10056 Federal Register / Vol. 79, No. 36 / Monday, February 24, 2014 / Proposed Rules 

should read ‘‘The amount of net gain or 

loss from the transferor’s Section 

1411(c)(4) Disposition that is includable 

in § 1.1411–4(a)(1)(iii) is determined by 

multiplying the transferor’s chapter 1 

gain or loss on the disposition by a 

fraction, the numerator of which is the 

sum of income, gain, loss, and 

deduction items (with any separately 

stated loss and deduction items netted 

as negative numbers) of a type that are 

taken into account in the calculation of 

net investment income (as defined in 

§ 1.1411–1(d)) that are allocated to the 

transferor during the Section 1411 

Holding Period and the denominator of 

which is the sum of all items of income, 

gain, loss, and deduction allocated to 

the transferor during the Section 1411 

Holding Period (with any separately 

stated loss and deduction items netted 

as negative numbers).’’. 

13. On page 72473, third column, the 

second and the third sentence of 

paragraph (c)(5) Example 1. (ii), should 

read ‘‘The total amount of A’s allocated 

net items during the Section 1411 

Holding Period equals $1,830,000 

($1,800,000 income from activity X, 

$10,000 loss from activity Y, and 

$20,000 income from marketable 

securities). Thus, less than 5% ($30,000/ 

1,830,000) of A’s allocations during the 

Section 1411 Holding Period are of a 

type that are taken into account in the 

computation of net investment income, 

and because A’s chapter 1 gain 

recognized of $900,000 is less than 

$5,000,000, A qualifies under § 1.1411– 

7(c)(2)(ii) to use the optional simplified 

method.’’. 

14. On page 72474, first column, the 

second sentence of paragraph (c)(5) 

Example 2., should read ‘‘Under 

paragraph (c)(4) of this section, A’s 

percentage of Section 1411 Property is 

determined by dividing A’s allocable 

share of income and loss of a type that 

are taken into account in the calculation 

of a net investment income (as defined 

in § 1.1411–1(d)) that are allocated to 

the transferor by the Passthrough Entity 

during the Section 1411 Holding Period 

is $10,000 ($10,000 loss from Y + 

$20,000 income from marketable 

securities) by $1,810,000, which is the 

sum of A’s share of income and loss 

from all of P’s activates ($1,800,000 + 

($10,000) + 20,000).’’ 

Martin V. Franks, 

Chief, Publications and Regulations Branch, 

Legal Processing Division, Associate Chief 

Counsel, (Procedure and Administration). 

[FR Doc. 2014–03763 Filed 2–21–14; 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; 

MMAA104000] 

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, Interior. 

ACTION: Proposed rule. 

SUMMARY: The Bureau of Ocean Energy 

Management (BOEM) is proposing to 

add a new subpart to its regulations on 

Oil Spill Financial Responsibility 

(OSFR) for Offshore Facilities designed 

to increase the limit of liability for 

damages applicable to offshore facilities 

under the Oil Pollution Act of 1990 

(OPA), to reflect significant increases in 

the Consumer Price Index (CPI) since 

1990, and to establish a methodology 

BOEM would use to periodically adjust 

for inflation the OPA offshore facility 

limit of liability. BOEM proposes to 

increase the limit of liability for 

damages from $75 million to $133.65 

million. OPA requires inflation 

adjustments to the offshore facility limit 

of liability not less than every three 

years to preserve the deterrent effect and 

‘‘polluter pays’’ principle embodied in 

the OPA Title I liability and 

compensation provisions. In addition, 

the Department of the Interior has 

determined that this change would 

further protect the environment by 

ensuring that any party that causes an 

oil spill would pay an increased amount 

of any potential damages. 

BOEM is publishing this update to its 

regulations and is soliciting public 

comments on the method of updates, 

the clarity of the rule and any other 

pertinent matters. The Department is 

limiting the rulemaking comment 

period to 30 days since it does not 

anticipate receiving adverse comments 

on this rulemaking. 

DATES: Submit comments by March 26, 

2014. 

ADDRESSES: You may submit comments 

on the rulemaking by any of the 

following methods. Please use the 

Regulation Identifier Number (RIN) 

1010–AD87 as an identifier in your 

submission. 

• Federal eRulemaking Portal: http:// 

www.regulations.gov. In the entry 

entitled, ‘‘Enter Keyword or ID,’’ enter 

BOEM–2012–0076, then click search. 

Follow the instructions to submit public 

comments and view supporting and 

related materials available for this 

rulemaking. BOEM will post all 

comments received during the comment 

period. 

• Mail or hand-carry comments to the 

Department of the Interior; Bureau of 

Ocean Energy Management; Attention: 

Peter Meffert, Office of Policy, 

Regulations and Analysis (OPRA); 381 

Elden Street, MS–4001, Herndon, 

Virginia 20170–4817. Please reference 

‘‘Consumer Price Index Adjustments of 

the Oil Pollution Act of 1990 Limit of 

Liability for Offshore Facilities’’ in your 

comments and include your name and 

return address so that we may contact 

you if we have questions regarding your 

submission. 

• Email comments to the Department 

of the Interior; Bureau of Ocean Energy 

Management; Attention: Peter Meffert, 

Office of Policy, Regulations and 

Analysis (OPRA) at peter.meffert@

boem.gov. 

Public availability of comments: 

• Before including your address, 

phone number, email address, or other 

personal identifying information in your 

comment, you should be aware that 

your entire comment—including your 

personal identifying information—may 

be made publicly available at any time. 

While you can ask us in your comment 

to withhold your personal identifying 

information from public review, we 

cannot guarantee that we will be able to 

do so. 

FOR FURTHER INFORMATION CONTACT: 

Questions regarding the limit of liability 

established by this proposed rule, or 

related to the limits of liability 

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: 

Background 

In general, under Title I of OPA, the 

responsible parties for any vessel or 

facility, including any offshore facility, 

which discharges, or poses a substantial 

threat of discharge of, oil into or upon 

United States 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 


sroberts on DSK5SPTVN1PROD with PROPOSALS
Federal Register / Vol. 79, No. 36 / Monday, February 24, 2014 / Proposed Rules 10057 

Liability Trust Fund (OSLTF) is 

available to compensate responsible 

parties and other claimants for removal 

costs and damages 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 OPA damages. 

To prevent the real value of the OPA 

limits of liability 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 

limits 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. 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. 

In 2006, following several large oil 

spill incidents that exceeded the 

statutory limits of liability in 33 U.S.C. 

2704(a), Congress enacted the Delaware 

River Protection Act (DRPA) of 2006 

(Title VI of the Coast Guard and 

Maritime Transportation Act of 2006, 

Pub. L. 109–241, July 11, 2006, 120 Stat. 

516). DRPA increased the OPA statutory 

limit of liability for vessels. In addition, 

section 603 of DRPA amended OPA (33 

U.S.C. 2704(d)(4)) to read as follows: 

‘‘Adjustment to reflect consumer price 

index. The President, by regulations 

issued not later than three years after 

July 11, 2006, and not less than three 

years thereafter, shall adjust the limits 

on liability specified in subsection (a) to 

reflect significant increases in the 

Consumer Price Index.’’ DRPA thus 

established a new statutory deadline of 

2009 (three years after the passage of 

DRPA) for the President to promulgate 

the first set of regulatory inflation 

adjustments to the limits of liability. 

Regulatory History 

On July 1, 2009, following substantial 

coordination with DOI and the other 

delegated agencies 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 

Proposed 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 had 

originally agreed to follow the Coast 

Guard’s inflation adjustment 

methodology when adjusting the limits 

of liability under their responsibility. 

After the Coast Guard’s 2009 rulemaking 

was completed, DOI and other delegated 

agencies actively coordinated with the 

Coast Guard on the next set of inflation 

adjustments to the OPA liability limits. 

Offshore Facility Limit of Liability 

This proposed rule would implement 

the first mandated adjustments, 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 proposed rule would 

also establish 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 limits of liability, the 

approach used by BOEM in the 

proposed rule, in most respects, and 

except as discussed further below under 

‘‘Discussion of this Proposed Rule,’’ 

follows the inflation adjustment 

approach used by the Coast Guard in its 

2009 CPI rulemaking, which adjusted 

the limits of liability for vessels and 

deepwater ports. That approach, found 

at 33 CFR Part 138, subpart B, went 

through 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 OPA damages that result 

from such a spill. The statutory offshore 

facility liability limit for OPA damages 

is $75 million. This proposed 

rulemaking would adjust the offshore 

facility limit of liability for OPA 

damages to reflect significant increases 

in the CPI. The responsible parties’ 

liability for OPA removal costs arising 

from actions or events associated with 

an offshore facility oil spill incident 

would remain unlimited. 

This proposed rulemaking would 

increase the $75 million statutory 

offshore facility limit of liability for 

OPA damages to $133.65 million. This 

increase reflects a 78.2 percent increase 

in the Consumer Price Index—All Urban 

Consumers (CPI–U) from 1990 through 

2013. 

Oil Spill Financial Responsibility 

Requirements Are Not Affected by This 

Rulemaking 

This rulemaking is intended to adjust 

the OPA offshore facility limit of 

liability for damages to reflect 

significant increases in the CPI. It would 

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. 

For example, 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 with worst case oil 

discharge potential of more than 1,000 

barrels and meeting other specific 

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 OPA evidence of financial 

responsibility requirements applicable 

to vessels and deepwater ports, which 


sroberts on DSK5SPTVN1PROD with PROPOSALS
10058 Federal Register / Vol. 79, No. 36 / Monday, February 24, 2014 / Proposed Rules 

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 may propose various changes 

to the Oil Spill Financial Responsibility 

regulations in a separate rulemaking. 

This rulemaking makes no proposed 

changes other than those described 

above. 

Additional Regulatory Changes in 30 

CFR Part 553 

In section 553.1, the purpose section 

would be expanded to include adjusting 

the limit of liability. In section 553.3, 

three new definitions would be added to 

facilitate the implementation of the 

inflation adjustment process. The three 

new terms that would be added to the 

regulations are as follows: Annual CPI– 

U, Current Period, and Previous Period. 

Discussion of This Proposed Rule 

I. Explanation of the CPI Adjustment to 

the Offshore Facility Limit of Liability 

for Damages 

This proposed rule would implement 

the first adjustment, mandated by 33 

U.S.C. 2704(d)(4), to the OPA limit of 

liability for damages for offshore 

facilities other than deepwater ports to 

reflect significant increases in the CPI. 

This rule would also establish 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 553 

subpart G. 

As mentioned in the Regulatory 

History section, the Department of the 

Interior is, in most respects, following 

the approach used by the Coast Guard 

in its 2009 CPI adjustments to the limits 

of liability for vessels and deepwater 

ports. That inflation adjustment 

methodology, found at 33 CFR Part 138, 

subpart B, went through full notice and 

comment rulemaking, and received no 

adverse comments. As discussed further 

in item 5, below, the only substantive 

difference between this rulemaking and 

the Coast Guard’s approach is the use of 

a 1990 ‘‘Previous Period,’’ or baseline 

year, to calculate the percent change in 

the CPI–U. The Coast Guard rulemaking 

documents explaining the CPI 

adjustment methodology are available in 

the public docket for their rulemaking. 

1. How would the Department of the 

Interior calculate CPI adjustments to the 

limit of liability for offshore facilities? 

We would 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. The only difference in the 

formula description from the Coast 

Guard regulations is use of ‘‘the decimal 

equivalent’’ since a quantity cannot 

properly be multiplied by a percent, but 

rather, must be multiplied by the 

decimal equivalent of a percent. This 

difference, however, is not substantive. 

2. Which CPI would the Department of 

the Interior use? 

The Bureau of Labor Statistics (BLS) 

publishes a variety of inflation indices. 

Consistent with the Coast Guard 

regulations at 33 CFR 138.240, BOEM 

plans to use the ‘‘Consumer Price 

Index—All Urban Consumers, Not 

Seasonally Adjusted, U.S. City Average, 

All Items, 1982–84=100,’’ also known as 

‘‘CPI–U.’’ CPI–U values may be viewed 

on the BLS Web site at: ftp//ftp.bls.gov/ 

pub/special.requests/cpi/cpiai.txt. This 

index is used by the Coast Guard for its 

CPI adjustments to limits of liability, 

and is the most current and broadest 

index published by BLS. The CPI–U is 

also commonly relied on in insurance 

policies and other commercial 

transactions with automatic inflation 

protection, by the media, and by 

economic analysts. 

3. What time interval CPI–U would the 

Department of the Interior use for the 

adjustments? 

BLS publishes the CPI–U for both 

monthly and annual periods. For 

consistency with the Coast Guard’s 

limits of liability CPI adjustment rule at 

33 CFR Part 138, subpart B, and 

simplicity, BOEM would use the annual 

period CPI–U (hereinafter the ‘‘Annual 

CPI–U’’) rather than the monthly period 

CPI–U. 

4. How would the Department of the 

Interior calculate the percent change in 

the Annual CPI–U? 

Consistent with the Coast Guard’s 

inflation adjustment methodology, we 

would 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. 

5. Which Annual CPI–U ‘‘Previous 

Period’’ and ‘‘Current Period’’ would the 

Department of the Interior use for its 

first inflation adjustment to the offshore 

facility limit of liability? 

To maintain the real value of the 

offshore facility limit of liability for 

damages, as contemplated in the 

original OPA mandate that directed the 

limits of liability be adjusted for the CPI, 

we would use a ‘‘Previous Period’’ of 

1990, the year OPA was enacted. For the 

‘‘Current Period’’ we would use the 

most recently published Annual CPI–U 

(see 30 CFR 553.73(a)). This approach 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 proposed 

rulemaking, we have used the 2013 

Annual CPI–U, published on January 

16, 2014. Future updates would proceed 

on a 3-year schedule as provided in 30 

CFR 553.73. 

6. Why is the ‘‘Previous Period’’ the 

Department of the Interior proposes to 

use for offshore facilities different than 

the ‘‘Previous Periods’’ used by the 

Coast Guard for vessels and deepwater 

ports, which are also required to be 

adjusted in accordance with the CPI? 

The Coast Guard’s 2009 CPI 

rulemaking established two ‘‘Previous 

Period’’ dates for the first set of 

regulatory inflation adjustments to the 

limits of liability for the Coast Guard 

delegated source categories. 

Specifically, the Coast Guard 

established a ‘‘Previous Period’’ date of 

2006 to adjust the statutory limits of 

liability in 33 U.S.C. 2704(a)(1), (2) and 

(4) for vessels, onshore facilities and 

deepwater ports other than Louisiana 

Offshore Oil Port (LOOP) facilities. As 

explained in the Coast Guard 

rulemaking documents, that date was 

chosen based on the date of enactment 


sroberts on DSK5SPTVN1PROD with PROPOSALS
Federal Register / Vol. 79, No. 36 / Monday, February 24, 2014 / Proposed Rules 10059 

of the DRPA, July 11, 2006, which was 

the last date Congress adjusted the 

statutory limits of liability in 33 U.S.C. 

2704(a). In addition, the Coast Guard 

established 1995 as the ‘‘Previous 

Period’’ date for calculating the first 

regulatory inflation adjustment to the 

limit of liability for the Louisiana 

Offshore Oil Port (LOOP). The August 4, 

1995, date was selected based on the 

date the LOOP deepwater port limit of 

liability was established by regulation 

(see 60 FR 39849). 

Unlike the Coast Guard’s reliance on 

previous adjustments by legislation in 

2006 and regulation in 1995 to 

determine its ‘‘Previous Period’’ to 

adjust the limits of liability for vessels 

and deepwater ports other than LOOP 

facilities, no such adjustments have 

occurred for offshore facilities since 

OPA’s enactment in 1990. In the 

absence of such adjustments, BOEM 

does not believe it may use a later 

‘‘previous period’’ or baseline, given the 

clarity of the 1990 statutory mandate. 

Accordingly, BOEM intends to use 1990 

as the ‘‘Previous Period’’ date for this 

first CPI adjustment to the offshore 

facility statutory limit of liability for 

damages. 

In addition to the fact that there has 

been no previous adjustment of the limit 

of liability for offshore facilities, the 

lessons learned from the Deepwater 

Horizon (DWH) explosion and oil spill 

support BOEM’s intention to use the 

earlier ‘‘Previous Period’’ of 1990 in this 

rulemaking. Since the passage of OPA, 

the DWH offshore facility oil spill has 

resulted in damages exceeding the 

offshore facility limit of liability. The 

DWH explosion and oil spill 

demonstrates that, although rare, 

catastrophic offshore facility oil spill 

incidents causing damages in excess of 

the offshore facility limit of liability can 

occur. The DWH incident, moreover, 

highlights the potential inadequacy of 

the statutory $75 million-per-incident 

offshore facility limit of liability for 

damages, and several bills have been 

proposed in Congress to repeal or 

substantially increase that statutory 

limit of liability. 

Given the fact that no adjustments to 

the limit of liability for offshore 

facilities have been made since OPA 

was first enacted in 1990, as well as 

changes to our collective understanding 

about the risks of offshore drilling 

occasioned by the DWH explosion and 

oil spill, including the possibility of 

natural resource and other damages 

exceeding the OPA offshore facility 

statutory limit of liability, the DOI has 

determined that it is appropriate to 

implement the most protective measures 

available within its existing statutory 

authorities. Specifically, BOEM believes 

it is appropriate to recognize the 

cumulative rate of inflation that has 

occurred since the passage of OPA for 

this first adjustment to the offshore 

facility limit. For that reason, BOEM 

would use a 1990 ‘‘Previous Period’’ in 

its CPI adjustment methodology 

resulting in a CPI percentage increase 

through 2013 of approximately 78.2 

percent (since 1990) versus an increase 

of 15.6 percent (since 2006). 

7. How would the Department of the 

Interior calculate the adjustment to the 

limit of liability and what would the 

new limit be? 

The following illustrates how we plan 

to 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 [minus] Annual 

CPI–U for Previous Period (1990): 130.7 

[equals] an index point change: 102.257 

[divided by] Annual CPI–U for Previous 

Period: 130.7 [equals] 0. 782; result 

multiplied by 100: 0.782 × 100 [equals] 

percent change in the Annual CPI–U: 

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 will be the Annual CPI–U 

for the previous calendar year, due to 

the BLS Annual CPI–U publication 

schedule. 

Applying these values, BOEM will 

adjust the statutory offshore facility 

limit of liability for OPA damages of $75 

million by the 78.2 percent increase in 

the Consumer Price Index (CPI–U) that 

has taken place since 1990, to 

$133,650,000. 

8. How would the Department of the 

Interior calculate the percent change for 

subsequent inflation adjustments to the 

OPA limit of liability for offshore 

facilities? 

This rule would also establish the 

adjustment methodology the DOI would 

use for subsequent CPI adjustments to 

the OPA limit of liability for offshore 

facilities. We would adopt the same 

calculation methodology found in 33 

CFR 138.240 of the Coast Guard 

regulations referenced earlier. Key 

features for the future inflation 

adjustments to the limit of liability 

include: 

• BOEM plans to publish the inflation 

adjustments to the limit of liability for 

offshore facilities every three years, 

beginning in 2014, provided that the 

threshold for a significant increase in 

the Annual CPI–U is met, consistent 

with the Coast Guard regulations at 33 

CFR 138.240(b). The current adjustment 

will use the Annual 2013 CPI–U 

‘‘Current Period.’’ 

• The DOI has discretion to adjust the 

offshore facility limit of liability more 

frequently by regulation than every 

three years to reflect significant 

increases in the CPI. 

• If Congress amends the limit of 

liability for offshore facilities, we would 

calculate the Annual CPI–U change with 

the ‘‘Previous Period’’ beginning with 

the year in which Congress amends the 

limit of liability. 

• The DOI would evaluate whether 

the cumulative percent change in the 

Annual CPI–U since the last ‘‘Current 

Period’’ has exceeded three percent in 

the three years beginning in 2017 (using 

the 2016 Annual CPI–U as the ‘‘Current 

Period’’). If the change is greater than 

three percent, a final rule will be 

published in the Federal Register with 

the new inflation-adjusted offshore 

facility limit of liability. The three 

percent or more constitutes a significant 

increase threshold. If, following the 

three-year period, the cumulative 

percent change in the Annual CPI–U is 

less than three percent, the DOI would 

publish a notice of no inflation 

adjustment to the limit of liability. 

• Following a notice of no inflation 

adjustment, the DOI would 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. 

9. How would BOEM provide public 

notice for the offshore facility limit of 

liability adjustments? 

BOEM plans to publish subsequent 

CPI or statutory adjustments to the 

offshore facility limit of liability for 

damages through a final rule in the 

Federal Register. A final rule would 

provide for timely notice of the CPI 

adjustments and would 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?’’) 

The purpose of this section would be 

revised to reflect the purpose of the new 

Subpart G addressing 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). 


sroberts on DSK5SPTVN1PROD with PROPOSALS
10060 Federal Register / Vol. 79, No. 36 / Monday, February 24, 2014 / Proposed Rules 

2. Definition changes for terms found at 

30 CFR 553.3 (‘‘How are the terms used 

in this regulation defined?’’) 

We propose to add definitions to 30 

CFR 553.3: Annual CPI–U, current 

period, and previous period. Also, we 

would replace the definition in 30 CFR 

553.3 of Responsible party. BOEM is 

proposing to replace the definition of 

responsible party because the current 

regulatory definition is limited to the 

responsible party for a COF. The 

proposed definition incorporates the 

OPA statutory definition and clarifies 

that if operating rights are limited to 

particular areas or depths, so are 

responsible party obligations. 

III. 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 & Regulatory Analyses 

Presidential Executive Orders 

E.O. 12630—Takings Implication 

Assessment 

According to Executive Order 12630, 

the proposed 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 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 

in this rule will impose greater nominal 

costs on the responsible parties. In 

constant 1990 dollars, the proposed 

limit of liability for offshore facilities 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. 

The proposed provisions do not 

impact oil spill financial responsibility 

under 30 CFR part 553. Based on the 

maximum potential worst case oil spill 

discharge, approximately 110 of the 170 

companies with COFs are required to 

demonstrate OSFR coverage of $70 

million or less (see 30 CFR 553.13). 

These 110 companies should see no 

insurance premium increases because of 

the increased limit of liability, since the 

level of required OSFR is not impacted 

by these adjustments to the current $75 

million limit of liability. Another five 

companies must demonstrate OSFR 

coverage of $105 million. BOEM 

believes that these companies will not 

see increased insurance premiums 

because of the increase of the limit of 

liability to $133.65 million, just as the 

few companies demonstrating the $150 

million in OSFR coverage that are not 

self-insured or guaranteed will also 

likely not be affected by this proposed 

rule. However, because BOEM cannot 

estimate how much, or if, insurance 

underwriters might increase their 

premiums for OSFR coverage, we 

welcome specific comments on the 

impact of an increased limit of liability, 

absent corresponding increases in 

required OSFR coverage. 

(2) This proposed 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 proposed 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 proposed 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. 

E.O. 12988—Civil Justice Reform 

This proposed 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 

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 does 

not create an environmental risk to 

health or a risk to safety that may 

disproportionately affect children. 

E.O. 13132—Federalism 

Under the criteria in E.O. 13132, this 

proposed rule does not have federalism 

implications. This proposed rule does 

not have substantial direct effects on the 

relationship between the Federal and 

State governments. To the extent that 

State and local governments have a role 

in OCS activities, this proposed rule 

will not affect that role. A Federalism 

Assessment is not required. 

E.O. 13175—Consultation and 

Coordination With Indian Tribal 

Governments 

This proposed rule does not have 

tribal implications under Executive 

Order 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 proposed 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 

We have analyzed this proposed rule 

under Executive Order 13211, ‘‘Actions 


sroberts on DSK5SPTVN1PROD with PROPOSALS
Federal Register / Vol. 79, No. 36 / Monday, February 24, 2014 / Proposed Rules 10061 

Concerning Regulations That 

Significantly Affect Energy Supply, 

Distribution, or Use.’’ We have 

determined that it is not a ‘‘significant 

energy action’’ under that order. This 

proposed 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 

Executive Order 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. 

This Executive Order is supplemental 

to and reaffirms the principles, 

structures, and definitions governing 

contemporary regulatory review that 

were established in Executive Order 

12866. As stated in that Executive 

Order, 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. 

Although BOEM does not believe that 

OSFR insurance premiums will be 

significantly impacted by this 

rulemaking, it is soliciting comments on 

that issue. 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 lists and tables. 

If you feel that we have not met these 

requirements, send your comments to 

Peter.Meffert@boem.gov. To better help 

us revise the proposed rule, your 

comments should be as specific as 

possible. For example, you should tell 

us the numbers of the sections or 

paragraphs that you think we wrote 

unclearly, which sections or sentences 

are too long, the sections where you feel 

lists or tables would be useful, etc. 

Public Availability of Comments 

We will post all comments, including 

names and addresses of respondents, at 

www.regulations.gov. Before including 

your address, phone number, email 

address, or other personal identifying 

information in your comment, you 

should be aware that we may make your 

entire comment—including your 

personal identifying information— 

publicly available at any time. While 

you can ask us in your comment to 

withhold your personal identifying 

information from public view, we 

cannot guarantee that we will be able to 

do so. 

Statutes 

Data Quality Act 

In developing this proposed rule, we 

did not conduct or use a study, 

experiment, or survey requiring peer 

review under the Data Quality Act (Pub. 

L. 106–554, app. C sec. 515, 114 Stat. 

2763, 2763A–153 to 154). 

National Environmental Policy Act 

(NEPA) of 1969 

This proposed rule would not 

constitute a major Federal action 

significantly affecting the quality of the 

human environment. BOEM has 

analyzed this proposed rule under the 

criteria of the National Environmental 

Policy Act (NEPA) and the Department’s 

regulations implementing NEPA. This 

proposed rule meets the criteria set forth 

at 43 CFR 46.210(i) for a Departmental 

Categorical Exclusion in that this 

proposed rule is ‘‘. . . of an 

administrative, financial, legal, 

technical, or procedural nature. . . .’’ 

Further, BOEM has analyzed this 

proposed 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 proposed rule 

would not involve any extraordinary 

circumstances. 

This proposed rule involves 

congressionally mandated regulations 

designed to protect the environment, 

specifically regulations implementing 

the requirements of the OPA. 

National Technology Transfer and 

Advancement Act 

The National Technology Transfer 

and Advancement Act (NTTAA, Pub. L. 

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 proposed 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 rulemaking does not contain new 

information collection requirements, 

and a submission under the PRA is not 

required. Therefore, an information 

collection request is not being submitted 


sroberts on DSK5SPTVN1PROD with PROPOSALS
10062 Federal Register / Vol. 79, No. 36 / Monday, February 24, 2014 / Proposed Rules 

to OMB for review and approval under 

the PRA (44 U.S.C. 3501 et seq.). The 

OMB approved the information 

collection for the 30 CFR 553 

regulations under OMB Control Number 

1010–0106. 

Regulatory Flexibility Act 

The Department of the Interior 

certifies that this proposed rule would 

not have a significant economic effect 

on a substantial number of small entities 

under the Regulatory Flexibility Act (5 

U.S.C. 601 et seq.). 

The changes in the proposed rule may 

potentially affect all oil and gas lessees 

and operators of leases and pipeline 

right-of-way holders in the OCS and in 

state waters. This could include about 

170 active operators and owners. 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 

proposed rule primarily fall under the 

Small Business Administration’s (SBA) 

North American Industry Classification 

System (NAICS) codes 211111, Crude 

Petroleum and Natural Gas Extraction, 

213111, Drilling Oil and Gas Wells and 

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 proposed rule, 

therefore, would 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 proposed rule could impact 

certain OCS operators and owners 

through negligibly higher insurance 

premiums or surety levels. 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. We do 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. 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 operators and owners. 

We welcome 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. 

Your comments are important. 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 evaluate the enforcement 

activities and rate an agency’s 

responsiveness to small business. 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), 

we want to assist small entities in 

understanding this proposed rule so that 

they can better evaluate its effects and 

participate in the rulemaking. If you 

believe that this proposed rule would 

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 Commenting Section 

listed above. 

This proposed rule is not a major rule 

under the Small Business Regulatory 

Enforcement Fairness Act (5 U.S.C. 

804(2)). This rule would 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 

on the OCS. 

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 BOEM, call 1–888– 

REG–FAIR (1–888–734–3247). 

Unfunded Mandates Reform Act of 1995 

This proposed rule would not impose 

an unfunded mandate on State, local, or 

tribal governments, or the private sector, 

of more than $100 million per year. The 

proposed 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. 

Dated: February 14, 2014. 

Tommy P. Beaudreau, 

Principal Deputy Assistant Secretary, Land 

and Minerals Management. 

For the reasons stated in the 

preamble, the Bureau of Ocean Energy 

Management, (BOEM) proposes to 

amend 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, 56 FR 54757, 3 CFR, 1991 Comp., p. 

351, 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) and sets forth the 

procedures for claims against COF 

guarantors and 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 

terms ‘‘Annual CPI–U’’ ‘‘Current 

period,’’ and ‘‘Previous period;’’ 


sroberts on DSK5SPTVN1PROD with PROPOSALS
Federal Register / Vol. 79, No. 36 / Monday, February 24, 2014 / Proposed Rules 10063 

■ b. Revising the definition of 

‘‘Responsible party;’’ 

The changes to read as follows: 

§ 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. 

* * * * * 

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 has the meaning in 

33 U.S.C. 2701(32)(C), (E) and (F). This 

definition includes, as applicable, 

lessees, permittees, right-of-use and 

easement holders, and pipeline owners 

and operators. 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. 

* * * * * 

■ 4. Add 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? 

Subpart G—Limit of Liability for 

Offshore Facilities 

§ 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. 

§ 553.702 What limit of liability applies to 

my offshore facility? 

Except as provided in 33 U.S.C. 

2704(c), the limit of OPA liability 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, 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, by final rule BOEM will 

increase 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. 

(5) Nothing in this paragraph (b) 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 § 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 CPI adjustments 

to the offshore facility limit of liability 

in § 553.702 through the publication of 

final rules in the Federal Register. 

[FR Doc. 2014–03738 Filed 2–21–14; 8:45 am] 

BILLING CODE 4310–MR–P 

DEPARTMENT OF LABOR 

Veterans’ Employment and Training 

Service 

41 CFR Parts 61–250 and 61–300 

RIN 1293–AA20 

Annual Report From Federal 

Contractors 

AGENCY: Veterans’ Employment and 

Training Service (VETS), Labor. 

ACTION: Notice of proposed rulemaking. 

SUMMARY: The Veterans’ Employment 

and Training Service (VETS) is 

publishing this Notice of Proposed 

Rulemaking (NPRM) to propose 

revisions to the regulations 

implementing the reporting 

requirements under the Vietnam Era 

Veterans’ Readjustment Assistance Act 

of 1974, as amended, (‘‘VEVRAA’’). 

VEVRAA requires Federal contractors 

and subcontractors to annually report 

on the total number of their employees 

who belong to the categories of veterans 

protected under the Act, and the total 

number of those employees who were 

hired during the period covered by the 

report. The NPRM proposes rescinding 

the regulations which prescribe the 


sroberts on DSK5SPTVN1PROD with PROPOSALS