Federal Register / Vol. 70, No. 29 / Monday, February 14, 2005 / Rules and Regulations 7403

contracts, Incorporation by reference, 

Investigations, Mineral royalties, Oil 

and gas development and production, 

Oil and gas exploration, Oil and gas 

reserves, Outer continental shelf, 

Penalties, Pipelines, Public lands—

mineral resources, Public lands—rightsof-way, Reporting and recordkeeping 

requirements, Sulphur development and 

production, Sulphur exploration, Surety 

bonds.

Dated: February 2, 2005. 

Rebecca W. Watson, 

Assistant Secretary—Land and Minerals 

Management.

■ For the reasons stated in the preamble, 

the Minerals Management Service 

amends 30 CFR Part 250 as follows:

PART 250—OIL AND GAS AND 

SULPHUR OPERATIONS IN THE 

OUTER CONTINENTAL SHELF

■ 1. The authority citation for part 250 

continues to read as follows:

Authority: 43 U.S.C. 1331 et seq.

■ 2. In § 250.198, in the table in 

paragraph (e), a new entry for document 

API 510 is added in alphanumeric order 

to read as follows:

§ 250.198 Documents incorporated by 

reference.

* * * * *

(e) * * *

Title of document Incorporated by reference at 

* * * * * 

API 510, Pressure Vessel Inspection Code: 

Maintenance Inspection, Rating, Repair, 

and Alteration, except 

for Sections 6.5 and 

8.5, Eighth Edition, 

June 1997, API Stock 

No. C51008.

§ 250.803(b)(1). 

§ 250.1629(b)(1). 

■ 3. In § 250.803, paragraph (b)(1) 

introductory text is revised to read as 

follows:

§ 250.803 Additional production system 

requirements.

* * * * *

(b) * * * 

(1) Pressure and fired vessels.

Pressure and fired vessels must be 

designed, fabricated, and code stamped 

in accordance with the applicable 

provisions of Sections I, IV, and VIII of 

the American Society of Mechanical 

Engineers (ASME) Boiler and Pressure 

Vessel Code. Pressure and fired vessels 

must have maintenance inspection, 

rating, repair, and alteration performed 

in accordance with the applicable 

provisions of the American Petroleum 

Institute’s Pressure Vessel Inspection 

Code: Maintenance Inspection, Rating, 

Repair, and Alteration API 510 (except 

Sections 6.5 and 8.5), which is 

incorporated by reference in § 250.198

* * * * *

■ 4. In § 250.1629, paragraph (b)(1) 

introductory text is revised to read as 

follows:

§ 250.1629 Additional production and fuel 

gas system requirements.

* * * * *

(b) * * *

(1) Pressure and fired vessels must be 

designed, fabricated, and code stamped 

in accordance with the applicable 

provisions of sections I, IV, and VIII of 

the American Society of Mechanical 

Engineers (ASME) Boiler and Pressure 

Vessel Code. Pressure and fired vessels 

must have maintenance inspection, 

rating, repair, and alteration performed 

in accordance with the provisions of the 

American Petroleum Institute’s Pressure 

Vessel Inspection Code: Maintenance 

Inspection, Rating, Repair, and 

Alteration, API 510 (except Sections 6.5 

and 8.5), which is incorporated by 

reference in § 250.198.

* * * * *

[FR Doc. 05–2746 Filed 2–11–05; 8:45 am] 

BILLING CODE 4310–MR–P

DEPARTMENT OF THE TREASURY

31 CFR Part 50

RIN 1505–ZA01

Terrorism Risk Insurance Program; 

Technical Amendments to ‘‘Make 

Available’’ Provision and ‘‘Insurer 

Deductible’’ Definition

AGENCY: Departmental Offices, Treasury.

ACTION: Final rule.

SUMMARY: The Department of the 

Treasury (Treasury) is issuing this final 

rule as part of its implementation of 

Title I of the Terrorism Risk Insurance 

Act of 2002 (Act). The Act established 

a temporary Terrorism Insurance 

Program (Program) under which the 

Federal Government will share the risk 

of insured loss from certified acts of 

terrorism with commercial property and 

casualty insurers until the Program ends 

on December 31, 2005. This final rule 

makes minor technical changes to 

Subpart A of Part 50 of Title 31. One 

change conforms existing regulations to 

the June 18, 2004 determination by the 

Secretary of the Treasury to extend the 

‘‘make available’’ provisions of section 

103(c) of the Act through the third year 

of the Program (calendar year 2005). A 

second change clarifies the definition of 

the insurer deductible for Program Year 

3 for certain newly formed insurers to 

more closely parallel the language of the 

Act.

DATES: This final rule is effective 

February 14, 2005.

FOR FURTHER INFORMATION CONTACT:

David Brummond, Legal Counsel, or 

Howard Leikin, Senior Insurance 

Advisor, Terrorism Risk Insurance 

Program, (202) 622–6770 (not a toll-free 

number).

SUPPLEMENTARY INFORMATION: 

I. Background 

On November 26, 2002, the President 

signed into law the Terrorism Risk 

Insurance Act of 2002 (Pub. L. 107–297, 

116 Stat. 2322). The Act was effective 

immediately. The Act’s purposes are to 

address market disruptions, ensure the 

continued widespread availability and 

affordability of commercial property 

and casualty insurance for terrorism 

risk, and to allow for a transition period 

for the private markets to stabilize and 

build capacity while preserving state 

insurance regulation and consumer 

protections. 

Title I of the Act establishes a 

temporary Federal program of shared 

public and private compensation for 

insured commercial property and 

casualty losses resulting from an act of 

terrorism, which as defined in the Act 

is certified by the Secretary of the 

Treasury, in concurrence with the 

Secretary of State and the Attorney 

General. The Act authorizes Treasury to 

administer and implement the 

Terrorism Risk Insurance Program, and 

to issue regulations and procedures. The 

Program provides a Federal reinsurance 

backstop for three years. The Program 

ends on December 31, 2005. Thereafter, 

the Act provides Treasury with certain 

continuing authority to take actions as 

necessary to ensure payment, 

recoupment, adjustments of 

compensation, and reimbursement for 

insured losses arising out of any act of 

terrorism (as defined under the Act) 

occurring during the period between 

November 26, 2002, and December 31, 

2005. 

Each entity that meets the definition 

of ‘‘insurer’’ (well over 2000 firms) must 

participate in the Program. The amount 

of the Federal share of an insured loss 

resulting from an act of terrorism is to 

be determined based upon insurance 

company deductibles and excess loss 

sharing with the Federal Government, as 

specified by the Act and the 

implementing regulations. An insurer’s 

deductible increases each year of the 

7404 Federal Register / Vol. 70, No. 29 / Monday, February 14, 2005 / Rules and Regulations 

Program, thereby reducing the Federal 

Government’s share prior to expiration 

of the Program. An insurer’s deductible 

is calculated based on a percentage of 

the value of direct earned premiums 

collected over certain statutory periods. 

Once an insurer has met its deductible, 

the Federal payments cover 90 percent 

of insured losses above the deductible, 

subject to an annual industry-aggregate 

limit of $100 billion. 

II. The ‘‘Make Available’’ Provision 

The mandatory availability or ‘‘make 

available’’ provisions in section 103(c) 

of the Act require that, for Program Year 

1, Program Year 2, and, if so determined 

by the Secretary, for Program Year 3, all 

entities that meet the definition of 

insurer under the Program must make 

available in all of their commercial 

property and casualty insurance policies 

coverage for insured losses resulting 

from an act of terrorism. This coverage 

cannot differ materially from the terms, 

amounts and other coverage limitations 

applicable to losses arising from events 

other than acts of terrorism. 

A. Secretary Determination 

The Act requires the Secretary of the 

Treasury to determine, not later than 

September 1, 2004, whether to extend 

the make available requirements 

through Program Year 3, based on 

factors referenced in section 108(d)(1) of 

the Act. The factors referred to in 

section 108(d)(1) of the Act are: 

• The ‘‘effectiveness of the Program;’’

• The ‘‘likely capacity of the property 

and casualty insurance industry to offer 

insurance for terrorism risk after 

termination of the Program;’’ and 

• The ‘‘availability and affordability 

of such insurance for various 

policyholders, including railroads, 

trucking, and public transit.’’

On May 5, 2004, Treasury published 

a request for comments in the Federal 

Register and solicited comments and 

information concerning the statutory 

factors in section 108(d)(1) of the Act to 

assist the Secretary with the ‘‘make 

available’’ determination. See 69 FR 

25168 (May 5, 2004). The comment 

period closed on June 4, 2004, and 

nearly 200 comments were received. 

On June 18, 2004, the Secretary 

announced his decision to extend the 

‘‘make available’’ requirements through 

Program Year 3. (See http://

www.treas.gov/press/releases/

js1734.htm; http://www.treas.gov/press/

releases/js1735.htm). This final rule 

conforms the Act’s implementing 

regulations to reflect the Secretary’s 

determination. 

B. The Final Rule 

This final rule amends section 

50.20(b), which was previously 

reserved, and section 50.21 to reflect the 

Secretary’s determination to extend the 

‘‘make available’’ provisions of section 

103(c) of the Act through Program Year 

3 (calendar year 2005). The amendment 

to section 50.20(b) also specifically 

clarifies that insurers are not required to 

provide coverage for insured losses 

resulting from acts of terrorism beyond 

the date the Program expires and the 

Federal backstop no longer exists.

III. Insurer Deductible—Newly Formed 

Insurers 

The Act defines ‘‘Insurer Deductible’’

in Section 102(7) for the various 

‘‘Program Years’’ of the Program. 

Section 102(7)(E) provides that 

notwithstanding the general rules for 

each Program Year, if an insurer has not 

had a full year of operations during the 

calendar year immediately preceding 

the applicable Program Year, the 

‘‘insurer deductible’’ is ‘‘such portion of 

the direct earned premiums of the 

insurer as the Secretary determines 

appropriate, subject to appropriate 

methodologies established by the 

Secretary for measuring such direct 

earned premiums.’’

The current regulation at Section 

50.5(g)(2) provides that for an insurer 

that came into existence after November 

26, 2002, the insurer deductible will be 

based on data for direct earned 

premiums for the current Program Year, 

and that if the insurer has not had a full 

year of operations during the applicable 

Program Year, the direct earned 

premiums for the current Program Year 

will be annualized. 

Treasury proposed this rule 

recognizing that new companies would 

have limited business operations, that 

their premium income likely would be 

somewhat volatile, and that this 

volatility could persist throughout the 

life of the Program. 68 FR 9811 (Feb. 28, 

2003). Two commenters generally 

supported Treasury’s determination that 

premiums for new insurers would be 

annualized in the calculation of their 

insurer deductible. 68 FR 41263 (July 

11, 2004). In revisiting this matter at this 

point in the Program, however, Treasury 

has concluded that while the concern 

about new company premium income 

volatility remains valid, the Act 

provides specific guidance in the case 

where an insurer was not in existence 

on November 26, 2002 but nevertheless 

has had a full year of operations in the 

year preceding Program Year 3, the last 

year of the Program. The final rule 

addresses such a circumstance by 

adding a new section 50.5(g)(3) for 

Program Year 3 with language that more 

closely parallels the statutory language 

of the Act. 

Procedural Requirements 

The Act established a Program to 

provide for loss sharing payments by the 

Federal Government for insured losses 

resulting from certified acts of terrorism. 

The Act became effective immediately 

upon the date of enactment (November 

26, 2002). Treasury has issued and will 

be issuing additional regulations to 

implement the Program. This final 

regulation makes two technical changes. 

First, it amends section 50.20(b) 

(previously reserved) to reflect the 

Secretary’s decision to extend the 

‘‘make available’’ provisions of section 

103(c) of the Act through Program Year 

3 (calendar year 2005). Second, the 

regulation clarifies the definition of 

‘‘insurer deductible’’ to more closely 

parallel the language in the Act. The 

first change reflects a determination 

already made and announced. The 

second change merely clarifies the 

regulation and conforms it to the 

language of the Act. 

For these reasons, Treasury has 

determined that notice and public 

comment are unnecessary and contrary 

to the public interest, pursuant to 5 

U.S.C. 553(b)(B) and, pursuant to 5 

U.S.C. 553(d)(3), that there is good cause 

for this final rule to become effective 

immediately upon publication. 

This final rule is not a significant 

regulatory action for purposes of 

Executive Order 12866. Because no 

notice of proposed rulemaking is 

required, the provisions of the 

Regulatory Flexibility Act (5 U.S.C. 

chapter 6) do not apply. However, the 

Act and the Program are intended to 

provide benefits to the U.S. economy 

and all businesses, including small 

businesses, by providing a federal 

reinsurance backstop to commercial 

property and casualty insurance 

policyholders and spreading the risk of 

insured loss resulting from an act of 

terrorism.

List of Subjects in 31 CFR Part 50

Terrorism risk insurance.

PART 50—TERRORISM RISK 

INSURANCE PROGRAM

■ 1. The authority citation for part 50 

continues to read as follows:

Authority: 5 U.S.C. 301; 31 U.S.C. 321; 

Title I, Pub. L. 107–297, 116 Stat. 2322 (15 

U.S.C. 6701 note).

■ 2. Subpart A of part 50 is amended by 

adding § 50.5(g)(3) to read as follows:

Federal Register / Vol. 70, No. 29 / Monday, February 14, 2005 / Rules and Regulations 7405

§ 50.5 Definitions.

* * * * *

(g) Insurer deductible means:

* * * * *

(3) Notwithstanding paragraph (g)(2) 

of this section, the insurer deductible 

for Program Year 3 (January 1, 2005 

through December 31, 2005) for an 

insurer that has not had a full year of 

operations during calendar year 2004 

will be based on annualized data for the 

insurer’s direct earned premiums for 

Program Year 3, multiplied by 15 

percent. For an insurer that came into 

existence after November 26, 2002 and 

has had a full year of operations during 

calendar year 2004, the insurer 

deductible for Program Year 3 is the 

value of an insurer’s direct earned 

premiums over calendar year 2004, 

multiplied by 15 percent.

■ 3. Subpart A of part 50 is amended by 

revising § 50.20(b) to read as follows:

§ 50.20 General mandatory availability 

requirements.

* * * * *

(b) Program Year 3—calendar year 

2005. In accordance with the 

determination of the Secretary 

announced June 18, 2004, an insurer 

must comply with paragraphs (a)(1) and 

(a)(2) of this section during Program 

Year 3. Notwithstanding paragraph 

(a)(2) of this section and § 50.23(a), 

property and casualty insurance 

coverage for insured losses does not 

have to be made available beyond 

December 31, 2005 (the last day of 

Program Year 3) even if the policy 

period of insurance coverage for losses 

from events other than acts of terrorism 

extends beyond that date.

■ 4. Subpart A of part 50 is amended by 

revising § 50.21(a) to read as follows:

§ 50.21 Make available. 

(a) General. The requirement to make 

available coverage as provided in 

§ 50.20 applies to policies in existence 

on November 26, 2002, new policies 

issued and renewals of existing policies 

during the period beginning on 

November 26, 2002 and ending on 

December 31, 2004 (the last day of 

Program Year 2), and to new policies 

issued and renewals of existing policies 

in Program Year 3 (calendar year 2005). 

The requirement applies at the time an 

insurer makes the initial offer of 

coverage as well as at the time an 

insurer makes an initial offer of renewal 

of an existing policy.

* * * * *

Dated: February 1, 2005. 

Gregory Zerzan, 

Acting Assistant Secretary of the Treasury.

[FR Doc. 05–2810 Filed 2–11–05; 8:45 am] 

BILLING CODE 4810–25–P

DEPARTMENT OF HOMELAND 

SECURITY 

Coast Guard 

33 CFR Part 117 

[CGD08–04–036] 

RIN 1625–AA09 

Drawbridge Operation Regulation; St. 

Croix River, MN

AGENCY: Coast Guard, DHS.

ACTION: Temporary final rule.

SUMMARY: The Coast Guard is changing 

the regulation governing the Stillwater 

Highway Drawbridge, across the St. 

Croix River at Mile 23.4, at Stillwater, 

Minnesota. Under this rule, the 

drawbridge need not open for river 

traffic and may remain in the closed-tonavigation position from midnight, 

October 14, 2005, until midnight, March 

15, 2006. This rule allows time to 

perform maintenance and repairs to the 

bridge.

DATES: This rule is effective from 

midnight, October 14, 2005 until 

midnight, March 15, 2006.

ADDRESSES: Comments and material 

received from the public, as well as 

documents indicated in this preamble as 

being available in the docket, are part of 

the docket [CGD08–04–036] and are 

available for inspection or copying at 

room 2.107f in the Robert A. Young 

Federal Building at Eighth Coast Guard 

District, between 8 a.m. and 4 p.m., 

Monday through Friday, except Federal 

holidays. Commander (obr), Eighth 

Coast Guard District, maintains the 

public docket for this rulemaking.

FOR FURTHER INFORMATION CONTACT: Mr. 

Roger K. Wiebusch, Bridge 

Administrator, (314) 539–3900, 

extension 2378.

SUPPLEMENTARY INFORMATION: 

Regulatory History 

On November 5, 2004, we published 

a notice of proposed rulemaking 

(NPRM) entitled, ‘‘Drawbridge 

Operation Regulation; St. Croix River, 

Minnesota,’’ in the Federal Register (69 

FR 64553). We received no comment 

letters on the proposed rule. No public 

meeting was requested, and none was 

held. 

Background and Purpose 

On September 13, 2004, the 

Minnesota Department of 

Transportation, requested a temporary 

change to the operation of the Stillwater 

Highway Drawbridge across the St. 

Croix River, Mile 23.4, at Stillwater, 

Minnesota to allow the drawbridge to 

remain in the closed-to-navigation 

position for 152 consecutive days for 

critical repairs and maintenance. 

The Stillwater Highway Drawbridge 

navigation span has a vertical clearance 

of 10.9 feet above normal pool in the 

closed to navigation position. 

Navigation on the waterway consists 

primarily of commercial and 

recreational watercraft and will not be 

significantly impacted due to the 

reduced navigation in winter months. 

Presently, the draw opens from October 

16 until May 14 with 24 hours advance 

notice for passage of river traffic. The 

Minnesota Department of 

Transportation requested the 

drawbridge be permitted to remain 

closed-to-navigation from midnight, 

October 14, 2005 until midnight, March 

15, 2006. Winter conditions on the St. 

Croix River will preclude any 

significant navigation demands for the 

drawspan opening. Performing 

maintenance on the bridge during the 

winter, when the number of vessels 

likely to be impacted is minimal, is 

preferred to bridge closure or advance 

notification requirements during the 

navigation season. This temporary 

change to the drawbridge’s operation 

has been coordinated with the 

commercial waterway operators. 

Discussion of Comments and Changes 

The Coast Guard received no 

comment letters. No changes will be 

made to this final rule. 

Regulatory Evaluation 

This rule is not a ‘‘significant 

regulatory action’’ under section 3(f) of 

Executive Order 12866, Regulatory 

Planning and Review, and does not 

require an assessment of potential costs 

and benefits under section 6(a)(3) of that 

Order. The Office of Management and 

Budget has not reviewed it under that 

Order. It is not ‘‘significant’’ under the 

regulatory policies and procedures of 

the Department of Homeland Security 

(DHS).

The Coast Guard expects that this 

temporary change to the operation of the 

Stillwater Highway Drawbridge will 

have minimal economic impact on 

commercial traffic operating on the St. 

Croix River. This temporary change has 

been written in such a manner as to 

allow for minimal interruption of the 

drawbridge’s regular operation.