Document ID: USCG-2015-0473-0005
Agency: uscg
Document Type: Supporting & Related Material
Title: 
Posted Date: 2015-12-01T05:00Z

Supporting Statement 

for

CERTIFICATES OF FINANCIAL RESPONSIBILITY UNDER THE OIL POLLUTION ACT OF
1990

OMB CONTROL NO.:  1625-0046

COLLECTION INSTRUMENTS:  Instruction, CG-5585, CG-5586, CG-5586-1,
CG-5586-2, CG-5586-3, and CG-5586-4.

A. Justification.

Circumstances that make the collection of information necessary.

This information collection is “reporting” in nature and is used by
the Coast Guard’s National Pollution Funds Center (NPFC) to establish
compliance with 33 CFR 138.80, the Oil Pollution Act of 1990 (OPA, 33
U.S.C. § 2716), and the Comprehensive Environmental Response,
Compensation and Liability Act (CERCLA, 42 U.S.C. § 9608).  

By whom, how, and for what purpose the information is to be used.

The information collection requirements described in this supporting
statement are necessary to provide evidence of a respondent’s ability
to pay for removal costs and damages associated with discharges or
substantial threats of discharges of hazardous material or oil into the
navigable waters, adjoining shorelines or the exclusive economic zone of
the United States.  The requirements are imposed generally on operators
and financial guarantors of vessels over 300 gross tons.

Consideration of the use of improved information technology.

Electronic submission of Certificates of Financial Responsibility (COFR)
applications (form CG-5585) and electronic payment (credit cards) are
now available using the Internet.  NPFC receives approximately 75% of
this collection directly from insurers through our COFR mailbox. NPFC
currently receives approximately an additional20% of this collection
electronically through ECOFR, primarily from its United States’
applicants.  

The NPFC has automated this process as much as possible.  Using E-COFR
first time COFR applicants use the electronic system, they must also
mail the required signatures, but all subsequent transactions can be
completed electronically.  The NPFC has researched using digital
signatures to fully automate this process, but the current lack of
technology and funding does not make this approach feasible.

In addition, NPFC has a small percentage of customers, particularly
international and/or infrequent users, who prefer to submit paper forms.
 The NPFC accepts electronic payment from major U.S. credit cards;
international customers who do not hold these cards or any customers who
prefer to use an alternative payment method would therefore need to
submit paperwork authorizing payment.  It is easier for these customers
to submit the entire application in paper rather than half in paper and
half electronically.  Similarly, customers who expect to need only a
one-time application may not find it expedient to go through the online
enrollment process.

The NPFC has not automated any of the CG-5586 series of forms because it
only receives approximately 10 of these forms annually.  Because of this
low volume, it is not cost effective to automate these forms at this
time. 

Efforts to identify duplication.  Why similar information cannot be
used.

No other entity provides the service required.  NPFC is the only
authority for the issuance of COFRs.

Methods to minimize the burden to small businesses if involved.

This information collection does not have an impact on small businesses
or other small entities.

 

Consequences of the Federal program if collection were conducted less
frequently.

If the collection is not conducted or is conducted less frequently, the
NPFC could not ensure that the respondents could pay for removal costs
and damages associated with an oil or hazardous substance incident, as
is required by statute and regulation.

Explain any special circumstances that would cause the information
collection to be conducted in a manner inconsistent with 5 CFR
1320.5(d)(2).

Respondents might be required to report information to the agency more
often than quarterly if they desire a COFR more frequently.

There is no requirement that respondents prepare a written response to a
collection of information in fewer than 30 days after receipt of it.

There is no requirement that respondents submit more than an original
and two copies of any document.

There is no requirement that respondents retain records other than
health, medical, government contract, grant-in-aid, or tax records for
more than 3 years.

There is no statistical survey involved.

There are no special circumstances that would cause an information
collection to be conducted in a manner that includes a pledge of
confidentiality that is not supported by the authority established in
statute or regulation, that is not supported by disclosure and data
security policies that are consistent with the pledge, or which
unnecessarily impedes sharing of data with other agencies for compatible
confidential use.

The only confidential information that may be required is company
financial data, which would be submitted if the respondent chooses to
obtain a COFR by means of self-insurance or financial guaranty method. 
Should respondents not wish to disclose this information, they could use
an alternative method to obtain a COFR (e.g., insurance from a
commercial provider). 

Outside consultation for this collection effort.

A 60-Day Notice (See [USCG-2015-0473], July 31, 2015, 80 FR 45667) and
30-Day Notice (XX XX, 2015, 80 FR XXXXX) were published in the Federal
Register to obtain public comment on this collection.  The Coast Guard
has not received any comments on this information collection. w

Explain any decision to provide any payment or gift to respondents.

There is no offer of monetary or material value for this information
collection.

Describe any assurance of confidentiality provided to respondents.

There are no assurances of confidentiality provided to the respondents
for this information collection.  Coast Guard program personnel will
handle the information. Program personnel are responsible for the
storage and ultimate disposal of the information required to be
reported.  Agency policy is to ensure FOIA and Privacy Act requirements
are followed in its custody of information.  Any material submitted by
respondents who request assurances of confidentiality will be handled in
accordance with established agency practices as well as applicable
statutes.

Additional justification for any questions of a sensitive nature.

There are no questions of sensitive language.

Estimates of reporting and recordkeeping hour and cost burdens of the
collection of information.

This information collection utilizes six CG-forms that need to be
completed by respondents. Initially all respondents need to complete
Application for Vessel Certification of Financial Responsibility
(CG-5585) and Insurance Guaranty Form (CG-5586), then every year
respondents may complete varies supplementary form.  

Types of respondents are:

Vessel operators:

New applicants that do not self insure need only to complete the CG-5585

The approximately 900 United States operators and 9,000 foreign
operators must renew their COFRs every 3 years.  Therefore, for the
purposes of this information collection budget, we have assumed that a
third of them renew each year.

Financial Guarantors

Only one applicable GC-5586 is completed by either a guarantor, self
insurer and insurer per operator.

The almost 100 guarantors, including self-insurers, must submit required
affidavits and financial documentation every year to maintain approval
to provide acceptable evidence of financial responsibility.

	Annual Burden

	Number of Respondents

Operator Respondents	3,300

	Financial Guarantor Respondents	100

	Burden

Reporting Hours per Response	1

	Recordkeeping Hours per Response	0

	Hour Burden	3,400

	Cost (assuming $26.04 per hour)	$88,500

	Total Burden Hours (Year 2 and Beyond)	3,400

Total Cost (Year 1 Only)	$348,900

Total Cost (Year 2 and Beyond)	$88,500

Estimates of annualized capital and start-up costs.

There are no record keeping, capital, start-up or maintenance costs
associated with this information collection.

Cost to Federal Government.

Five Marine Insurance Examiners, most of which are GS-13, spend about
40% of their time on this information collection.  

Number of Marine Insurance Examiners	5

Annual Hours per Examiner	768

Cost (assuming $66 per hour) per Examiner	$50,688

Total Annual Government Cost Burden	$ 253,440

Explain the reasons for the change in burden.

There is no change to the burden estimate.  The reporting requirements,
and the methodology for calculating burden, remain unchanged.

 

For collections of information whose results are planned to be published
for statistical use, outline plans for tabulation, statistical analysis
and publication.

This information collection will not be published for statistical
purposes.  The NPFC provides a public search function on its COFR Web
site on approved vessel COFRs. The Web site is automatically updated
daily from the COFR database, which NPFC maintains through this
information collection.

In addition, NPFC posts graphs and tables on various types of insurers
and methods of financial responsibility on its COFR Web site.  These are
generated from its COFR database and posted on a monthly basis. 

Explain the reasons for seeking not to display the expiration date for
OMB approval of the information of collection.

USCG will display the expiration date for OMB approval of this
information collection.

Explain each exception to the certification statement.

USCG does not request an exception to the certification of this
information collection.

B.  Collection of Information Employing Statistical Methods.

This information collection does not employ statistical methods.

 Assumes that 1/3 of the approximately 9,900 vessel operators would
submit information per year.  

 Burdened labor rate based on 2005 Bureau of Labor Statistics mean
national wage average ($18.21 per hour) + 43 percent overhead factor to
estimate employee benefits.  Bureau of Labor Statistics data shows that
total employee benefits is approximately 30% of total compensation.  By
applying a benefit factor of approximately 43 percent to the hourly
wage, we calculate total compensation.  Hourly Wage + Benefit Factor =
Total Compensation.  $18.21 per hour + 0.43 x 18.21 = $ 26.04 per hour.

 Calculated from 40% of [(50 weeks/year x 40 hours/week) – (10 Federal
holidays x 8 hours/day)]

 To assess the cost of government effort, we used an employee rate of
$66 per hour, which is the in-government hourly rate for GS-13 personnel
from COMDTINST 7310.1J, Standard Rates.

1625-0046