73832 Federal Register / Vol. 79, No. 239 / Friday, December 12, 2014 / Rules and Regulations 

§ 1.6038D–7T [Removed] 

■ Par. 17. Section 1.6038D–7T is 

removed. 

■ Par. 18. Section 1.6038D–8 is added 

to read as follows: 

§ 1.6038D–8 Penalties for failure to 

disclose. 

(a) In general. If a specified person 

fails to file a Form 8938, ‘‘Statement of 

Specified Foreign Financial Assets,’’ 

that includes the information required 

by section 6038D(c) and § 1.6038D–4 

with respect to any taxable year at the 

time and in the manner described in 

section 6038D(a) and § 1.6038D–2, a 

penalty of $10,000 will apply to that 

specified person. 

(b) Married specified individuals 

filing a joint annual return. Married 

specified individuals who file a joint 

annual return and fail to file a required 

Form 8938 that includes the information 

required by section 6038D(c) and 

§ 1.6038D–4 with respect to any taxable 

year at the time and in the manner 

described in section 6038D(a) and 

§ 1.6038D–2 are subject to penalties 

under this section as if the married 

specified individuals are a single 

specified individual. The liability of 

married specified individuals who file a 

joint annual return with respect to any 

penalties under this section is joint and 

several. 

(c) Increase in penalty. If any failure 

to comply with the applicable reporting 

requirement of section 6038D and the 

regulations continues for more than 90 

days after the day on which the 

Commissioner or his delegate mails a 

notice of the failure to the specified 

person required to file the Form 8938, 

the specified person is required to pay 

an additional penalty of $10,000 for 

each 30-day period (or fraction thereof) 

during which the failure continues after 

the 90-day period has expired. The 

additional penalty imposed by section 

6038D(d)(2) and this paragraph (c) is 

limited to a maximum of $50,000 for 

each such failure. 

(d) Presumption of aggregate value. 

For the purpose of assessing penalties 

imposed under section 6038D(d), if the 

Commissioner or his delegate 

determines that a specified person has 

an interest in one or more specified 

foreign financial assets and the specified 

person does not provide sufficient 

information to demonstrate the 

aggregate value of the assets upon 

request by the Commissioner or his 

delegate, then the aggregate value of the 

assets is treated as being in excess of the 

applicable reporting threshold set forth 

in § 1.6038D–2(a). 

(e) Reasonable cause exception—(1) 

In general. If the failure to report the 

information required in section 

6038D(c) and § 1.6038D–4 is shown to 

be due to reasonable cause and not due 

to willful neglect, no penalty will be 

imposed under section 6038D(d) or this 

section. 

(2) Affirmative showing required. In 

order to show that the failure to report 

the information required in section 

6038D(c) and § 1.6038D–4 is due to 

reasonable cause and not due to willful 

neglect for purposes of section 6038D(g) 

and this section, the specified person 

must make an affirmative showing of all 

the facts alleged as reasonable cause for 

the failure to disclose. 

(3) Facts and circumstances taken 

into account. The determination of 

whether a failure to disclose a specified 

foreign financial asset on Form 8938 

was due to reasonable cause and not 

due to willful neglect is made on a caseby-case basis, taking into account all 

pertinent facts and circumstances. The 

fact that a foreign jurisdiction would 

impose a civil or criminal penalty on 

the specified person (or any other 

person) for disclosing the required 

information is not reasonable cause. 

(f) Penalties for underpayments 

attributable to undisclosed foreign 

financial assets—(1) Accuracy-related 

penalty. For application of the accuracyrelated penalty in the case of any 

portion of an underpayment attributable 

to any undisclosed foreign financial 

asset understatement, see section 

6662(j). 

(2) Criminal penalties. In addition to 

other penalties, failure to comply with 

the reporting requirements of section 

6038D and the regulations, or any 

underpayment related to such failure, 

may result in criminal penalties under 

sections 7201, 7203, 7206, et seq., or 

other provisions of Federal law. 

(g) Effective/applicability dates. This 

section applies to taxable years ending 

after December 19, 2011. Taxpayers may 

elect to apply the rules of this section 

to taxable years ending prior to 

December 19, 2011. 

§ 1.6038D–8T [Removed] 

■ Par. 19. Section 1.6038D–8T is 

removed. 

John Dalrymple, 

Deputy Commissioner for Services and 

Enforcement. 

Approved: December 4, 2014. 

Mark J. Mazur, 

Assistant Secretary of the Treasury (Tax 

Policy). 

[FR Doc. 2014–29125 Filed 12–11–14; 8:45 am] 

BILLING CODE 4830–01–P 

DEPARTMENT OF THE INTERIOR 

Bureau of Ocean Energy Management 

30 CFR Part 553 

[Docket ID: BOEM–2012–0076] 

RIN 1010–AD87 

Consumer Price Index Adjustments of 

the Oil Pollution Act of 1990 Limit of 

Liability for Offshore Facilities 

AGENCY: Bureau of Ocean Energy 

Management (BOEM), Interior. 

ACTION: Final rule. 

SUMMARY: The Oil Pollution Act of 1990 

(OPA) establishes a comprehensive 

regime for addressing the consequences 

of oil spills, ranging from spill response 

to compensation for damages to injured 

parties. Other than deepwater ports 

subject to the Deepwater Port Act of 

1974, the Bureau of Ocean Energy 

Management (BOEM) is authorized to 

adjust the limit of liability in OPA for 

offshore facilities, including pipelines. 

This rule amends BOEM’s regulations to 

add to the regulations on Oil Spill 

Financial Responsibility (OSFR) for 

offshore facilities in order to increase 

the limit of liability for damages caused 

by the responsible party for an offshore 

facility from which oil is discharged, or 

which poses the substantial threat of an 

oil discharge, as described in OPA. This 

rule adjusts the limit of liability to 

reflect the significant increase in the 

Consumer Price Index (CPI) that has 

taken place since 1990. It also 

establishes a methodology for BOEM to 

use to periodically adjust the OPA 

offshore facility limit of liability for 

inflation. BOEM is hereby increasing the 

limit of liability for damages under OPA 

from $75 million to $133.65 million. 

DATES: This final rule is effective 

January 12, 2015. 

FOR FURTHER INFORMATION CONTACT: 

Peter Meffert, Office of Policy, 

Regulations and Analysis (OPRA), 

Bureau of Ocean Energy Management, 

Department of the Interior, at 381 Elden 

Street, MS–4050 Herndon, Virginia 

20170–4817 at (703) 787–1610, or email 

at peter.meffert@boem.gov. Questions 

related to the limit of liability or the 

adjustment process should be directed 

to Dr. Marshall Rose, Chief, Economics 

Division, Office of Strategic Resources, 

Bureau of Ocean Energy Management, at 

381 Elden Street, MS–4050 Herndon, 

Virginia 20170–4817 at (703) 787–1538, 

or email at marshall.rose@boem.gov. 

SUPPLEMENTARY INFORMATION: 


rljohnson on DSK3VPTVN1PROD with RULES
Federal Register / Vol. 79, No. 239 / Friday, December 12, 2014 / Rules and Regulations 73833 

Introduction 

OPA requires inflation adjustments to 

the offshore facility limit of liability not 

less than every three years to reflect 

significant increases in the CPI. 33 

U.S.C. 2704(d)(4). This requirement is to 

preserve the deterrent effect and 

‘‘polluter pays’’ principle embodied in 

the OPA Title I liability and 

compensation provisions. 

On February 24, 2014, BOEM 

published a proposed rule to increase 

the OPA offshore facility limit of 

liability to $133.65 million and establish 

the methodology for future inflation 

adjustments (79 FR 10056). The 

rulemaking comment period initially 

closed on March 26, 2014. Various 

groups requested additional time to 

review and analyze the implications of 

this proposed rule and BOEM extended 

the comment period by an additional 30 

days (79 FR 15275) which closed on 

April 25, 2014. 

Of the public comments received, all 

were generally supportive of the 

proposed rule. Also, one offered an 

alternative CPI adjustment. BOEM has 

posted all comments received in the 

docket [BOEM–2012–0076] for this 

rulemaking at www.regulations.gov. 

Background 

In general, under Title I of OPA, the 

responsible parties for any vessel or 

facility, including any offshore facility 

that discharges or poses a substantial 

threat of discharge of oil into or upon 

navigable waters, adjoining shorelines, 

or the exclusive economic zone, are 

liable for the OPA removal costs and 

damages that result from such incident 

(as specified in 33 U.S.C. 2702(a) and 

(b)). Under 33 U.S.C. 2704(a), however, 

the total liability of the responsible 

parties is limited (with certain 

exceptions specified in 33 U.S.C. 

2704(c)). In instances when the OPA 

liability limit applies, the Oil Spill 

Liability Trust Fund (OSLTF) is 

available to compensate claimants for 

damages in excess of the liability limit 

and to reimburse responsible parties for 

damages that they pay for that are in 

excess of the liability limit, as provided 

in 33 U.S.C. 2708, 2712(a)(4), and 2713. 

The OPA at 33 U.S.C. 2704(a)(3) 

provides that responsible parties for an 

offshore facility incident are liable for 

‘‘the total of all removal costs plus 

$75,000,000.’’ The $75 million limit of 

liability only applies to damages 

covered by OPA. 

To prevent the real value of the 

amount of liability authorized by OPA 

from declining over time as a result of 

inflation, and shifting the financial risk 

of oil spill incidents to the OSLTF, OPA 

(33 U.S.C. 2704(d)(4), requires that the 

President adjust the limit of liability’’ 

not less than every three years,’’ by 

regulation, to reflect significant 

increases in the CPI. This mandate has 

been in place since 1990. 

Executive Order 12777, as amended, 

delegates the implementation of the 

President’s OPA limit of liability 

inflation adjustment authority, dividing 

the responsibility among several Federal 

agencies. Among those delegations, 

section 4 of Executive Order 12777 vests 

the Secretary of the Interior (DOI) with 

authority to adjust the limit of liability 

for ‘‘offshore facilities, including 

associated pipelines, other than 

deepwater ports subject to the 

[Deepwater Port Act of 1974]’’ for 

inflation. Under Secretarial Order 3299, 

BOEM exercises this authority on behalf 

of DOI. In addition, section 4 of 

Executive Order 12777, as amended and 

in relevant part, vests in the Secretary 

of the Department in which the Coast 

Guard is operating the President’s 

authority to adjust for inflation the OPA 

limits of liability for vessels and 

deepwater ports (including associated 

pipelines), and the statutory limit of 

liability for onshore facilities. This 

authority has been redelegated by the 

Secretary of Homeland Security to the 

Coast Guard. 

Regulatory History 

On July 1, 2009, following substantial 

coordination with DOI, the 

Environmental Protection Agency and 

the Department of Transportation to 

achieve consistent approaches to the 

inflation adjustment mandate, the Coast 

Guard published an Interim Final Rule 

With Request For Comments (IFR) (74 

FR 31357), implementing the first set of 

regulatory inflation adjustments to the 

limits of liability for vessels and 

deepwater ports, and establishing the 

methodology the Coast Guard will use 

for future inflation adjustments to the 

limits of liability for its delegated source 

categories. (See 33 CFR 138.240. See 

also, Notice of Final Rulemaking, 73 FR 

54997 (September 24, 2008), and Final 

Rule, 75 FR 750 (January 6, 2010)). 

As described in the preamble to the 

Coast Guard’s IFR, DOI and other 

agencies with delegated authority for 

adjusting the OPA liability limits agreed 

to follow the Coast Guard’s inflation 

adjustment methodology. BOEM has 

coordinated with the Coast Guard on the 

inflation adjustments to the OPA 

liability limit in this rulemaking. 

BOEM published its proposed rule to 

increase the OPA offshore facility limit 

of liability on February 24, 2014 (79 FR 

10056). The comment period closed on 

April 25, 2014. This final rule increases 

the offshore facility limit of liability for 

OPA damages to $133.65 million and 

establishes the methodology for future 

inflation adjustments, which generally 

follows the Coast Guard’s approach. 

Offshore Facility Limit of Liability 

This rule implements the first 

mandated adjustment, under 33 U.S.C. 

2704(d)(4), to the OPA limit of liability 

for damages for offshore facilities to 

reflect significant increases in the CPI. 

This rule also establishes a methodology 

for making inflation adjustments to the 

OPA limit of liability for offshore 

facilities. To ensure maximum 

consistency in promulgating rules for 

CPI adjustments to the OPA limit of 

liability, the approach used by BOEM 

follows, in most respects, the inflation 

adjustment approach used by the Coast 

Guard in its 2009 CPI rulemaking that 

adjusted the limits of liability for vessels 

and deepwater ports. That approach, 

found at 33 CFR part 138, subpart B, 

went through a full notice and comment 

rulemaking and received no adverse 

comments. 

Offshore facilities are unique among 

the vessels and facilities covered under 

OPA. The OPA, at 33 U.S.C. 2704(a), 

assigns unlimited liability to the 

responsible parties for removal costs 

resulting from an offshore facility oil 

spill incident, and only limits their 

liability for the damages that result from 

such a spill and that are covered by 

OPA. This rulemaking adjusts the 

offshore facility limit of liability for 

OPA damages to $133.65 million. Under 

OPA, the responsible parties’ liability 

for removal costs resulting from an 

offshore facility oil spill incident 

remains unlimited. 

Oil Spill Financial Responsibility 

Requirements Are Not Affected by This 

Rulemaking 

This rulemaking does not affect the 

level of oil spill financial responsibility 

(OSFR) coverage (found in 33 U.S.C. 

2716(c), and 30 CFR 553.13) that 

responsible parties must demonstrate 

for covered offshore facilities (COFs) 

under subparts B through E in the 

regulations at 30 CFR part 553. 

The OPA offshore facility limit of 

liability applies to more facilities than 

are covered by the OSFR requirement. 

The limit of liability for offshore 

facilities applies to all offshore facilities 

(other than deepwater ports), while 

OSFR coverage is required only for 

offshore facilities (other than deepwater 

ports) located seaward of the coastline, 

or in any portion of a bay connected to 

the sea generally, with a worst case oil 

discharge potential of more than 1,000 

barrels and meeting other specific 


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73834 Federal Register / Vol. 79, No. 239 / Friday, December 12, 2014 / Rules and Regulations 

criteria in the definition of COF found 

in 30 CFR 553.3. 

The OSFR coverage levels are 

specified at 33 U.S.C. 2716 and are not 

tied to the offshore facility limit of 

liability and, therefore, are not affected 

by the inflation adjustments required 

under OPA at 33 U.S.C. 2704(d)(4). The 

OSFR coverage provisions of OPA 

establish minimum and maximum 

coverage amounts for any activity 

involving a COF. The OSFR coverage 

amounts are found in OPA at 33 U.S.C. 

2716(c) and in the regulations at 30 CFR 

553.13. 

Unlike the evidence of financial 

responsibility requirements applicable 

to vessels and deepwater ports, which 

are administered by the Coast Guard 

and are directly tied to the applicable 

CPI-adjusted limits of liability, OSFR 

coverage requirements are not directly 

tied to, and their levels do not 

automatically increase with changes in, 

the offshore facility limit of liability. 

OPA does not authorize an OSFR 

increase based solely on an increase in 

the limit of liability for offshore 

facilities occasioned by CPI 

adjustments. Rather, as stated in 33 

U.S.C. 2716(c)(1)(C), any adjustment to 

the required OSFR coverage amount 

must be separately ‘‘justified based on 

the relative operational, environmental, 

human health, and other risks posed by 

the quantity or quality of oil that is 

explored for, drilled for, produced, or 

transported by the responsible party 

. . . .’’ 

BOEM specifically requested 

comments on any potential OSFR 

insurance underwriter premium 

increases. We received no comments 

related to OSFR insurance premiums 

during the proposed rule comment 

period. 

Additional Regulatory Changes in 30 

CFR Part 553 

Section 553.1 of this rule, consistent 

with the proposed rule, expands the 

purpose section to include adjusting the 

limit of liability. In section 553.3, the 

final rule also adds, consistent with the 

proposed rule, the following three new 

definitions to facilitate the 

implementation of the inflation 

adjustment process: Annual CPI–U, 

Current Period, and Previous Period. It 

also adds a new definition for 

Responsible Party, in the context of 

Subpart G. 

Discussion of This Rule 

I. Explanation of the CPI Adjustment to 

the Offshore Facility Limit of Liability 

for Damages 

This rule implements the first 

adjustment, mandated by 33 U.S.C. 

2704(d)(4), to the OPA limit of liability 

for damages caused by the responsible 

party for a facility from which oil is 

discharged, or which poses the 

substantial threat of a discharge from 

offshore facilities other than deepwater 

ports to reflect significant increases in 

the CPI. This rule also establishes the 

methodology that BOEM will use to 

make periodic CPI adjustments to the 

OPA offshore facility limit of liability 

for damages. These provisions are 

encompassed in a new 30 CFR part 553 

subpart G. 

1. How will BOEM calculate CPI 

adjustments to the limit of liability for 

offshore facilities? 

BOEM will calculate the new limit of 

liability for the offshore facility source 

category using the following formula: 

New limit of liability = Previous limit of 

liability + (Previous limit of liability 

multiplied by the decimal equivalent of 

the percent change in the CPI from the 

year the previous limit of liability was 

established, or last adjusted by statute or 

regulation, whichever is later, to the 

present year), then rounded to the 

closest $100. 

2. Which CPI will BOEM use? 

The Bureau of Labor Statistics (BLS) 

publishes a variety of inflation indices, 

including the ‘‘Consumer Price Index— 

All Urban Consumers, Not Seasonally 

Adjusted, U.S. City Average, All Items, 

1982–84 = 100,’’ also known as ‘‘CPI– 

U,’’ for both monthly and annual 

periods. Consistent with the Coast 

Guard regulations at 33 CFR 138.240, 

BOEM will use CPI–U values, which 

may be viewed on the BLS Web site at: 

http://www.bls.gov/cpi/cpifiles/

cpiai.txt. For consistency with the Coast 

Guard’s limits of liability CPI 

adjustment rule, BOEM will use the 

annual period CPI–U (hereinafter the 

‘‘Annual CPI–U’’), rather than the 

monthly period CPI–U. 

3. How will BOEM calculate the percent 

change in the Annual CPI–U? 

Consistent with the Coast Guard’s 

inflation adjustment methodology, 

BOEM will calculate the percent change 

in the Annual CPI–U using the BLS 

escalation formula described in Fact 

Sheet 00–1, U.S. Department of Labor 

Program Highlights, ‘‘How to Use the 

Consumer Price Index for Escalation,’’ 

September 2000. This formula provides 

that: Percent change in the Annual CPI– 

U = [(Annual CPI–U for Current 

Period—Annual CPI–U for Previous 

Period) ÷ Annual CPI–U for Previous 

Period] × 100. Fact Sheet 00–1 is 

available from the BLS online at http:// 

www.bls.gov/cpi/cpi1998d.pdf. 

4. Which Annual CPI–U ‘‘Previous 

Period’’ and ‘‘Current Period’’ will 

BOEM use for its first inflation 

adjustment to the offshore facility limit 

of liability? 

To maintain the real value of the 

amount of liability authorized by OPA 

for damages, as contemplated in the 

original OPA mandate that directed the 

limit of liability be adjusted for the CPI, 

BOEM will use a ‘‘Previous Period’’ of 

1990, the year OPA was enacted. For the 

‘‘Current Period,’’ BOEM will use the 

most recently published Annual CPI–U 

(see 30 CFR 553.703(a)). The latter is 

consistent with the Coast Guard’s OPA 

limits of liability rule at 33 CFR 138.240 

for vessels and deep water ports. 

For the calculations in this rule, 

BOEM has used the 2013 Annual CPI– 

U, published on January 16, 2014. 

Future updates will proceed on a 3-year 

schedule, as provided in 30 CFR 

553.703. 

5. How has BOEM calculated the 

adjustment to the limit of liability and 

what is the new limit? 

The following illustrates how BOEM 

will apply the BLS escalation formula to 

calculate the decimal equivalent of the 

percent change in the Annual CPI–U to 

adjust the limit of liability for offshore 

facilities. The Annual CPI–U (index 

base period (1982–84 = 100)) for Current 

Period (2013): 232.957 ¥ Annual CPI– 

U for Previous Period (1990): 130.7 = an 

index point change: 102.257 ÷ Annual 

CPI–U for Previous Period: 130.7 = 

0.782; result multiplied by 100: 0.782 × 

100 = percent change in the Annual 

CPI–U of 78.2 percent. Note that the 

cumulative percent change value is 

rounded to one decimal place as 

provided in § 553.703. 

The ‘‘Current Period’’ value for this 

methodology is the Annual CPI–U for 

the previous calendar year, due to the 

BLS Annual CPI–U publication 

schedule. 

Applying these values, this final rule 

adjusts the statutory offshore facility 

limit of liability for OPA damages of $75 

million by the 78.2 percent increase in 

the Consumer Price Index Annual (CPI– 

U) that has taken place since 1990, to 

$133,650,000. 

6. How will BOEM calculate the percent 

change for subsequent inflation 

adjustments to the OPA limit of liability 

for offshore facilities? 

This rule establishes the adjustment 

methodology BOEM will use for 

subsequent CPI adjustments to the OPA 

limit of liability for offshore facilities. 

Key features for the future inflation 

adjustments to the limit of liability 

include: 


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Federal Register / Vol. 79, No. 239 / Friday, December 12, 2014 / Rules and Regulations 73835 

• BOEM plans to publish, through a 

final rule in the Federal Register, the 

inflation adjustments to the limit of 

liability for offshore facilities every 

three years, counting from 2014 with 

this rulemaking, provided that the 

threshold for a significant increase in 

the Annual CPI–U is met. A three 

percent or more change constitutes the 

significant increase threshold. The 

current adjustment uses the 2013 

Annual CPI–U for the ‘‘Current Period.’’ 

• BOEM has discretion to adjust the 

offshore facility limit of liability more 

frequently than every three years, by 

regulation, to reflect significant 

increases in the CPI. 

• If Congress amends the limit of 

liability for offshore facilities, BOEM 

will calculate the Annual CPI–U change 

with the ‘‘Previous Period’’ beginning 

with the year in which Congress amends 

the limit of liability. Otherwise we will 

calculate the percent change in the CPI– 

U for the next CPI adjustment to the 

offshore facility limit using the 2013 

Annual CPI–U (the ‘‘Current Period’’ for 

today’s adjustment to the limit of 

liability) as the ‘‘Previous Period’’ value. 

• BOEM will evaluate whether the 

cumulative percent change in the 

Annual CPI–U since the last adjustment 

has exceeded three percent no later than 

2017 (using the 2016 Annual CPI–U as 

the ‘‘Current Period’’). If the change is 

three percent or greater, BOEM will 

publish a final rule in the Federal 

Register with the new inflation-adjusted 

offshore facility limit of liability. If, by 

the end of the three-year period, the 

cumulative percent change in the 

Annual CPI–U is less than three percent, 

BOEM will publish a notice in the 

Federal Register of no inflation 

adjustment to the limit of liability. 

• Following a notice of no inflation 

adjustment, BOEM will evaluate the 

cumulative percent change in the 

Annual CPI–U annually and adjust the 

limit based on the cumulative percent 

change in the Annual CPI–U, once the 

three-percent threshold is reached. After 

this adjustment is made, BOEM will 

resume its process of conducting a 

review every three years. 

7. How will BOEM provide public notice 

for the offshore facility limit of liability 

adjustments? 

BOEM will publish subsequent CPI or 

statutory adjustments to the offshore 

facility limit of liability for damages in 

a final rule in the Federal Register. A 

final rule will provide for timely notice 

of the CPI adjustments and will keep the 

offshore facility limit of liability amount 

current in BOEM regulations. 

II. Additional Changes to 30 CFR Part 

553 

1. Update to Section 553.1 (What is the 

purpose of this part?’’) 

Consistent with the proposed rule, 

BOEM is making the following changes 

to 30 CFR part 553, setting forth the 

limit of liability for offshore facilities 

under OPA. 

2. Definition Changes for Terms Found 

at 30 CFR 553.3 (‘‘How are the terms 

used in this regulation defined?’’) 

BOEM is adding the following 

definitions to 30 CFR 553.3: Annual 

CPI–U, current period, previous period 

and Responsible party for purposes of 

Subpart G. 

Changes Made Between the Proposed 

Rule and This Final Rule 

The proposed rule would have 

revised the definition of ‘‘responsible 

party’’ in the existing regulation at 30 

CFR 553.3, which addresses the party’s 

responsibilities for COFs under the 

OSFR program. While the existing 

definition of ‘‘responsible party’’ 

adequately addresses the needs of the 

OSFR program, it does not contemplate 

the broader range of facilities that are 

covered by the limit of liability for 

offshore facilities under OPA at 33 

U.S.C. 2704. In the context of OPA 

liability, a responsible party’s liability is 

not limited to damages or removal costs 

associated with a COF. In this final rule, 

the new definition of ‘‘responsible 

party’’ for the limit of liability for 

offshore facilities in subpart G now 

makes clear that it also applies to all 

offshore facilities, whether the facilities 

are COFs (subject to the financial 

responsibility requirements of subparts 

A through F), or not, while the existing 

definition of ‘‘responsible party’’ for 

OSFR remains unchanged. 

Further, BOEM has removed the 

following sentence from the definition 

of ‘‘responsible party’’ that appeared in 

the notice of proposed rulemaking: ‘‘The 

owner of operating rights in a lease is a 

responsible party with respect to 

facilities that serve or served an area 

and depth in which it holds operating 

rights, but not with respect to any 

facility that only serves parts of the 

lease to which it does not hold 

operating rights.’’ A lessee of the area in 

which the facility is located is a 

responsible party under OPA at sec. 

2701(32)(C). The definition of 

‘‘responsible party’’ in both the 

proposed rule and in this final rule 

includes lessees as responsible parties. 

BOEM’s definition of ‘‘lessee’’ in its 

existing regulation at 30 CFR 553.3 

(which is not changed by this final rule) 

includes a holder of operating rights 

(working interest owner). Therefore, 

when read together, the definition of 

‘‘responsible party’’ without the 

described sentence and the definition of 

‘‘lessee’’ hold operating rights owners 

responsible, making this sentence 

unnecessary. To reinforce this 

connection between the definitions, 

BOEM has added a phrase in the second 

sentence of the definition of 

‘‘responsible party for purposes of 

Subpart G’’ to expressly state that a 

responsible party includes lessees ‘‘as 

defined in this subpart.’’ 

Response to Comments 

BOEM published a proposed rule 

entitled, ‘‘Consumer Price Index 

Adjustments of the Oil Pollution Act of 

1990 Limit of Liability for Offshore 

Facilities’’ in the Federal Register on 

February 24, 2014, with a 30 day request 

for comment period. The comment 

period was extended by an additional 

30 days on March 26, 2014. The 

comment period ended on April 25, 

2014. BOEM received a number of 

comment letters from interested 

stakeholders, and carefully considered 

them prior to finalizing the rulemaking. 

Sixteen distinct written comments, 

eight from organizations and eight from 

individuals, were submitted regarding 

the proposed rule. Of the organizations, 

BOEM received three comments from 

industry/trade associations, one from a 

charitable trust, and the four remaining 

comments, submitted on behalf of a 

total of 17 organizations, were from 

environmental organizations. None of 

the comments that BOEM received 

expressed any opposition to the 

proposed increase in the limit of 

liability for offshore facilities. 

One company, ConocoPhillips, 

supported the rule as proposed; while 

other industry organizations, the 

Independent Petroleum Association of 

America and the National Ocean 

Industries Association took no position 

on the proposed rule. The Pew 

Charitable Trust, the Gulf Restoration 

Network, the Ocean Conservancy, and 

five of the individual commenters 

supported the rule as proposed. 

The Alaska Wilderness League, the 

Center for Biological Diversity (CBD), 

the Alaska Inter-Tribal Council, the 

Citizens’ Coalition to Ban Toxic 

Dispersants, Clean Ocean Action, 

Defenders of Wildlife, Friends of the 

Earth, Greenpeace, Hands Across the 

Sand, the Natural Resources Defense 

Council, the Northern Alaska 

Environmental Center, Oasis Earth, 

Ocean Conservation Research, Pacific 

Environment, and the Surfrider 

Foundation also supported the proposed 


rljohnson on DSK3VPTVN1PROD with RULES
73836 Federal Register / Vol. 79, No. 239 / Friday, December 12, 2014 / Rules and Regulations 

increase, but argued that the amount of 

increase is too small. The CBD 

suggested an alternative limit of 

between $20 and $50 billion. 

With one exception, all of the 

comments expressed support for the 

proposed inflation index and 

methodology, which BOEM proposed to 

use to adjust the limit of liability on an 

ongoing basis. BOEM received a 

comment suggesting the Chained CPI–U 

(C–CPI–U) be used instead of the 

standard CPI–U for adjusting the 

offshore facility limit of liability. The 

commenter suggested that the C–CPI–U 

is a ‘‘closer approximation to a cost-ofliving index’’ than the CPI–U. 

Responses to those comments are 

contained in the table below. 

Comment received BOEM response 

Commenter Tupper suggested that BOEM should use a chained Consumer Price Index (C–CPI–U) instead of the CPI for All Urban Consumers (CPI–U).That issue is addressed in detail at the end of this Section. 

Commenter Tupper also suggested that the update methodology 

should include a mechanism for adjusting the limit for offshore facilities downward, as well as upward, to account for potential deflation, 

as well as inflation.

BOEM’s authority to increase the financial responsibility requirements 

is limited to the circumstances and amount set forth in 33 U.S.C. 

2716(c)(1)(C). 

The Oil Pollution Act does not have any provision to allow for downward revisions in the limits of liability for deflation. In addition to the 

statutory restriction, BOEM believes that the limit of liability is already 

potentially too low and that any downward adjustment would conflict 

with the goals of the statute. For these reasons, the adjustment formula is not revised to allow for downward adjustments in the limit of 

liability amount. 

The CBD and its co-respondents suggested that BOEM ‘‘should also 

increase the financial responsibility requirements to ensure that companies in fact have the capability to meet the increased liability requirements’’.

BOEM’s authority to increase the financial responsibility requirements 

is limited to the circumstances and amount set forth in 33 U.S.C. 

2716(c)(1)(C). 

Commenter Dobkin suggested that the state and federal tax deductibility of payments made in connection with an oil spill be eliminated.Laws related to taxation are outside the scope of this rule and not within BOEM’s authority to regulate. 

Commenter Commeaux suggested that an automatic stop-work order 

be issued in the event of a spill.

Stop work orders are outside the scope of this rule. 

Commenter Commeaux also suggested that criminal penalties be implemented against those responsible for any spill.Authority to invoke criminal penalties against those responsible for oil 

spills is outside the scope of this rule and not within BOEM or the 

DOI’s authority to regulate. 

Commenter Commeaux also implied that new or increased civil penalties be considered against those responsible for any spill.Authority to impose or increase civil penalties against those responsible for oil spills is outside the scope of this rule and not within 

BOEM or the DOI’s authority to regulate. 

Commenter Donovan suggested that BOEM redefine the meaning of 

the word ‘‘expenditure’’ as used in the context of any oil spill. ‘‘. . . 

the proper definition of the term ‘‘expenditure,’’ under the OSLTF, 

means an expenditure that is not reimbursed by the responsible 

party.’’ Mr. Donovan explains why he believes this change would be 

appropriate: ‘‘The advantage of defining an expenditure, under the 

OSLTF, as ‘‘an expenditure that is not reimbursed by the responsible 

party,’’ is twofold: (a) It eliminates, without the need to pass retroactive legislation, the $1 billion cap which may be paid from the 

OSLTF with respect to any single incident and allows the OSLTF to 

maintain a balance of at least $1 billion for the purpose of paying 

claims for damages resulting from other oil spill incidents. As the 

OSLTF pool of $1 billion is depleted by payments made to oil spill 

claimants, it is replenished, by virtue of subrogation, by reimbursements made to the OSLTF by the responsible party; and (b) It ensures that the cost of a catastrophic oil spill incident shall be borne 

by the responsible party, not the federal taxpayer’’.

Interpreting the meaning of the word ‘‘expenditure,’’ as used in 26 

U.S.C. 9509(c) (per incident cap on Oil Spill Liability Trust Funds 

(OSLTF) expenditures), is outside the scope of this rule and not 

within BOEM or the DOI’s authority to regulate. 

The CPI–U measures prices of a base 

basket, which uses a single expenditure 

base period to compute the price change 

over time; in contrast, the C–CPI–U, 

which the commenter suggested, reflects 

the effect of any substitutions 

consumers make across item categories 

in response to relative price changes. 

BOEM is retaining the CPI–U for several 

reasons. 

(a) The adjustment of the limit of 

liability addresses inflation since 1990 

when the current offshore facility limit 

was established. The C–CPI–U was first 

published by Bureau of Labor Statistics 

(BLS) in 2002, with a historical series 

dating back to 1999. The officially 

published C–CPI–U series from BLS 

does not extend back to 1990. Although 

it may be possible to join the published 

C–CPI–U with the older, non-chained 

CPI–U series or with data not included 

in the officially published C–CPI–U, 

such an adjustment would not represent 

an official BLS statistical series. 

Therefore, to ensure a consistent 

adjustment to reflect inflation, this rule 

uses the CPI–U. 

(b) The CPI–U was the primary CPI 

measure at the time of the Delaware 

River Protection Act (DRPA) OPA 

amendments in 2006 (Pub. L. 109–241). 

The DRPA amendments maintained the 

requirement of three year adjustments to 

‘‘reflect significant increases in the 

Consumer price Index.’’ In addition, the 

C–CPI–U was available when DRPA 

amended the limits of liability 

adjustment provision of OPA, 33 U.S.C. 

2704(d)(4), and Congress could have, 

but did not, require its use. 

(c) The CPI–U is the most frequently 

used escalation variable in private 

sector collective bargaining agreements, 

rental contracts, and insurance policies 

with automatic inflation protection. 

(d) Also, the U.S. Coast Guard uses 

the CPI–U for the OPA limit of liability 


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adjustments under its jurisdiction. 

Based on this and the three previous 

considerations, BOEM has concluded 

that the C–CPI–U does not provide a 

compelling advantage for more accurate 

price measurements of changes in 

potential liabilities under this 

rulemaking. 

Summary of Changes to 30 CFR Part 

553 by Subpart 

Amendments to Subpart A 

Changes to sections 553.1 and 553.3, 

as described above. 

Amendments to Subpart B 

None. 

Amendments to Subpart C 

None. 

Amendments to Subpart D 

None. 

Amendments to Subpart E 

None. 

Amendments to Subpart F 

None. 

Addition of New Subpart G 

New Subpart, as described above. 

Legal and Regulatory Analyses 

Presidential Executive Orders 

E.O. 12630—Takings Implication 

Assessment 

According to Executive Order 12630, 

this final rule does not have significant 

takings implications. The rulemaking is 

not a governmental action capable of 

interfering with constitutionally 

protected property rights. A Takings 

Implication Assessment is not required. 

E.O. 12866—Regulatory Planning and 

Review 

The Office of Management and Budget 

(OMB) has not reviewed this rulemaking 

under section 6(a)(3) of E.O. 12866. 

BOEM does not believe this rulemaking 

constitutes a ‘‘significant regulatory 

action’’ under E.O. 12866 based on the 

following: 

(1) These provisions simply adjust the 

offshore facility limit of liability for 

damages by the CPI. This rule will likely 

not have an annual effect of $100 

million or more on the economy. It will 

likely also not adversely affect in a 

material way the economy, productivity, 

competition, jobs, the environment, 

public health or safety, or State, local, 

or tribal governments or communities. 

The new offshore facility limit of 

liability increases the pollution liability 

of offshore facility responsible parties 

and may result in increased costs if 

damages exceed $75 million. If damages 

from an offshore facility oil spill exceed 

$75 million, the higher limit of liability 

($133.65 million) in this rule will 

impose greater nominal costs on the 

responsible parties. In constant 1990 

dollars, the limit of liability for offshore 

facilities implemented by this final rule 

is the same as established in OPA and 

preserves the ‘‘polluter pays’’ principle. 

The infrequent occurrence of large oil 

spills from offshore facilities suggests 

that the compliance costs from this 

increase in the limit of liability are 

likely to be immaterial to the operating 

costs for offshore facility responsible 

parties over time. 

(2) This final rule would not create a 

serious inconsistency or otherwise 

interfere with an action taken or 

planned by another agency. BOEM has 

coordinated with the Coast Guard and 

the Department of Justice on this 

rulemaking. 

(3) This final rule would not alter the 

budgetary effects of entitlements, grants, 

user fees, or loan programs or the rights 

or obligations of their recipients. 

(4) This final rule does not raise any 

novel legal or policy issues. OPA 

requires the offshore facility limit of 

liability to be adjusted for inflation not 

less than every three years to reflect 

significant increases in the CPI. 

E.O. 12988—Civil Justice Reform 

This final rule complies with the 

requirements of E.O. 12988. 

Specifically, this rule: 

(a) Meets the criteria of section 3(a) 

requiring that all regulations be 

reviewed to eliminate errors and 

ambiguity and be written to minimize 

litigation; and 

(b) Meets the criteria of section 3(b)(2) 

requiring that all regulations be written 

in clear language and contain clear legal 

standards. 

E.O. 13045—Protection of Children 

From Environmental Health Risks and 

Safety Risks 

BOEM has analyzed this final rule 

under E.O. 13045, Protection of 

Children from Environmental Health 

Risks and Safety Risks. This final rule 

is not an economically significant rule 

and an analysis of environmental health 

risks is therefore not required. 

Regardless, this is an administrative rule 

and it does not create any 

environmental risk to health or any risk 

to safety that may disproportionately 

affect children. 

E.O. 13132—Federalism 

Under the criteria in E.O. 13132, this 

final rule does not have federalism 

implications. This final rule does not 

have substantial direct effects on the 

relationship between the Federal and 

State governments. This final rule will 

not affect the role of State and local 

governments with respect to their 

offshore facility activities. A Federalism 

Assessment is not required. 

E.O. 13175—Consultation and 

Coordination With Indian Tribal 

Governments 

This final rule does not have tribal 

implications under E.O. 13175, 

Consultation and Coordination with 

Indian Tribal Governments, because it 

does 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. Under 

the criteria in E.O. 13175, we evaluated 

this final rule and determined that it has 

no substantial direct effects on federally 

recognized Indian tribes. 

E.O. 13211—Effects on the Nation’s 

Energy Supply 

BOEM has analyzed this final rule 

under E.O. 13211, ‘‘Actions Concerning 

Regulations That Significantly Affect 

Energy Supply, Distribution, or Use.’’ 

BOEM has determined that it is not a 

‘‘significant energy action’’ under that 

order. This final rule is not likely to 

have a significant adverse effect on the 

supply, distribution, or use of energy. 

The Administrator of the Office of 

Information and Regulatory Affairs has 

not designated it as a significant energy 

action. Therefore, it does not require a 

Statement of Energy Effects under E.O. 

13211. 

E.O. 13563—Improving Regulation and 

Regulatory Review 

E.O. 13563 requires that our 

regulatory system protect public health, 

welfare, safety, and our environment 

while promoting economic growth, 

innovation, competitiveness, and job 

creation. It must be based on the best 

available science. It must allow for 

public participation and an open 

exchange of ideas. It must promote 

predictability and reduce uncertainty. It 

must identify and use the best, most 

innovative and least burdensome tools 

for achieving regulatory ends. It must 

take into account benefits and costs, 

both quantitative and qualitative. It 

must ensure that regulations are 

accessible, consistent, written in plain 

language, and easy to understand. It 

must measure, and seek to improve, the 

actual results of regulatory 

requirements. 


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This E.O. is supplemental to and 

reaffirms the principles, structures, and 

definitions governing contemporary 

regulatory review that were established 

in E.O. 12866. As stated in that E.O., 

and to the extent permitted by law, each 

agency must, among other things: (1) 

Propose or adopt a regulation only upon 

a reasoned determination that its 

benefits justify its costs (recognizing 

that some benefits and costs are difficult 

to quantify); (2) tailor its regulations to 

impose the least burden on society, 

consistent with obtaining regulatory 

objectives, taking into account, among 

other things, and to the extent 

practicable, the costs of cumulative 

regulations; (3) select, in choosing 

among alternative regulatory 

approaches, those approaches that 

maximize net benefits (including 

potential economic, environmental, 

public health and safety, and other 

advantages; distributive benefits; and 

equity); (4) to the extent feasible, specify 

performance objectives, rather than 

specifying the behavior or manner of 

compliance that regulated entities must 

adopt; and (5) identify and assess 

available alternatives to direct 

regulation, including providing 

economic incentives to encourage the 

desired behavior, such as user fees or 

marketable permits, or providing 

information with which choices can be 

made by the public. 

The increased offshore facility limit of 

liability for damages in this rulemaking 

is required by statute (OPA). This 

rulemaking does not amend the OSFR 

requirements in 30 CFR part 553. BOEM 

does not believe that OSFR insurance 

premiums will be significantly impacted 

by this rulemaking. BOEM solicited 

comments on that issue; however, no 

comments were received. The limit of 

liability increase is necessary to ensure 

that the deterrent effect and the 

‘‘polluter pays’’ principle embodied in 

OPA’s liability provisions are preserved. 

Clarity of this Regulation 

E.O. 12866 (section 1(b)(2)), E.O. 

12988 (section 3(b)(1)(B)), and, E.O. 

13563 (section 1(a)), and the 

Presidential Memorandum of June 1, 

1998, require that every agency write its 

rules in plain language. This means that, 

wherever possible, each rule must: (a) 

Have a logical organization; (b) use the 

active voice to address readers directly; 

(c) use common, everyday words, and 

clear language, rather than jargon; (d) 

use short sections and sentences; and (e) 

maximize the use of lists and tables. 

With the issuance of the proposed 

rule, BOEM requested that any 

commenters that believed that it has not 

met these requirements should send 

their comments to Peter Meffert at 

Peter.Meffert@boem.gov. To better help 

us revise the final rule, BOEM requested 

that your comments be as specific as 

possible. For example, BOEM asked 

whether any of the sections or the 

paragraphs were written unclearly, 

which sections or sentences were too 

long, what additional sections, lists or 

tables would be useful, etc. No 

comments were received on this topic. 

For that reason, BOEM has concluded 

that no changes in the clarity and 

organization of the rule are necessary. 

Public Availability of Comments 

All written comments that have been 

received in the docket [BOEM–2012– 

0076] for this rulemaking, including 

names and addresses of respondents, 

have been posted at 

www.regulations.gov. 

Statutes 

Data Quality Act 

In developing this final rule, BOEM 

did not conduct or use a study, 

experiment, or survey requiring peer 

review under the Data Quality Act (Pub. 

L. 106–554, app. C § 515, 114 Stat. 2763, 

2763A–153 to 154). 

National Environmental Policy Act 

(NEPA) of 1969 

This final rule does not constitute a 

major Federal action significantly 

affecting the quality of the human 

environment. BOEM has analyzed this 

final rule under the criteria of NEPA 

and DOI’s regulations implementing 

NEPA. This final rule meets the criteria 

set forth at 43 CFR 46.210(i) for a 

Departmental Categorical Exclusion in 

that this final rule is ‘‘. . . of an 

administrative, financial, legal, 

technical, or procedural nature . . .’’ 

BOEM also has analyzed this final rule 

to determine if it involves any of the 

extraordinary circumstances that would 

require an environmental assessment or 

an environmental impact statement, as 

set forth in 43 CFR 46.215, and 

concluded that this final rule would not 

involve any extraordinary 

circumstances. 

Further, this final rule involves 

congressionally mandated regulations 

and there is no discretion in the agency 

to be informed by NEPA analysis. 

National Technology Transfer and 

Advancement Act (NTTAA) 

The NTTAA, Public Law 104–113 (15 

U.S.C. 272 note) 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 final rule does not require the 

use of any technical specifications or 

standards and, therefore, the 

requirement to follow voluntary 

consensus standards does not apply to 

this rulemaking. 

Paperwork Reduction Act (PRA) of 

1995 

This rule does not contain new 

information collection requirements that 

require approval by OMB under the 

PRA (44 U.S.C. 3501 et seq.). OMB has 

reviewed and approved the information 

collection requirements associated with 

30 CFR 553 and assigned OMB Control 

Number 1010–0106, which expires 

December 31, 2016. BOEM may not 

conduct or sponsor and you are not 

required to respond to a collection of 

information unless it displays a 

currently valid OMB control number. 

Regulatory Flexibility Act (RFA) 

DOI certifies that this final rule would 

not have a significant economic effect 

on a substantial number of small entities 

under the RFA (5 U.S.C. 601 et seq.). 

The changes in this final rule will 

potentially affect all oil and gas lessees, 

operators of leases, holders or rights of 

use and easement, and pipeline right-ofway holders in the OCS and in State 

waters. The changes further may affect 

any operators of oil and gas facilities in 

other offshore locations, such as 

navigable rivers and lakes; however, the 

level of damages for inland water 

offshore facility incidents have 

historically been far below the statutory 

limit and are not likely to exceed the 

statutory limit of liability. Available 

information indicates that the changes 

would mainly affect about 170 active 

operators and owners on the OCS and 

State offshore waters. These 

approximately 170 operators and 

owners provide OSFR coverage for more 

than 7,800 OCS Right-of-Use and 

Easement (RUE) facilities, pipeline 

Rights-of-Way (ROWs), and leases (both 

with and without permanent facilities). 

Small lessees, ROW or RUE holders or 

operators that operate under this final 

rule primarily fall under the Small 

Business Administration’s North 

American Industry Classification 

System (NAICS) codes 211111, Crude 

Petroleum and Natural Gas Extraction, 

213111, Drilling Oil and Gas Wells and 


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Federal Register / Vol. 79, No. 239 / Friday, December 12, 2014 / Rules and Regulations 73839 

237120, Oil and Gas Pipeline and 

Related Structures. For these NAICS 

code classifications, a small company is 

one with fewer than 500 employees. 

Based on these criteria, an estimated 

two-thirds of these companies are 

considered small. This final rule, 

therefore, will affect a substantial 

number of small entities, but it would 

not have a significant economic effect 

on those entities, since the OSFR 

thresholds are not being adjusted. 

This final rule could impact certain 

OCS and other offshore operators and 

owners through negligibly higher 

insurance premiums. Most small 

entities do not self-insure, but rather 

share ownership with larger companies 

that provide them with OSFR coverage 

or else they obtain insurance for their 

OSFR obligations in the private 

marketplace. BOEM does not expect the 

78.2 percent increase in the limit of 

liability to cause the OSFR insurance 

premiums to materially increase 

because of the very low anticipated 

frequency of claims and because each 

guarantor’s or insurer’s exposure is 

limited to the OSFR prescribed coverage 

limit of $35 million or $150 million. 

Any potential increased insurance 

premium should be relatively 

insignificant as compared to the 

considerable operational costs and 

liability risks associated with activities 

on the OCS. This is true for even the 

smallest of OCS and other offshore 

operators and owners. BOEM welcomed 

specific comments on any expected or 

potential corresponding OSFR premium 

increases that may occur because of the 

increased limit of liability or for some 

related reason. No such comments were 

received. For this reason, BOEM 

believes that its original assessment was 

correct that no such OSFR premium 

increases will necessarily occur as a 

result of this rulemaking. 

The Small Business and Agriculture 

Regulatory Enforcement Ombudsman 

and 10 Regional Fairness Boards were 

established to receive comments from 

small businesses about Federal agency 

enforcement actions. The Ombudsman 

will annually rate an agency’s 

responsiveness to their comments and 

evaluate the enforcement activities. If 

you wish to comment on the actions of 

BOEM, call 1–888–734–3247. You may 

comment to the Small Business 

Administration without fear of 

retaliation. Allegations of 

discrimination/retaliation filed with the 

Small Business Administration will be 

investigated for appropriate action. 

Small Business Regulatory Enforcement 

Fairness Act 

Pursuant to section 213(a) of the 

Small Business Regulatory Enforcement 

Fairness Act of 1996 (Pub. L. 104–121), 

BOEM wants to assist small entities in 

understanding this final rule so that 

they can better evaluate its effects and 

participate in the rulemaking. If you 

believe that this final rule will affect 

your small business, organization, or 

governmental jurisdiction and you have 

questions concerning its provisions or 

options for compliance, please contact 

Marshall Rose, of the BOEM Economics 

Division, at the address in the Technical 

Information Section listed above. 

This final rule is not a major rule 

under the Small Business Regulatory 

Enforcement Fairness Act (5 U.S.C. 

804(2)). This rule will not: 

• Have an annual effect on the 

economy of $100 million or more; 

• cause a major increase in costs or 

prices for consumers, individual 

industries, Federal, State, or local 

government agencies, or geographic 

regions; or, 

• have significant adverse effects on 

competition, employment, investment, 

productivity, innovation, or the ability 

of U.S.-based enterprises to compete 

with foreign-based enterprises. The 

requirements of this rule will apply to 

all entities having oil and gas operations 

offshore, including in State waters. 

Based on the maximum potential 

worst case oil spill discharge, 

approximately 110 of the 170 companies 

with covered offshore facilities are 

required to demonstrate OSFR coverage 

of $70 million or less (see 30 CFR 

553.13). These 110 companies will 

likely not experience any insurance 

premium increases because of the 

increased limit of liability, since the 

level of required OSFR is not impacted 

by the offshore limit of liability 

adjustment to $133.65 million. Another 

five companies must demonstrate OSFR 

coverage of $105 million. BOEM 

believes that these companies are 

unlikely to experience increased 

insurance premiums resulting from the 

increased offshore facility limit of 

liability, just as the few companies 

demonstrating the $150 million in OSFR 

coverage that are not self-insured or 

guaranteed are unlikely to be affected by 

this rule. 

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 businesses. If 

you wish to comment on actions by 

employees of BOEM, call 1–888–REG– 

FAIR (1–888–734–3247). 

Unfunded Mandates Reform Act of 

1995 

This final rule will not impose an 

unfunded mandate on State, local, or 

tribal governments, or the private sector, 

of more than $100 million per year. The 

final rule will not have a significant or 

unique effect on State, local, or tribal 

governments or the private sector. A 

statement containing the information 

required by the Unfunded Mandates 

Reform Act (2 U.S.C. 1501 et seq.) is not 

required. 

List of Subjects in 30 CFR Part 553 

Administrative practice and 

procedure, Continental shelf, Economic 

analysis, Environmental impact 

statements, Environmental protection, 

Financial responsibility, Government 

contracts, Intergovernmental relations, 

Investigations, OCS, Oil and gas 

exploration, Oil pollution, Liability, 

Limit of liability, Penalties, Pipelines, 

Public lands—mineral resources, Public 

lands—rights-of-way, Reporting and 

recordkeeping requirements, Surety 

bonds, Treasury securities. 

Janice M. Schneider, 

Assistant Secretary—Land and Minerals 

Management. 

For the reasons stated in the 

preamble, the Bureau of Ocean Energy 

Management amends 30 CFR part 553 as 

follows: 

PART 553—OIL SPILL FINANCIAL 

RESPONSIBILITY FOR OFFSHORE 

FACILITIES 

■ 1. Revise the authority citation for part 

553 to read as follows: 

Authority: 33 U.S.C. 2704, 2716; E.O. 

12777, as amended. 

■ 2. Revise § 553.1 to read as follows: 

§ 553.1 What is the purpose of this part? 

This part establishes the requirements 

for demonstrating Oil Spill Financial 

Responsibility for covered offshore 

facilities (COF), sets forth the 

procedures for claims against COF 

guarantors, and sets forth the limit of 

liability for offshore facilities, as 

adjusted, under Title I of the Oil 

Pollution Act of 1990, as amended, 33 

U.S.C. 2701 et seq. (OPA). 

■ 3. Amend § 553.3 by: 

■ a. Adding in alphabetical order the 

definitions of ‘‘Annual CPI–U,’’ 


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73840 Federal Register / Vol. 79, No. 239 / Friday, December 12, 2014 / Rules and Regulations 

‘‘Current period,’’ and ‘‘Previous 

period;’’ 

■ b. Revising the definition of 

‘‘Responsible party’’ to read as follows: 

§ 553.3 How are the terms used in this 

regulation defined? 

§ 553.3 How are the terms used in this 

regulation defined? 

* * * * * 

Annual CPI–U means the annual 

‘‘Consumer Price Index-All Urban 

Consumers, Not Seasonally Adjusted, 

U.S. City Average, All items, 1982 ¥ 84 

= 100,’’ published by the U.S. 

Department of Labor, Bureau of Labor 

Statistics. 

* * * * * 

Current period means the year in 

which the Annual CPI–U was most 

recently published by the U.S. 

Department of Labor, Bureau of Labor 

Statistics. 

* * * * * 

Previous period means the year in 

which the previous limit of liability was 

established, or last adjusted by statute or 

regulation, whichever is later. 

Responsible party, for purposes of 

subparts B through F, has the following 

meanings: 

(1) For a COF that is a pipeline, 

responsible party means any person 

owning or operating the pipeline; 

(2) For a COF that is not a pipeline, 

responsible party means either the 

lessee or permittee of the area in which 

the COF is located, or the holder of a 

right-of-use and easement granted under 

applicable State law or the OCSLA (43 

U.S.C. 1301–1356) for the area in which 

the COF is located (if the holder is a 

different person than the lessee or 

permittee). A Federal agency, State, 

municipality, commission, or political 

subdivision of a State, or any interstate 

body that as owner transfers possession 

and right to use the property to another 

person by lease, assignment, or permit 

is not a responsible party; and 

(3) For an abandoned COF, 

responsible party means any person 

who would have been a responsible 

party for the COF immediately before 

abandonment. 

Responsible party, for purposes of 

subpart G, has the meaning in 33 U.S.C. 

2701(32)(C), (E) and (F). This definition 

includes, as applicable, lessees as 

defined in this subpart, permittees, 

right-of-use and easement holders, and 

pipeline owners and operators. 

* * * * * 

■ 4. Add a new subpart G to part 553 

to read as follows: 

Subpart G—Limit of Liability for 

Offshore Facilities 

Sec. 

553.700 What is the scope of this subpart? 

553.701 To which entities does this subpart 

apply? 

553.702 What limit of liability applies to 

my offshore facility? 

553.703 What is the procedure for 

calculating the limit of liability 

adjustment for inflation? 

553.704 How will BOEM publish the 

offshore facility limit of liability 

adjustment? 

§ 553.700 What is the scope of this 

subpart? 

This subpart sets forth the limit of 

liability for damages for offshore 

facilities under Title I of the Oil 

Pollution Act of 1990, as amended (33 

U.S.C. 2701 et seq.) (OPA), as adjusted, 

under section 1004(d) of OPA (33 U.S.C. 

2704(d)). This subpart also sets forth the 

method for adjusting the limit of 

liability for damages for offshore 

facilities for inflation, by regulation, 

under section 1004(d) of OPA (33 U.S.C. 

2704(d)). 

§ 553.701 To which entities does this 

subpart apply? 

This subpart applies to you if you are 

a responsible party for an offshore 

facility, other than a deepwater port 

under the Deepwater Port Act of 1974 

(33 U.S.C. 1501–1524), but including an 

offshore pipeline, or an abandoned 

offshore facility, including any 

abandoned offshore pipeline, unless 

your liability is unlimited under OPA 

90 (33 U.S.C. 2704(c)). 

§ 553.702 What limit of liability applies to 

my offshore facility? 

Except as provided in 33 U.S.C. 

2704(c), the limit of liability under OPA 

for a responsible party for any offshore 

facility, including any offshore pipeline, 

is the total of all removal costs plus 

$133.65 million for damages with 

respect to each incident. 

§ 553.703 What is the procedure for 

calculating the limit of liability adjustment 

for inflation? 

The procedure for calculating limit of 

liability adjustments for inflation is as 

follows: 

(a) Formula for calculating a 

cumulative percent change in the 

Annual CPI–U. BOEM calculates the 

cumulative percent change in the 

Annual CPI–U from the year the limit of 

liability was established by statute, or 

last adjusted by regulation, whichever is 

later (i.e., the Previous Period), to the 

year in which the Annual CPI–U is most 

recently published (i.e., the Current 

Period), using the following formula: 

Percent change in the Annual CPI–U = 

[(Annual CPI–U for Current Period ¥ 

Annual CPI–U for Previous Period) ÷ 

Annual CPI–U for Previous Period] × 

100. This cumulative percent change 

value is rounded to one decimal place. 

(b) Significance threshold. 

(1) A cumulative increase in the 

Annual CPI–U equal to three percent or 

more constitutes a significant increase 

in the Consumer Price Index within the 

meaning of 33 U.S.C. 2704(d)(4). 

(2) Not later than every three years 

from the year the limit of liability was 

last adjusted for inflation, BOEM will 

evaluate whether the cumulative 

percent change in the Annual CPI–U 

since that year has reached a 

significance threshold of three percent 

or greater. 

(3) For any three-year period 

evaluated under paragraph (b)(2) of this 

section in which the cumulative percent 

increase in the Annual CPI–U is less 

than three percent, if BOEM has not 

issued an inflation adjustment during 

that period, BOEM will publish a notice 

of no inflation adjustment to the 

offshore facility limit of liability for 

damages in the Federal Register. 

(4) Once the three-percent threshold 

is reached, BOEM will increase by final 

rule the offshore facility limit of liability 

for damages in § 553.702 by an amount 

equal to the cumulative percent change 

in the Annual CPI–U from the year the 

limit was established by statute, or last 

adjusted by regulation, whichever is 

later. After this adjustment is made, 

BOEM will resume its process of 

conducting a review every three years. 

(5) Nothing in this section will 

prevent BOEM, in BOEM’s sole 

discretion, from adjusting the offshore 

facility limit of liability for damages for 

inflation by regulation issued more 

frequently than every three years. 

(c) Formula for calculating inflation 

adjustments. BOEM calculates 

adjustments to the offshore facility limit 

of liability in 30 CFR 553.702 for 

inflation using the following formula: 

New limit of liability = Previous limit of 

liability + (Previous limit of liability 

× the decimal equivalent of the 

percent change in the Annual CPI– 

U calculated under paragraph (a) of 

this section), then rounded to the 

closest $100. 

§ 553.704 How will BOEM publish the 

offshore facility limit of liability adjustment? 

BOEM will publish the inflationadjusted limit of liability, and any 

statutory amendments to that limit of 

liability in the Federal Register, as 

amendments to § 553.702. Updates to 

the limit of liability under this section 

are effective on the 90th day after 


rljohnson on DSK3VPTVN1PROD with RULES
Federal Register / Vol. 79, No. 239 / Friday, December 12, 2014 / Rules and Regulations 73841 

publication in the Federal Register of 

the amendments to § 553.702, unless 

otherwise specified by statute (in the 

event of a statutory amendment to the 

limit of liability), or in the Federal 

Register rule amending § 553.702. 

[FR Doc. 2014–29093 Filed 12–11–14; 8:45 am] 

BILLING CODE 4310–MR–P 

DEPARTMENT OF THE TREASURY 

Fiscal Service 

31 CFR Part 210 

RIN 1510–AB24 

Federal Government Participation in 

the Automated Clearing House 

AGENCY: Bureau of the Fiscal Service, 

Treasury. 

ACTION: Final rule; technical correction. 

SUMMARY: This document corrects a 

technical error that appeared in the July 

24, 2014 amendments to our regulation 

governing the use of the Automated 

Clearing House (ACH) network by 

Federal agencies. 

DATES: This technical correction is 

effective December 12, 2014. 

FOR FURTHER INFORMATION CONTACT: Ian 

Macoy, Director, Settlement Services 

Division, at (202) 874–6835 or 

ian.macoy@fiscal.treasury.gov or Natalie 

H. Diana, Senior Counsel, at (202) 874– 

6680 or natalie.diana@

fiscal.treasury.gov. 

SUPPLEMENTARY INFORMATION: 

Background 

On July 24, 2014, the Bureau of the 

Fiscal Service (Service) published a 

final rule in the Federal Register (79 FR 

42974) to amend our regulation at 31 

CFR part 210 (Part 210) governing the 

use of the ACH network by Federal 

agencies. Among the revisions to Part 

210 that were published in the final rule 

were several non-substantive changes to 

§ 210.8(b) to reflect the re-numbering of 

the NACHA Rules and the updated 

citation to the Consumer Financial 

Protection Bureau’s Regulation E. In 

revising § 210.8(b), subparagraphs (1) 

and (2) of paragraph (b) were 

inadvertently omitted due to a drafting 

error. 

Description of Correction 

This action corrects the omission of 

paragraphs (b)(1) and (2) from 

§ 210.8(b). In the section-by-section 

analysis of the final rule preamble 

published on July 24, 2014, the Service 

stated that the changes to § 210.8 

consisted of the replacement of specific 

ACH Rules references to reflect renumbering of the ACH Rules and the 

updating of the regulatory citation to 

Regulation E to reflect its re-codification 

at 12 CFR part 1005. There was no 

indication in the section-by-section 

analysis or discussion elsewhere in the 

preamble of the deletion of 

subparagraphs (1) and (2), which have 

no relation to the reasons for the 

technical revisions to § 210.8, i.e., the 

re-numbering of the ACH Rules and the 

re-codification of Regulation E. 

Similarly, there was no proposal to 

make any substantive change to § 210.8 

in the preamble or section-by-section 

analysis of the Service’s notice of 

proposed rulemaking to amend Part 210, 

which was published on December 12, 

2013 (78 FR 75528). Subparagraphs (1) 

and (2) were omitted by error from the 

final rule purely due to a drafting error 

in which the text of the subparagraphs 

was not included in the amendatory 

instructions to § 210.8(b). 

Procedural Matters 

Section 553 of the Administrative 

Procedure Act (APA) (5 U.S.C. 

553(b)(3)(B)) provides that, when an 

agency for good cause finds that notice 

and public procedure are impracticable, 

unnecessary or contrary to the public 

interest, and provides a statement of the 

reasons for that finding, the agency may 

issue a final rule without providing 

notice and an opportunity for public 

comment. The APA also generally 

requires that a final rule be effective no 

sooner than 30 days after the date of 

publication in the Federal Register. 

This 30-day delay in effective date can 

be waived, however, if an agency finds 

good cause why the effective date 

should not be delayed, and the agency 

incorporates a statement of the findings 

and its reasons in the rule issued. 

The Service finds that there is good 

cause, and that it would be contrary to 

the public interest and unnecessary, to 

undertake notice and comment 

procedures to make this technical 

correction. As discussed above, the 

preamble and the section-by-section 

analysis to both the notice of proposed 

rulemaking and the final rule 

amendments correctly refer to and 

discuss the substance of the section 

affected by this technical correction. 

The Service is also waiving the 30-day 

delay in effective date for this 

correction. We believe that it is in the 

public interest to ensure that the 

correction be made as expeditiously as 

possible to avoid confusion. Therefore, 

we find that delaying the effective date 

of this correction would be contrary to 

the public interest and we find good 

cause to waive the 30-day delay in the 

effective date. 

This document is not a ‘‘significant 

regulatory action’’ subject to review by 

the Office of Management and Budget 

under Executive Order 12866, entitled 

Regulatory Planning and Review. 

The Regulatory Flexibility Act (RFA) 

(5 U.S.C. 601 et seq.) generally requires 

an agency to prepare a regulatory 

flexibility analysis of any rule subject to 

notice and comment rulemaking 

requirements under the Administrative 

Procedure Act or any other statute 

unless the agency certifies that the rule 

will not have a significant impact on a 

substantial number of small entities. 

Because no notice of proposed 

rulemaking is required, the provisions 

of the Regulatory Flexibility Act do not 

apply. 

List of Subjects in 31 CFR Part 210 

Automated Clearing House, Electronic 

funds transfer, Financial institutions, 

Fraud, and Incorporation by reference. 

Words of Issuance 

Accordingly, 31 CFR part 210 is 

corrected by making the following 

correcting amendments: 

PART 210—FEDERAL GOVERNMENT 

PARTICIPATION IN THE AUTOMATED 

CLEARING HOUSE 

■ 1. The authority citation for part 210 

continues to read as follows: 

Authority: 5 U.S.C. 5525; 12 U.S.C. 391; 

31 U.S.C. 321, 3301, 3302, 3321, 3332, 3335, 

and 3720. 

■ 2. Amend § 210.8 by revising 

paragraph (b) to read as follows: 

§ 210.8 Financial institutions. 

* * * * * 

(b) Liability. Notwithstanding ACH 

Rules Subsections 2.4.4, 2.8.4, 4.8.5, 

2.9.2, 3.2.2, and 3.13.3, if the Federal 

Government sustains a loss as a result 

of a financial institution’s failure to 

handle an entry in accordance with this 

part, the financial institution shall be 

liable to the Federal Government for the 

loss, up to the amount of the entry, 

except as otherwise provided in this 

section. A financial institution shall not 

be liable to any third party for any loss 

or damage resulting directly or 

indirectly from an agency’s error or 

omission in originating an entry. 

Nothing in this section shall affect any 

obligation or liability of a financial 

institution under Regulation E, 12 CFR 

part 1005, or the Electronic Funds 

Transfer Act, 12 U.S.C. 1693 et seq. 

(1) An ODFI that transmits a debit 

entry to an agency without the prior 

written or similarly authenticated 


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