application instruction section, Sec.  138.60,
proposed Sec.  138.80(d) would not require an original signature page
for applications submitted by email or fax. Instead, the COFR Operator
may submit a legible scan of the signature page.
Proposed Sec.  138.100 How To Calculate a Total Applicable Amount
    Proposed Sec.  138.100(c) states that when statute or regulation
adjusts limits of liability, the COFR Operator must establish and
maintain evidence of financial responsibility in an amount equal to or
greater than the amended total applicable amount, as provided in Sec.
138.240(a).
Proposed Sec.  138.110 How To Establish and Maintain Evidence of
Financial Responsibility
    The proposed rule removes from the regulation the surety bond as a
specifically mentioned method for establishing and maintaining evidence
of financial responsibility. This method is still permitted as falling
under the ``other method'' provision in paragraph (f).
    Proposed Sec.  138.110(a) explains that the guarantor continues to
be liable and must provide coverage for 30 days following NPFC receipt
of a notice of cancellation and not from the date the guarantor issues
the notice. The proposed rule moves this provision currently contained
on the COFR guaranty forms into the regulation, and reflects a current
and important NPFC business practice. The guarantor would provide the
reason for termination as part of its notice of cancellation, if known.
Additionally, proposed Sec.  138.110(a) requires COFR Operators,
guarantors, and self-insurers to notify the Director of any material
change in submitted information, including any material change in the
guarantor or self-insurer's financial position. A material change is a
change that would affect the basis of the Director's approval of the
guarantor or evidence of financial responsibility. This notification
would be required immediately when a change occurs, rather than within
10 days of the change as specified in the current rule.
    Proposed Sec.  138.110(b) describes the current practice for
establishing and maintaining the acceptability of COFR insurance
guarantors. This will entail the guarantor submitting information on
its structure, business practices, history, financial strength, and
other information as requested by the Director. This process involves
an initial determination followed by annual submission by each COFR
insurance guarantor.
    Proposed Sec.  138.110(c) clarifies the net worth and working
capital requirements for financial guarantors to reflect current
practice. Currently, the NPFC does not add the total applicable amount
of each vessel owned by one operator; rather, it bases evidence of
financial responsibility on the operator's vessel with the greatest
total applicable amount. This proposed rule would require net worth and
working capital be based on the aggregate total applicable amounts.
    Proposed Sec.  138.110(f) changes the submission date for
requesting another guaranty method for establishing evidence of
financial responsibility from 45 to 90 days prior to the date the COFR
is required. The NPFC needs this additional 45 days to review the
financial documentation and communicate with the potential guarantor.
Proposed Sec.  138.120 Fees
    Proposed Sec.  138.120 would eliminate an existing requirement that
the application fee must be paid before the Director will issue a COFR.
This would add flexibility and convenience for COFR Operators,
especially if they are underway and want to enter U.S.

navigable waters or U.S. Exclusive Economic Zone. It further explains
that failure to pay fees in a timely manner may result in denial or
revocation of COFR, debt collection, or other enforcement. Finally, it
amends the fee refund procedures in the case of overpayment. The
Director would refund overpayments, because, under the proposed
amendment, the NPFC will not credit overpayments for the operator's
future use or for transfer to another operator anymore.
Proposed Sec.  138.130 Designating Agents for Service of Process
    Proposed Sec.  138.130(d) shortens the notification period for a
COFR Operator or Guarantor to notify the Director of a new agent for
service of process from 10 days to 5 days. This shortened period
reflects efficiencies relating to electronic notifications in place of
mailed notifications.
Proposed Sec.  138.140 Application Withdrawals, COFR Denials and
Revocations
    Proposed Sec.  138.140 is revised to reflect current business
practice. It adds a provision noting that the COFR Operator may
withdraw an Application at any time before issuance of the COFR. It
also includes the failure to designate and maintain a U.S. agent for
service of process to the list of cases in which the Director may deny
an Application or revoke a COFR. The proposed section revision also
clarifies that the Director may deny an Application or revoke a COFR
after obtaining additional information, such as transfer to a new
operator, vessel renaming, guaranty termination or cancellation, or
disapproval of the guarantor, and it adds a duty to remedy violations
where a COFR for a vessel expires. Finally, it adds a provision
specifying that where a COFR is revoked because 30 days have elapsed
following the date the Director receives a guarantor's notice of
termination, the Director may reinstate the COFR if the guarantor
promptly notifies the Director that the guarantor rescinded the
termination and there was no gap in coverage. This will align the
regulation to the COFR guaranty forms.
Proposed Sec.  138.150 Reporting Requirements
    The proposed rule would merge reporting requirements into this one
section. It would also revise the regulatory text to emphasize prior
notices of changes that will require a new COFR before the change
occurs. Proposed Sec.  138.150 identifies the information that must be
reported to the Director no later than 21 business days before a new
COFR is required for permanent vessel transfers and other changes
requiring issuance of a new COFR, and information that need only be
reported 3 business days before implementing the change for changes not
requiring issuance of a new COFR. Changes that will require issuance of
a new COFR include, but are not limited to: a permanent vessel
transfer, change of COFR Operator, vessel name change, change in the
vessel's gross tonnage, or termination of guaranty.

C. Proposed Removal of 33 CFR 138.90(f)

    Current paragraph Sec.  138.90(f) contains a non-regulatory
provision dealing with the temporary transfer of custody of an unmanned
barge that has a COFR issued under subpart A of part 138. The COFR
Operator who transfers the barge continues to be liable under OPA 90,
CERCLA, or both, and continues to maintain on file with the Director
acceptable evidence of financial responsibility with respect to the
barge. The provision encourages the temporary transferee to require the
transferring COFR Operator to acknowledge in writing that the
transferring COFR Operator agrees to remain responsible for pollution
liabilities. We propose to remove Sec.  138.90(f) because the existing
COFR remains in effect in respect to that vessel, and a temporary new
COFR is not required. We welcome comments on its removal, particularly
from those who may employ the practice it encourages.

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

    This document also proposes to remove 33 CFR part 135 and subpart D
of 33 CFR part 153 because OPA 90 repealed the legal authorities for
them.
    The regulations in 33 CFR part 135 apply to the management of the
OCSLA Fund, under Title III of the Outer Continental Shelf Lands Act
Amendments of 1978 (OCSLAA). Section 2004 in OPA 90 repealed the
authority for this part of the CFR (see 26 U.S.C. 9509 note). Like the
311(k) Fund, the funds in the OCSLA Fund were transferred to the OSLTF.
Similarly, OPA 90 superseded the financial responsibility requirements
of OCSLAA. However, OPA 90 (33 U.S.C. 2751(b) and 33 U.S.C. 2716(h))
preserved the force and effect of the regulations in 33 CFR part 135
regarding OCSLAA financial responsibility implementation, until OPA 90
financial responsibility regulations superseded these provisions (see
33 U.S.C. 2716(h), 59 FR 34210, July 1, 1994 (interim rule) and 61 FR
9264, March 7, 1996 (final rule)). Since 1992, other regulations have
superseded, or appeared to overlap with, the pollution incident
notification provisions of 33 CFR part 135. On November 1, 2011, the
Coast Guard published a notice of inquiry (76 FR 67385) soliciting
public comment on removing 33 CFR part 135. We received no comments
opposed to its removal.
    The regulations in subpart D of 33 CFR part 153 apply to the
management of the 311(k) Fund. That section of the FWPCA was repealed
by OPA 90 section 2002(b)(2) (see 33 U.S.C. 1321 note), and the funds
in the 311(k) Fund were transferred to the Oil Spill Liability Trust
Fund (OSLTF).
    Removing part 135 and subpart D of part 153 to eliminate
unauthorized regulatory requirements is necessary to eliminate
potential confusion to the public.

V. Regulatory Analyses

    We developed this proposed rule after considering numerous statutes
and Executive orders related to rulemaking. A summary of our analyses
based on these statutes or Executive orders follows.

A. Regulatory Planning and Review

    Executive Orders 12866 (Regulatory Planning and Review) and 13563
(Improving Regulation and Regulatory Review) direct agencies to assess
the costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distributive impacts, and equity). Executive
Order 13563 emphasizes the importance of quantifying costs and
benefits, reducing costs, harmonizing rules, and promoting flexibility.
Executive Order 13771 (Reducing Regulation and Controlling Regulatory
Costs) directs agencies to reduce regulation and control costs and
provides that ``for every one new regulation issued, at least two prior
regulations be identified for elimination, and that the cost of planned
regulations be prudently managed and controlled through a budgeting
process.''
    The Office of Management and Budget (OMB) has not designated this
proposed rule a significant regulatory action under section 3(f) of
Executive Order 12866. Accordingly, OMB has not reviewed it. Because
this proposed rule is not a significant regulatory action, it is exempt
from the requirements of Executive Order 13771. See the OMB Memorandum
titled ``Guidance Implementing Executive Order 13771, titled `Reducing
Regulation and Controlling Regulatory Costs' '' (April 5,

2017). A draft Regulatory Assessment is available in the docket, and a
summary follows. As explained in this section, this proposed rule would
impose some quantified costs, and create qualitative benefits, which
the Coast Guard believes will justify the costs.
1. Analysis of Alternatives
    Alternative 1: No action.
    The ``No Action'' alternative makes no regulatory changes to the
evidence of financial responsibility regulations in 33 CFR part 138,
subpart A. The ``No Action'' alternative is not viable because the
statute requires evidence of financial responsibility regulations for
tank vessels greater than 100 gross tons but less than or equal to 300
gross tons. At a minimum, a regulation implementing this requirement is
required. This alternative reflects the status quo and therefore would
have no regulatory cost or benefit.
    Alternative 2: Promulgate evidence of financial responsibility
regulations for tank vessels greater than 100 gross tons but less than
or equal to 300 gross tons (statutory requirement).
    Alternative 2 reflects the absolute minimum rulemaking effort to
address the statutory requirement in Section 712 of the Coast Guard
Authorization Act of 2010. However, the fact that there are other
aspects of the Coast Guard's evidence of financial responsibility
program that the Coast Guard would like to address, in addition to
revising 33 CFR part 138, subpart A and removing regulations that are
no longer authorized involving funds that were subsumed by the
establishment of the OSLTF, makes this alternative unviable. This
alternative would have the least net benefits of all of the proposed
alternatives. This alternative reflects the most costly aspect of the
rulemaking and is included in all of the proposed alternatives because
it is a statutory provision.
    Alternative 3: Promulgate evidence of financial responsibility
regulations for tank vessels greater than 100 gross tons but less than
or equal to 300 gross tons (statutory requirement) and for deepwater
ports (discretionary requirement).
    Alternative 3 adds promulgating evidence of financial
responsibility regulations for deepwater ports to Alternative 2. The
Coast Guard considered proposing financial responsibility regulations
for deepwater ports as part of this rulemaking. The deepwater port
industry is experiencing increased activity in the liquefied natural
gas deepwater port industry sector, raising questions about how
existing laws and policies regarding these facilities would apply.
These issues do not impact vessel evidence of financial responsibility,
however, and could create complexity and potentially delay the mandated
regulation of tank vessels greater than 100 gross tons but less than or
equal to 300 gross tons. In addition, currently only one liquefied
natural gas deepwater port is in operation and it uses less than 100
gallons of oil, whereas other designs might pose a greater risk of oil
spills. Additional time is necessary to analyze the effects of
liquefied natural gas regulation on the economy, maritime safety, and
the environment. The only other deepwater port in operation, an oil
deepwater port called the Louisiana Offshore Oil Port, is self-insured,
and provides evidence of financial responsibility sufficient to meet
its maximum liability under OPA 90 under grandfathered requirements of
the Deepwater Port Act of 1974.
    After evaluating this alternative, the Coast Guard has decided not
to develop deepwater port financial responsibility regulations at this
time. Postponing evidence of financial responsibility regulations for
deepwater ports will not impact maritime safety or the environment.
Currently, there is no established market that provides and maintains
evidence of financial responsibility for deepwater ports. If the market
decides to pursue these ventures in the future, the costs and benefits
would be analyzed accordingly as part of a future rulemaking.
    Alternative 4 (Preferred alternative) Promulgate evidence of
financial responsibility regulations for tank vessels greater than 100
gross tons but less than or equal to 300 gross tons (statutory
requirement); require COFR Operators and guarantors to submit
additional information to the Coast Guard; make conforming amendments
reflect current practices (discretionary requirement); and remove
subpart D of 33 CFR part 153 D and 33 CFR part 135 from the Code of
Federal Regulations (discretionary requirement).
    Alternative 4 addresses the statutory requirement to require tank
vessels greater than 100 gross tons but less than or equal to 300 gross
tons to establish and maintain financial responsibility. It also
provides necessary updates to the current financial responsibility
regulations to reflect current practices that have evolved over the
past two decades, taking into account technological improvements as
well as changes in policy. Lastly, this alternative removes 33 CFR part
135 and subpart D of 33 CFR part 153, both of which regulate two
defunct funds, the OCSLA Fund and the 311(k) Fund.
    In addition to the regulatory costs and benefits associated with
Alternative 2, this alternative would add two aspects with no cost:
Conforming regulations to current practice and removing two defunct
portions of the CFR, which would provide intangible benefits of
eliminating confusion for the public, as well as ensuring that the
regulations reflect how the Coast Guard's financial responsibility
program currently operates. Additionally, a small amount of regulatory
cost would be associated with the proposed requirement to require COFR
Operators and guarantors to provide additional information to the Coast
Guard. Although the benefits of this alternative are qualitative, the
Coast Guard expects them to justify these costs.
2. Proposed Regulatory Changes
    We propose amending the vessel evidence of financial responsibility
regulations at 33 CFR part 138, subpart A, to:
    1. Require financial responsibility to now include all tank vessels
greater than 100 gross tons but less than or equal to 300 gross tons.
    2. Require additional information from the COFR Operator and
guarantor. The proposed revisions include:
     Reporting of gross tonnage measurement system used and
submission of a copy of the tonnage certifying document, upon request;
     Electronic submissions;
     Reporting of reason for termination of guaranty by a
guarantor, if known; and
     Reporting vessel name change and increased reporting on
location of vessel when there is a change in ownership on date of
change.
    3. Conform regulations to current practice. The proposed revisions
include:
     How to apply vessel gross tonnages;
     Removal of requirement to pay fees before issuance of a
COFR;
     Moving surety bond method to ``other methods'' for
establishing and maintaining evidence of financial responsibility;
     Clarification on continuation of guarantor's liability and
requirement to provide coverage for 30 days after cancellation of
guaranty; and
     Process for establishing and maintaining acceptability of
COFR insurance guarantors.
    In addition, for the reasons discussed above, we propose removing
33 CFR part 135 and subpart D of 33 CFR part 153 which concern
management of two defunct pollution funds.
    Table 2 shows whether a category of regulatory amendments have a

regulatory cost, regulatory benefit, or both. Those amendments that
have a regulatory cost or benefit are discussed in detail following the
table.

            Table 2--Summary of Regulatory Amendment Impacts
------------------------------------------------------------------------
                                           Regulatory       Regulatory
                                              cost           benefit
------------------------------------------------------------------------
Require financial responsibility for
 tank vessels greater than 100 gross
 tons but less than or equal to 300
 gross tons to establish and maintain
 evidence of financial responsibility
 (Statutory)
    Application and certification                  Yes              Yes
     costs............................
    COFR premium costs................             Yes              Yes
Require Additional Information from
 the COFR Operator and guarantor
 (Discretionary)
    Reporting of gross tonnage                     Yes              Yes
     measurement systems used and
     submission of a copy of the
     tonnage certifying document, upon
     request..........................
    Electronic submissions............          No \4\              Yes
    Reporting of reason for                        Yes              Yes
     termination of guaranty by a
     guarantor........................
    Reporting vessel name change and               Yes              Yes
     increased reporting on location
     of vessel when there is a change
     in ownership on date of change...
Conform regulations to current
 Practice (Discretionary)
    How to apply vessel gross tonnages              No              Yes
    Removal of requirement to pay fees              No              Yes
    before issuance of a COFR.........
    Moving Surety Bond method to                    No              Yes
     ``other methods'' for
     establishing and maintaining
     evidence of financial
     responsibility...................
    Clarification on continuation of                No              Yes
     guarantor's liability and
     requirement to provide coverage
     for 30 days after cancellation of
     guaranty.........................
    Process for establishing and                    No              Yes
     maintaining acceptability of COFR
     insurance guarantors.............
Removal of 33 CFR part 135 and subpart
 D of 33 CFR part 153 (Discretionary)
    Removal of 33 CFR part 135........          No \5\              Yes
    Removal of subpart D of 33 CFR              No \6\              Yes
     part 153.........................
------------------------------------------------------------------------

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

    \4\ Electronic submissions creates cost savings.
    \5\ Removal of superseded regulatory requirements have no cost.
The OCSLAA Fund was subsumed by the Oil Spill Liability Trust Fund.
    \6\ Removal of superseded regulatory requirements have no cost.
The 311(k) Fund was subsumed by the Oil Spill Liability Trust Fund.
---------------------------------------------------------------------------

    There are two regulatory costs identified for this proposed rule:
     Regulatory Cost 1: Require the additional tank vessels
greater than 100 gross tons but less than or equal to 300 gross tons to
establish and maintain evidence of financial responsibility (statutory
requirement).
     Regulatory Cost 2: Require additional information from the
COFR Operator and guarantor (discretionary requirement).
Discussion of Regulatory Cost 1
    The proposed rule would now require tank vessels greater than 100
gross tons but less than or equal to 300 gross tons to establish and
maintain evidence of financial responsibility.\7\ These vessels would
be required to have COFRs, which would result in two types of costs:
---------------------------------------------------------------------------

    \7\ Regulatory Cost 1 does not include vessels greater than 300
gross tons that are already required to have a COFR.
---------------------------------------------------------------------------

     Application and certification costs; and
     COFR premium costs.
    Application and Certification Costs: In the first year of the
analysis period, the COFR Operator would be required to pay an
Application fee of $200 and a Certification fee of $100 for each vessel
requiring a COFR. A new Certification fee would be required every 3
years to renew the COFR.
    COFR Premium Costs: The additional operators of tank vessels
greater than 100 gross tons but less than or equal to 300 gross tons
would have to establish and maintain evidence of financial
responsibility using one of these several methods: Insurance, Self-
insurance, or Financial Guaranty.\8\
---------------------------------------------------------------------------

    \8\ Historically, the surety bond method has been used in a very
few instances. This proposed rule would move this method to the
``other methods'' category of financial responsibility under Sec.
138.110(f).
---------------------------------------------------------------------------

    Affected Population: According to the Coast Guard's Marine
Information for Safety and Law Enforcement (MISLE) database, there are
an average of 481 tank vessels using U.S. navigable waters or U.S.
Exclusive Economic Zone from 2014-2018 that are greater than 100 gross
tons but less than or equal to 300 gross tons. Table 3 shows the number
of tank vessels greater than 100 gross tons but less than or equal to
300 gross tons per year (2014-2018).

  Table 3--Number of Tank Vessels Greater Than 100 Gross Tons but Less
                     Than or Equal to 300 Gross Tons
------------------------------------------------------------------------
                                                             Number of
                          Year                                vessels
------------------------------------------------------------------------
2014....................................................             488
2015....................................................             492
2016....................................................             477
2017....................................................             474
2018....................................................             474
Average (2014-2018).....................................             481
------------------------------------------------------------------------

Cost Summary Regulatory Cost 1
    Application and Certification Costs: We assumed the number of
future COFR Applications and Certifications, based on the historical
average number of vessels in the population from 2014 to 2018 (481
vessels) would be constant for the 10-year analysis period.\9\ We also
assumed that all vessels would renew their COFRs every 3 years through
the full 10-year analysis period. In the first year of the analysis
period, COFR Operators would pay an Application fee ($200) and a
Certification fee ($100) when applying for a COFR for their vessels.
Every 3 years thereafter, COFR Operators would pay a Certification fee
($100) when renewing their COFRs. In the first year of the analysis
period, the

annual cost would be calculated by multiplying the number of vessels
applying for COFRs (481 vessels) by the cost of the Application ($200)
and adding the number of vessels requesting certification (481)
multiplied by the cost of certification ($100) to equal $144,300. Every
third year thereafter, the cost would be calculated by multiplying the
number of vessels (481) requesting certification for renewal of their
COFRs by the cost of the certification ($100) to equal $48,100.
---------------------------------------------------------------------------

    \9\ This estimate, based on COFR trends for currently COFRed
vessels, was validated by subject matter expert in Coast Guard's
Vessel Certification Division.
---------------------------------------------------------------------------

    COFR Premium Costs: It is possible for vessel operators to choose
to use the Self-insurance or Financial Guaranty methods of establishing
their evidence of financial responsibility, which allows them to use
their U.S. business assets. Alternatively, in the case of the Financial
Guaranty method, vessels may use the U.S. business assets of a parent,
affiliate, or special purpose company as evidence that they are capable
of paying for removal costs and damages up to the applicable limit of
liability. In those cases, they have made a business decision that the
cost of the assuming liability risk under OPA 90 is less than the
premium charged by commercial insurance companies. This assessment of
OPA 90 risk is company-specific and not quantifiable. Therefore, for
the purposes of this analysis, we have assumed that the responsible
parties would use the Insurance method of establishing and maintaining
their evidence of financial responsibility. We received estimates of
COFR insurance premium amounts for tank vessels greater than 100 gross
tons but less than or equal to 300 gross tons from 4 COFR insurance
companies representing over 90 percent of existing COFRs.\10\ Based on
this survey of guarantors, we estimated that the premiums per vessel
would range between $300 and $1,000 per year.
---------------------------------------------------------------------------

    \10\ Source: NPFC's COFR database.
---------------------------------------------------------------------------

    Vessel Premium Low Range Cost Estimate: The Coast Guard calculated
the vessel premium low range cost estimate by using the following
formula:
    Number of vessels x cost of premium per vessel per year:

481 vessels x $300 per vessel per year = $144,300 per year
    Vessel Premium High Range Cost Estimate: The Coast Guard calculated
the vessel premium high range cost estimate by using the following
formula:
    Number of vessels x the cost of premium per vessel per year:

    481 vessels x the $1,000 per vessel per year = $481,000 per year
Discussion of Regulatory Cost 2
    This proposed rule would require additional information from the
COFR Operator and guarantor that would result in three types of costs:
     Reporting of gross tonnage measurement systems used and
submission of copy of tonnage certifying document, upon request;
     Reporting of reason for termination of guaranty by a
guarantor, if known; and
     Reporting vessel name change and increased reporting on
location of vessel when there is a change in ownership on date of
change.
    Reporting of Gross Tonnage Measurement Systems Used and Submission
of a Copy of Tonnage Certifying Document, upon request--Affected
Population: All COFR Operators, including those for the tank vessels
greater than 100 gross tons but less than or equal to 300 gross tons
proposed in this rule, would report the gross tonnage measurement
systems used when applying for and/or renewing a COFR. The Coast
Guard's COFR database indicates that there are 25,875 currently COFRed
vessels. Adding the 481 COFRed tank vessels greater than 100 gross tons
but less than or equal to 300 gross tons proposed in Regulation Cost 1,
and assuming the number of COFRed vessels remains constant during the
analysis period, the total number of COFRed vessels equals 26,356.
    Master Certificate and Fleet Certificate holders would also be
required to provide the gross tonnage measurement systems used for the
largest vessel covered by the Application. According to the COFR
database, there are currently 8 Master Certificates and 12 Fleet
Certificates.
    COFR Operators would also provide a copy of the tonnage certifying
document, upon request. We assume that the Coast Guard would request a
copy of the tonnage certifying document when there is an incident.
According to incident data from the Coast Guard's CIMS database, there
was an average of 12 incidents per year involving vessels with COFRs
and vessels that would be required to have COFRs under this proposed
rule over the five year period 2012-2017. We assume that for the
analysis period, the number of incidents will remain constant with this
average.
    & of Reason for Termination of Guaranty by a Guarantor--Affected
Population:
    Based on NPFC Vessel Certification Program data on the historical
number of annual notices of guaranty termination by guarantors, the
Coast Guard estimates that there will be 4,000 per year for the 10-year
analysis period.
    Reporting Vessel Name Change and Increased Reporting on Location of
Vessel When There is a Change in Ownership on Date of change--Affected
Population: Based on NPFC Vessel Certification Program historical data,
the Coast Guard estimates that there will be 1,000 submissions per
year.
Cost Summary Regulatory Cost 2
    Reporting of Gross Tonnage Measurement Systems Used and Submission
of Copy of Tonnage Certifying Document, upon request: Reporting the
gross tonnage measurement systems used with the application and/or
requests for COFR renewal would result in a negligible cost impact
(less than one minute of time) to the COFR Operator and would be
completed with the Application for the COFR. We do not quantify this
cost because it is negligible.
    Based on estimates received from COFR insurance guarantors who
would submit, upon request, a copy of the tonnage certifying document
on behalf of the COFR Operator, COFR Operators would require 15 minutes
(0.25 hours) per submission.
    Number of submissions per year x number of hours x the labor cost
per hour:

12 x 0.25 hours per submission = 3 hours
3 hours per year x $35.64 per hour \11\ = $107 per year
---------------------------------------------------------------------------

    \11\ Total employer compensation costs for private industry
workers averaged, $35.64 per hour worked, found at https://www.bls.gov/news.release/archives/ecec_12152017.pdf. Bureau of Labor
Statistics Economic News Release Employer Costs for Employee
Compensation news release text. Friday, December 15, 2017. This wage
rate was selected because it is the most general and reflects that
the person submitting the information could be any worker whether an
administrative assistant or a Chief Executive Officer of a company.
---------------------------------------------------------------------------

    Reporting of reason for termination of guaranty by a guarantor: We
estimated that it would take 5 minutes (0.08 hours) for the guarantor
to add the reason why the guaranty was terminated to the information
they already provide to the Coast Guard when they terminate a guaranty.
    Number of terminations per year x number of hours per submission x
labor cost per hour:

4,000 submissions per year x 0.08 hours per submission x $35.64 per
hour = $11,405 per year
    Reporting Vessel Name Change and Increased Reporting on Location of
Vessel When There is a Change in Ownership on Date of Change: We
assumed that it will take an additional

5 minutes (0.08 hours) per submission to provide additional information
that is not already required under the current rule.
    Number of submissions per year x number of hours per submission x
the labor cost per hour:

1,000 submissions per year x the 0.08 hours/submission x the $35.64 per
hour \12\ = $2,851 per year
---------------------------------------------------------------------------

    \12\ See footnote 8.
---------------------------------------------------------------------------

    Present Value Regulatory Costs (Low Range): We estimated that the
10-year present value of the proposed rule, at a 3-percent discount
rate, to be $1.6 million. We estimated that the 10-year present value
of the proposed rule, at a 7-percent discount rate, to be $1.3 million.
The estimated annualized discounted cost of the proposed rule, at a 3-
percent discount rate, is $188,877. The estimated annualized discounted
cost of the proposed rule, at a 7-percent discount rate, is $190,835.
    Present Value Regulatory Costs (High Range): We estimated the 10-
year present value of the proposed rule, at a 3-percent discount rate,
to be $4.4 million. We estimated the 10-year present value of the
proposed rule, at a 7-percent discount rate, to be $3.7 million. The
estimated annualized discounted cost of the proposed rule, at a 3-
percent discount rate, is $525,577. The estimated annualized discounted
cost of the proposed rule, at a 7-percent discount rate, is $527,535.
4. Regulatory Benefits
    There are four qualitative benefits identified for this proposed
rule:
     Regulatory Benefit 1: Require Tank Vessels Greater than
100 Gross Tons to 300 Gross Tons to Establish and Maintain Evidence of
Financial Responsibility (statutory requirement).
     Regulatory Benefit 2: Require additional information from
the COFR Operator and guarantor (discretionary requirement).
     Regulatory Benefit 3: Conform Regulations to Current
Practice (discretionary requirement).
     Regulatory Benefit 4: Removal of 33 CFR part 135 and
subpart D of 33 CFR part 153 (discretionary requirement).
Discussion of Regulatory Benefit 1
    Oil pollution removal costs and damages for incidents have
substantially increased since 1990, even for relatively small-sized
discharges. When there is no evidence of financial responsibility, it
becomes more likely that the OSLTF will have to pay for at least some
of the costs resulting from the incident.\13\ When vessels have COFRs,
the incident cost amount paid by the responsible party is higher than
for vessels that do not have COFRs. This proposed rule would add tank
vessels greater than 100 gross tons but less than or equal to 300 gross
tons to the vessels that are already required to establish and maintain
evidence of financial responsibility.
---------------------------------------------------------------------------

    \13\ Lawrence I. Kiern, ``Liability, Compensation, and Financial
Responsibility Under the Oil Pollution Act of 1990: A review of the
Second Decade.'' 36 Tulane Maritime Law Journal. 23-24 (2011).
---------------------------------------------------------------------------

    Of the 10,000 incidents sampled from the Coast Guard's Contract
Information Management System (CIMS) database during the ``1990 to
2017'' period, 4.91 percent were COFRed vessels and 29.15 percent were
non-COFRed vessels.\14\ Coast Guard CIMS data show that the Coast Guard
recovers 98.98 percent of costs when a vessel was COFRed, and only
27.71 percent of costs when it was not COFRed.
---------------------------------------------------------------------------

    \14\ The remaining 65.94 percent of incidents were either
facility incidents or incidents where the Coast Guard could not
identify the source.
---------------------------------------------------------------------------

    The proposed requirement would ensure that the costs are
internalized because parties responsible for oil spills would be more
fully responsible for (moving from less than \1/3\ to nearly 100
percent) paying for the oil pollution removal costs and damages and
help correct this market failure.\15\ Increased recovered cost rates
shift the risk and actual costs from the OSLTF to the polluting
responsible party.
---------------------------------------------------------------------------

    \15\ See OMB Circular A-4, page 4 dated September 17, 2003 for a
short discussion on market failures and externalities such as
environmental problems.
---------------------------------------------------------------------------

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

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

B. Small Entities

    Under the Regulatory Flexibility Act, 5 U.S.C. 601-612, we have
considered whether this proposed rule would have a significant economic
impact on a substantial number of small entities. The term ``small
entities'' comprises small businesses, not-for-profit organizations
that are independently owned and operated and are not dominant in their
fields, and governmental jurisdictions with populations of less than
50,000.
    An Initial Regulatory Flexibility Analysis discussing the impact of
this proposed rule on small entities is available in the docket, and a
summary follows.
    There are two potential direct costs to small entities that would
result from this proposed rule:

     Regulatory Cost 1: Require Tank Vessels Greater than 100
Gross Tons to 300 Gross Tons to Establish and Maintain Evidence of
Financial Responsibility (Statutory Requirement) \16\
---------------------------------------------------------------------------

    \16\ Regulatory Cost 1 does not include vessels greater than 300
gross tons that are already required to have a COFR.
---------------------------------------------------------------------------

     Regulatory Cost 2: Require Additional Information from
COFR Operators and Guarantors (Discretionary Requirement)
    Regulatory Cost 1--Require Tank Vessels Greater than 100 Gross Tons
to 300 Gross Tons Establish and Maintain Evidence of Financial
Responsibility (Statutory Requirement).
    Affected Population: We queried NPFC's COFR database to determine
that there are 149 U.S. entities that operate tank vessels greater than
100 gross tons but less than or equal to 300 gross tons. We researched
the number of employees and revenue for these entities using public and
proprietary databases. We then determined which entities were small
based on the Regulatory Flexibility Act's criteria for small non-
profits and small governmental jurisdictions and the U.S. Small
Business Administration's (SBA) ``Table of Small Business Standards
Matched to North American Industry Classification System (NAICS)
Codes'' publication for businesses.\17\
---------------------------------------------------------------------------

    \17\ The criteria for determining whether an entity is small
vary by NAICS code and generally involve the number of employees or
annual sales.
---------------------------------------------------------------------------

    Of these 149 entities, we found employee and revenue data on 59
entities. Of these 59 entities, 27 were small and 32 were not small
based on the Regulatory Flexibility Act and SBA's criteria. For the
purposes of this analysis, we assumed that the remaining 90 entities
were small entities. Adding the known small entities to the unknown
entities brings the total number of entities considered to be small
entities for the purpose of this analysis to be 117. Of the small
entities, 115 are businesses, 2 are governmental jurisdictions, and 0
are small non-profits.
    Regulatory Cost 2--Require Additional Information from COFR
Operators and Guarantors (Discretionary Requirement).
    Affected Population: We queried NPFC's COFR database to determine
that there are 761 U.S. entities that operate vessels with COFRs,
including those operating vessels proposed in Regulatory Cost 1. We
researched the number of employees and revenue for these entities using
public and proprietary databases. We then determined which entities
were small based on the Regulatory Flexibility Act's criteria for small
non-profits and small governmental jurisdictions and the U.S. Small
Business Administration's (SBA) ``Table of Small Business Standards
Matched to North American Industry Classification System (NAICS)
Codes'' publication for businesses.\18\
---------------------------------------------------------------------------

    \18\ The criteria for determining whether an entity is small
vary by NAICS code and generally involve the number of employees or
annual sales.
---------------------------------------------------------------------------

    Of these 761 entities, we found employee and revenue data on 354
entities. Of these 354 entities, 245 were small and 109 were not small
based on the Regulatory Flexibility Act and SBA's

criteria. For the purposes of this analysis, we assumed that the
remaining 407 entities were small entities. Adding the known small
entities to the unknown entities brings the total number of entities
considered to be small entities for the purpose of this analysis to be
652. Of the small entities, 641 are businesses, 4 are governmental
jurisdictions, and 7 are small non-profits.
Regulatory Cost 1 Summary
    The following calculation shows the average annual cost of
establishing financial responsibility per vessel for tank vessels
greater than 100 gross tons but less than or equal to 300 gross tons:

Number of Vessels x Annual Cost of Application/Certification + Number
of Vessels x Annual COFR Insurance Premium

    In the first year of the analysis period, COFR Operators would pay
an Application fee ($200) and a Certification fee ($100) when applying
for a COFR for their vessels. Every 3 years thereafter, COFR Operators
would pay a Certification fee ($100) when renewing their COFRs. For
each tank vessel greater than 100 gross tons but less than or equal 300
gross tons, the total 10 year cost is $600. The average annual cost for
these vessels is $60. We calculated the average premium ($650 per year)
by averaging the high-range COFR insurance premium ($1,000 per year)
and low-range COFR insurance premium estimates ($300 per year) provided
by COFR insurance guarantors.
    For example, for a small entity with three vessels, the calculation
would be as follows:

Number of Vessels x Annual Cost of Application/Certification + Number
of Vessels x Annual COFR Insurance Premium
3 vessels x $60 per year + 3 vessels x $650 per year = $2,130 per year

    Table 4 shows the annual cost of Regulatory Cost 1 for each small
entity based on the number of vessels they operate.\19\
---------------------------------------------------------------------------

    \19\ Source: NPFC's COFR database.

                  Table 4--Annual Cost per Small Entity
------------------------------------------------------------------------
                                                            Annual cost
            Number of vessels                Number of       per small
                                          small entities      entity
------------------------------------------------------------------------
1.......................................              77            $710
2.......................................              17           1,420
3.......................................               9           2,130
4.......................................               3           2,840
5.......................................               4           3,550
6.......................................               1           4,260
7.......................................               3           4,970
8.......................................               0               0
9.......................................               0               0
10......................................               0               0
11......................................               0               0
12......................................               1           8,520
13......................................               1           9,230
14......................................               0               0
15......................................               1          10,650
                                         -------------------------------
    Total...............................             117  ..............
------------------------------------------------------------------------

    We then divided the annual cost per small entity by the small
entity's associated annual revenue and then multiplied by 100 to
determine the percent impact of the proposed rule on the small
entities' revenue. Table 5 shows the economic impact to small entities
of Regulatory Cost 1.

      Table 5--Economic Impact to Small Entities--Regulatory Cost 1
------------------------------------------------------------------------
                                             Number of      Percent of
        Percent of annual revenue         small entities  small entities
------------------------------------------------------------------------
1 to 2..................................               0               0
<1......................................             117             100
------------------------------------------------------------------------

Regulatory Cost 2 Summary
    Reporting the gross tonnage measurement systems used with the
application and/or requests for COFR renewal would result in a
negligible cost impact (less than one minute of time) to the COFR
Operator and would be completed with the Application for the COFR. We
do not quantify this cost because it is negligible. As shown in the
Cost Benefit Analysis section of the Regulatory Analysis, the annual
cost for Regulatory Cost 2 is $14,363 per year total for all COFRed
vessels, including those operating vessels proposed in Regulatory Cost
1. The per vessel cost of Regulatory Cost 2 to small entities is
calculated by determining the total cost of Regulatory Cost 2 divided
by number of COFRed vessels.

$14,363 / 26,356 COFRed Vessels = $1 per vessel \20\
---------------------------------------------------------------------------

    \20\ Rounded up to nearest dollar from $0.55.

    Table 6 shows the annual cost of Regulatory Cost 2 for each small
entity based on the number of vessels they operate.\21\
---------------------------------------------------------------------------

    \21\ Source: NPFC's COFR database.

                  Table 6--Annual Cost per Small Entity
------------------------------------------------------------------------
                                                            Annual cost
            Number of vessels                Number of       per small
                                          small entities      entity
------------------------------------------------------------------------
1.......................................             362               1
2.......................................              77               2
3.......................................              41               3
4.......................................              26               4
5.......................................              22               5
6.......................................              19               6
7.......................................              18               7
8.......................................               5               8
9.......................................               9               9
10......................................              12              10
11......................................               3              11
12......................................               3              12
13......................................               4              13
14......................................               3              14
15......................................               4              15
16......................................               1              16
18......................................               3              18
19......................................               1              19
20......................................               1              20
23......................................               1              23
24......................................               1              24
25......................................               1              25
26......................................               1              26
27......................................               1              27
30......................................               2              30
31......................................               1              31
32......................................               1              32
35......................................               2              35
36......................................               1              36
37......................................               1              37
41......................................               1              41
42......................................               1              42
53......................................               1              53
55......................................               1              55
56......................................               1              56
57......................................               1              57
60......................................               1              60
61......................................               1              61
77......................................               1              77
79......................................               1              79
80......................................               1              80
96......................................               2              96
98......................................               1              98
104.....................................               1             104
107.....................................               1             107
116.....................................               2             116
129.....................................               1             129
158.....................................               1             158
169.....................................               1             169
315.....................................               1             315
389.....................................               1             389
462.....................................               1             462
496.....................................               1             496
                                         -------------------------------
    Total...............................             652  ..............
------------------------------------------------------------------------

    We then divided the annual cost per small entity by the small
entity's associated annual revenue and then multiplied by 100 to
determine the percent impact of the proposed rule on the small
entities' revenue.\22\ Table 7 shows the economic impact to small
entities of Regulatory Cost 2.
---------------------------------------------------------------------------

    \22\ Revenue information researched at https://www.manta.com/.

      Table 7--Economic Impact to Small Entities--Regulatory Cost 2
------------------------------------------------------------------------
                                             Number of      Percent of
        Percent of annual revenue         small entities  small entities
------------------------------------------------------------------------
1 to 2..................................               0               0
< 1.....................................             652             100
------------------------------------------------------------------------

C. Assistance for Small Entities

    Under section 213(a) of the Small Business Regulatory Enforcement
Fairness Act of 1996, Public Law 104-121, we want to assist small
entities in understanding this proposed rule so that they can better
evaluate its effects on them and participate in the rulemaking. If the
proposed rule would affect your small business, organization, or
governmental jurisdiction and you have questions concerning its
provisions or options for compliance, please contact the person in the
FOR FURTHER INFORMATION CONTACT section of this proposed rule. The
Coast Guard will not retaliate against small entities that question or
complain about this rule or any policy or action of the Coast Guard.
    Small businesses may send comments on the actions of Federal
employees who enforce, or otherwise determine compliance with, Federal
regulations to the Small Business and Agriculture Regulatory
Enforcement Ombudsman and the Regional Small Business Regulatory
Fairness Boards. The Ombudsman evaluates these actions annually and
rates each agency's responsiveness to small business. If you wish to
comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR
(1-888-734-3247).

D. Collection of Information

    This proposed rule would revise a previously approved collection of
information (OMB Control Number 1625-0046) under the Paperwork
Reduction Act of 1995, 44 U.S.C. 3501-3520. As defined in 5 CFR
1320.3(c), ``collection of information'' comprises reporting,
recordkeeping, monitoring, posting, labeling, and other similar
actions. The title and description of the information collections, a
description of those who must collect the information, and an estimate
of the total annual burden follow. The estimate covers the time for
reviewing instructions, searching existing sources of data, gathering
and maintaining the data needed, and completing and reviewing the
collection. We also discuss the following incremental paperwork burden
associated with this proposed rule earlier in the ``Cost Benefit
Analysis'' under ``Regulatory Cost 2'' and ``Regulatory Benefit 2.''
    Title: Financial Responsibility for Water Pollution.
    OMB Control Number: 1625-0046.
    Summary of the Collection of Information: This proposed rule would
add additional collection of information requirements to existing OMB
Control Number 1625-0046 for: COFR Operators to report gross tonnage
and gross tonnage measurement systems used, and submit a copy of their
tonnage certifying document, upon request; guarantors to report the
reason for termination of a guaranty; and COFR Operators to report
vessel name changes and increase reporting on location of vessel when
there is a change in ownership on date of change.
    Need for Information:
    Reporting of gross tonnage measurement systems used and submission
of copy of the tonnage certifying document, upon request.
    Providing tonnage measurement systems used and submitting the
tonnage certifying document, upon request, in the proposed rule, with
respect to gross tonnage will allow the Coast Guard to determine more
effectively the limit of liability and applicable amounts of financial
responsibility for the incident. In some cases, the vessel may be
assigned tonnage under more than one measurement system depending on a
variety of factors including the vessel's flag, length, voyage type,
keel laid, or substantial alteration date, and whether it is a self-
propelled vessel. This has caused confusion with respect to which
method to use to determine limit of liability and amount of financial
responsibility.
    Regardless of the tonnage reported on the Application, the tonnage
certifying document governs the required evidence of financial
responsibility and the limit of liability at the time of the incident
(except when the responsible parties or guarantors knew or should have
known that the tonnage certifying document or certificate of registry
was incorrect). Using the tonnage certifying document provides the
following benefits: It ensures that the Coast Guard has the most
accurate tonnage measurements; it provides the method used to determine
tonnage, as well as the tonnage amount; it provides information for
foreign flagged vessels that is oftentimes difficult to obtain; and
without the applicable tonnage certifying document, if an incident
occurred, a re-measurement of tonnage could alter the already
determined financial responsibility and limit of liability.
    Reporting of reason for termination of guaranty by a guarantor.
    The proposed rule would require that the guarantor include the
reason for termination, if known, with the notification for termination
of the guaranty. This information would provide the Coast Guard with
information about the COFR Operator that otherwise would not be known
in the event there is an incident.
    Reporting vessel name change and increased reporting on location of
vessel when there is a change in ownership on date of change.
    The additional collection of information in the proposed rule would
ensure the information the Coast Guard relies on when initially issuing
a COFR is up to date and remains current--especially concerning vessels
that, over time, become derelict while in U.S. navigable waters or U.S.
Exclusive Economic Zone. The proposed revisions would also improve the
Coast Guard's ability to establish compliance with COFR regulations by
more effectively ensuring that the responsible party is able to pay its
liability and mitigate risks to the OSLTF. For example, if a vessel is
sold while using a place subject to U.S. jurisdiction, the new
responsible parties become immediately subject to the COFR program.
These proposed changes would ensure that, while the Coast Guard still
has regulatory authority over a responsible party and the financial
assurances of the guarantor, the Coast Guard receives information
material to continued compliance before problems arise. Enforcing
compliance with the COFR program's requirements, however, depends on
the Coast Guard knowing about the vessel transfer. The proposed
regulatory revisions seek to ensure that the Coast Guard receives this
information and to mitigate the risk of uninsured responsible parties
and derelict vessels.
    Proposed Use of Information:
    Reporting of gross tonnage measurement systems used and

submission of copy of the tonnage certifying document, upon request.
    The Coast Guard would use the additional collection of information
in the proposed rule to ensure that the gross tonnage of a vessel
involved in an incident is accurate to determine its limit of liability
and applicable amount of financial responsibility.
    Reporting of reason for termination of guaranty by a guarantor.
    The Coast Guard would use the additional collection of information
in the proposed rule to learn more about a vessel and its COFR
Operators in the event of an incident. Adding a new requirement to
provide the reason for guaranty termination will reduce the possibility
that a guarantor would cancel the guaranty to simply shield themselves
from potential liability in the event of an incident.
    Reporting vessel name change and increased reporting on location of
vessel when there is a change in ownership on date of change.
    The Coast Guard would use the additional collection of information
in the proposed rule to identify a responsible party in the event there
is an incident.
    Description of the Respondents: The respondents are COFR Operators
of vessels and OPA 90 COFR insurance guarantors.
    Number of Respondents: The additional collection of information in
this proposed rule would affect 761 COFR Operators and 14 OPA 90 COFR
insurance guarantors.
    Frequency of Response:
    Reporting of gross tonnage measurement systems used and submission
of copy of the tonnage certifying document.
    All COFR Operators, including those for the tank vessels greater
than 100 gross tons but less than or equal to 300 gross tons proposed
in this rule, would report the gross tonnage measurement systems used
when applying for a COFR. The Coast Guard's COFR database indicates
that there are 25,875 currently COFRed vessels. Adding the 481 COFRed
tank vessels greater than 100 gross tons but less than or equal to 300
gross tons proposed in Regulation Cost 1, and assuming the number of
COFRed vessels remains constant during the analysis period the total
number of COFRed vessels equals 26,356.
    Master Certificate and Fleet Certificate holders would also be
required to provide the gross tonnage measurement systems used for the
largest vessel covered by the Application.
    The Coast Guard estimated that COFR Operators would provide
information on \1/3\ of the vessels with COFRs each year due to the 3-
year cycle of the Application process.
    Individual Certificates--The Coast Guard's COFR database indicates
that, currently, there are 25,875 COFRed vessels. Adding the 481 COFRed
tank vessels greater than 100 gross tons to 300 gross tons proposed in
Regulation Cost 1 equals 26,356 COFRed vessels.
    26,356 COFRed vessels / 3 = 8,785 COFRed vessels per year that
would require the submission of the gross tonnage measurement systems
used.
    Masters Certificates--According to the COFR database, there are
currently 8 Master Certificates.
    8 Master Certificates / 3 = 3 Master Certificates per year that
would require the submission of the gross tonnage measurement systems
used for the largest vessel covered by the Application.
    Fleet Certificates--According to the COFR database, there are
currently 12 Fleet Certificates.
    12 Fleet Certificates / 3 = 4 Fleet Certificates per year that
would require the submission of the gross tonnage measurement systems
used for the largest vessel covered by the Application.
    COFR Operators would also provide a copy of the tonnage certifying
document, upon request. We assume that the Coast Guard would request a
copy of the tonnage certifying document when there is an incident.
According to incident data from the Coast Guard's CIMS database, there
was an average of 12 incidents per year involving vessels with COFRs
and vessels that would be required to have COFRs under this proposed
rule over the five year period 2012-2017. We assume that for the
analysis period, the number of incidents will remain constant with this
average.
    Reporting of reason for termination of guaranty by a guarantor.
    Based on NPFC Vessel Certification Program data on the historical
number of annual notices of guaranty termination by guarantors, the
Coast Guard estimates that there will be 4,000 vessels per year for the
10-year analysis period.
    Reporting vessel name change and increased reporting on location of
vessel when there is a change in ownership on date of change.
    Based on NPFC Vessel Certification Program historical data, the
Coast Guard estimates that there will be 1,000 submissions on vessel
name changes and change in location when there is a change in ownership
per year.
    Burden of Response:
    Reporting of gross tonnage measurement systems used and submission
of copy of the tonnage certifying document, upon request.
    Reporting the gross tonnage measurement systems used with the
application and/or requests for COFR renewal would result in a
negligible burden (less than one minute of time) to the COFR Operator
and would be completed with the Application for or request for renewal
of the COFR.
    Based on estimates received from COFR insurance guarantors who
would submit, upon request, a copy of the tonnage certifying document
on behalf of the COFR Operator, COFR Operators would require 15 minutes
(0.25 hours) per submission.
    Reporting of reason for termination of guaranty by a guarantor.
    The Coast Guard estimated that it will take 5 minutes (0.08 hours)
for the guarantor to add the reason why the guaranty was terminated to
the information they provide to the Coast Guard already when he or she
terminates a guaranty.
    Reporting vessel name change and increased reporting on location of
vessel when there is a change in ownership on date of change.
    The Coast Guard assumed that it will take an additional 5 minutes
(0.08 hours) per submission to provide additional information that is
not already required under the current rule.
    Estimate of Total Annual Burden:
    Reporting of gross tonnage measurement systems used and submission
of copy of the tonnage certifying document, upon request.
    As stated above in the cost benefit analysis section of the
preamble, we do not quantify the cost impact of reporting the gross
tonnage measurement systems used because it is negligible and is
provided as part of the Application and/or request for COFR renewal.
    The cost burden associated with COFR Operators providing, upon
request, their tonnage certifying document is calculated as follows:
    Number submissions per year x Number of hours x labor cost per
hour:

12 x 0.25 hours per submission = 3 hours
3 hours per year x $35.64 per hour = $107 per year

    Reporting of reason for termination of guaranty by a guarantor.
    Number of terminations per year x number of hours per submission x
labor cost per hour:

4,000 submissions per year x 0.08 hours per submission x $35.64 per
hour = $11,405 per year

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

    Number of submissions per year x number of hours per submission x
labor cost per hour:

1,000 submissions per year x 0.08 hours per submission x $35.64 per
hour = $2,851 per year

    As required by 44 U.S.C. 3507(d), we will submit a copy of this
proposed rule to OMB for its review of the collection of information.
    We ask for public comment on the proposed collection of information
to help us determine, among other things--
     How useful the information is;
     Whether the information can help us perform our functions
better;
     How we can improve the quality, usefulness, and clarity of
the information;
     Whether the information is readily available elsewhere;
     How accurate our estimate is of the burden of collection;
     How valid our methods are for determining the burden of
collection; and
     How we can minimize the burden of collection.
    If you submit comments on the collection of information, submit
them by the date listed in the DATES section of this preamble to both
the OMB and to the docket where indicated under ADDRESSES.
    You need not respond to a collection of information unless it
displays a currently valid control number from OMB. Before the Coast
Guard could enforce the collection of information requirements in this
proposed rule, OMB would need to approve the Coast Guard's request to
collect this information.

E. Federalism

    A rule has implications for federalism under Executive Order 13132
(Federalism) if it has a substantial direct effect on States, on the
relationship between the national government and the States, or on the
distribution of power and responsibilities among the various levels of
government. We have analyzed this proposed rule under Executive Order
13132 and have determined that it is consistent with the fundamental
federalism principles and preemption requirements described in
Executive Order 13132. Our analysis follows.
    This rulemaking is based on provisions in OPA 90 and CERCLA; 33
U.S.C. 2716 and 42 U.S.C. 9608, respectively. This proposed rule would
amend Coast Guard regulations on vessel evidence of financial
responsibility and remove certain unnecessary pollution fund
regulations. The OPA 90 contains a savings clause that saves to the
States the ability to regulate activities contained in Title I of OPA
90, including vessel evidence of financial responsibility requirements.
See 33 U.S.C. 2718; United States v. Locke and Intertanko v. Locke, 529
U.S. 89, 105, 120 S.Ct. 1135, 1146 (2000). Thus, nothing in this
proposed rule would preempt states from regulating vessel evidence of
financial responsibility requirements for oil pollution. However,
CERCLA contains an express preemption provision which prohibits States,
except under limited circumstances, from requiring vessels to establish
or maintain evidence of financial responsibility in connection with
liability for the release of a hazardous substance if those vessels
maintain evidence of the financial responsibility required under that
subchapter (42 U.S.C. 9614(d)). Thus, except under limited
circumstances, States cannot regulate requirements for vessel evidence
of financial responsibility requirements for hazardous material
pollution. The removal of 33 CFR part 135 and subpart D of part 153
would remove certain federal pollution fund's regulatory requirements
that were superseded by OPA 90 and subsumed by the OSLTF. As the
proposed rule clarifies but does not alter the existing, applicable
federal law relating to pollution funds, it would not have preemptive
impact. Therefore, this proposed rule is consistent with the
fundamental federalism principles and preemption requirements described
in Executive Order 13132.
    Additionally, for rules with federalism implications and preemptive
effect, Executive Order 13132 specifically directs agencies to consult
with State and local governments during the rulemaking process. If you
believe this rule has implications for federalism under Executive Order
13132, please contact the person listed in the FOR FURTHER INFORMATION
CONTACT section of this preamble.

F. Unfunded Mandates Reform Act

    The Unfunded Mandates Reform Act of 1995, 2 U.S.C. 1531-1538,
requires Federal agencies to assess the effects of their discretionary
regulatory actions. In particular, the Act addresses actions that may
result in the expenditure by a State, local, or tribal government, in
the aggregate, or by the private sector of $100 million (adjusted for
inflation) or more in any one year. Although this proposed rule would
not result in such an expenditure, we do discuss the effects of this
rule elsewhere in this preamble.

G. Taking of Private Property

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

H. Civil Justice Reform

    This proposed rule meets applicable standards in sections 3(a) and
3(b)(2) of Executive Order 12988, (Civil Justice Reform), to minimize
litigation, eliminate ambiguity, and reduce burden.

I. Protection of Children

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

J. Indian Tribal Governments

    This proposed rule does not have tribal implications under
Executive Order 13175 (Consultation and Coordination with Indian Tribal
Governments), because it would not have a substantial direct effect on
one or more Indian tribes, on the relationship between the Federal
Government and Indian tribes, or on the distribution of power and
responsibilities between the Federal Government and Indian tribes.

K. Energy Effects

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

L. Technical Standards

    The National Technology Transfer and Advancement Act, codified as a
note to 15 U.S.C. 272, directs agencies to use voluntary consensus
standards in their regulatory activities unless the agency provides
Congress, through OMB, with an explanation of why using these standards
would be inconsistent with applicable law or otherwise impractical.
Voluntary consensus standards are technical standards (e.g.,
specifications of materials, performance, design, or operation; test
methods;

sampling procedures; and related management systems practices) that are
developed or adopted by voluntary consensus standards bodies.
    This proposed rule does not use technical standards. Therefore, we
did not consider the use of voluntary consensus standards.

M. Environment

    We have analyzed this proposed rule under Department of Homeland
Security Management Directive 023-01 and Commandant Instruction
M16475.1D, which guide the Coast Guard in complying with the National
Environmental Policy Act of 1969 (42 U.S.C. 4321-4370f), and have made
a preliminary determination that this action is one of a category of
actions that do not individually or cumulatively have a significant
effect on the human environment. This proposed rule would be
categorically excluded under paragraph L53 of Appendix A, Table 1 of
DHS Instruction Manual 023-01-001-01, Rev. 01. Paragraph L53 pertains
to congressionally mandated regulations designed to improve or protect
the environment. A preliminary Record of Environmental Consideration
supporting this determination is available in the docket where
indicated under the ``Public Participation and Request for Comments''
section of this preamble. This proposed rule involves expanding vessel
financial responsibility to include tank vessels greater than 100 gross
tons but less than or equal to 300 gross tons, clarifying and updating
the rule's reporting requirements, conforming the rule to current
practice, and removing two superseded regulations. We seek any comments
or information that may lead to the discovery of a significant
environmental impact from this proposed rule.

List of Subjects

33 CFR Part 135

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

33 CFR Part 138

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

33 CFR Part 153

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

    For the reasons discussed in the preamble, the Coast Guard proposes
to remove 33 CFR part 135, and to amend 33 CFR parts 138 and 153 as
follows:

PART 135--[REMOVED]

0
1. Remove part 135.

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

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

    Authority: 33 U.S.C. 2704, 2716, 2716a; 42 U.S.C. 9608, 9609; 6
U.S.C. 552(d); E.O. 12580, Sec. 7(b), 3 CFR, 1987 Comp., p. 193;
E.O. 12777, Secs. 4 and 5, 3 CFR, 1991 Comp., p. 351, as amended by
E.O. 13286, Sec. 89, 3 CFR, 2004 Comp., p. 166, and by E.O. 13638,
Sec. 1, 3 CFR, 2014 Comp., p.227; Department of Homeland Security
Delegation Nos. 0170.1 and 5110, Revision 01. Section 138.40 also
issued under the authority of 46 U.S.C. 2103 and 14302.

0
3. In part 138, revise the part heading to read as set out above; and
revise subpart A, consisting of Sec. Sec.  138.10 through 138.170, to
read as follows:
Subpart A -- Evidence of Financial Responsibility for Water Pollution
(Vessels)
Sec.
138.10 Scope and purpose.
138.20 Applicability.
138.30 Definitions.
138.40 General requirements.
138.50 How to apply vessel gross tonnages.
138.60 Forms and submissions; ensuring submission timeliness.
138.70 Issuance and renewal of COFRs.
138.80 Applying for COFRs.
138.90 Renewing COFRs.
138.100 How to calculate a total applicable amount.
138.110 How to establish and maintain evidence of financial
responsibility.
138.120 Fees.
138.130 Agents for Service of process. 138.140 Application
withdrawals, COFR denials and revocations.
138.150 Reporting requirements.
138.160 Non-owning COFR Operator's responsibility for
identification. 138.170 Enforcement.

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

Sec.  138.10  Scope and purpose.

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

Sec.  138.20  Applicability.

    (a) Applicability generally. This subpart applies--
    (1) To the COFR Operator of--
    (i) Any vessel over 300 gross tons (except a vessel listed in
paragraphs (d)(1) or (d)(2) of this section) using the navigable waters
of the United States, or any port or other place subject to the
jurisdiction of the United States, including any such vessel using a
deepwater port or other offshore facility subject to the jurisdiction
of the United States;
    (ii) Any vessel of any size (except a vessel listed in paragraphs
(d)(1) or (d)(3) of this section) using the waters of the Exclusive
Economic Zone to transship or lighter oil (whether delivering or
receiving) destined for a place subject to the jurisdiction of the
United States; and
    (iii) Any tank vessel over 100 gross tons (except a vessel listed
in paragraphs (d)(1) or (d)(3) of this section) using the navigable
waters of the United States, or any port or other place subject to the
jurisdiction of the United States, including any such tank vessel using
a deepwater port or other offshore facility subject to the jurisdiction
of the United States;
    (2) To a guarantor providing evidence of financial responsibility
under this subpart on behalf of one or more of a vessel's responsible
parties;

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

Sec.  138.30   Definitions.

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

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

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