[Federal Register Volume 73, Number 181 (Wednesday, September 17, 2008)]
[Rules and Regulations]
[Pages 53691-53705]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-21554]


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DEPARTMENT OF HOMELAND SECURITY

Coast Guard

33 CFR Part 138

[Docket No. USCG-2005-21780]
RIN 1625-AA98


Financial Responsibility for Water Pollution (Vessels) and OPA 90 
Limits of Liability (Vessels and Deepwater Ports)

AGENCY: Coast Guard, DHS.

ACTION: Final rule.

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SUMMARY: The Coast Guard is amending the regulatory requirements, under 
the Oil Pollution Act of 1990 and the Comprehensive Environmental 
Response, Compensation and Liability Act, for vessel operators (as 
defined in the rule) to establish and maintain evidence of financial 
responsibility. The amendments ensure that the amounts of financial 
responsibility that must be demonstrated by vessel operators are 
consistent with recent statutory increases, and future mandated 
increases, to the limits of liability under the Oil Pollution Act of 
1990. The amendments also implement changes in the Coast Guard's 
administration of the certificate of financial responsibility program, 
and clarify the current rule.

DATES: This final rule is effective October 17, 2008.

ADDRESSES: Comments and material received from the public, as well as 
documents mentioned in this preamble as being available in the docket, 
are part of docket USCG-2005-21780 and are available for inspection or 
copying at the Docket Management Facility (M-30), U.S. Department of 
Transportation, West Building Ground Floor, Room W12-140, 1200 New 
Jersey Avenue, SE., Washington, DC 20590, between 9 a.m. and 5 p.m., 
Monday through Friday, except Federal holidays. You may also find this 
docket on the Internet at http://www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: If you have questions on this rule, 
call Benjamin White, National Pollution Funds Center, Coast Guard, 
telephone 202-493-6863. If you have questions on viewing the docket, 
call Renee V. Wright, Program Manager, Docket Operations, telephone 
202-366-9826.

SUPPLEMENTARY INFORMATION:

I. Acronyms

    CERCLA Title I of the Comprehensive Environmental Response, 
Compensation, and Liability Act of 1980, as amended (42 U.S.C. 9601-
9675).
    CFR Code of Federal Regulations.
    COFR Certificate of Financial Responsibility.
    DPA Deepwater Port Act of 1974, as amended (33 U.S.C. 1501 et 
seq.).
    DRPA Delaware River Protection Act of 2006, Title VI of the 
Coast Guard and Maritime Transportation Act of 2006, Public Law 109-
241, July 11, 2006, 120 Stat. 516.
    FRFA Final Regulatory Flexibility Analysis.
    FR Federal Register.
    Fund Oil Spill Liability Trust Fund.
    IRFA Initial Regulatory Flexibility Analysis.
    LOOP Louisiana Offshore Oil Port.
    MODU Mobile Offshore Drilling Unit.
    NEPA National Environmental Policy Act of 1969 (42 U.S.C. 4321-
4370f).
    NPRM Notice of Proposed Rulemaking.
    OPA 90 The Oil Pollution Act of 1990, as amended (33 U.S.C. 
2701, et seq.).
    U.S.C. United States Code.
    U.S.C.C.A.N. United States Code Congressional and Administrative 
News.

II. Regulatory History

    On August 18, 2006, before initiating this rulemaking, we published 
a notice of policy in the Federal Register (71 FR 47737) entitled ``New 
Oil Pollution Limits of Liability for Vessels--Delaware River 
Protection Act of 2006 Amendment to the Oil Pollution Act of 1990'' 
(hereafter the ``Notice of Policy'').
    On February, 5, 2008, we published a notice of proposed rulemaking 
(NPRM) in the Federal Register (73 FR 6642), entitled ``Financial 
Responsibility for Water Pollution (Vessels) and OPA 90 Limits of 
Liability (Vessels and Deepwater Ports)''.
    On February 13, 2008, we published corrections to the NPRM in the 
Federal Register (73 FR 8250), to clarify the proposed effective date 
of the rule and the distinction between the financial responsibility 
applicable amounts of Sec.  138.80(f) and the OPA 90 limits of 
liability in proposed Subpart B.
    We received seven letters during the public comment period raising 
13

[[Page 53692]]

issues, and one additional letter after the public comment period 
closed on May 5, 2008, raising one issue. No public meeting was 
requested and none was held.

III. Background and Purpose

    In general, under the Oil Pollution Act of 1990, as amended (33 
U.S.C. 2701, et seq.) (OPA 90), responsible parties (i.e., the owners 
and operators, including demise charterers) for a vessel or a facility 
from which oil is discharged, or which poses the substantial threat of 
a discharge of oil, into or upon the navigable waters or adjoining 
shorelines or the exclusive economic zone are liable for the removal 
costs and damages specified in OPA 90 that result from such incident, 
up to prescribed limits of liability. (33 U.S.C. 2702(a); 33 U.S.C. 
2704). Embodying the polluter pays principle, this liability is strict, 
joint and several.\1\ Similar requirements apply under Section 107 of 
the Comprehensive Environmental Response, Compensation and Liability 
Act of 1980, as amended (42 U.S.C. 9607) (CERCLA) to owners and 
operators of vessels and facilities that release or threaten to release 
hazardous substances.
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    \1\ See, Oil Pollution Desk Book, Environmental Law Institute 
1991, hereinafter OPA 90 Desk Book, p. 88, H.R. Conf. Report 101-
653, at p. 102, reprinted in 1990 U.S.C.C.A.N. 779, 780 [''The term 
`liable' or `liability' * * * is to be construed to be the standard 
of liability * * * under section 311 of the [Federal Water Pollution 
Control Act, 33 U.S.C. 1321] * * *. That standard of liability has 
been determined repeatedly to be strict, joint and several 
liability.'']; OPA 90 Desk Book p. 93, H.R. Conf. Report 101-653, at 
118, 1990 U.S.C.C.A.N., at 797 (Aug. 3, 1990) [``[T]he primary 
responsibility to compensate victims of oil pollution rests with the 
person responsible for the source of the pollution[.]''].
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    The OPA 90 limits of liability are set out in 33 U.S.C. 2704(a). 
The CERCLA limits of liability are set out in 42 U.S.C. 9607.
    In addition to the limit of liability provisions, 33 U.S.C. 2716(a) 
of OPA 90 and 42 U.S.C. 9608(a) of CERCLA require that the owners and 
operators, including demise charterers, of certain vessels establish 
and maintain evidence of financial responsibility (i.e., ability to 
pay) sufficient to meet the maximum amount of liability to which they 
could be subjected under 33 U.S.C. 2704 and 42 U.S.C. 9607.
    According to 33 U.S.C. 2716(a)(1) and (2), the evidence of 
financial responsibility requirements apply, in relevant part for 
purposes of OPA 90, to responsible parties for: Any vessel over 300 
gross tons (except a non-self propelled vessel that does not carry oil 
as cargo or fuel) using any place subject to the jurisdiction of the 
United States; and any vessel using the waters of the exclusive 
economic zone to transship or lighter oil destined for a place subject 
to the jurisdiction of the United States. OPA 90, at 33 U.S.C. 2716(c), 
also imposes evidence of financial responsibility requirements on 
offshore facilities and deepwater ports. This rulemaking, however, only 
concerns the OPA 90 evidence of financial responsibility requirements 
that must be met by vessels under 33 U.S.C. 2716(a).
    The OPA 90 limits of liability are subject to amendment both by 
statute and, under 33 U.S.C. 2704(d), by regulation, and when the 
limits of liability are amended the financial responsibility 
requirements must be adjusted by regulation. On July 11, 2006, the 
President signed the Delaware River Protection Act of 2006, Title VI of 
the Coast Guard and Maritime Transportation Act of 2006, Public Law 
109-241, July 11, 2006, 120 Stat. 516 (DRPA). Section 603(a) of DRPA 
amended the OPA 90 limits of liability for vessels at 33 U.S.C. 
2704(a).
    The following table shows the OPA 90 limits of liability in effect 
before DRPA, and the new limits of liability under OPA 90 as amended by 
DRPA Section 603(a), by vessel type:

            Changes to OPA 90 Vessel Limits of Liability \2\
------------------------------------------------------------------------
                               The original limit   The amended limit of
     If the vessel is a        of liability limit     liability is the
                              was the greater of--      greater of--
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 Tank vessel greater than      $1,200 per gross      $3,000 per gross
 3,000 gross tons with a       ton or $10,000,000.   ton or $22,000,000.
 single hull, with double
 sides only, or with a
 double bottom only.
 Tank vessel less than or      $1,200 per gross      $3,000 per gross
 equal to 3,000 gross tons     ton or $2,000,000.    ton or $6,000,000.
 with a single hull, with
 double sides only, or with
 a double bottom only.
 Tank vessel greater than      $1,200 per gross      $1,900 per gross
 3,000 gross tons with a       ton or $10,000,000.   ton or $16,000,000.
 double hull.
 Tank vessel less than or      $1,200 per gross      $1,900 per gross
 equal to 3,000 gross tons     ton or $2,000,000.    ton or $4,000,000.
 with a double hull.
 Any vessel other than a       $600 per gross ton    $950 per gross ton
 tank vessel.                  or $500,000.          or $800,000.
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\2\ Sources: 33 U.S.C. 2704(a) immediately prior to amendment by DRPA,
  and 33 U.S.C. 2704(a) as amended by DRPA Section 603(a). Although the
  original and current versions of 33 U.S.C. 2704(a) both distinguish
  between vessels on the basis of their gross tonnage and whether they
  are tank vessels, 33 U.S.C. 2704(a) as amended by DRPA Section 603(a)
  now also distinguishes between single-hulled and double-hulled tank
  vessels.

    On August 18, 2006, before initiating this rulemaking, we published 
a Notice of Policy in the Federal Register (71 FR 47737, see, 
Regulatory History) explaining:
    <bullet> That the OPA 90 limits of liability for vessels were 
changed by DRPA effective July 11, 2006 for non-tank vessels, and 
effective October 9, 2006 for tank vessels;
    <bullet> The amounts of the new OPA 90 vessel limits of liability;
    <bullet> That the OPA 90 proof of financial responsibility 
(applicable amount) requirements for vessels at 33 CFR part 138 would 
stay at the applicable amount levels in effect prior to the DRPA 
amendments until changed by rulemaking; and
    <bullet> That a rulemaking project would be initiated to require 
vessel owners and operators to provide evidence of financial 
responsibility applicable amounts under 33 CFR part 138 to the amended 
OPA 90 limits of liability.

Scope of the Rule

    This rulemaking was initiated, as contemplated in the Notice of 
Policy, to ensure that the owners and operators (including demise 
charterers, hereafter referred to jointly as the operators) of any 
vessel required to have a certificate of financial responsibility under 
33 U.S.C. 2716, demonstrate that they are

[[Page 53693]]

financially able to meet their potential liability under OPA 90, 33 
U.S.C. 2704, under the new limits of liability as amended by DRPA, in 
the event of an incident where an OPA 90 limit of liability applies. 
The rulemaking amends 33 CFR part 138 to ensure consistency between the 
OPA 90 vessel evidence of financial responsibility applicable amounts 
at Sec.  138.80(f)(1) and the OPA 90 vessel limits of liability as 
amended by DRPA.\3\
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    \3\ This rulemaking does not change the limits of liability or 
applicable amount provisions for vessels under CERCLA at 42 U.S.C. 
9607(c), 42 U.S.C. 9608(a), and Sec.  138.80(f)(2).
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    This rulemaking also establishes the framework for ensuring 
consistency when regulatory changes to the OPA 90 limits of liability 
for vessels and deepwater ports are promulgated in the future under 33 
U.S.C. 2704(d).
    Specifically, the rulemaking divides part 138 of Title 33 CFR into 
two subparts. The vessel financial responsibility requirements, former 
33 CFR part 138, as amended by this rulemaking now appears under 33 CFR 
part 138, new subpart A. In addition, a new subpart has been created, 
at 33 CFR part 138, subpart B, to set forth the OPA 90 limits of 
liability for vessels and deepwater ports, and reserving paragraphs for 
other oil spill source categories that are regulated by the Coast 
Guard. Last, rather than specifically enumerating the OPA 90 financial 
responsibility applicable amounts for vessels in Sec.  138.80(f)(1), 
that section now cross-references to the OPA 90 limits of liability for 
vessels as amended by DRPA or hereafter by regulation, as set forth in 
new subpart B. This change ensures that the OPA 90 financial 
responsibility applicable amounts that must be proven by vessel 
operators, under 33 CFR part 138, subpart A, will always be consistent 
with the OPA 90 limits of liability set forth in 33 CFR part 138, 
subpart B.
    This rulemaking also eliminates the requirement in former Sec.  
138.65 that an original Certificate of Financial Responsibility 
(Certificate or COFR), or an authorized copy thereof, be carried aboard 
covered vessels. Improved technology now enables the Coast Guard to 
view vessel COFRs electronically, which is more cost effective than 
tasking inspectors to view a paper Certificate on board each vessel.
    In addition, the rule increases the COFR application and 
certification fees found in Sec.  138.130. The prior fee amounts were 
established in 1994 in the interim rule entitled ``Financial 
Responsibility for Water Pollution (Vessels)'' (59 FR 34210), and the 
amounts had not been increased since that time. The new fee amounts 
established by this rulemaking approximate the fluctuations to the 
Consumer Price Index occurring as a result of inflation since 1994.
    Finally, this rulemaking revises the definition of ``owner'' in 
Sec.  138.20 to reflect amendments to OPA 90 by the Coast Guard and 
Maritime Transportation Act of 2004, Public Law 108-293, August 9, 
2004, 118 Stat. 1045.

IV. Discussion of Comments and Changes

    We received seven letters raising 13 issues during the public 
comment period for the proposed rule (73 FR 6642 and 73 FR 8250), and 
one additional letter raising one issue after the public comment period 
closed on May 5, 2008. The letters we received during the public 
comment period were from a private citizen, three COFR guarantors, a 
proposed liquid natural gas (LNG) deepwater port developer, a State 
environmental agency, and an association of oil spill regulatory 
agencies from Alaska, British Columbia, Washington, Oregon, Hawaii and 
California. The letter received after the public comment period closed 
was from an offshore drilling association. The following discussion 
summarizes the public comments we received and our responses to the 
comments.
    One commenter was concerned with an oil spill off the coast of New 
Jersey more than one year ago where the responsible party was never 
identified, and proposed that, to improve security and prevent 
pollution, the U.S. have information on every ship carrying any cargo 
that enters any U.S. waters at any time. This rulemaking only addresses 
the requirements under 33 U.S.C. 2716 for vessels to provide evidence 
of financial responsibility. The comment is therefore beyond the scope 
of this rulemaking, and no change has been made in the final rule in 
response to this comment. The Coast Guard, however, agrees that 
maritime domain awareness is important to our national security and 
efforts to reduce pollution, and is taking steps to improve vessel 
tracking systems.
    The same commenter proposed that the Coast Guard establish a 
requirement for vessels to post a five million dollar bond to pay for 
any damage in the event of an oil spill incident. This comment is 
beyond the scope of this rulemaking. OPA 90 does not authorize the 
Coast Guard to impose a bonding requirement on vessels including cargo 
vessels. Therefore, no change has been made to the final rule in 
response to this comment. OPA 90 does, however, establish limits of 
liability at 33 U.S.C. 2704(a), applicable to all vessels. Those limits 
are generally more than five million dollars for tank vessels, and for 
most large ocean-going vessels. Furthermore, at 33 U.S.C. 2716 and in 
these regulations, OPA 90 requires that all vessels--including cargo 
vessels--over 300 gross tons establish and maintain evidence of 
financial responsibility sufficient to meet the maximum amount of 
liability to which the responsible party could be subjected under 33 
U.S.C. 2704(a).
    Two commenters recommended adding the following proviso at the end 
of the first sentence of Sec.  138.80(d)(2) Limitation on guarantor 
liability: ``, provided that the guarantor was immediately notified as 
required by 33 U.S.C. 2714 and given the same opportunity to respond to 
an incident or a release or threatened release, as that given to the 
responsible party.'' This comment is beyond the scope of this 
rulemaking. This rulemaking only addresses the requirements under 33 
U.S.C. 2716 for vessels to provide evidence of financial 
responsibility. The provisions of OPA 90 concerning designation of 
sources, and notification of responsible parties and guarantors, are 
set forth in 33 U.S.C. 2714(a), and are detailed further in regulations 
at 33 CFR part 136, subpart D (33 CFR 136.305(a)).
    Furthermore, there is no provision in 33 U.S.C. 2714(a) or 
elsewhere in OPA 90 that limits a guarantor's liability for removal 
costs and damages in the event the government does not notify the 
responsible party or guarantor of a source designation. A failure to 
notify only affects the responsible party's and guarantor's obligations 
concerning advertisement to potential claimants, under 33 U.S.C. 
2714(b) and implementing regulations at 33 CFR part 136. The Coast 
Guard therefore disagrees with the proposed change to Sec.  138.80(d).
    One commenter recommended changing the reference to the Louisiana 
Offshore Oil Port (LOOP) in Sec.  138.220(b), to encompass any limit of 
liability established under 33 U.S.C. 2704(d)(2)(A)-(C). We agree that 
the wording in the proposed regulatory text was unnecessarily narrow 
and have amended Sec.  138.220(b) accordingly.
    One commenter asked that Sec.  130.220(b) be expanded to describe 
the nature of any studies that might be required of deepwater port 
license applicants or license holders and the specific administrative 
process to be followed under 33 U.S.C. 2704(d)(2) for seeking 
adjustments to the limits of liability for deepwater ports under 33

[[Page 53694]]

U.S.C. 2704(a). This comment concerns issues that go beyond the scope 
of this rulemaking. This rulemaking identifies the existing limits of 
liability for vessels and deepwater ports, but it does not adjust any 
limits of liability. Nor does it concern the studies and other criteria 
under 33 U.S.C. 2704(d) for adjusting the limits. Instead, it primarily 
concerns the evidence of financial responsibility requirements 
applicable to vessels under 33 U.S.C. 2716.
    One commenter asked several questions concerning how the Coast 
Guard determines a vessel's category for purposes of implementation of 
the COFR rule. First, the commenter wanted to know what documents will 
serve as a reference point for the Coast Guard to determine whether a 
vessel has a single or double hull, and whether the Coast Guard would 
use a classification society survey or some other official document 
that is generally accepted as an accurate record of the hull 
construction. The same commenter asked what document will be used by 
the Coast Guard as the reference point for classifying a vessel in 
circumstances where a vessel has changed type (e.g., from a Very-large 
Crude Carrier tanker to a dry cargo vessel).
    The Coast Guard may confirm vessel details provided in the 
application for a certificate of financial responsibility, including 
any guarantee schedule, by referring to certificates of inspection and 
other normally available information sources such as Class Society 
surveys, Lloyds List, and Protection & Indemnity Club information. We 
have clarified the rule in response to these questions, consistent with 
legislative intent, by replacing the words ``other than a vessel 
referred to in Sec.  138.220(a)(1),'' in Sec.  138.220(a)(2) and (4), 
with the term ``double hull'', and by adding at the end of Sec.  
138.220(a) that the term ``double hull'' has the meaning used in 33 CFR 
part 157 and that the term ``single hull'' means any hull that is not a 
``double hull''. (See, 152 Cong. Rec. H1640, H1663).
    The commenter also asked how the Coast Guard intends to enforce the 
imminent phase-out of single-hull tank vessels? Specifically, the 
commenter asked, in a hypothetical instance where a single-hull tank 
vessel owner misstates in an application for a guaranty that the vessel 
is double hulled: How would the Coast Guard determine that the vessel 
should not enter the U.S. Exclusive Economic Zone? What would the 
consequence be to the vessel owner? Would there be any consequence for 
the guarantor? Enforcement of the phase-out of single-hull tankers is 
outside the scope of this rulemaking. Furthermore, the consequences of 
any illegal vessel entry would depend in part on the circumstances of 
the entry and the applicable law(s). No change is made to the rule in 
response to these questions.
    Two commenters noted that the rulemaking did not increase the OPA 
90 limits of liability, under 33 U.S.C. 2704(d), to reflect significant 
increases in the Consumer Price Index. One of the commenters noted that 
the notice of proposed rulemaking did not increase the limits of 
liability for facilities under the Coast Guard's jurisdiction for 
inflation. The same commenter also stated that ``the proposed increases 
for vessels, including tank barges, is at the 2006 DRPA level only: No 
[Consumer Price Index] increases since 2006 are reflected in the 
proposed rule[,]'' and noted that DRPA also amended the provision 33 
U.S.C. 2704(d) authorizing increases to limits of liability based on 
the Consumer Price Index.
    The other commenter stated that ``the limits of liability for non-
tank vessels should be increased''. The same commenter stated that the 
``proposed rulemaking fails to address the issue of limits of liability 
for oil handling facilities'', and erroneously characterized the NPRM 
as proposing to change the limits of liability for vessels ``based on 
the consumer price index''.
    These commenters misunderstand the scope of this rulemaking. This 
rulemaking does not adjust the OPA 90 limits of liability for any 
source category. Nor does this rulemaking adjust any limits of 
liability for inflation. This rulemaking is primarily intended to 
conform the OPA 90 financial responsibility ``applicable amounts'' for 
vessels under 33 U.S.C. 2716 (at 33 CFR part 138, subpart A, Sec.  
138.80(f)), to the limits of liability for vessels under OPA 90 as 
amended by DRPA.
    Although the rulemaking establishes a new subpart B setting forth 
the OPA 90 limits of liability for vessels and deepwater ports, and 
establishes the framework for future regulatory changes to the OPA 90 
limits of liability, including adjustments for inflation, the primary 
purpose of this rulemaking is to ensure consistency between the OPA 90 
vessel financial responsibility applicable amounts at Sec.  138.80(f) 
and the OPA 90 limits of liability now in effect and as may hereafter 
be amended by regulation. Consumer Price Index increases to the OPA 90 
limits of liability for Coast Guard delegated source categories, 
including oil handling facilities, other facilities, tank barges and 
other vessels, will be promulgated by regulation, in accordance with 33 
U.S.C. 2704(d), in separate rulemakings.
    To eliminate some of the confusion concerning the scope of this 
rulemaking, we have eliminated the reference to the Consumer Price 
Index that appeared in proposed Sec.  138.200. We also have edited the 
regulatory text of Sec.  138.85 to clarify the distinction between the 
effective date of this rule and the date by which operators must 
establish evidence of financial responsibility in an amount equal to or 
greater than the new applicable amounts. Finally we have amended 
subpart B for clarity and to reserve space for future regulatory 
adjustments to the limits of liability under 33 U.S.C. 2704(d), 
including adjustments to reflect significant increases in the Consumer 
Price Index.
    One commenter commented favorably that the rulemaking would 
``eliminate the requirement for vessel operators to maintain their 
certificates of financial responsibility (COFR) on board ships. We 
support this direction towards electronic certification. We currently 
use the USCG online database for vessel contingency plans. In addition 
the addition of the online COFR database will prove to be beneficial 
for cross-agency partnership work.'' No changes have been made to the 
rule in response to this comment.
    One commenter, who submitted a comment after the close of the 
public comment period, asked for a supplemental rulemaking to treat all 
mobile offshore drilling units (MODUs) as double hull tank vessels for 
purposes of the financial responsibility requirements of 33 CFR part 
138, subpart A. OPA 90 at 33 U.S.C. 2716(a) requires that evidence of 
financial responsibility be provided up to the applicable limits of 
liability. OPA 90 at 33 U.S.C. 2704(b), in turn, provides that when a 
MODU is used as an offshore facility it is generally treated as a tank 
vessel for purposes of OPA 90. There, however, is no provision in OPA 
90 authorizing treatment of single-hulled MODUs when used as offshore 
facilities as double-hulled tank vessels for purposes of determining 
the applicable limit of liability or the financial responsibility 
requirements. The Coast Guard therefore will not initiate a 
supplemental rulemaking in response to this comment.

V. Regulatory Analyses

    We developed this rule after considering numerous statutes and 
executive orders related to rulemaking. Below we summarize our analyses 
based on 13 of these statutes or executive orders.

[[Page 53695]]

A. Regulatory Planning and Review

    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. A final Regulatory Assessment is 
available in the docket as indicated under ADDRESSES. A summary of the 
Regulatory Assessment follows:
    On February 5, 2008, an NPRM was published (73 FR 6642) which 
included a supplemental Preliminary Regulatory Assessment of the costs 
and benefits of the proposed rule. The comment period ended on May 5, 
2008. No comments were received on the Preliminary Regulatory 
Assessment. Prior to developing the Final Regulatory Assessment, we 
confirmed that the data contained in the Preliminary Regulatory 
Assessment had not changed.
    There are two regulatory costs of this rule:
    Regulatory Cost 1: The rule increases the cost to responsible 
parties associated with application for and certification of COFRs. 
This rule increases the cost per application from $150 to $200 and the 
cost per certification from $80 to $100. We estimate that there will be 
1,600 COFR application fees submitted per year and 8,600 COFR 
certification fees submitted per year for the foreseeable future. The 
aggregated annual increase in cost due to these fee increases is 
approximately $252,000 per year.
    Regulatory Cost 2: The rule increases the cost associated with 
establishing financial responsibility under 33 CFR part 138. This 
occurs in two ways: Responsible parties using commercial insurance as 
their method of guaranty will incur higher insurance premiums; and, 
responsible parties using self-insurance as their method of guaranty 
will need to seek out and acquire commercial insurance for vessels they 
operate that are no longer eligible for self-insurance based on their 
working capital and net worth.
    There are approximately 16,982 vessels using commercial insurance 
and 823 vessels using self insurance methods of guaranty. The 10-year 
present value of this regulatory cost at a 3 percent discount rate is 
between $73.8 million and $83.4 million. The 10-year present value of 
this regulatory cost at a 7 percent discount rate is between $63.3 
million and $71.9 million. The ranges reflect two vessel profiles that 
were developed and analyzed separately to account for the uncertainty, 
due to data gaps, of when existing single-hulled tank vessels will be 
phased out.
    The 10-year present value of the total cost of the rule (Regulatory 
Cost 1 + Regulatory Cost 2) at a 3 percent discount rate is between $76 
million and $85.6 million. The 10-year present value of the total cost 
of the rule (Regulatory Cost 1 + Regulatory Cost 2) at a 7 percent 
discount rate is between $65.2 million and $73.8 million.
    There are two regulatory benefits of this rule: First, the rule 
aligns the financial responsibility amounts for vessels in 33 CFR part 
138 in subpart A with the amended statutory limits of liability under 
OPA 90, as specified in 33 U.S.C. 2704. This ensures the ability of 
responsible parties to meet their maximum liability limit under OPA 90 
in the event of an incident. Second, the rule eliminates the burden on 
owners and operators of maintaining COFRs onboard vessels.

B. Small Entities

    Under the Regulatory Flexibility Act (5 U.S.C. 601-612), we have 
considered whether this rule would have a significant economic impact 
on a substantial number of small entities. The term ``small entities'' 
comprises small businesses, not-for-profit organizations that are 
independently owned and operated and are not dominant in their fields, 
and governmental jurisdictions with populations of less than 50,000.
    A Final Regulatory Flexibility Analysis (FRFA) discussing the 
impact of this rule on small entities is available in the docket where 
indicated under the ADDRESSES section of this preamble.
    The NPRM for this rulemaking published on February 5, 2008 (73 FR 
6642) included an Initial Regulatory Flexibility Analysis (IRFA) which 
quantified the economic impacts to small entities of the proposed rule. 
The comment period ended on May 5, 2008. No comments were received on 
either the IRFA or with respect to any aspects of the NPRM that might 
concern small entities. Prior to developing the FRFA, we confirmed that 
the data contained in the IRFA had not changed.
    In our analysis, we researched vessel operator size and revenue 
data using public and proprietary business databases. We then 
determined which entities were small based on the U.S. Small Business 
Administration's criteria as they pertain to business size standards 
for all sectors of the North American Industry Classification System 
(NAICS).
    There are an estimated 600 small entities affected by this rule. We 
found that 82 distinct NAICS codes are represented in the population of 
small entities (of which 32 contained more than 5 entities). The 
available data indicate that: increases in insurance premiums will 
result in an average annual cost of $523 per vessel, increases in self-
insurer costs will result in an average annual cost of $7,200 per 
vessel, and increases in COFR application fees will result in an 
average annual cost of $12 per vessel.
    The data further indicate that, of the small entities impacted, 92 
percent will experience an annual economic impact that is less than 1 
percent of their annual sales. Furthermore, 98 percent of the small 
entities will experience an economic impact less than 3 percent of 
their total sales. Two percent will experience an annual economic 
impact that is equal to or greater than 3 percent of their annual sales 
and none will experience an annual economic annual impact greater than 
10 percent of their annual sales. Based on this analysis, we believe 
that implementation of this rule would not have a significant economic 
impact on a substantial number of small entities under 5 U.S.C. 605(b). 
Therefore, the Coast Guard certifies under 5 U.S.C. 605(b) that this 
final rule will not have a significant economic impact on a substantial 
number of small entities.

C. Assistance for Small Entities

    Under section 213(a) of the Small Business Regulatory Enforcement 
Fairness Act of 1996 (Pub. L. 104-121), we offered in the NPRM to 
assist small entities in understanding the rule so that they could 
better evaluate its effects on them and participate in the rulemaking. 
No assistance was requested from small entities.
    Small businesses may send comments on the actions of Federal 
employees who enforce, or otherwise determine compliance with, Federal 
regulations to the Small Business and Agriculture Regulatory 
Enforcement Ombudsman and the Regional Small Business Regulatory 
Fairness Boards. The Ombudsman evaluates these actions annually and 
rates each agency's responsiveness to small business. If you wish to 
comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR 
(1-888-734-3247).

D. Collection of Information

    This rule calls for a new collection of information under the 
Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520). As defined in 5 
CFR 1320.3(c), ``collection of information'' comprises reporting, 
recordkeeping, monitoring, posting, labeling, and other, similar 
actions. The title and description of the

[[Page 53696]]

information collections, a description of those who must collect the 
information, and an estimate of the total annual burden follow. The 
estimate covers the time for reviewing instructions, searching existing 
sources of data, gathering and maintaining the data needed, and 
completing and reviewing the collection.
    Title: Financial Responsibility for Water Pollution (Vessels) and 
Limits of Liability.
    Summary of the Collection of Information: Not later than 90 days 
after the effective date of this regulation, operators are required to 
establish evidence of financial responsibility to the amended 
applicable amounts in Sec.  138.80(f).
    This rule eliminates the existing recordkeeping burden associated 
with 33 CFR part 138, and revises the current information collection 
entitled, Financial Responsibility for Water Pollution (Vessels) 
(Office of Management and Budget control number 1625-0046, approved 
December 7, 2006).
    Need for Information: This information collection is necessary to 
enforce this rule. Without this collection, it would not be possible 
for the Coast Guard to know which operators were in compliance with the 
amended financial responsibility applicable amounts determined under 
Sec.  138.80(f), and which were not. Vessels not in compliance will be 
subject to the penalties provided under Sec.  138.140.
    Use of Information: The Coast Guard will use this information to 
verify that vessel operators have established evidence of financial 
responsibility to reflect the amended financial responsibility 
applicable amounts determined under Sec.  138.80(f).
    Description of the Respondents: Operators, as this term is defined 
in 33 CFR part 138, subpart A, and guarantors of vessels that require 
COFRs under 33 CFR part 138, Subpart A.
    Number of Respondents: There are approximately 900 United States 
operators, 9,000 foreign operators and 100 guarantors of vessels that 
will submit information to the Coast Guard.
    Frequency of Response: This is a one-time submission occurring not 
later than 90 days after the effective date of this regulation. 
Subsequent submissions that may be required as a result of regulatory 
changes to limits of liability under 33 U.S.C. 2704(d) are not included 
here because they will be addressed in future rulemakings.
    Burden of Response:
    Increased burden associated with reporting requirements: 10,000 
respondents x 1.0 hours per response = 10,000 hours.
    Reduced burden associated with recordkeeping requirements: 9,900 
respondents x 0.0138 hours/respondent = 137 hours.
    Estimate of Total Annual Burden: We used the ``All Occupations'' 
average hourly wage of $18.21 per hour, found in the May 2005 National 
Occupational Employment and Wage Estimates United States, published by 
the Department of Labor's Bureau of Labor Statistics, and applied a 43 
percent overhead factor to estimate employee benefits to calculate the 
burdened labor rate. Bureau of Labor Statistics data show that total 
employee benefits is approximately 30 percent of total compensation. By 
applying a benefit factor of 43 percent to the hourly wage, we 
calculated total compensation: $18.21 per hour + ($18.21 per hour x 43 
percent) = $26 per hour.
    We then multiplied the number of net burden hours by the burdened 
labor rate calculated above.
    Increased burden associated with reporting requirements: 10,000 
hours x $26 per hour = $260,000.
    Reduced burden associated with recordkeeping requirements: 137 
hours x $26 per hour = $3,562.
    As required by 44 U.S.C. 3507(d), we submitted a copy of the 
proposed rule to the Office of Management and Budget (OMB) for its 
review of the collection of information. OMB has yet to complete its 
review of this collection. Therefore, Sec.  138.85 may not be enforced 
until this collection is approved by OMB. We will publish notice in the 
Federal Register of OMB's decision to approve, modify, or disapprove 
the collection.
    You are not required to respond to a collection of information 
unless it displays a currently valid OMB control number.

E. Federalism

    A rule has implications for federalism under Executive Order 13132, 
Federalism, if it has a substantial direct effect on State or local 
governments and would either preempt State law or impose a substantial 
direct cost of compliance on them. We have analyzed this rule under 
that Order and have determined that it does not have implications for 
federalism.

F. Unfunded Mandates Reform Act

    The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) 
requires Federal agencies to assess the effects of their discretionary 
regulatory actions. In particular, the Act addresses actions that may 
result in the expenditure by a State, local, or tribal government, in 
the aggregate, or by the private sector of $100,000,000 or more in any 
one year. Though this rule will not result in such an expenditure, we 
do discuss the effects of this rule elsewhere in this preamble.

G. Taking of Private Property

    This rule will not effect a taking of private property or otherwise 
have taking implications under Executive Order 12630, Governmental 
Actions and Interference with Constitutionally Protected Property 
Rights.

H. Civil Justice Reform

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

I. Protection of Children

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

J. Indian Tribal Governments

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

K. Energy Effects

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

L. Technical Standards

    The National Technology Transfer and Advancement Act (NTTAA) (15 
U.S.C. 272 note) directs agencies to use voluntary consensus standards 
in their regulatory activities unless the agency provides Congress, 
through the Office of Management and Budget, with an explanation of why 
using these standards would be inconsistent with

[[Page 53697]]

applicable law or otherwise impractical. Voluntary consensus standards 
are technical standards (e.g., specifications of materials, 
performance, design, or operation; test methods; sampling procedures; 
and related management systems practices) that are developed or adopted 
by voluntary consensus standards bodies.
    This rule does not use technical standards. Therefore, we did not 
consider the use of voluntary consensus standards.

M. Environment

    We have analyzed this rule under Commandant Instruction M16475.lD 
and Department of Homeland Security Management Directive 5100.1, which 
guide the Coast Guard in complying with the National Environmental 
Policy Act of 1969 (NEPA) (42 U.S.C. 4321-4370f), and have concluded 
that there are no factors in this case that would limit the use of a 
categorical exclusion under section 2.B.2 of the Instruction. 
Therefore, this rule is categorically excluded, under figure 2-1, 
paragraph (34)(a), of the Instruction, from further environmental 
documentation. This rulemaking only addresses the requirements under 33 
U.S.C. 2716 for vessels to provide evidence of financial 
responsibility. It has no effect on the environment. A final 
environmental analysis checklist and a final categorical exclusion 
determination are available in the docket where indicated under 
ADDRESSES.

List of Subjects in 33 CFR Part 138

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

0
For the reasons discussed in the preamble, the Coast Guard revises 33 
CFR part 138 as follows:

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

Subpart A--Financial Responsibility for Water Pollution (Vessels)
Sec.
138.10 Scope.
138.15 Applicability.
138.20 Definitions.
138.30 General.
138.40 Forms.
138.45 Where to apply for and renew Certificates.
138.50 Time to apply.
138.60 Applications, general instructions.
138.65 Issuance of Certificates.
138.70 Renewal of Certificates.
138.80 Financial responsibility, how established.
138.85 Implementation schedule for amendments to applicable amounts 
by regulation.
138.90 Individual and Fleet Certificates.
138.100 Non-owning operator's responsibility for identification.
138.110 Master Certificates.
138.120 Certificates, denial or revocation.
138.130 Fees.
138.140 Enforcement.
138.150 Service of process.
Subpart B--OPA 90 Limits of Liability (Vessels and Deepwater Ports)
138.200 Scope.
138.210 Applicability.
138.220 Limits of liability.

    Authority: 33 U.S.C. 2716, 2716a; 42 U.S.C. 9608, 9609; Sec. 
1512 of the Homeland Security Act of 2002, Pub. L. 107-296 , Title 
XV, Nov. 25, 2002, 116 Stat. 2310 (6 U.S.C. 552); E.O. 12580, Sec. 
7(b), 3 CFR, 1987 Comp., p. 198; E.O. 12777, 3 CFR, 1991 Comp., p. 
351; E.O. 13286, Sec. 89 (68 FR 10619, Feb. 28, 2003); Department of 
Homeland Security Delegation Nos. 0170.1 and 5110. Section 138.30 
also issued under the authority of 46 U.S.C. 2103, 46 U.S.C. 14302.

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


Sec.  138.10  Scope.

    This subpart sets forth the procedures by which an operator of a 
vessel must establish and maintain, for itself and for the owners and 
demise charterers of the vessel, evidence of financial responsibility 
required by Section 1016(a) of the Oil Pollution Act of 1990, as 
amended (OPA 90) (33 U.S.C. 2716), and Section 108 of the Comprehensive 
Environmental Response, Compensation, and Liability Act of 1980, as 
amended (CERCLA) (42 U.S.C. 9608), equal to the total applicable amount 
determined under this subpart and sufficient to cover their liability 
arising under--
    (a) Sections 1002 and 1004 of OPA 90 (33 U.S.C. 2702, 2704); and
    (b) Section 107 of CERCLA (42 U.S.C. 9607).


Sec.  138.15  Applicability.

    (a) This subpart applies to the operator as defined herein of --
    (1) A tank vessel of any size, and a foreign-flag vessel of any 
size, using the waters of the exclusive economic zone to transship or 
lighter oil (whether delivering or receiving) destined for a place 
subject to the jurisdiction of the United States; and
    (2) Any vessel using the navigable waters of the United States or 
any port or other place subject to the jurisdiction of the United 
States, including a vessel using an offshore facility subject to the 
jurisdiction of the United States, except--
    (i) A vessel that is 300 gross tons or less; or
    (ii) A non-self-propelled barge that does not carry oil as cargo or 
fuel and does not carry hazardous substances as cargo.
    (b) For the purposes of financial responsibility under OPA 90, a 
mobile offshore drilling unit is treated as a tank vessel when it is 
being used as an offshore facility and there is a discharge, or a 
substantial threat of a discharge, of oil on or above the surface of 
the water. A mobile offshore drilling unit is treated as a vessel other 
than a tank vessel when it is not being used as an offshore facility.
    (c) In addition to a non-self-propelled barge over 300 gross tons 
that carries hazardous substances as cargo, for the purposes of 
financial responsibility under CERCLA, this subpart applies to a self-
propelled vessel over 300 gross tons, even if it does not carry 
hazardous substances.
    (d) This subpart does not apply to operators of public vessels.


Sec.  138.20  Definitions.

    (a) As used in this subpart, the following terms have the meaning 
as set forth in--
    (1) Section 1001 of the Oil Pollution Act of 1990 (33 U.S.C. 2701), 
respecting the financial responsibility referred to in Sec.  138.10(a): 
claim, claimant, damages, discharge, exclusive economic zone, liable, 
liability, navigable waters, mobile offshore drilling unit, natural 
resources, offshore facility, oil, owner or operator, person, remove, 
removal, removal costs, security interest, and United States; and
    (2) Section 101 of the Comprehensive Environmental Response, 
Compensation, and Liability Act (42 U.S.C. 9601), respecting the 
financial responsibility referred to in Sec.  138.10(b): claim, 
claimant, damages, environment, hazardous substance, liable, liability, 
navigable waters, natural resources, offshore facility, owner or 
operator, person, release, remove, removal, security interest, and 
United States.
    (b) As used in this subpart --
    Acts means OPA 90 and CERCLA.
    Applicable amount means an amount of financial responsibility that 
must be demonstrated under this subpart, determined under Sec.  
138.80(f)(1) for OPA 90 or Sec.  138.80(f)(2) for CERCLA.
    Applicant means an operator who has applied for a Certificate or 
for the renewal of a Certificate under this subpart.
    Application means an Application for Vessel Certificate of 
Financial Responsibility (Water Pollution) (Form CG-5585), which can be 
obtained from the U.S. Coast Guard National Pollution

[[Page 53698]]

Funds Center as provided in Sec. Sec.  138.40 and 138.45.
    Cargo means goods or materials on board a vessel for purposes of 
transportation, whether proprietary or nonproprietary. A hazardous 
substance or oil carried solely for use aboard the carrying vessel is 
not Cargo.
    CERCLA means title I of the Comprehensive Environmental Response, 
Compensation, and Liability Act of 1980, as amended (42 U.S.C. 9601-
9675).
    Certificant means an operator who has a current Certificate issued 
by the U.S. Coast Guard National Pollution Funds Center (NPFC) under 
this subpart.
    Certificate means a Vessel Certificate of Financial Responsibility 
(Water Pollution) (Form CG-5585) issued by the NPFC under this subpart, 
as provided in Sec.  138.65.
    Day or days means calendar days. If a deadline specified in this 
subpart falls on a weekend or Federal holiday, the deadline will occur 
on the next working day. Compliance with a submission deadline will be 
determined based on the day the submission is received by NPFC.
    Director, NPFC means the head of the NPFC.
    E-COFR means the Electronic Certificate of Financial Responsibility 
web-based process located on the NPFC Web site (http://www.npfc.gov/cofr), which may be used by operators to apply for and renew 
Certificates.
    Financial guarantor means a guarantor who provides a financial 
guaranty under Sec.  138.80(b)(4), and is distinct from an insurer, a 
self-insurer or a surety.
    Financial responsibility means the statutorily required financial 
ability to meet a responsible party's liability under the Acts.
    Fish tender vessel and fishing vessel have the same meaning as set 
forth in 46 U.S.C. 2101.
    Fuel means any oil or hazardous substance used or capable of being 
used to produce heat or power by burning, including power to operate 
equipment. A hand-carried pump with not more than five gallons of fuel 
capacity, that is neither integral to nor regularly stored aboard a 
non-self-propelled barge, is not equipment.
    Guarantor means any person, other than a responsible party, who 
provides evidence of financial responsibility under the Acts on behalf 
of a vessel's responsible parties. A responsible party who can qualify 
as a self-insurer under Sec.  138.80(b)(3) may act as both a self-
insurer of vessels owned, operated or demise chartered by the 
responsible party, and as a financial guarantor for the responsible 
parties of other vessels under Sec.  138.80(b)(4).
    Hazardous material means a liquid material or substance that is--
    (1) Flammable or combustible;
    (2) A hazardous substance designated under Section 311(b) of the 
Federal Water Pollution Control Act (33 U.S.C. 1321(b)); or
    (3) Designated a hazardous material under the Hazardous Materials 
Transportation Act, Section 104 (46 U.S.C. 5103(a)) (1994).
    Incident means any occurrence or series of occurrences having the 
same origin, involving one or more vessels, facilities, or any 
combination thereof, resulting in the discharge or substantial threat 
of discharge of oil into or upon the navigable waters or adjoining 
shorelines or the exclusive economic zone.
    Insurer is a type of guarantor and means one or more insurance 
companies, associations of underwriters, ship owners' protection and 
indemnity associations, or other persons, each of which must be 
acceptable to the Director, NPFC.
    Master Certificate means a Certificate issued under this subpart to 
a person who is a builder, repairer, scrapper, lessor, or seller of a 
vessel and is acting as the vessel's operator.
    Offshore supply vessel has the same meaning as set forth in 46 
U.S.C. 2101.
    OPA 90 means the Oil Pollution Act of 1990 (33 U.S.C. 2701, et 
seq.).
    Operator means a person who is an owner, a demise charterer, or 
other contractor, who conducts the operation of, or who is responsible 
for the operation of, a vessel. A builder, repairer, scrapper, lessor, 
or seller who is responsible, or who agrees by contract to become 
responsible, for a vessel is an operator. A time or voyage charterer 
that does not assume responsibility for the operation of a vessel is 
not an operator for the purposes of this subpart.
    Owner means any person holding legal or equitable title to a 
vessel. In a case where a U.S. Coast Guard Certificate of Documentation 
or equivalent document has been issued, the owner is considered to be 
the person or persons whose name or names appear thereon as owner. 
Owner does not include a person who, without participating in the 
management of a vessel, holds indicia of ownership primarily to protect 
the owner's security interest in the vessel.
    Public vessel means a vessel owned or bareboat chartered by the 
United States, or by a State or political subdivision thereof, or by a 
foreign nation, except when the vessel is engaged in commerce.
    Responsible party, for purposes of OPA 90 financial responsibility 
has the same meaning as defined at 33 U.S.C. 2701(32), and for purposes 
of CERCLA financial responsibility means any person who is an owner or 
operator, as defined at 42 U.S.C. 9601(20), including any person 
chartering a vessel by demise.
    Self-elevating lift vessel means a vessel with movable legs capable 
of raising its hull above the surface of the sea and that is an 
offshore work boat (such as a work barge) that does not engage in 
drilling operations.
    Tank vessel means a vessel (other than an offshore supply vessel, a 
fishing vessel or a fish tender vessel of 750 gross tons or less that 
transfers fuel without charge to a fishing vessel owned by the same 
person, or a towing or pushing vessel (tug) simply because it has in 
its custody a tank barge) that is constructed or adapted to carry, or 
that carries, oil or liquid hazardous material in bulk as cargo or 
cargo residue, and that--
    (1) Is a vessel of the United States;
    (2) Operates on the navigable waters; or
    (3) Transfers oil or hazardous material in a place subject to the 
jurisdiction of the United States.
    Total applicable amount means the amount determined under Sec.  
138.80(f)(3).
    Vessel means every description of watercraft or other artificial 
contrivance used, or capable of being used, as a means of 
transportation on water.


Sec.  138.30  General.

    (a) The regulations in this subpart set forth the procedures for an 
operator of a vessel subject to this subpart to demonstrate that the 
responsible parties of the vessel are financially able to meet their 
potential liability for costs and damages in the applicable amounts set 
forth in this subpart at Sec.  138.80(f). Although the owners, 
operators, and demise charterers of a vessel are strictly, jointly and 
severally liable under OPA 90 and CERCLA for the costs and damages 
resulting from each incident or release or threatened release, together 
they need only establish and maintain evidence of financial 
responsibility under this subpart equal to the combined OPA 90 and 
CERCLA limits of liability arising from a single incident and a single 
release, or threatened release. Only that portion of the total 
applicable amount of financial responsibility demonstrated under this 
subpart with respect to--
    (1) OPA 90 is required to be made available by a vessel's 
responsible parties and guarantors for the costs and damages related to 
an incident where

[[Page 53699]]

there is not also a release or threatened release; and
    (2) CERCLA is required to be made available by a vessel's 
responsible parties and guarantors for the costs and damages related to 
a release or threatened release where there is not also an incident. A 
guarantor (or a self-insurer for whom the exceptions to limitations of 
liability are not applicable), therefore, is not required to apply the 
entire total applicable amount of financial responsibility demonstrated 
under this subpart to an incident involving oil alone or a release or 
threatened release involving a hazardous substance alone.
    (b) Where a vessel is operated by its owner or demise charterer, or 
the owner or demise charterer is responsible for its operation, the 
owner or demise charterer is considered to be the operator for purposes 
of this subpart, and must submit the Application and requests for 
renewal for a Certificate. In all other cases, the vessel operator must 
submit the Application or requests for renewal.
    (c) For a United States-flag vessel, the applicable gross tons or 
gross tonnage, as referred to in this part, is determined as follows:
    (1) For a documented U.S. vessel measured under both 46 U.S.C. 
Chapters 143 (Convention Measurement) and 145 (Regulatory Measurement). 
The vessel's regulatory gross tonnage is used to determine whether the 
vessel exceeds 300 gross tons where that threshold applies under the 
Acts. If the vessel's regulatory gross tonnage is determined under the 
Dual Measurement System in 46 CFR part 69, subpart D, the higher gross 
tonnage is the regulatory gross tonnage for the purposes of determining 
whether the vessel meets the 300 gross ton threshold. The vessel's 
gross tonnage as measured under the International Convention on Tonnage 
Measurement of Ships, 1969 (Convention), is used to determine the 
vessel's required applicable amounts of financial responsibility, and 
limit of liability under Section 1004 of OPA 90 (33 U.S.C. 2704), 
including subpart B of this part, and Section 107 of CERCLA (42 U.S.C. 
9607).
    (2) For all other United States vessels. The vessel's gross tonnage 
under 46 CFR part 69 is used for determining the vessel's 300 gross ton 
threshold, the required applicable amounts of financial responsibility, 
and limits of liability under Section 1004 of OPA 90 (33 U.S.C. 2704), 
including subpart B of this part, and Section 107 of CERCLA (42 U.S.C. 
9607). If the vessel's gross tonnage is determined under the Dual 
Measurement System, the higher gross tonnage is used in all 
determinations.
    (d) For a vessel of a foreign country that is a party to the 
Convention, gross tons or gross tonnage, as referred to in this part, 
is determined as follows:
    (1) For a vessel assigned, or presently required to be assigned, 
gross tonnage under Annex I of the Convention. The vessel's gross 
tonnage as measured under Annex I of the Convention is used for 
determining the 300 gross ton threshold, if applicable, the required 
applicable amounts of financial responsibility, and limits of liability 
under Section 1004(a) of OPA 90 (33 U.S.C. 2704), including subpart B 
of this part, and under Section 107 of CERCLA (42 U.S.C. 9607).
    (2) For a vessel not presently required to be assigned gross 
tonnage under Annex I of the Convention. The highest gross tonnage that 
appears on the vessel's U.S. Coast Guard Certificate of Documentation 
or equivalent document and that is acceptable to the Coast Guard under 
46 U.S.C. chapter 143 is used for determining the 300 gross ton 
threshold, if applicable, the required applicable amounts of financial 
responsibility, and limits of liability under Section 1004 of OPA 90 
(33 U.S.C. 2704), including subpart B of this part, and Section 107 of 
CERCLA (42 U.S.C. 9607). If the vessel has no document, or the gross 
tonnage appearing on the document is not acceptable under 46 U.S.C. 
chapter 143, the vessel's gross tonnage is determined by applying the 
Convention Measurement System under 46 CFR part 69, subpart B, or if 
applicable, the Simplified Measurement System under 46 CFR part 69, 
subpart E. The measurement standards applied are subject to applicable 
international agreements to which the United States Government is a 
party.
    (e) For a vessel of a foreign country that is not a party to the 
Convention, gross tons or gross tonnage, as referred to in this part, 
is determined as follows:
    (1) For a vessel measured under laws and regulations found by the 
Commandant to be similar to Annex I of the Convention. The vessel's 
gross tonnage under the similar laws and regulations is used for 
determining the 300 gross ton threshold, if applicable, the required 
applicable amounts of financial responsibility, and limits of liability 
under Section 1004 of OPA 90 (33 U.S.C. 2704), including subpart B of 
this part, and Section 107 of CERCLA (42 U.S.C. 9607). The measurement 
standards applied are subject to applicable international agreements to 
which the United States Government is a party.
    (2) For a vessel not measured under laws and regulations found by 
the Commandant to be similar to Annex I of the Convention. The vessel's 
gross tonnage under 46 CFR part 69, subpart B, or, if applicable, 
subpart E, is used for determining the 300 gross ton threshold, if 
applicable, the required applicable amount of financial responsibility, 
and the limits of liability under Section 1004 of OPA 90 (33 U.S.C. 
2704), including subpart B of this part, and Section 107 of CERCLA (42 
U.S.C. 9607). The measurement standards applied are subject to 
applicable international agreements to which the United States is a 
party.
    (f) A person who agrees to act as a guarantor or a self-insurer is 
bound by the vessel's gross tonnage as determined under paragraphs (c), 
(d), or (e) of this section, regardless of what gross tonnage is 
specified in an Application or guaranty form submitted under this 
subpart. Guarantors, however, may limit their liability under a 
guaranty of financial responsibility to the applicable gross tonnage 
appearing on a vessel's International Tonnage Certificate or other 
official, applicable certificate of measurement and will not incur any 
greater liability with respect to that guaranty, except when the 
guarantors knew or should have known that the applicable tonnage 
certificate was incorrect.


Sec.  138.40  Forms.

    All forms referred to in this subpart may be obtained from NPFC by 
requesting them in writing at the address given in Sec.  138.45(a) or 
by clicking on the Forms link at the NPFC E-COFR Web site, http://www.npfc.gov/cofr.


Sec.  138.45  Where to apply for and renew Certificates.

    (a) An operator must submit all Applications for a Certificate and 
all requests for renewal of a Certificate, together with all evidence 
of financial responsibility required under Sec.  138.80 and all fees 
required under Sec.  138.130, to the NFPC at the following address: 
U.S. Coast Guard, National Pollution Funds Center (Cv), 4200 Wilson 
Boulevard, Suite 1000, Arlington, VA 22203-1804, telephone (202) 493-
6780, Telefax (202) 493-6781; or electronically using NPFC's E-COFR 
Web-based process at http://www.npfc.gov/cofr.
    (b) All requests you have for assistance in completing 
Applications, requests for renewal and other submissions under this 
subpart, including telephone inquiries, should be directed to the U.S. 
Coast Guard

[[Page 53700]]

NPFC at the addresses in paragraph (a) of this section.


Sec.  138.50  Time to apply.

    (a) A vessel operator who wishes to obtain a Certificate must 
submit a completed Application form and all required supporting 
evidence of financial responsibility, and must pay all applicable fees, 
at least 21 days prior to the date the Certificate is required. The 
Director, NPFC, may grant an extension of this 21-day deadline upon 
written request and for good cause shown. An applicant seeking an 
extension of this deadline must set forth the reasons for the extension 
request and deliver the request to the Director, NPFC, at least 15 days 
before the deadline. The Director, NPFC, will not consider a request 
for an extension of more than 60 days.
    (b) The Director, NPFC, generally processes Applications and 
requests for renewal in the order in which they are received at the 
NPFC.


Sec.  138.60  Applications, general instructions.

    (a) You may obtain an Application for Vessel Certificate of 
Financial Responsibility (Water Pollution) (Form CG-5585) by following 
the instructions in Sec. Sec.  138.40 and 138.45.
    (b) Your Application and all supporting documents must be in 
English, and express all monetary terms in United States dollars.
    (c) An authorized official of the applicant must sign the signature 
page of the Application. The title of the signer must be shown in the 
space provided on the Application. The operator must submit the 
original signature page of the Application to NPFC in hard copy.
    (d) If the signer is not identified on the Application as an 
individual (sole proprietor) applicant, a partner in a partnership 
applicant, or a director, chief executive officer, or any other duly 
authorized officer of a corporate applicant, the Application must be 
accompanied by a written statement certifying the signer's authority to 
sign on behalf of the applicant.
    (e) If, before the issuance of a Certificate, the applicant becomes 
aware of a change in any of the facts contained in the Application or 
supporting documentation, the applicant must, within 5 business days of 
becoming aware of the change, notify the Director, NPFC, in writing, of 
the changed facts.


Sec.  138.65  Issuance of Certificates.

    Upon the satisfactory demonstration of financial responsibility and 
payment of all fees due, the Director, NPFC, will issue a Vessel 
Certificate of Financial Responsibility (Water Pollution) (Form CG-
5585) in electronic form. Copies of the Certificate may be downloaded 
from NPFC's E-COFR Web site.


Sec.  138.70  Renewal of Certificates.

    (a) The operator of a vessel required to have a Certificate under 
this subpart must submit a written or E-COFR request for renewal of the 
Certificate to the NPFC at least 21 days, but not earlier than 90 days, 
before the expiration date of the Certificate. A letter may be used for 
this purpose. The request for renewal must comply in all other respects 
with the requirements in Sec.  138.60 concerning Applications. The 
Director, NPFC, may waive this 21-day requirement for good cause shown.
    (b) The operator must identify in the request for renewal any 
changes which have occurred since the original Application for a 
Certificate was filed, and must set forth the correct information in 
full.


Sec.  138.80  Financial responsibility, how established.

    (a) General. In addition to submitting an Application, requests for 
renewal, and fees, an applicant must file, or cause to be filed, with 
the Director, NPFC, evidence of financial responsibility acceptable to 
the Director, NPFC, in an amount equal to the total applicable amount 
determined under Sec.  138.80(f)(3). A guarantor may file the evidence 
of financial responsibility on behalf of the applicant directly with 
the Director, NPFC.
    (b) Methods. An applicant or certificant must establish and 
maintain evidence of financial responsibility by one or more of the 
following methods:
    (1) Insurance. By filing with the Director, NPFC, an Insurance 
Guaranty (Form CG-5586) or, when applying for a Master Certificate 
under Sec.  138.110, a Master Insurance Guaranty (Form CG-5586-1), 
executed by not more than four insurers that have been found acceptable 
by, and remain acceptable to, the Director, NPFC, for purposes of this 
subpart.
    (2) Surety bond. By filing with the Director, NPFC, a Surety Bond 
Guaranty (Form CG-5586-2), executed by not more than 10 acceptable 
surety companies certified by the United States Department of the 
Treasury with respect to the issuance of Federal bonds in the maximum 
penal sum of each bond to be issued under this subpart.
    (3) Self-insurance. By filing with the Director, NPFC, the 
financial statements specified in paragraph (b)(3)(i) of this section 
for the applicant's fiscal year preceding the date of Application and 
by demonstrating that the applicant or certificant maintains, in the 
United States, working capital and net worth each in amounts equal to 
or greater than the total applicable amount determined under Sec.  
138.80(f)(3), based on a vessel carrying hazardous substances as cargo. 
As used in this paragraph, working capital means the amount of current 
assets located in the United States, less all current liabilities 
anywhere in the world; and net worth means the amount of all assets 
located in the United States, less all liabilities anywhere in the 
world. For each fiscal year after the initial filing, the applicant or 
certificant must also submit statements as follows:
    (i) Initial and annual filings. An applicant or certificant must 
submit annual, current, and audited non-consolidated financial 
statements prepared in accordance with Generally Accepted Accounting 
Principles, and audited by an independent Certified Public Accountant 
in accordance with Generally Accepted Auditing Standards. These 
financial statements must be accompanied by an additional statement 
from the Treasurer (or equivalent official) of the applicant or 
certificant certifying both the amount of current assets and the amount 
of total assets included in the accompanying balance sheet, which are 
located in the United States. If the financial statements cannot be 
submitted in non-consolidated form, a consolidated statement may be 
submitted if accompanied by an additional statement prepared by the 
same Certified Public Accountant, verifying the amount by which the 
applicant's or certificant's--
    (A) Total assets located in the United States exceed its total 
(i.e., worldwide) liabilities; and
    (B) Current assets located in the United States exceed its total 
(i.e., worldwide) current liabilities. This additional Certified Public 
Accountant statement must specifically name the applicant or 
certificant, indicate that the amounts so verified relate only to the 
applicant or certificant, apart from any other affiliated entity, and 
identify the consolidated financial statement to which it applies.
    (ii) Semiannual self-insurance submissions. When the self-insuring 
applicant's or certificant's demonstrated net worth is not at least ten 
times the total applicable amount of financial responsibility 
determined under Sec.  138.80(f)(3), the applicant's or certificant's 
Treasurer (or equivalent official) must file affidavits with the 
Director, NPFC, covering the first six months of the applicant's or 
certificant's current fiscal year. The affidavits must state that 
neither the working capital

[[Page 53701]]

nor the net worth have, during the first six months of the current 
fiscal year, fallen below the applicant's or certificant's required 
total applicable amount of financial responsibility as determined under 
this subpart.
    (iii) Additional self-insurance submissions. A self-insuring 
applicant or certificant--
    (A) Must, upon request of the Director, NPFC, within the time 
specified in the request, file additional financial information; and
    (B) Must notify the Director, NPFC, within 5 business days of the 
date the applicant or certificant knows, or has reason to know, that 
its working capital or net worth has fallen below the total applicable 
amounts required by this subpart.
    (iv) Time for self-insurance filings. All required annual financial 
statements must be received by the Director, NPFC, within 90 days after 
the close of the applicant's or certificant's fiscal year, and all 
affidavits required by paragraph (b)(3)(ii) of this section must be 
received by the Director, NPFC, within 30 days after the close of the 
applicable six-month period. The Director, NPFC, may grant an extension 
of the time limits for filing the annual financial statements, semi-
annual affidavits or additional financial information upon written 
request and for good cause shown. An applicant or certificant seeking 
an extension of any deadline must set forth the reasons for the 
extension request and deliver the request to the Director, NPFC, at 
least 15 days before the annual financial statements, affidavits or 
additional information are due. The Director, NPFC, will not consider a 
request for an extension of more than 60 days.
    (v) Failure to submit. The Director, NPFC, may deny or revoke a 
Certificate for failure of the applicant or certificant to timely file 
any statement, data, notification, or affidavit required by paragraph 
(b)(3) of this section.
    (vi) Waiver of working capital. The Director, NPFC, may waive the 
working capital requirement for any applicant or certificant that--
    (A) Is a regulated public utility, a municipal or higher-level 
governmental entity, or an entity operating solely as a charitable, 
non-profit organization qualifying under Section 501(c) Internal 
Revenue Code. The applicant or certificant must demonstrate in writing 
that the grant of a waiver would benefit a local public interest; or
    (B) Demonstrates in writing that working capital is not a 
significant factor in the applicant's or certificant's financial 
condition. An applicant's or certificant's net worth in relation to the 
amount of its required total applicable amount of financial 
responsibility and a history of stable operations are the major 
elements considered by the Director, NPFC.
    (4) Financial Guaranty. By filing with the Director, NPFC, a 
Financial Guaranty (Form CG-5586-3), or, when applying for a Master 
Certificate, a Master Financial Guaranty (Form CG-5586-4), executed by 
not more than four financial guarantors, including, but not limited to, 
a parent or affiliate acceptable to the Director, NPFC. A financial 
guarantor must comply with all of the self-insurance provisions of 
paragraph (b)(3) of this section. In addition, a person who is a 
financial guarantor for more than one applicant or certificant must 
have working capital and net worth no less than the aggregate total 
applicable amounts of financial responsibility determined under Sec.  
138.80(f)(3) provided as a financial guarantor for each applicant or 
certificant, plus the total applicable amount required to be 
demonstrated by a self-insurer under this subpart if the financial 
guarantor is also acting as a self-insurer.
    (5) Other evidence of financial responsibility. The Director, NPFC, 
will not accept a self-insurance method other than the one described in 
paragraph (b)(3) of this section. An applicant may in writing request 
that the Director, NPFC, accept a method different from one described 
in paragraph (b)(1), (2), or (4) of this section to demonstrate 
evidence of financial responsibility. An applicant submitting a request 
under this paragraph must submit the request to the Director, NPFC, at 
least 45 days prior to the date the Certificate is required. The 
applicant must describe in detail the method proposed, the reasons why 
the applicant does not wish to use or is unable to use one of the 
methods described in paragraph (b)(1), (2), or (4) of this section, and 
how the proposed method assures that the responsible parties for the 
vessel are able to fulfill their obligations to pay costs and damages 
in the event of an incident or a release or threatened release. The 
Director, NPFC, will not accept a method under this paragraph that 
merely deletes or alters a provision of one of the methods described in 
paragraph (b)(1), (2), or (4) of this section (for example, one that 
alters the termination clause of the Insurance Guaranty (Form CG-5586). 
An applicant that makes a request under this paragraph must provide the 
Director, NPFC, a proposed guaranty form that includes all the elements 
described in paragraphs (c) and (d) of this section. A decision of the 
Director, NPFC, not to accept a method requested by an applicant under 
this paragraph is final agency action.
    (c) Forms--(1) Multiple guarantors. Four or fewer insurers (a lead 
underwriter is considered to be one insurer) may jointly execute an 
Insurance Guaranty (Form CG-5586) or a Master Insurance Guaranty (Form 
CG-5586-1). Ten or fewer sureties (including lead sureties) may jointly 
execute a Surety Bond Guaranty (Form CG-5586-2). Four or fewer 
financial guarantors may jointly execute a Financial Guaranty (Form CG-
5586-3). If more than one insurer, surety, or financial guarantor 
executes the relevant form--
    (i) Each is bound for the payment of sums only in accordance with 
the percentage of vertical participation specified on the relevant form 
for that insurer, surety, or financial guarantor. Participation in the 
form of layering (tiers, one in excess of another) is not acceptable; 
only vertical participation on a percentage basis and participation 
with no specified percentage allocation is acceptable. If no percentage 
of participation is specified for an insurer, surety, or financial 
guarantor, the liability of that insurer, surety, or financial 
guarantor is joint and several for the total of the unspecified 
portions; and
    (ii) The guarantors must designate a lead guarantor having 
authority to bind all guarantors for actions required of guarantors 
under the Acts, including but not limited to receipt of designation of 
source, advertisement of a designation, and receipt and settlement of 
claims.
    (2) Operator name. An applicant or certificant must ensure that 
each form submitted under this subpart sets forth in full the correct 
legal name of the vessel operator to whom a Certificate is to be 
issued.
    (d) Direct Action--(1) Acknowledgment. Any evidence of financial 
responsibility filed with the Director, NPFC, under this subpart must 
contain an acknowledgment by each insurer or other guarantor that an 
action in court by a claimant (including a claimant by right of 
subrogation) for costs or damages arising under the provisions of the 
Acts, may be brought directly against the insurer or other guarantor. 
The evidence of financial responsibility must also provide that, in the 
event an action is brought under the Acts directly against the insurer 
or other guarantor, the insurer or other guarantor may invoke only the 
following rights and defenses:
    (i) The incident, release, or threatened release was caused by the 
willful

[[Page 53702]]

misconduct of the person for whom the guaranty is provided.
    (ii) Any defense that the person for whom the guaranty is provided 
may raise under the Acts.
    (iii) A defense that the amount of a claim or claims, filed in any 
action in any court or other proceeding, exceeds the amount of the 
guaranty with respect to an incident or with respect to a release or 
threatened release.
    (iv) A defense that the amount of a claim or claims that exceeds 
the amount of the guaranty, which amount is based on the gross tonnage 
of the vessel as entered on the vessel's International Tonnage 
Certificate or other official, applicable certificate of measurement, 
except when the guarantor knew or should have known that the applicable 
tonnage certificate was incorrect.
    (v) The claim is not one made under either of the Acts.
    (2) Limitation on guarantor liability. A guarantor that 
participates in any evidence of financial responsibility under this 
subpart will be liable because of that participation, with respect to 
an incident or a release or threatened release, in any proceeding only 
for the amount and type of costs and damages specified in the evidence 
of financial responsibility. A guarantor will not be considered to have 
consented to direct action under any law other than the Acts, or to 
unlimited liability under any law or in any venue, solely because of 
the guarantor's participation in providing any evidence of financial 
responsibility under this subpart. In the event of any finding that 
liability of a guarantor exceeds the amount of the guaranty provided 
under this subpart, that guaranty is considered null and void with 
respect to that excess.
    (e) Public access to data. Financial data filed with the Director, 
NPFC, by an applicant, certificant, and any other person is considered 
public information to the extent required by the Freedom of Information 
Act (5 U.S.C. 552) and permitted by the Privacy Act (5 U.S.C. 552a).
    (f) Total applicable amount. The total applicable amount is 
determined as follows:
    (1) The applicable amount under OPA 90 is equal to the applicable 
vessel limit of liability, which is determined as provided in subpart B 
of this part.
    (2) The applicable amount under CERCLA is determined as follows:
    (i) For a vessel over 300 gross tons carrying a hazardous substance 
as cargo, the greater of $5,000,000 or $300 per gross ton.
    (ii) For any other vessel over 300 gross tons, the greater of 
$500,000 or $300 per gross ton.
    (3) The total applicable amount is the applicable amount determined 
under paragraph (f)(1) of this section plus the applicable amount 
determined under paragraph (f)(2) of this section.


Sec.  138.85  Implementation schedule for amendments to applicable 
amounts by regulation.

    Each operator of a vessel described in Sec.  138.15 must establish 
evidence of financial responsibility acceptable to the Director, NPFC, 
in an amount equal to or greater than the total applicable amounts 
determined under Sec.  138.80(f), by not later than January 15, 2009. 
In the event an applicable amount determined under Sec.  138.80(f) is 
thereafter amended by regulation, each operator of a vessel described 
in Sec.  138.15 must establish evidence of financial responsibility 
acceptable to the Director, NPFC, in an amount equal to or greater than 
the amended total applicable amount, by not later than 90 days after 
the effective date of the final rule, unless another date is required 
by statute or specified in the amending regulation.


Sec.  138.90  Individual and Fleet Certificates.

    (a) The Director, NPFC, issues an individual Certificate for each 
vessel listed on a completed Application or request for renewal when 
the Director, NPFC, determines that acceptable evidence of financial 
responsibility has been provided and appropriate fees have been paid, 
except where a Fleet Certificate is issued under this section or where 
a Master Certificate is issued under Sec.  138.110. Each Certificate of 
any type issued under this subpart is issued only in the name of a 
vessel operator and is effective for not more than 3 years from the 
date of issuance, as indicated on each Certificate. An authorized 
official of the applicant may submit to the Director, NPFC, a letter 
requesting that additional vessels be added to a previously submitted 
Application for an individual Certificate. The letter must set forth 
all information required in item 5 of the Application form. The 
authorized official must also file, or cause to be filed with the 
Director, NPFC, acceptable evidence of financial responsibility, if 
required, and must pay all applicable certification fees for the 
additional vessels.
    (b) An operator of a fleet of two or more barges that are not tank 
vessels and that from time to time may be subject to this subpart 
(e.g., a hopper barge over 300 gross tons when carrying oily metal 
shavings or similar cargo) may apply to the Director, NPFC, for 
issuance of a Fleet Certificate, so long as the operator of such a 
fleet is a self-insurer or arranges with an acceptable guarantor to 
cover, automatically, all such barges for which the operator may from 
time to time be responsible.
    (c) A person must not make any alteration on any copy of a 
Certificate issued under this subpart.
    (d) If, at any time after a Certificate has been issued, a 
certificant becomes aware of a change in any of the facts contained in 
the Application or supporting documentation, the certificant must 
notify the Director, NPFC, in writing within 10 days of becoming aware 
of the change. A vessel or operator name change or change of a 
guarantor must be reported by the operator as soon as possible by 
telefax or other electronic means to the Director, NPFC, and followed 
by a written notice sent within 3 business days. (See, Sec.  138.45, 
Where to apply for and renew Certificates, for contact information).
    (e) Except as provided in Sec.  138.90(f), at the moment a 
certificant ceases to be the operator of a vessel for any reason, 
including a vessel that is scrapped or transferred to a new operator, 
the individual Certificate naming the vessel is void and its further 
use is prohibited. In that case, the certificant must, within 10 
business days of the Certificate becoming void, submit the following 
information in writing to the Director, NPFC:
    (1) The number of the individual Certificate and the name of the 
vessel.
    (2) The date and reason why the certificant ceased to be the 
operator of the vessel.
    (3) The location of the vessel on the date the certificant ceased 
to be the operator.
    (4) The name and mailing address of the person to whom the vessel 
was sold or transferred.
    (f) In the event of the temporary transfer of custody of an 
unmanned barge with a Certificate under this subpart, where the 
certificant transferring the barge continues to be liable under the 
Acts and continues to maintain on file with the Director, NPFC, 
acceptable evidence of financial responsibility with respect to the 
barge, the existing Certificate remains in effect in respect to that 
vessel, and a temporary new Certificate is not required for the vessel. 
The temporary transferee is encouraged to require the transferring 
certificant to acknowledge in writing that the transferring certificant 
agrees to remain responsible for pollution liabilities.

[[Page 53703]]

Sec.  138.100  Non-owning operator's responsibility for identification.

    (a) Each operator that is not an owner of a vessel with a 
Certificate under this subpart, other than an unmanned barge, must 
ensure that the original or a legible copy of the demise charter-party 
(or other written document on the owner's letterhead, signed by the 
vessel owner, which specifically identifies the vessel operator named 
on the Certificate) is maintained on board the vessel.
    (b) The demise charter-party or other document required by 
paragraph (a) of this section must be presented, upon request, for 
examination and copying, to a United States Government official.


Sec.  138.110  Master Certificates.

    (a) A contractor or other person who is responsible for a vessel in 
the capacity of a builder, scrapper, lessor, or seller (including a 
repairer who agrees to be responsible for a vessel under its custody) 
may apply for a Master Certificate instead of applying for an 
individual Certificate or Fleet Certificate for each vessel. A Master 
Certificate covers all of the vessels subject to this subpart held by 
the applicant solely for purposes of construction, repair, scrapping, 
lease, or sale. A vessel which is being operated commercially in any 
business venture, including the business of building, repairing, 
scrapping, leasing, or selling (e.g., a slop barge used by a shipyard) 
cannot be covered by a Master Certificate. Any vessel for which a 
Certificate is required, but which is not eligible for a Master 
Certificate, must be covered by either an individual Certificate or a 
Fleet Certificate.
    (b) An applicant for a Master Certificate must submit an 
Application form in the manner prescribed by Sec. Sec.  138.40 through 
138.60. An applicant must establish evidence of financial 
responsibility in accordance with Sec.  138.80, by submission, for 
example, of an acceptable Master Insurance Guaranty Form, Surety Bond 
Guaranty Form, Master Financial Guaranty Form, or acceptable self-
insurance documentation. An Application for a Master Certificate must 
be completed in full, except for Item 5. The applicant must make the 
following statement in Item 5: ``This is an application for a Master 
Certificate. The largest tank vessel to be covered by this application 
is [insert applicable gross tons] gross tons. The largest vessel other 
than a tank vessel is [insert applicable gross tons] gross tons.'' The 
dollar amount of financial responsibility evidenced by the applicant 
must be sufficient to meet the amount required under this subpart.
    (c) Each Master Certificate issued by the Director, NPFC, 
indicates--
    (1) The name of the applicant (i.e., the builder, repairer, 
scrapper, lessor, or seller);
    (2) The date of issuance and termination, encompassing a period of 
not more than 3 years; and
    (3) The gross tons of the largest tank vessel and gross tons of the 
largest vessel other than a tank vessel eligible for coverage by that 
Master Certificate. (The Master Certificate does not identify the name 
of each vessel covered by the Certificate.)
    (d) Each additional vessel which does not exceed the respective 
tonnages indicated on the Master Certificate and which is eligible for 
coverage by a Master Certificate is automatically covered by that 
Master Certificate. Before acquiring a vessel, by any means, including 
conversion of an existing vessel, that would have the effect of 
increasing the certificant's required applicable amount of financial 
responsibility (above that provided for issuance of the existing Master 
Certificate), the certificant must submit to the Director, NPFC, the 
following:
    (1) Evidence of increased financial responsibility.
    (2) A new certification fee.
    (3) Either a new Application or a letter amending the existing 
Application to reflect the new gross tonnage which is to be indicated 
on a new Master Certificate.
    (e) A person to whom a Master Certificate has been issued must 
submit to the Director, NPFC, every six months beginning the month 
after the month in which the Master Certificate is issued, a report 
indicating the name, previous name, type, and gross tonnage of each 
vessel covered by the Master Certificate during the preceding six-month 
reporting period and indicating which vessels, if any, are tank 
vessels.


Sec.  138.120  Certificates, denial or revocation.

    (a) The Director, NPFC, may deny a Certificate when an applicant--
    (1) Willfully or knowingly makes a false statement in connection 
with an Application or other submission or filing under this subpart 
for an initial or renewal Certificate;
    (2) Fails to establish acceptable evidence of financial 
responsibility as required by this subpart;
    (3) Fails to pay the required Application or certification fees;
    (4) Fails to comply with or respond to lawful inquiries, 
regulations, or orders of the Coast Guard pertaining to the activities 
subject to this subpart; or
    (5) Fails to timely file with the Director, NPFC, required 
statements, data, notifications, or affidavits.
    (b) The Director, NPFC, may revoke a Certificate when a 
certificant--
    (1) Willfully or knowingly makes a false statement in connection 
with an Application for an initial or a renewal Certificate, or in 
connection with any other filing required by this subpart;
    (2) Fails to comply with or respond to lawful inquiries, 
regulations, or orders of the Coast Guard pertaining to the activities 
subject to this subpart; or
    (3) Fails to timely file with the Director, NPFC, required 
statements, data, notifications, or affidavits.
    (c) A Certificate is immediately invalid, and considered revoked, 
without prior notice, when the certificant--
    (1) Fails to maintain acceptable evidence of financial 
responsibility as required by this subpart;
    (2) Is no longer the responsible operator of the vessel or fleet in 
question; or
    (3) Alters any copy of a Certificate.
    (d) The Director, NPFC, will advise the applicant or certificant, 
in writing, of the intention to deny or revoke a Certificate under 
paragraph (a) or (b) of this section and will state the reason for the 
decision. Written advice from the Director, NPFC, that an incomplete 
Application will be considered withdrawn unless it is completed within 
a stated period, is the equivalent of a denial.
    (e) If the intended revocation under paragraph (b) of this section 
is based on failure to timely file required financial statements, data, 
notifications, or affidavits with the Director, NPFC, the revocation is 
effective 10 days after the date of the notice of intention to revoke, 
unless, before the effective date of the revocation, the certificant 
demonstrates to the satisfaction of the Director, NPFC, that the 
required documents were timely filed or have been filed.
    (f) If the intended denial is based on paragraph (a)(1) or (a)(4) 
of this section, or the intended revocation is based on paragraph 
(b)(1) or (b)(2) of this section, the applicant or certificant may 
request, in writing, an opportunity to present information for the 
purpose of showing that the applicant or certificant is in compliance 
with the subpart. The request must be received by the Director, NPFC, 
within 10 days after the date of the notification of intention to deny 
or revoke. A Certificate subject to revocation under this paragraph 
remains valid until the Director, NPFC, issues a written decision 
revoking the Certificate.
    (g) An applicant or certificant whose Certificate has been denied 
under paragraph (a) of this section or revoked under paragraph (b) or 
(c) of this section

[[Page 53704]]

may request the Director, NPFC, to reconsider the denial or revocation. 
The certificant must submit a request for reconsideration, in writing, 
to the Director, NPFC, within 20 days of the date of the denial or 
revocation. The certificant must state the reasons for requesting 
reconsideration. The Director, NPFC, will generally issue a written 
decision on the request within 30 days of receipt, provided that, if 
the Director, NPFC, does not issue a decision within 30 days, the 
request for reconsideration will be deemed to have been denied, and the 
denial or revocation will be deemed to have been affirmed. Unless the 
Director, NPFC, issues a decision reversing the revocation, a revoked 
Certificate remains invalid. A decision by the Director, NPFC, 
affirming a denial or revocation, is final agency action.


Sec.  138.130  Fees.

    (a) The Director, NPFC, will not issue or renew a Certificate until 
the fees set forth in paragraphs (c) and (d) of this section have been 
paid.
    (b) For those using E-COFR, credit card payment is required. 
Otherwise, fees must be paid in United States currency by check, draft, 
or postal money order made payable to the ``U.S. Coast Guard''.
    (c) An applicant who submits an Application under this subpart must 
pay a non-refundable Application fee of $200 for each Application 
(i.e., individual Certificate, Fleet Certificate, or Master 
Certificate), except as follows:
    (1) An Application for an additional (i.e., supplemental) 
individual Certificate,
    (2) A request to amend or renew an existing Certificate, or
    (3) An Application submitted within 90 days following a revocation 
or other invalidation of a Certificate.
    (d) In addition to the Application fee of $200, an applicant must 
pay a certification fee of $100 for each vessel for which a Certificate 
is requested. An applicant must pay the $100 certification fee for each 
vessel listed in, or later added to, an Application for an individual 
Certificate(s). An applicant must pay the $100 certification fee to 
renew or to reissue a Certificate for any reason, including, but not 
limited to, a vessel or operator name change.
    (e) A certification fee is refunded, upon receipt of a written 
request, if the Application is denied or withdrawn before issuance of 
the Certificate. Overpayments of Application and certification fees are 
refunded, on request, only if the refund is for $100 or more. However, 
any overpayments not refunded will be credited, for a period of 3 years 
from the date of receipt of the monies by the Coast Guard, for the 
applicant's possible future use or transfer to another applicant under 
this subpart.


Sec.  138.140  Enforcement.

    (a) Any person who fails to comply with this subpart with respect 
to evidence of financial responsibility under Section 1016 of OPA 90 
(33 U.S.C. 2716) is subject to a civil penalty under Section 4303(a) of 
OPA 90 (33 U.S.C. 2716a(a)). In addition, under Section 4303(b) of OPA 
90 (33 U.S.C. 2716a(b)), the Attorney General may secure such relief as 
may be necessary to compel compliance with the OPA 90 requirements of 
this subpart, including termination of operations. Further, any person 
who fails to comply with this subpart with respect to evidence of 
financial responsibility under Section 108(a) of CERCLA (42 U.S.C. 
9608(a)), is subject to a Class I administrative civil penalty, a Class 
II administrative civil penalty or a judicial penalty under Section 109 
of CERCLA (42 U.S.C. 9609).
    (b) The Secretary of the Department in which the U.S. Coast Guard 
is operating will withhold or revoke the clearance required by 46 
U.S.C. 60105 to any vessel subject to this subpart that has not 
provided the evidence of financial responsibility required by this 
subpart.
    (c) The Coast Guard may deny entry to any port or place in the 
United States or the navigable waters of the United States, and may 
detain at a port or place in the United States in which it is located, 
any vessel subject to this subpart, which has not provided the evidence 
of financial responsibility required by this subpart.
    (d) Any vessel subject to this subpart which is found operating in 
the navigable waters without having been issued a Certificate or 
maintained the necessary evidence of financial responsibility as 
required by this subpart is subject to seizure by, and forfeiture to, 
the United States.
    (e) Knowingly and willfully using an altered copy of a Certificate, 
or using a copy of a revoked, expired or voided Certificate for 
anything other than recordkeeping purposes, is prohibited. If a 
Certificate is revoked, has expired or is rendered void for any reason, 
the certificant must cease using all copies of the Certificate for 
anything other than the operator's own historical recordkeeping 
purposes.


Sec.  138.150  Service of process.

    (a) When executing the forms required by this subpart, each 
applicant, certificant and guarantor must designate thereon a person 
located in the United States as its agent for service of process for 
purposes of this subpart and for receipt of notices of responsible 
party designations and presentations of claims under the Acts 
(collectively referred to herein as ``service of process''). Each 
designated agent must acknowledge the agency designation in writing 
unless the agent has already furnished the Director, NPFC, with a 
master (i.e., blanket) agency acknowledgment showing that the agent has 
agreed in advance to act as the United States agent for service of 
process for the applicant, certificant, or guarantor in question.
    (b) If any applicant, certificant, or guarantor desires, for any 
reason, to change any designated agent, the applicant, certificant, or 
guarantor must notify the Director, NPFC, of the change. If a master 
agency acknowledgment for the new agent is not on file with NPFC, the 
applicant, certificant, or guarantor must furnish to the Director, 
NPFC, all the relevant information, including the new agent's 
acknowledgment, required in accordance with paragraph (a) of this 
section. In the event of death, disability, unavailability, or similar 
event of a designated agent, the applicant, certificant, or guarantor 
must designate another agent in accordance with paragraph (a) of this 
section within 10 days of knowledge of any such event. The applicant, 
certificant, or guarantor must submit the new designation to the 
Director, NPFC. The Director, NPFC, may deny or revoke a Certificate if 
an applicant, certificant, or guarantor fails to designate and maintain 
an agent for service of process.
    (c) If a designated agent cannot be served because of death, 
disability, unavailability, or similar event, and another agent has not 
been designated under this section, then service of process on the 
Director, NPFC, will constitute valid service of process. Service of 
process on the Director, NPFC, will not be effective unless the 
server--
    (1) Sends the applicant, certificant, or guarantor, as applicable 
(by registered mail, at the last known address on file with the 
Director, NPFC), a copy of each document served on the Director, NPFC; 
and
    (2) Attests to this registered mailing, at the time process is 
served upon the Director, NPFC, indicating that the intent of the 
mailing is to effect service of process on the applicant, certificant, 
or guarantor and that service on the designated agent is not possible, 
stating the reason why.

[[Page 53705]]

Subpart B--OPA 90 Limits of Liability (Vessels and Deepwater Ports)


Sec.  138.200  Scope.

    This subpart sets forth the limits of liability for vessels and 
deepwater ports under section 1004 of the Oil Pollution Act of 1990, as 
amended (33 U.S.C. 2704) (OPA 90), including adjustments pursuant to 
section 1004(d) of OPA 90 (33 U.S.C. 2704(d)).


Sec.  138.210  Applicability.

    This subpart applies to you if you are a responsible party for a 
vessel as defined under Section 1001(37) of OPA 90 (33 U.S.C. 2701(37)) 
or a deepwater port as defined under Section 1001(6) of OPA 90 (33 
U.S.C. 2701(6)), unless your OPA 90 liability is unlimited under 
Section 1004(c) of OPA 90 (33 U.S.C. 2704(c)).


Sec.  138.220  Limits of liability.

    (a) Vessels. (1) The OPA 90 limits of liability for vessels are--
    (i) For a tank vessel greater than 3,000 gross tons with a single 
hull, including a single-hull vessel fitted with double sides only or a 
double bottom only, the greater of $3,000 per gross ton or $22,000,000;
    (ii) For a tank vessel greater than 3,000 gross tons with a double 
hull, the greater of $1,900 per gross ton or $16,000,000.
    (iii) For a tank vessel less than or equal to 3,000 gross tons with 
a single hull, including a single-hull vessel fitted with double sides 
only or a double bottom only, the greater of $3,000 per gross ton or 
$6,000,000.
    (iv) For a tank vessel less than or equal to 3,000 gross tons with 
a double hull, the greater of $1,900 per gross ton or $4,000,000.
    (v) For any other vessel, the greater of $950 per gross ton or 
$800,000.
    (2) As used in this paragraph (a), the term double hull has the 
meaning set forth in 33 CFR part 157 and the term single hull means any 
hull other than a double hull.
    (b) Deepwater ports. The OPA 90 limits of liability for deepwater 
ports are--
    (1) Generally. For any deepwater port other than a deepwater port 
with a limit of liability established by regulation under Section 
1004(d)(2) of OPA 90 (33 U.S.C. 2704(d)(2)) and set forth in paragraph 
(b)(2) of this section, $350,000,000; and
    (2) For deepwater ports with limits of liability established by 
regulation under Section 1004(d)(2) of OPA 90 (33 U.S.C. 2704(d)(2)):
    (i) For the Louisiana Offshore Oil Port (LOOP), $62,000,000;
    (ii) [Reserved].
    (c) [Reserved].

    Dated: September 3, 2008.
Craig A. Bennett,
Director, National Pollution Funds Center, United States Coast Guard.
[FR Doc. E8-21554 Filed 9-16-08; 8:45 am]
BILLING CODE 4910-15-P