[Federal Register Volume 62, Number 57 (Tuesday, March 25, 1997)]
[Proposed Rules]
[Pages 14052-14079]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-7270]


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DEPARTMENT OF THE INTERIOR

Minerals Management Service

30 CFR Part 253

RIN 1010-AC33


Oil Spill Financial Responsibility for Offshore Facilities

AGENCY: Minerals Management Service (MMS), Interior.

ACTION: Notice of proposed rulemaking.

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[[Page 14053]]

SUMMARY: MMS is proposing new requirements for demonstrating oil spill 
financial responsibility (OSFR) for cleanup and damages from oil 
discharges due to oil exploration, production, and associated pipeline 
facilities. This rule will apply to operations located in: the Outer 
Continental Shelf (OCS); State waters seaward of the line of ordinary 
low water along that portion of the coast that is in direct contact 
with the open sea; and in coastal inland waters, such as bays and 
estuaries, seaward of the line of ordinary low water along that portion 
of the coast that is not in direct contact with the open sea. This rule 
implements the authority of the Oil Pollution Act of 1990 (OPA).

DATES: MMS will consider all comments received by June 23, 1997. We may 
not fully consider comments received after June 23, 1997.

ADDRESSES: Mail or hand-carry comments to the Department of the 
Interior, Minerals Management Service, Mail Stop 4700, 381 Elden 
Street, Herndon, Virginia 20170-4817; Attention: Rules Processing Team.

FOR FURTHER INFORMATION CONTACT: Ray Beittel, Performance and Safety 
Branch, at (703) 787-1591.

SUPPLEMENTARY INFORMATION: Title I of OPA (33 U.S.C. 2701 et seq.), as 
amended by the Coast Guard Authorization Act of 1996 (Pub. L. 104-324), 
provides at section 1016 that parties responsible for offshore 
facilities establish and maintain OSFR for those facilities according 
to methods determined acceptable to the President. Section 1016 
supersedes the offshore facility OSFR provisions of the Outer 
Continental Shelf Lands Act Amendments (OCSLAA) of 1978. The 
Presidential Executive Order (E.O.) implementing OPA (E.O. 12777; 
October 18, 1991) assigned the offshore facility OSFR certification 
function to the Department of the Interior (DOI). The Secretary of the 
Interior, in turn, delegated this function to MMS.
    The regulation proposed today replaces the current offshore 
facility OSFR regulation written pursuant to the OCSLAA. The OCSLAA 
regulation is limited to facilities located in the OCS and sets the 
amount of OSFR that must be demonstrated by responsible parties at $35 
million. The regulation proposed today covers both the OCS and State 
waters lying seaward of the line of ordinary low water. Today's 
proposal also requires responsible parties to demonstrate as much as 
$150 million in OSFR if MMS believes it is justified by the risks from 
potential oil spills from covered offshore facilities.
    The minimum amount of OSFR that must be demonstrated under the 
proposed regulation is $35 million for covered facilities located in 
the OCS and $10 million for covered facilities located in State waters. 
The proposed regulation provides a conditional exemption for persons 
responsible for facilities having a potential worst case oil-spill 
discharge of 1,000 barrels or less.

Background

    The initial OSFR program for offshore facilities was developed 
under Title III of the OCSLAA and administered by the U.S. Coast Guard 
(USCG). OPA replaced and rescinded the Title III OSFR requirements. 
However, section 1016(h) of OPA provides that any regulation relating 
to OSFR remain in force until superseded by a new regulation issued 
under OPA. Therefore, the existing USCG OSFR regulations for offshore 
facilities in the OCS (33 CFR part 135) remain in effect until this 
proposed rule becomes final.
    The Secretary of Transportation has authority for vessel oil 
pollution financial responsibility, and the USCG regulates the 
financial responsibility program for vessels. However, a well drilled 
from a mobile offshore drilling unit (MODU), which is a type of vessel, 
is an offshore facility under the proposed rule.
    Upon request from the USCG, MMS will provide available information 
for any covered offshore facility (COF) involved in an oil pollution 
incident including:
    (1) The lease, permit, or right of use and easement (RUE) for the 
area in which the COF is located;
    (2) The designated applicant and guarantors and their contacts for 
claims;
    (3) Agents for service of process; and
    (4) Amounts guaranteed.

Section-by-Section Discussion

Subpart A

    Sec. 253.1  What is the purpose of this regulation? This is an 
introductory section explaining that this part establishes the 
requirements for OSFR for COF's under Title I of OPA, 33 U.S.C. 2701 et 
seq.
    Sec. 253.3  How are the terms used in this regulation defined? This 
section contains definitions of terms used in this part. Some of these 
definitions are based on terms in OPA and differ from how MMS normally 
uses them. The principal definitions will be addressed later in this 
preamble in the context in which they are used.
    Sec. 253.5  What is the authority for collecting OSFR information? 
This section explains that the information collected under this part is 
used to ensure compliance with the OSFR requirements in OPA.

Subpart B

    Sec. 253.10  What facilities does this regulation cover? This 
introductory section provides a general statement of applicability. It 
states that this part applies to any ``COF'' or any ``lease'' or 
``permit'' issued under, or a ``RUE'' granted under the Outer 
Continental Shelf Lands Act (OCSLA) or applicable State law. This 
applicability concept incorporates many defined terms.
    An important term in these rules is COF which is based on 
requirements in OPA. There are three tests to determine whether your 
facility is a COF. First, it must be a structure, group of structures, 
a well (including a well drilled from an MODU), equipment, pipeline, or 
device used for exploring for, drilling for, or producing oil. This 
includes platforms, gathering lines, subsea completions, and other 
equipment common to oil production activities. Facilities that are used 
to store, handle, transfer, or process oil and that are related to the 
oil production process also are included. Thus, a platform with 
equipment to initially treat oil (dewatering, desanding, etc.) is 
covered.
    OPA excludes from the COF definition vessels and pipelines licensed 
under the Deepwater Port Act of 1974 (33 U.S.C. 1501 et seq.). Also 
within the coverage of this first test are facilities used to transport 
oil, which includes transportation pipelines (gathering lines are part 
of production facilities) and pipeline appurtenances. If a well is 
drilled from a MODU, the well could be a COF under the proposed 
regulation, but the MODU could not. However, the MODU owner or operator 
is required to demonstrate OSFR for the MODU according to USCG 
regulations at 33 CFR part 138.
    Under the proposed rule, for a facility to be a COF, it must pass 
two other tests. First, it must be located seaward of the line of 
ordinary low water along that portion of the coast that is in direct 
contact with the open sea, or located in coastal inland waters, such as 
bays and estuaries, seaward of the line of ordinary low water along 
that portion of the coast that is not in direct contact with the open 
sea. This concept comes directly from the 1996 amendments to OPA (see 
section 1016(c)(1)). It clearly includes the Federal OCS and each 
State's territorial sea.
    The line of ordinary low water along that portion of the coast that 
is in direct contact with the open sea was defined by the courts for 
each coastal State

[[Page 14054]]

where there might be a COF. This adjudicated line, known as the 
``coastline,'' represents both the seaward limit of inland waters and 
the base for establishing a State's seaward boundary that separates 
State waters from the Federal OCS.
    It is clear that OSFR regulations should apply to areas seaward of 
the coastline. It also seems clear that ``coastal inland waters, such 
as bays and estuaries, seaward of the line of ordinary low water along 
that portion of the coast that is not in direct contact with the open 
sea'' lie landward of the coastline. However, OPA does not define the 
extent of these coastal inland waters, and the record of Congress for 
the 1996 amendments to OPA offers no clarification or statement of 
intent. Thus, MMS is afforded some discretion in determining the extent 
to which areas lying landward of the coastline should be covered by 
this proposed regulation.
    We considered two options for defining the phrase ``coastal inland 
waters, such as bays and estuaries, seaward of the line of ordinary low 
water along that portion of the coast that is not in direct contact 
with the open sea.'' In developing these options, we focused on the 
three relevant statutory phrases: line of ordinary low water, coastal 
inland waters, and bays and estuaries.
    The first option for defining places landward of the coastline that 
are covered by the rule includes the submerged coastal areas subject to 
tidal influence. That is, if an area affected by the tide is normally 
submerged, even at low tide, it is seaward of the line of ordinary low 
water. As such, it is covered by the rule. Given the dynamic nature of 
coastal geologic processes, especially in places like the Mississippi 
River Delta, the area covered by this option could change with time. As 
a result, a person responsible for a facility currently located on dry 
land is not subject to the proposed rule today. However, if that 
facility is later inundated as a result of shoreline erosion, the 
facility might become a COF.
    The area covered by this option does not include large inland water 
bodies affected by the tides (e.g., the Great Salt Lake) because none 
lie along the coast. Likewise, smaller landlocked water bodies located 
along the coast are not included because they are not affected by the 
tides. The area that is covered by this option includes coastal bays, 
river mouths to the extent there is a tidal influence, and coastal 
wetlands that are submerged at low tide.
    A second option for defining places landward of the coastline that 
are covered by the rule includes the area affected by the tides lying 
between the coastline and a parallel line that is a fixed distance from 
the coastline. This band of coastal inland waters does not change 
unless the adjudicated coastline changes. The band should be wide 
enough to cover the prominent coastal bays and estuaries. We believe an 
appropriate width is 50 to 100 miles, although some may not consider 
locations 100 miles inland to be ``along the coast.'' Conversely, if 
the band is narrow, some bays and estuaries along the coast might not 
be covered completely. For example, a 50-mile band excludes the 
furthest reaches of San Francisco Bay and all of the Lake Pontchartrain 
estuary.
    MMS incorporated the first coastal inland waters option into the 
proposed rule because we believe it is more consistent with the word 
and spirit of OPA. However, we have neither finally determined this 
option to be the best one, nor have we decided that the two options 
considered are the only suitable ones. As such, we invite your comments 
on both options and your recommendations for others that might be 
appropriate. In particular, we would like your opinion on how wide the 
coastal band should be if the second option is adopted. Given the known 
locations of existing coastal oil facilities, we found little 
difference between the options regarding who is subject to the proposed 
rule. If you have evidence that this finding may be inaccurate, please 
submit it to us with your comments on the proposed rule.
    The last test to be a COF is that a facility must have a worst case 
oil-spill discharge potential of more than 1,000 barrels. MMS could 
require a facility with a lesser spill potential to be covered if we 
determine in writing that OSFR must be demonstrated. Also, a person may 
agree to cover a facility with OSFR even if it does not exceed the 
worst case oil-spill threshold. As explained in more detail below, this 
would occur if a person is providing maximum blanket coverage for all 
its facilities under the blanket.
    For this proposed rule to apply, the COF must be on a lease, permit 
(defined as a permit for geological exploration), or RUE issued under 
OCSLA or applicable State law.
    MMS recognizes the possibility that a transportation pipeline could 
begin offshore and move production onshore. In that event, under 
Sec. 253.10(b), the pipeline is covered to the point it reaches the 
first accessible flow shutoff device landward of the line of ordinary 
low water.
    Sec. 253.11  Who must demonstrate OSFR? MMS's proposal is that 
every lease, permit, or RUE with a COF would have only one person who 
demonstrates OSFR. This person is the designated applicant.
    The designated applicant is required to submit Form MMS 1016 and 
agree to demonstrate OSFR on behalf of all the responsible parties for 
the lease, permit, or RUE. If the designated applicant is not a 
responsible party, it must agree to be liable for oil pollution 
damages, cleanup costs, and other claims under OPA jointly and 
severally with the responsible parties. MMS's intent is that the 
responsible parties agree who the one designated applicant should be on 
their behalf. MMS also wants that person to be liable for any damages 
or other claims so a claimant or the Oil Spill Liability Trust Fund 
(the Fund) does not have to pursue anyone other than the person who 
agreed to be the designated applicant. Of course, the other responsible 
parties still remain liable if the designated applicant does not 
satisfy the liability.
    Under paragraph (b), if the land within a lease with a COF also is 
subject to a permit or RUE with a COF, there must be a designated 
applicant for the lease and a designated applicant for each permit or 
RUE. They may be the same person, but a Form MMS 1017 designating the 
applicants for the different COF's must be filed with MMS.
    Paragraph (c) requires the designated applicant for a lease with a 
COF to be either a lessee (who is a responsible party under these rules 
and OPA) or the designated operator (who, if not a lessee, does not 
meet the definition of responsible party). However, the designated 
operator for an OCS lease or unit must be the same party that is the 
designated operator under 30 CFR 250.8. That rule requires the 
designated operator to fulfill the lessee's obligations under the OCSLA 
and MMS regulations. Therefore, it makes sense for that person to 
demonstrate OSFR and to accept liability on behalf of the lessees. For 
leases not in the OCS, to ensure that any nonlessee designated 
applicant is a person with similar responsibilities for spill 
prevention and cleanup to those of a Federal OCS operator, paragraph 
(c)(2) requires that such applicant be an operator under a lease or 
unit operating agreement that provides the operator is responsible for 
compliance with all the laws and regulations applicable to the lease or 
unit. Otherwise, that operator could not be a designated applicant 
under the proposed rules, and a lessee

[[Page 14055]]

is required to demonstrate OSFR for the lease.
    Paragraph (d) provides that only the permittee may be a designated 
applicant for a permit with a COF. Under paragraph (e), for a RUE with 
a COF, who the designated applicant may be depends on whether the COF 
is a pipeline. If it is, then an owner or operator of each pipeline 
segment on the RUE must be a designated applicant. For a RUE with a COF 
that is not a pipeline segment, the holder of the RUE is the designated 
applicant. If there also is a pipeline segment on the RUE, both the 
owner or operator of the pipeline segment and the holder of the RUE 
must be designated applicants. Again, the designated applicant for each 
of these situations could be the same person, but the designation is 
required to be separately denominated on the Form MMS 1017.
    Paragraph (f) is a catchall provision allowing MMS to require a 
different designated applicant if MMS determines that the circumstances 
warrant a different person than the rules otherwise prescribe.
    Sec. 253.12  Who determines whether I must demonstrate OSFR? As a 
general matter, it is the obligation of those persons who could be 
responsible parties to determine if there is a COF on their lease, 
permit, or RUE. MMS recognizes that this rule is unusual since it 
regulates persons who do not operate in the Federal OCS and are not 
otherwise subject to MMS jurisdiction. These persons may need help in 
interpreting their obligation under the rules, especially in marginal 
situations. In other words, the person may not be sure whether the 
lease, permit, or RUE is geographically covered or whether its facility 
has a sufficient worst case oil-spill potential to warrant a 
demonstration of OSFR. In this circumstance, you could ask MMS whether 
the rule applies to you. You are required to submit sufficient 
information for MMS to make the determination.
    Sec. 253.13  How much OSFR must I demonstrate? This section 
explains the amount of OSFR a designated applicant must demonstrate. If 
you have only one COF for your lease, permit, or RUE, paragraph (b) of 
the section has a table with different amounts of OSFR depending on the 
worst case oil-spill discharge volume for your COF. For a COF in the 
Federal OCS, the amount of OSFR ranges from $35 million to $150 
million. For a COF not in the Federal OCS, it ranges from $10 million 
to $150 million.
    If you have two or more COF's on the lease, permit, or RUE, then 
you must demonstrate the highest amount of OSFR that applies to any of 
the COF's. Thus, if you had three production platforms on a lease, then 
you must demonstrate the amount of OSFR based on the one with the 
highest worst case oil-spill potential.
    If you are the designated applicant for more than one lease, 
permit, or RUE with a COF, you are required to demonstrate the highest 
amount of OSFR that applies to any of them. By way of illustration, 
assume you had one lease with two production platforms requiring $10 
million of OSFR and the other requiring $35 million, and you had a 
second lease with a platform requiring $10 million of OSFR. You are 
required to demonstrate $35 million in OSFR which covers all the COF's 
on both leases.
    The table in paragraph (a) of this section clarifies that if you 
have leases, permits, and RUE's located in the Federal OCS and State 
waters, you must demonstrate the highest amount of OSFR that applies to 
any of the COF's on those leases, permits, or RUE's regardless of which 
jurisdiction they are located in.
    In addition to setting out the amount of OSFR for a COF based on 
whether it is located in the Federal OCS and its worst case oil-spill 
discharge volume, paragraph (b) allows MMS to increase the OSFR amount 
to a maximum of $150 million based on the relative operational, 
environmental, human health, and other risks posed by the quality or 
quantity of oil handled. The dollar amounts in the table are based on 
estimates of the per-barrel costs of oil-spill removal and damages as 
generated by the ``Spillcalc'' element of MMS General Purpose 
Environmental Cost Model (GPECM).
    The GPECM was developed to support the MMS 5-Year OCS Oil and Gas 
Leasing Program. The average of the calculated high-range oil-spill 
removal and damages costs for the offshore regions analyzed in the 
GPECM (Atlantic, Gulf of Mexico, California, Washington-Oregon, Alaska) 
is about $900 per barrel in 1993 dollars. For simplicity, the table 
uses a cost factor of $1,000 and the largest volume covered by a spill 
discharge bracket to establish the required OSFR amount for any COF 
that fits into the bracket.
    Under paragraph (b)(3), MMS could require an OSFR demonstration in 
excess of the table amounts based on the relative operational, human 
health, and other risks your COF poses. As noted above, the maximum 
still is $150 million.
    Sec. 253.14  How do I determine the worst case oil-spill discharge 
volume? Designated applicants are instructed to use the same method of 
calculating worst case discharges they use in preparing oil spill 
response plans for MMS or another Federal agency administering section 
311 of the Federal Water Pollution Control Act.
    Sec. 253.15  What are my general OSFR compliance responsibilities? 
This section spells out the designated applicant's obligation to 
maintain continuous coverage for all leases, permits, and RUE's with 
COF's.

Subpart C

    Sec. 253.20  What are the methods for evidencing OSFR? This section 
authorizes the use of self-insurance, insurance, guarantees or surety 
bonds to evidence OSFR. In addition, the Director may approve 
alternative methods under Sec. 253.32.
    Secs. 253.21 through 253.28  How can I use self-insurance as OSFR 
evidence? These sections establish two methods for qualifying as a 
self-insurer: a net-worth test and a test involving the pledge of 
unencumbered assets. The self-insurance application must be supported 
by audited financial statements.
    The section contains formulae for calculating the level of self-
insurance for which you qualify under each self-insurance method. These 
formulae are different from those MMS currently uses to determine 
whether a person qualifies as a self-insurer under 33 CFR part 135. The 
revised formulae are intended to provide a more realistic assessment of 
net worth by better reflecting current business practices and economic 
conditions.
    An independent certified public accounting firm has reviewed the 
proposed formulae and has recommended certain changes to ensure their 
suitability for making self-insurance determinations. You are 
encouraged to request a copy of this report from the address listed at 
the beginning of this notice and provide MMS comments on the formulae 
and the contractor's recommendations. We will consider your comments 
and the contractor's recommendations in developing the formulae that 
will be included in the final rule.
    Sec. 253.29  How can I use insurance as OSFR evidence? This section 
establishes minimum qualifications of insurers and the documentation 
required to support insurance as OSFR evidence. An insurer must be a 
syndicate of Lloyds of London, a member of the Institute of London 
Underwriters, or rated ``secure'' or better by A.M. Best, Standard and 
Poor's, or an equivalent rating service. While you may obtain insurance

[[Page 14056]]

coverage in layers, the rule limits the number of layers in relation to 
the amount of coverage provided.
    Sec. 253.30  How can I use a guarantee as OSFR evidence? This 
section allows a designated applicant to use a single guarantee to meet 
all or part of its OSFR obligation. A guarantee is a promise of 
indemnification by a single indemnitor who meets the qualifications for 
self-insurance under Secs. 253.21 through 253.28.
    Sec. 253.31  How can I use a surety bond as OSFR evidence? This 
section allows a designated applicant to use a surety bond as OSFR 
evidence if the bond is issued by a surety acceptable to the Department 
of the Treasury and licensed in the State (or the State adjacent to 
that portion of the OCS) where at least one COF is located.
    Sec. 253.32  Are there alternative methods to evidence OSFR? This 
section authorizes the MMS Director, within his/her sole discretion, to 
accept letters of credit, pooling arrangements, or other alternative 
methods of evidencing OSFR that provide equivalent assurance of the 
prompt satisfaction of claims that is equivalent to the methods 
authorized in the proposed regulations.

Subpart D

    Sec. 253.40  What OSFR evidence must I submit to MMS? This section 
describes the forms that must be submitted as part of the OSFR 
evidence. Designated applicants are directed to submit a single 
demonstration for all leases, permits, and RUE's for which they are 
designated applicants.
    Sec. 253.41  What terms must I include in my OSFR evidence? The 
rule specifies the terms and conditions under which OSFR instruments 
can be terminated. Notice to MMS of intent to cancel and replacement of 
the terminated instruments is required unless the COF is permanently 
abandoned. Requirements for including in each OSFR instrument 
information about direct action for claims and service of process also 
is covered in this section.
    Sec. 253.42  How can I amend my OSFR demonstration? This section 
describes how to add or delete COF's from an existing OSFR 
demonstration. You must submit information on additional leases, 
permits, or RUE's at least 30 days before they are added or deleted.
    Sec. 253.43  When is my OSFR demonstration effective? This section 
provides that MMS notify designated applicants when it determines 
whether the evidence submitted is adequate to demonstrate OSFR. It also 
states how long an OSFR demonstration is effective.
    Sec. 253.44  When must I comply with this regulation? This section 
establishes a schedule for complying with this rule. You are allowed 
not more than 60 days after the effective date of the final regulation 
to submit to MMS your evidence of OSFR for all the COF's on all the 
leases, permits, and RUE's for which you are the designated applicant.
    Sec. 253.45  To whom do I submit my OSFR evidence? Submissions are 
made to the listed address of MMS Oil Spill Financial Responsibility 
Program.

Subpart E

    Sec. 253.50  How can my OSFR evidence be refused or invalidated? 
Generally, MMS would give a 15-day notice of its intent to invalidate 
an OSFR demonstration. However, we could immediately invalidate an OSFR 
demonstration if a person is no longer the designated applicant or 
permits the cancellation or termination of the insurance policy, surety 
bond, or guarantee on which your demonstration is based.
    Sec. 253.51  What are the penalties for not complying with this 
part? Failure to comply with these regulations could result in 
penalties of up to $25,000 per COF per day. The maximum civil penalties 
are stated along with a reference to the appeals process of 30 CFR part 
250. MMS has considered the civil penalty amounts that should be 
applied to this part, and the amounts may be those shown in the 
following table.

Amounts of Civil Penalties Per COF for Noncompliance with Oil Spill Financial Responsibility Requirements (OSFR)
                                                       \1\                                                      
----------------------------------------------------------------------------------------------------------------
                                                              Period of noncompliance                           
    Category of noncompliance    -------------------------------------------------------------------------------
                                   First week       Second and third weeks                After 3 weeks         
----------------------------------------------------------------------------------------------------------------
Failure to submit OSFR evidence.         $500  $750 per week...................  $250 per day.                  
Lapse in OSFR coverage..........         $750  $1,000 per week.................  $300 per day.                  
Cancellation of OSFR without           $2,500  $5,000 per week.................  $1,000 per day.                
 alternative coverage.                                                                                          
Failure to correct an erroneous          $100  $250 per week...................  $1,000 per week.               
 or inadequate submission within                                                                                
 30 Days of MMS request \2\.                                                                                    
----------------------------------------------------------------------------------------------------------------
Notes:                                                                                                          
\1\ Penalties will be doubled each time there is an additional violation within 1 calendar year of the first    
  violation, up to a maximum of $25,000 per day. The penalty amounts in this table will be updated periodically 
  as needed to ensure compliance.                                                                               
\2\ Includes under-subscribed insurance slips, use of insurers not rated ``secure'' or better, errors in lease, 
  permit, or RUE identification and similar problems with the OSFR evidence submitted.                          

    This section also provides for penalties that are greater or less 
than the amounts shown in the table, depending on specific factors 
listed in OPA.

Subpart F

    Sec. 253.60  How must a claim be presented? This section prescribes 
the process a claimant follows to recover the costs of oil-spill 
removal and damages from the designated applicant, its guarantor, or 
the Fund. The general approach is to present claims first to the 
designated applicant and then, if necessary, to the designated 
applicant's guarantor or the Fund.
    Sec. 253.61  When is a guarantor subject to direct action for 
claims? This section specifies the situations in which a designated 
applicant's guarantor is subject to suit on claims for oil spill 
removal and damage costs directly by a claimant. It also states the 
protections from direct action a guarantor is allowed under OPA.
    The 1996 amendments to OPA limit the assertion of a claim against a 
guarantor to three circumstances: (1) The United States makes a claim 
for removal costs and damages for compensation paid by the Fund; (2) 
the responsible party denies or fails to pay a claim on grounds of 
insolvency; and (3) the responsible party has filed for bankruptcy. OPA 
does not expressly address the common circumstance of numerous 
responsible parties for a single offshore facility and whether all

[[Page 14057]]

responsible parties must be insolvent before the claimant may pursue 
the guarantor. MMS believes that it should be sufficient for the 
claimant to demonstrate only that the designated applicant is insolvent 
before it could pursue the guarantor. The claimant should not be 
required to pursue multiple responsible parties in that circumstance 
because, for some COF's, there could be over 20 responsible parties. 
Thus, the proposed rule allows recourse to a guarantor if the 
designated applicant is insolvent or in bankruptcy. MMS does not 
believe it would serve OPA's objective of prompt payment to force a 
claimant to determine whether each and every responsible party is 
insolvent or in bankruptcy before a claim could be asserted against a 
guarantor.
    MMS specifically invites comments on this issue. We specifically 
invite comments on whether the final rule should instead adopt the 
alternative of limiting action against a guarantor by private claimants 
to cases where every responsible party has denied or failed to pay on 
grounds of insolvency, or where every single responsible party has 
petitioned for bankruptcy.
    Sec. 253.62  What are the designated applicant's obligations 
regarding a claim? This section specifies whom the designated applicant 
must notify upon receipt of a claim for oil discharge removal and 
damages.

Appendix

    This section presents the nine MMS forms and a cover sheet the 
designated applicant is required to use to submit OSFR information to 
MMS. These forms are referenced throughout the OSFR regulations. You 
must submit to MMS only those forms that apply to your OSFR 
demonstration. You are not allowed to alter a form in any way.

Author

    Ray L. Beittel, Performance and Standards Branch, MMS, prepared 
this document.

E.O. 12886

    This proposed rule does not meet the criteria for a significant 
rule requiring review by the Office of Management and Budget (OMB) 
under E.O. 12866.
    All of the oil and gas companies currently operating in the OCS, 
including those considered to be small businesses, comply with the 
existing OSFR regulations (i.e., 33 CFR part 135). MMS does not expect 
that these companies will incur any significant operating cost 
increases from complying with the proposed rule. Also, of the estimated 
20 oil and gas companies operating in State coastal waters that would 
be affected by the proposed rule, all but three hold, have applied for, 
or have held a Certificate of Financial Responsibility under 30 CFR 
part 135. If these three companies use insurance to demonstrate OSFR 
under the proposed rule, the estimated annual cost of the insurance is 
$35,000 per company, which represents an industry-wide cost of 
$105,000.
    The proposed rule should not generate any adverse effects on 
competition, investment, productivity, innovation, or the ability of 
U.S.-based enterprises to compete with foreign-based enterprises in 
domestic or export markets. Therefore, OMB review of this proposed 
regulation under E.O. 12866 is unnecessary.

Regulatory Flexibility Act

    The Small Business Administration defines small business as a 
company employing 500 or fewer people. There are many small oil and gas 
exploration, production, and transportation businesses operating in the 
Federal OCS and in State coastal waters. MMS estimates that 
approximately 20 of the oil and gas businesses operating in State 
coastal waters are subject to this proposed regulation. We consider 8 
of those 20 to be large businesses because they each employ more than 
500 people. All but 3 of the 12 small businesses in this group 
currently demonstrate or have demonstrated $35 million in OSFR under 
current regulation. We expect that under the proposed regulation those 
three businesses will be required to demonstrate $10 million in OSFR. 
It is reasonable to assume that each company would use insurance as the 
means for demonstrating OSFR, and the annual premium for such insurance 
will be about $35,000 per company. Thus, the total annual economic 
impact on small businesses under this proposed regulation is estimated 
to be $105,000.
    The amount of oil a company produces is generally proportional to 
its size. We do not expect smaller companies to operate any individual 
facilities that produce, store, or transport more than 35,000 barrels 
of oil per day. If a smaller company undertakes a project with higher 
production levels, such as the deep-water ventures in the Gulf of 
Mexico, we expect it to do so in partnership with a larger company that 
can demonstrate OSFR by qualifying as a self-insurer. We further expect 
that the larger company will be selected as the designated applicant 
under the proposed regulations and demonstrate OSFR on behalf of the 
smaller partner. Therefore, we do not expect that implementing the 
proposed regulations will require small businesses to demonstrate OSFR 
for amounts greater than $35 million.
    MMS expects the proposed regulations will have no adverse effect on 
oil company service industries, such as the supply vessel and service 
vessel industries. The persons responsible for such vessels already 
comply with separate OSFR requirements under 33 CFR part 135.

Paperwork Reduction Act

    This proposed rule contains a collection of information which has 
been submitted to OMB for review and approval under section 3507(d) of 
the Paperwork Reduction Act of 1995. As part of our continuing effort 
to reduce paperwork and respondent burden, MMS invites the public and 
other Federal agencies to comment on any aspect of the reporting 
burden. Submit your comments to the Office of Information and 
Regulatory Affairs, OMB, Attention Desk Officer for the Department of 
the Interior (OMB control number 1010-XXXX), 725 17th Street, NW., 
Washington, DC 20503. Send a copy of your comments to the Minerals 
Management Service; Attention: Rules Processing Team; Mail Stop 4700; 
381 Elden Street; Herndon, Virginia 20170-4817.
    You may obtain a copy of the proposed collection of information and 
supporting statement by contacting the Bureau's Information Collection 
Clearance Officer at (703) 787-1242. The Paperwork Reduction Act of 
1995 provides that an agency may not conduct or sponsor, and a person 
is not required to respond to, a collection of information unless it 
displays a currently valid OMB control number.
    OMB may make a decision to approve or disapprove this collection of 
information after 30 days from receipt of our request. Therefore, your 
comments are best assured of being considered if OMB receives them 
within that time period. However, MMS will consider all comments 
received during the comment period for this notice of proposed 
rulemaking.
    The title of this collection of information is ``30 CFR Part 253, 
Oil Spill Financial Responsibility for Offshore Facilities.'' The 
information collected consists of the following, and the estimated 
burden for each is shown in parentheses:
    <bullet> Form MMS 1016, Designated Applicant Information 
Certification (1 hour)
    <bullet> Form MMS 1017, Designation of Applicant (9 hours)
    <bullet> Form MMS 1018, Self-insurance or Guarantee Information (1 
hour)

[[Page 14058]]

    <bullet> Form MMS 1019, Insurance Certificate (120 hours)
    <bullet> Form MMS 1020, Surety Bond (24 hours)
    <bullet> Forms MMS 1021, Lease Listing (3 hours)
    <bullet> Form MMS 1022, Permit or Right of Use and Easement Listing 
(3 hours)
    <bullet> Form MMS 1023, Lease Changes (1 hour)
    <bullet> Form MMS 1024, Permit or Right of Use and Easement Changes 
(1 hour)
    <bullet> Letter requesting a determination of applicability of the 
regulation (2 hours)
    <bullet> Proposal to accept an alternative method to demonstrate 
OSFR (no burden--we anticipate no requests but have provided the option 
in the rule)
    <bullet> Written notice to MMS of change in ability to comply (1 
hour)
    <bullet> Claims (no burden-MMS will not be involved in the claims 
process; the regulations only provide procedures for claimants to 
follow; MMS will not be advised of claims activity, and we will have no 
way of estimating the numbers).
    MMS will use the information to verify compliance with OPA, to 
confirm that applicants possess the required amounts of OSFR for a 
potential worst case oil spill discharge of more than 1,000 barrels (or 
a lesser amount if MMS determines the risk justifies it), and to 
establish a reference source of names, addresses, and telephone numbers 
of parties responsible for COF's and their designated agents and 
guarantors for claims associated with oil pollution.
    Respondents will be approximately 600 holders of leases, permits, 
and RUE's in the OCS and in State coastal waters who appoint 
approximately 200 designated applicants. Other respondents will be the 
designated applicants' insurance agents and brokers, bonding companies, 
and indemnitors. MMS receives approximately 2,631 responses each year. 
The frequency of submission will vary, but most will respond at least 
once per year. We estimate the total annual burden of this collection 
of information to be 20,381 reporting hours and zero recordkeeping 
hours. Based on $35 per hour, the total burden hour cost to respondents 
is estimated to be $713,335. The public reporting burden for this 
information will vary by form and collection (as shown above). The 
burden per response is averaged to be 8 hours, including the time for 
reviewing instructions, searching existing data sources, gathering and 
maintaining the data needed, and completing and reviewing the 
information collection.
    In addition to the hour burden, some respondents will bear the cost 
of demonstrating OSFR. The amount of OSFR currently required in the OCS 
under the OCSLA is $35 million, the same as the minimum level of OSFR 
required in the OCS under OPA. The estimated annual cost to OCS 
operators of providing evidence of OSFR for that amount is $21.6 
million. This cost is already borne by all operators in the OCS under 
the OCSLA provisions. No additional costs to OCS operators are 
attributable to the proposed rule. New annual costs of approximately 
$850,000 will be imposed on persons operating in State coastal waters. 
There is currently no Federal requirement for demonstrating OSFR in 
State coastal waters, and the entire $850,000 is a new cost imposed by 
the proposed rule. Therefore, MMS estimates the total annual cost for 
OSFR demonstrations to be $22.5 million.
    MMS will summarize written responses to this notice and address 
them in the final rule. All comments will become a matter of public 
record.
    1. MMS specifically solicits comments on the following questions:
    (a) Is the proposed collection of information necessary for the 
proper performance of MMS's functions, and will it be useful?
    (b) Are the estimates of the burden hours of the proposed 
collection reasonable?
    (c) Do you have any suggestions that enhance the quality, clarity, 
or usefulness of the information to be collected?
    (d) Is there a way to minimize the information collection burden on 
those who are to respond, including through the use of appropriate 
automated electronic, mechanical, or other forms of information 
technology?
    2. In addition, the Paperwork Reduction Act of 1995 requires 
agencies to estimate the total annual cost burden to respondents or 
recordkeepers resulting from the collection of information. MMS needs 
your comments on this item. Your response should split the cost 
estimate into two components: (a) Total capital and startup cost and 
(b) annual operation, maintenance, and purchase of services. Your 
estimates should consider the costs to generate, maintain, and disclose 
or provide the information. You should describe the methods you use to 
estimate major cost factors, including system and technology 
acquisition, expected useful life of capital equipment, discount 
rate(s), and the period over which you incur costs. Capital and startup 
costs include, among other items, computers and software you purchase 
to prepare for collecting information; monitoring, sampling, drilling, 
and testing equipment; and record storage facilities. Generally, your 
estimates should not include equipment or services purchased: before 
October 1, 1995; to comply with requirements not associated with the 
information collection; for reasons other than to provide information 
or keep records for the Government; or as part of customary and usual 
business or private practices.

Takings Implication Assessment

    DOI has determined that this proposed rule does not represent a 
governmental action capable of interfering with constitutionally 
protected property rights. Thus, DOI does not need to prepare a Takings 
Implication Assessment under E.O. 12630, Governmental Actions and 
Interference with Constitutionally Protected Property Rights.

E.O. 12988

    DOI has certified to OMB that the proposed rule meets the 
applicable reform standards provided in section 3(a) and 3(b)(2) of 
E.O. 12988.

Unfunded Mandates Reform Act of 1995

    DOI has determined and certifies under the Unfunded Mandates Reform 
Act, 2 U.S.C. 1502 et seq., that this rule will not impose a cost of 
$100 million or more in any given year on State, local, and tribal 
governments or the private sector.

National Environmental Policy Act

    DOI has determined that this action does not constitute a major 
Federal action significantly affecting the quality of the human 
environment; therefore, an environmental impact statement is not 
required.

List of Subjects in 30 CFR Part 253

    Continental shelf, Environmental protection, Insurance, Oil and gas 
exploration, Oil pollution, Penalties, Pipelines, Public lands--mineral 
resources, Public lands--rights-of-way, Reporting and recordkeeping 
requirements, and Surety bonds.

    Dated: March 13, 1997.

Bob Armstrong,
Assistant Secretary, Land and Minerals Management.

    For the reasons stated above, MMS proposes to add a new part 253 to 
Chapter II of Title 30 of the CFR as follows:

[[Page 14059]]

PART 253--OIL SPILL FINANCIAL RESPONSIBILITY FOR OFFSHORE 
FACILITIES

Subpart A--General

Sec.
253.1  What is the purpose of this regulation?
253.3  How are the terms used in this regulation defined?
253.5  What is the authority for collecting Oil Spill Financial 
Responsibility (OSFR) information?

Subpart B--Applicability And Amount of OSFR

253.10  What facilities does this regulation cover?
253.11  Who must demonstrate OSFR?
253.12  Who determines whether I must demonstrate OSFR?
253.13  How much OSFR must I demonstrate?
253.14  How do I determine the worst case oil-spill discharge 
volume?
253.15  What are my general OSFR compliance responsibilities?

Subpart C--Methods for Evidencing OSFR

253.20  What are the methods for evidencing OSFR?
253.21  How can I use self-insurance as OSFR evidence?
253.22  How do I establish the amount of self-insurance allowed as 
OSFR evidence?
253.23  What information must I submit to support my net worth 
qualifications?
253.24  When I submit audited financial statements in connection 
with my net worth, what standards must they meet?
253.25  What financial test procedures must I use to evaluate the 
amount of self-insurance allowed as OSFR evidence based on net 
worth?
253.26  What information must I submit to support my net assets 
qualifications?
253.27  When I submit audited financial statements in connection 
with my net assets, what standards must they meet?
253.28  What financial test procedures must I use to evaluate the 
amount of self-insurance allowed as OSFR evidence based on net 
assets?
253.29  How can I use insurance as OSFR evidence?
253.30  How can I use a guarantee as OSFR evidence?
253.31  How can I use a surety bond as OSFR evidence?
253.32  Are there alternative methods to demonstrate OSFR?

Subpart D--Requirements for Submitting OSFR Information

253.40  What OSFR evidence must I submit to MMS?
253.41  What terms must I include in my OSFR evidence?
253.42  How can I amend my OSFR demonstration?
253.43  When is my OSFR demonstration effective?
253.44  When must I comply with this regulation?
253.45  To whom do I submit my OSFR evidence?

Subpart E--Revocation and Penalties

253.50  How can my OSFR evidence be refused or invalidated?
253.51  What are the penalties for not complying with this part?

Subpart F--Claims for Oil-Spill Removal Costs and Damages

253.60  How must a claim be presented?
253.61  When is a guarantor subject to direct action for claims?
253.62  What are the designated applicant's obligations regarding a 
claim?

Appendix--Forms for Submitting OSFR Information

    Authority: 33 U.S.C. 2701 et seq.

Subpart A--General


Sec. 253.1  What is the purpose of this regulation?

    This part establishes the requirements for demonstrating OSFR for 
covered offshore facilities under Title I of the Oil Pollution Act of 
1990 (OPA), as amended, 33 U.S.C. 2701 et seq.


Sec. 253.3  How are the terms used in this regulation defined?

    Claim means a request, made in writing for a sum certain, for 
compensation for damages or removal costs resulting from an incident.
    Claimant means any person or government who presents a claim for 
compensation under OPA.
    Covered offshore facility (COF) means a facility:
    (1) Including any structure, group of structures (including wells), 
mobile offshore drilling unit, equipment, pipeline, or device (other 
than a vessel or other than a pipeline or deep water port licensed 
under the Deepwater Port Act of 1974 (33 U.S.C. 1501 et seq.)) used for 
exploring for, drilling for, or producing oil (including storing, 
handling, transferring, or processing oil associated with such 
production activities) or used for transporting oil from such 
facilities. This includes a well drilled by a MODU, but it does not 
include the MODU;
    (2) That is located in the area along the coast that is affected by 
the tides and is submerged when free from disturbing influences or in 
the area offshore therefrom; and
    (3) That has a worst case oil-spill discharge potential of more 
than 1,000 barrels of oil, or that has a worst case oil-spill discharge 
potential of less than 1,000 barrels of oil if MMS determines in 
writing that OSFR must be demonstrated for the facility.
    Designated applicant means a person designated by the responsible 
parties to demonstrate OSFR for COF's on a lease, permit, or right of 
use and easement.
    Director means the Director of the Minerals Management Service.
    Fund means the Oil Spill Liability Trust Fund established by 
section 9509 of the Internal Revenue Service Code of 1986 (26 U.S.C. 
9509).
    Guarantee means an agreement to indemnify a designated applicant 
upon its satisfaction of a claim.
    Guarantor means a person other than the designated applicant who 
provides a guaranty.
    Guaranty means any acceptable form of OSFR evidence provided by a 
guarantor including a guarantee, insurance, or surety bond.
    Incident means any occurrence or series of occurrences having the 
same origin resulting in the discharge or substantial threat of 
discharge of oil.
    Indemnitor means a person providing a guarantee for a designated 
applicant using self-insurance.
    Independent accountant means a certified public accountant who is 
certified by one of the States or a chartered accountant certified by 
the country of incorporation.
    Insolvent has the meaning set forth in 11 U.S.C. 101 and generally 
refers to a financial condition in which the sum of a person's debts is 
greater than the value of the person's property.
    Lease means any form of authorization issued under the Outer 
Continental Shelf Lands Act or State law which allows oil and gas 
exploration or production in the area covered by the authorization.
    Lessee means a person holding a leasehold interest in an oil or gas 
lease including an owner of record title or a holder of operating 
rights (working interest owner).
    Oil means oil of any kind or in any form, including but not limited 
to, petroleum, fuel oil, sludge, oil refuse, and oil mixed with wastes 
other than dredged spoil but does not include petroleum, including 
crude oil or any fraction thereof, which is specifically listed or 
designated as a hazardous substance under subparagraphs (A) through (F) 
of section 101(14) of the Comprehensive Environmental Response, 
Compensation, and Liability Act (CERCLA) (42 U.S.C. 9601) and which is 
subject to the provisions of CERCLA. Oil includes hydrocarbons produced 
at the wellhead in liquid form. Condensate is oil, including condensate 
that has been separated from gas before pipeline injection.
    Outer Continental Shelf (OCS) means the term ``Outer Continental 
Shelf'' as defined in section 2(a) of the OCS Lands Act (OCSLA) (43 
U.S.C. 1331(a)).

[[Page 14060]]

    Permit means an authorization, license, or permit for geological 
exploration issued under section 11 of the OCSLA (43 U.S.C. 1340) or 
applicable State law.
    Person means an individual, corporation, partnership, association, 
State, municipality, commission, or political subdivision of a State or 
any interstate body.
    Pipeline means all the pipeline segments and any associated 
equipment and appurtenances used or intended for use in the 
transportation of oil or natural gas. A pipeline segment is any portion 
of a pipeline connecting two COF's, any COF to shore, a COF and a 
subsea tie-in, or two subsea tie-ins.
    Responsible party means for a COF:
    (1) Other than a pipeline, 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 responsible party is not 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;
    (2) That is a pipeline, any person owning or operating the 
pipeline; and
    (3) That is abandoned, the persons who would have been the 
responsible parties for the COF immediately prior to abandonment.
    Right of use and easement (RUE) means any authorization other than 
a lease or permit to use the OCS or State land seaward of the line of 
ordinary low water along the coast. It includes pipeline rights-of-way.
    State means the several States of the United States, the District 
of Columbia, the Commonwealth of Puerto Rico, Guam, American Samoa, the 
United States Virgin Islands, the Commonwealth of the Northern 
Marianas, and any other territory or possession of the United States.


Sec. 253.5  What is the authority for collecting Oil Spill Financial 
Responsibility (OSFR) information?

    (a) The Office of Management and Budget (OMB) has approved the 
information collection requirements in this part 253 under 44 U.S.C. 
3501 et seq. and assigned OMB control number 1010-XXXX.
    (b) MMS collects the information to ensure that a party responsible 
for a COF has the financial resources necessary to pay for cleanup and 
damages that could be caused by oil discharges from the COF. MMS uses 
the information to ensure compliance of offshore lessees, owners, and 
operators of offshore facilities with OPA; to establish eligibility of 
designated applicants for OSFR certification; and to establish a 
reference source of names, addresses, and telephone numbers of 
responsible parties for offshore facilities and their designated agents 
and guarantors for claims associated with oil pollution from designated 
offshore facilities. The requirement to provide the information is 
mandatory. No confidential or proprietary information must be 
submitted. All information collected will be treated according to the 
requirements of the Freedom of Information Act (5 U.S.C. 552).
    (c) An agency may not conduct or sponsor, and a person is not 
required to respond to, a collection of information unless it displays 
a currently valid OMB control number.
    (d) Send comments regarding any aspect of the collection of 
information under this part, including suggestions for reducing the 
burden, to the Information Collection Clearance Officer, Minerals 
Management Service, Mail Stop 2200, 381 Elden Street, Herndon, Virginia 
20170-4817; and to the Office of Information and Regulatory Affairs, 
Office of Management and Budget, Attention: Desk Officer for the 
Department of the Interior (1010-XXXX), 725 17th Street NW., 
Washington, DC 20503.

Subpart B--Applicability and Amount of OSFR


Sec. 253.10  What facilities does this regulation cover?

    (a) This part applies to any COF on any lease or permit issued or 
on any RUE granted under the OCSLA or applicable State law.
    (b) For a pipeline flowing landward across the line of ordinary low 
water, this part applies seaward of the point the pipeline reaches the 
first accessible flow shutoff device landward of the line of ordinary 
low water.


Sec. 253.11  Who must demonstrate OSFR?

    (a) A designated applicant must show OSFR. A designated applicant 
may be a responsible party or another person authorized under this 
section. Every lease, permit, or RUE with a COF must have a single 
designated applicant.
    (1) If there is more than one responsible party, those responsible 
parties must use Form MMS 1017 to select a designated applicant. The 
designated applicant must submit Form MMS 1016 and agree to demonstrate 
OSFR on behalf of all the responsible parties.
    (2) If you are a designated applicant who is not a responsible 
party, you must agree to be liable for claims under OPA jointly and 
severally with the responsible parties.
    (b) If the land within a lease with a COF includes a permit or RUE 
with a COF, there must be a designated applicant for:
    (1) The lease;
    (2) Each permit with a COF; and
    (3) Each RUE with a COF.
    (c) The designated applicant for a lease with a COF must be either:
    (1) A lessee; or
    (2) The designated operator for the OCS lease under 30 CFR 250.8; 
the unit operator designated under a federally approved unit including 
the OCS lease. For a lease or unit not in the OCS, the operator 
designated under the lease or unit operating agreement for the lease 
may be the designated applicant only if the operating agreement 
provides that the operator is responsible for compliance with all the 
laws and regulations applicable to the lease or unit.
    (d) The designated applicant for a permit with a COF must be the 
permittee.
    (e) The designated applicant for a RUE with a COF must be the 
holder of the RUE or, if there is a pipeline on the RUE, the owner or 
operator of the pipeline.
    (f) MMS may require the designated applicant for a lease, permit, 
or RUE to be a person other than a person identified in paragraphs (c) 
through (e) of this section if MMS determines there is inadequate 
demonstration of OSFR.


Sec. 253.12  Who determines whether I must demonstrate OSFR?

    You may ask MMS whether this part applies to you. You must submit a 
request for a determination of OSFR applicability according to 
Sec. 253.45. You must include in your request any information that will 
assist MMS in making the determination. MMS may require you to submit 
other information before making a determination of OSFR applicability.


Sec. 253.13  How much OSFR must I demonstrate?

    (a) The following general parameters apply to the amount of OSFR 
that you must demonstrate:

[[Page 14061]]



------------------------------------------------------------------------
If you are the designated applicant for  then you must demonstrate . . .
------------------------------------------------------------------------
A lease, permit, or RUE with only one    The amount of OSFR that applies
 COF.                                     to the COF.                   
A lease, permit, or RUE with more than   The highest amount of OSFR that
 one COF.                                 applies to any of the COF's.  
More than one lease, permit, or RUE      The highest amount of OSFR that
 with one or more COF's.                  applies to any of the COF's on
                                          any of the leases, permits, or
                                          RUE's.                        
Leases, permits, and RUE's located in    The highest amount of OSFR that
 both OCS and State lands with one or     applies to any of the COF's   
 more COF's.                              located on the leases,        
                                          permits, or RUE's.            
------------------------------------------------------------------------

    (b) The amount of OSFR applicable to a lease, permit, or RUE is as 
follows:
    (1) For a COF located wholly or partially in the OCS:

------------------------------------------------------------------------
                                                            Applicable  
        COF worst case oil-spill discharge volume         amount of OSFR
------------------------------------------------------------------------
Up to 35,000 barrels....................................     $35,000,000
Over 35,000 but not more than 70,000 barrels............      70,000,000
Over 70,000 but not more than 105,000 barrels...........     105,000,000
Over 105,000 barrels....................................     150,000,000
------------------------------------------------------------------------

    (2) For a COF not located in the OCS:

------------------------------------------------------------------------
                                                            Applicable  
        COF worst case oil-spill discharge volume         amount of OSFR
------------------------------------------------------------------------
Up to 10,000 barrels....................................     $10,000,000
Over 10,000 but not more than 35,000 barrels............      35,000,000
Over 35,000 but not more than 70,000 barrels............      70,000,000
Over 70,000 but not more than 105,000 barrels...........     105,000,000
Over 105,000 barrels....................................     150,000,000
------------------------------------------------------------------------

    (3) The Director may determine that you must demonstrate an amount 
of OSFR greater than the amount in paragraph (b)(1) and (2) of this 
section based on the relative operational, environmental, human health, 
and other risks your COF poses. The amount that the Director may 
require will be one or more levels higher than the amount indicated in 
paragraph (b)(1) or (2) of this section for your COF. The Director will 
not require an OSFR demonstration that exceeds $150 million.


Sec. 253.14  How do I determine the worst case oil-spill discharge 
volume?

    (a) To calculate the amount of OSFR you must demonstrate for a 
facility under Sec. 253.13(b), you must use the worst case oil-spill 
discharge volume that you determined under whichever of the following 
regulations applies:
    (1) 30 CFR part 254-Response Plans for Facilities Located Seaward 
of the Coast Line;
    (2) 40 CFR part 112-Oil Pollution Prevention; or
    (3) 49 CFR part 194-Response Plans for Onshore Oil Pipelines.
    (b) If you are a designated applicant and you choose to demonstrate 
$150 million in OSFR, you are not required to determine any worst case 
oil-spill discharge volumes, since that is the maximum amount of OSFR 
required by this part.


Sec. 253.15  What are my general OSFR compliance responsibilities?

    (a) You must maintain continuous OSFR coverage for all your leases, 
permits, and RUE's with COF's.
    (b) You must ensure that new OSFR evidence is bound before your 
current evidence lapses or is canceled and that coverage for a new COF 
is bound before the COF goes into operation.
    (c) You may use self-insurance to demonstrate OSFR and find that 
you no longer qualify for that amount of self-insurance, based upon 
your latest audited financial statements. If this happens, you must 
demonstrate supplemental means of OSFR acceptable to MMS by whichever 
of the following dates comes first:
    (1) Sixty calendar days after you receive your latest financial 
statement; or
    (2) The first calendar day of the 5th month after the close of your 
fiscal year.
    (d) You must notify MMS in writing within 15 calendar days after a 
change occurs (e.g., you or your indemnitor petitions for bankruptcy 
under Title 11, U.S.C.) that would prevent you or your guarantors from 
complying with requirements to accept direct action for claims or 
meeting any other OSFR obligations. You must take any action MMS 
directs to ensure an acceptable OSFR demonstration.
    (e) If you deny payment of a claim presented to you under 
Sec. 253.60(b) or (d), you must give the claimant a written explanation 
for your denial.

Subpart C--Methods for evidencing OSFR


Sec. 253.20  What are the methods for evidencing OSFR?

    You may satisfy your OSFR requirements by using one or a 
combination of the following methods to demonstrate OSFR:
    (a) Self-insurance under Secs. 253.21 through 253.28;
    (b) Insurance under Sec. 253.29;
    (c) A guarantee under Sec. 253.30;
    (d) A surety bond under Sec. 253.31; or
    (e) An alternative method the Director approves under Sec. 253.32.


Sec. 253.21  How can I use self-insurance as OSFR evidence?

    (a) If you use self-insurance to satisfy all or part of your 
obligation to demonstrate OSFR, you must annually pass either a net 
worth test or an unencumbered net asset test.

[[Page 14062]]

    (b) You must submit a complete and unaltered Form MMS 1018 with 
each application to demonstrate OSFR using self-insurance.
    (c) You may submit to MMS your initial application to demonstrate 
OSFR using self-insurance at any time.
    (d) You must submit your application to renew OSFR using self-
insurance by the first calendar day of the 5th month after the close of 
your fiscal year.


Sec. 253.22  How do I establish the amount of self-insurance allowed as 
OSFR evidence?

    To establish the amount of self-insurance allowed, you must submit 
evidence of your net worth (see Sec. 253.23) or your unencumbered 
assets (see Sec. 253.26).


Sec. 253.23  What information must I submit to support my net worth 
qualifications?

    You must support your net worth qualifications with information 
contained in your previous fiscal year's audited financial statements.
    (a) Audited financial statements must be in the form of:
    (1) An annual report, prepared in accordance with the generally 
accepted accounting practices of the United States or other 
international accounting practices determined to be equivalent by MMS; 
or
    (2) A Form 10-K, prepared in accordance with Securities and 
Exchange Commission regulations.
    (b) Audited financial statements must be submitted together with a 
letter signed by your treasurer highlighting:
    (1) The State or the country of incorporation;
    (2) The total value of the stockholders' equity as shown on the 
balance sheet;
    (3) The net value of the plant, property, and equipment shown on 
the balance sheet; and
    (4) The net value of the identifiable U.S. assets and the 
identifiable total assets in the auditor's notes to the financial 
statements (i.e., a geographic segmented business note).


Sec. 253.24  When I submit audited financial statements in connection 
with my net worth, what standards must they meet?

    (a) Your audited financial statements must be bound.
    (b) Your audited financial statements must include the unqualified 
opinion by an independent accountant that:
    (1) The financial statements are free from material misstatement, 
and
    (2) The audit was conducted in accordance with the generally 
accepted auditing standards of the United States or other international 
auditing standards MMS determines to be equivalent.
    (c) The financial information you submit must be expressed in U.S. 
dollars. If this information was originally reported in another form of 
currency, you must provide a conversion factor to U.S. dollars that was 
effective on the last day of the fiscal year pertinent to your 
financial statements. You also must identify the market source of the 
currency exchange rate.


Sec. 253.25  What financial test procedures must I use to evaluate the 
amount of self-insurance allowed as OSFR evidence based on net worth?

    (a) Divide the total value of the stockholder's/owners' equity 
listed on the balance sheet by 10.
    (b) Divide the net value of the identifiable U.S. assets by the net 
value of the identifiable total assets.
    (c) Multiply the net value of plant, property, and equipment shown 
on the balance sheet by the number calculated under paragraph (b) of 
this section and divide the resultant product by 10.
    (d) The smaller of the numbers calculated under paragraphs (a) or 
(c) of this section is the maximum allowable amount you may use to 
demonstrate OSFR under this method.


Sec. 253.26  What information must I submit to support my net assets 
qualifications?

    You must support your net assets qualifications with the 
information required by Sec. 253.23(a) and a list of pledged, 
unencumbered, and unimpaired U.S. assets whose value will not be 
affected by an oil discharge from a COF. The assets must be plant, 
property, or equipment. You must submit a letter signed by you or your 
treasurer:
    (a) Identifying which assets are pledged;
    (b) Certifying that the assets are unencumbered, including 
contingent encumbrances;
    (c) Promising that the identified assets will not be sold, 
subjected to a security interest, or otherwise encumbered throughout 
the specified fiscal year; and
    (d) Specifying:
    (1) The State of the country of incorporation;
    (2) The total value of the stockholder's/owners' equity;
    (3) The identification and location of the pledged U.S. assets; and
    (4) The value of the pledged U.S. assets using the same valuation 
method used in your audited financial statements.


Sec. 253.27  When I submit audited financial statements in connection 
with my net assets, what standards must they meet?

    Any audited financial statements that you submit must:
    (a) Meet the standards in Sec. 253.24; and
    (b) Include a certification by the independent accountant who 
audited the financial statements that:
    (1) The value of the unencumbered assets is reasonable and
    (2) There are no encumbrances on the asset.


Sec. 253.28  What financial test procedures must I use to evaluate the 
amount of self-insurance allowed as OSFR evidence based on net assets?

    (a) Divide the total value of the stockholders'/owners' equity 
listed on the balance sheet by 4.
    (b) Divide the value of the unencumbered U.S. assets by 2.
    (c) The smaller number calculated under paragraphs (a) or (b) of 
this section is the maximum allowable amount you may use to demonstrate 
OSFR under this method.


Sec. 253.29  How can I use insurance as OSFR evidence?

    (a) If you use insurance to satisfy all or part of your obligation 
to demonstrate OSFR, you may use only insurance certificates issued by 
insurers that are:
    (1) Syndicates of Lloyds of London;
    (2) Members of the Institute of London Underwriters; or
    (3) Other foreign or domestic insurers that have achieved a 
``Secure'' rating of claims paying ability in their latest review by 
A.M. Best's Insurance Reports, Standard & Poor's Insurance Rating 
Services, or other equivalent rating made by a rating service 
acceptable to MMS.
    (b) You must submit information about your insurers to MMS on a 
completed and unaltered Form MMS 1019. The information you submit must:
    (1) Include all the information required by Sec. 253.41 of this 
part; and
    (2) Be executed on one original insurance certificate showing all 
participating insurers and their respective percentage of participation 
in this risk. The certificate must bear the original signatures of each 
insurer's underwriter or of their lead underwriters, underwriting 
managers, or delegated brokers, depending on the underwriting 
arrangement.
    (3) For each insurance company on the insurance certificate, 
indicate the insurer's rating of claims paying ability and the rating 
service that issued the rating.
    (c) The insurance you provide to MMS as OSFR evidence may be 
divided into layers, subject to the following restrictions:
    (1) The total amount of insurance must equal the total amount of 
OSFR you must demonstrate as determined under Sec. 253.13 of this part;

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    (2) No more than four insurance layers may be used, including the 
base layer;
    (3) If the total amount of insurance is $35 million or less, it 
must not be layered. Insurance for greater amounts may be layered in 
multiples of $35 million. If the amount of insurance is $150 million, 
one $45 million layer is allowed;
    (4) Each insurer's participation in the covered insurance risk must 
be expressed as a percentage of a whole layer with no intermediate, 
horizontal layering permitted;
    (5) You may use an insurance deductible. If your insurance is 
layered, the deductible amount must apply only to the base layer. You 
must use one or more of the other MMS-approved OSFR methods to 
establish an insurance deductible; and
    (6) Each insurance layer submitted as OSFR evidence must be 
presented on a separate Form MMS 1019.


Sec. 253.30  How can I use a guarantee as OSFR evidence?

    (a) You may use only one guarantee issued by only one indemnitor to 
satisfy all or part of your obligation to demonstrate OSFR.
    (b) Your indemnitor must complete an unaltered Form MMS 1018 and 
provide a guarantee that:
    (1) Includes all the information required by Sec. 253.41 of this 
part; and
    (2) Does not exceed the amounts calculated using the net worth and 
net assets tests specified under Secs. 253.21 through 253.28 of this 
part.
    (c) You may submit to MMS your initial application to demonstrate 
OSFR using a guarantee at any time. You must submit your application to 
renew OSFR using a guarantee by the first calendar day of the 5th month 
after the close of your indemnitor's fiscal year.


Sec. 253.31  How can I use a surety bond as OSFR evidence?

    (a) Each bonding company that issues a surety bond that you submit 
to MMS as OSFR evidence must:
    (1) Be licensed to do business in the State in which the surety 
bond is executed;
    (2) Be certified by the U.S. Treasury Department as an acceptable 
surety for Federal obligations and listed in the current Treasury 
Circular No. 570; and
    (3) Provide the surety bond on Form MMS 1020 without alteration 
specifying the terms of your surety agreement for claims filed against 
you under OPA; and
    (4) Be in compliance with applicable statutes regulating surety 
company participation in insurance-type risks.
    (b) A surety bond that you submit as OSFR evidence must include all 
the information required by Sec. 253.41 of this part.


Sec. 253.32  Are there alternative methods to demonstrate OSFR?

    The Director may accept other methods to demonstrate OSFR that 
provide equivalent assurance of timely satisfaction of claims. This may 
include pools of guarantors, letters of credit, or other comparable 
methods. Submit your proposal, together with all the supporting 
documents, to the Director at the address in Sec. 253.45. The 
Director's decision whether to approve your alternative method to 
evidence OSFR is solely at the Director's discretion and is not subject 
to administrative appeal under 30 CFR part 290 or 43 CFR part 4.

Subpart D--Requirements for Submitting OSFR Information


Sec. 253.40  What OSFR evidence must I submit to MMS?

    (a) You must submit to MMS:
    (1) A single demonstration of OSFR that covers all the COF's on all 
the leases, permits, and RUE's for which you are the designated 
applicant;
    (2) A completed and unaltered Form MMS 1016;
    (3) MMS forms that identify your leases (MMS 1021), permits (MMS 
1022), and RUE's (MMS 1022), and the methods you used to demonstrate 
OSFR for any COF's (forms are available from the address in 
Sec. 253.45); and
    (4) Any insurance certificates, guarantees, and surety bonds used 
as OSFR evidence for the leases, permits, and RUE's for which you are 
the designated applicant.
    (b) You must sign each MMS form submitted to MMS as part of an OSFR 
demonstration. You also must attach to Form MMS 1016 evidence of your 
authority to sign if:
    (1) You submit OSFR evidence on behalf of a designated applicant; 
and
    (2) You are not disclosed as an individual (sole proprietor), 
designated applicant, or a managing partner of a partnership-designated 
applicant.


Sec. 253.41  What terms must I include in my OSFR evidence?

    Each instrument you submit as OSFR evidence must specify:
    (a) The effective date, and except for a surety bond, the 
expiration date;
    (b) That termination of the instrument will not affect the 
liability of the instrument issuer for claims arising from an incident 
that occurred on or before the effective date of termination;
    (c) That the instrument will remain in force until the termination 
date or until:
    (1) Thirty calendar days after MMS and the designated applicant 
receive from the instrument issuer a notification of intent to cancel;
    (2) MMS receives from the designated applicant other acceptable 
OSFR evidence; or
    (3) All the COF's to which the instrument applies are permanently 
abandoned in compliance with 30 CFR part 250 or equivalent State 
requirements;
    (d) That the instrument issuer agrees to direct action for claims 
made under OPA up to the guaranty amount, subject to the defenses in 
paragraph (f) of this section and following the procedures in 
Sec. 253.60 of this part;
    (e) An agent in the United States for service of process; and
    (f) That the instrument issuer will not use any defenses against a 
claim made under OPA except:
    (1) All the rights and defenses that would be available to a 
designated applicant or responsible party for whom the guaranty was 
provided; and
    (2) The incident leading to the claim for removal costs or damages 
was caused by willful misconduct of a responsible party for whom the 
designated applicant demonstrated OSFR.


Sec. 253.42  How can I amend my OSFR demonstration?

    (a) If you want to add lease, permit, or RUE areas not included in 
your initial OSFR demonstration, you must submit to MMS a completed 
Form MMS 1023 or Form MMS 1024. If applicable, you also must submit any 
additional guarantees, surety bonds, insurance certificates, or other 
instruments required to extend the coverage of your original OSFR 
demonstration to the COF's on the areas to be added. You do not need to 
resubmit previously accepted audited financial statements for the 
current fiscal year. You must ensure that MMS receives this information 
at least 30 days before the areas are to be added.
    (b) If you want to drop lease, permit, or RUE areas included in 
your initial OSFR demonstration, you must submit to MMS a completed 
Form MMS 1023 or Form MMS 1024. You must ensure that MMS receives this 
information at least 30 days before the leases, permits, or RUE's are 
to be dropped.


Sec. 253.43  When is my OSFR demonstration effective?

    (a) MMS will notify you in writing after we determine whether your 
evidence is acceptable to demonstrate OSFR, and your demonstration is 
effective upon MMS acceptance. If we

[[Page 14064]]

find that you have not submitted all the information needed to 
demonstrate OSFR, we may require you to provide additional information 
before we determine whether your OSFR evidence is acceptable.
    (b) Except in the case of self-insurance or guarantee, MMS 
acceptance of OSFR evidence is valid until the surety bond, insurance 
certificate, or other accepted OSFR instrument expires. In the case of 
self-insurance or guarantee, acceptance is valid until the first day of 
the 5th month after the close of your or your indemnitor's current 
fiscal year.


Sec. 253.44  When must I comply with this regulation?

    You must submit to MMS your evidence of OSFR for all the COF's on 
all the leases, permits, and RUE's for which you are the designated 
applicant no later than 60 days after May 21, 1997.


Sec. 253.45  To whom do I submit my OSFR evidence?

    All correspondence and required submissions relative to this part 
must be addressed to: U.S. Department of the Interior, Minerals 
Management Service, Gulf of Mexico Region, Oil Spill Financial 
Responsibility Program, 1201 Elmwood Park Boulevard, New Orleans, 
Louisiana 70123.

Subpart E--Revocation and Penalties


Sec. 253.50  How can my OSFR evidence be refused or invalidated?

    (a) If MMS determines that any OSFR evidence you submit fails to 
comply with the requirements of this part, we may refuse to accept it. 
If we refuse to accept your OSFR evidence, we will notify you in 
writing. You must take any corrective action included with that 
notification.
    (b) MMS may immediately and without prior notice invalidate your 
OSFR demonstration if you:
    (1) Are no longer the designated applicant for the COF included in 
your demonstration; or
    (2) Permit the cancellation or termination of the insurance policy, 
surety bond, or guarantee upon which the continued validity of the 
demonstration is based.
    (c) If MMS determines you are not complying with the requirements 
of this part for any reason other than paragraph (b) of this section, 
we may notify you of our intent to invalidate your OSFR demonstration. 
Unless you take the corrective action MMS specifies within 15 calendar 
days from the date you receive such a notice, we will invalidate your 
OSFR demonstration.


Sec. 253.51  What are the penalties for not complying with this part?

    (a) If you fail to comply with the requirements of OPA and this 
part, you are subject to a civil penalty of up to $25,000 per COF per 
day of violation (that is, each day you operate a COF without 
acceptable evidence of OSFR). For any COF with more than one 
responsible party, each responsible party is subject to a civil penalty 
of up to $25,000 per COF per day of violation.
    (b) MMS will determine the date of a noncompliance. MMS will assess 
penalties in accordance with an OSFR penalty schedule using the 
procedures found at 30 CFR part 250, subpart N. You may obtain a copy 
of the penalty schedule from MMS at the address in Sec. 253.45 of this 
part.
    (c) MMS may assess a civil penalty against you that is greater or 
less than the amount in the penalty schedule after taking into account 
the factors in section 4303(a) of OPA (33 U.S.C. 2716a).
    (d) If you fail to correct a deficiency in the OSFR evidence for a 
COF, the Director may suspend operation of a COF in the OCS under 30 
CFR 250.10 or seek judicial relief, including an order suspending the 
operation of any COF.

Subpart F--Claims for Oil Spill Removal Costs and Damages


Sec. 253.60  How must a claim be presented?

    (a) You must present your claim for removal costs and damages first 
to the designated applicant for the COF that is the source of the 
incident resulting in your claim.
    (b) If the designated applicant denies your claim under paragraph 
(a) of this section for a reason in Sec. 253.61(b), you may elect to 
present your claim to:
    (1) The designated applicant's guarantor if there is a guarantor;
    (2) The Fund using the procedures at 33 CFR part 136; or
    (3) Any of the responsible parties for the COF that is the source 
of the incident resulting in your claim.
    (c) If the designated applicant fails to pay your claim under 
paragraph (a) of this section for a reason in Sec. 253.61(b), you may 
elect to present your claim to:
    (1) The designated applicant's guarantor if there is a guarantor;
    (2) The Fund using the procedures at 33 CFR part 136 if at least 90 
days have passed since you first presented your claim to the designated 
applicant; or
    (3) Any of the responsible parties for the COF that is the source 
of the incident resulting in your claim.
    (d) If the designated applicant denies your claim under paragraph 
(a) of this section for a reason not in Sec. 253.61(b), you may elect 
to:
    (1) Start a court action against the designated applicant and/or 
any of the parties responsible for the COF that is the source of the 
incident resulting in your claim;
    (2) Present your claim to the Fund using the procedures found at 33 
CFR part 136; or
    (3) Any of the responsible parties for the COF that is the source 
of the incident resulting in your claim.
    (e) If the designated applicant fails to pay your claim under 
paragraph (a) of this section within 90 days for a reason not in 
Sec. 253.61(b), you may elect to:
    (1) Start a court action against the designated applicant and/or 
any of the parties responsible for the COF that is the source of the 
incident resulting in your claim;
    (2) Present your claim to the Fund using the procedures at 33 CFR 
part 136; or
    (3) Any of the responsible parties for the COF that is the source 
of the incident resulting in your claim.
    (f) If the guarantor denies your claim under paragraph (b)(1) of 
this section, you may elect to:
    (1) Start a court action against the guarantor; or
    (2) Present your claim to the Fund using the procedures at 33 CFR 
part 136.
    (g) If the guarantor fails to pay your claim under paragraph (c)(1) 
of this section within 90 days after it was first presented to the 
designated applicant, you may elect to:
    (1) Start a court action against the guarantor; or
    (2) Present your claim to the Fund using the procedures at 33 CFR 
part 136.
    (h) You may ask MMS for assistance if you are uncertain whether the 
guarantor is subject to your claim under paragraphs (b)(1) or (c)(1) of 
this section. Submit your request for assistance to the address in 
Sec. 253.45. You must include with your request any information that 
will assist MMS in determining whether you may present your claim to 
the guarantor.


Sec. 253.61  When is a guarantor subject to direct action for claims?

    You are subject to direct action for any claim asserted by:
    (a) The United States or for any compensation paid by the Fund 
under OPA, including compensation claim processing costs; and
    (b) A claimant other than the United States if the designated 
applicant has:
    (1) Denied or failed to pay a claim because of being insolvent; or
    (2) Filed a petition for bankruptcy under Title 11, U.S.C.

[[Page 14065]]

Sec. 253.62  What are the designated applicant's obligations regarding 
a claim?

    When you receive a claim for removal costs and damages, you must 
notify within 15 calendar days of receipt of a claim:
    (a) Your guarantor(s); and
    (b) The responsible parties for whom you are acting as the 
designated applicant.

Appendix--Forms for Submitting OSFR Information

Minerals Management Service Oil Pollution Act of 1990

Application for Certification of Oil Spill Financial Responsibility

OMB Control Number 1010-XXXX

Expiration Date: ________________

Paperwork Reduction Act Statement
    The Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.) 
requires us to inform you that the Minerals Management Service (MMS) 
collects this information to:
    1. Provide a standard method for establishing eligibility for 
certification of oil spill financial responsibility (OSFR) for offshore 
facilities;
    2. Identify and maintain a record of those offshore facilities that 
have a potential oil-spill liability;
    3. Establish and maintain a continuous record, over the liability 
term specified in Title I of the Oil Pollution Act of 1990, of 
financial evidence and instruments established to pay claims for oil-
spill cleanup and damages resulting from operations conducted on 
offshore facilities and the transportation of oil from offshore 
platforms and wells;
    4. Establish and maintain a continuous record of responsible 
parties, as defined in Title I of the Oil Pollution Act of 1990, and 
their agents for certification of OSFR for offshore facilities; and
    5. Establish and maintain a continuous record, over the liability 
term specified in Title I of the Oil Pollution Act of 1990, of persons 
to contact and U.S. agents for service of process for claims associated 
with oil spills from offshore facilities.
    The MMS will routinely use the information to:
    1. Ensure compliance of offshore lessees and owners and operators 
of offshore facilities with Title I of the Oil Pollution Act of 1990;
    2. Establish eligibility of applicants for certification of OSFR; 
and
    3. Establish a reference source of names, addresses, and telephone 
numbers of responsible parties for offshore facilities and their 
designated agents and guarantors for claims associated with oil 
pollution from designated offshore facilities.
    Response to this request is mandatory (33 U.S.C. 2716). No 
confidential or proprietary information must be submitted. OSFR 
demonstrations, including supporting audited financial statements, will 
be subject to review under the Freedom of Information Act (5 U.S.C. 
552).
    An agency may not conduct or sponsor, and a person is not required 
to respond to, a collection of information unless it displays a 
currently valid Office of Management and Budget (OMB) Control Number. 
The combined public reporting burden for an application for 
certification of oil spill financial responsibility is estimated to 
average 8 hours per response, including the time for reviewing 
instructions, gathering and maintaining data, and completing and 
reviewing the application. The average burden for each of the nine 
forms that could comprise an application is:

Form MMS 1016, Designated Applicant Information..................1 hour
Form MMS 1017, Designation of Applicant.........................9 hours
Form MMS 1018, Self-insurance or Guarantee Information...........1 hour
Form MMS 1019, Insurance Certificate..........................120 hours
Form MMS 1020, Surety Bond.....................................24 hours
Form MMS 1021, Lease Listing....................................3 hours
Form MMS 1022, Permit or Right of Use and Easement Listing......3 hours
Form MMS 1023, Lease Changes.....................................1 hour
Form MMS 1024, Permit or Right of Use and Easement Changes.......1 hour

    Direct comments regarding the burden estimate or any other aspect 
of this collection to the Information Collection Clearance Officer, 
Mail Stop 2200, Minerals Management Service, 381 Elden Street, Herndon, 
VA 20170-4817; and to the Office of Management and Budget, Office of 
Information and Regulatory Affairs, Desk Officer for the Department of 
the Interior (OMB No. 1010-XXXX), 725 17th Street, NW, Washington, DC 
20503.

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[FR Doc. 97-7270 Filed 3-24-97; 8:45 am]
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