Financial Responsibility-Vessels; Superseded Pollution Funds

CourtHomeland Security Department
Citation86 FR 68123
Publication Date01 December 2021
Record Number2021-26046
Federal Register, Volume 86 Issue 228 (Wednesday, December 1, 2021)
[Federal Register Volume 86, Number 228 (Wednesday, December 1, 2021)]
                [Rules and Regulations]
                [Pages 68123-68149]
                From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
                [FR Doc No: 2021-26046]
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                DEPARTMENT OF HOMELAND SECURITY
                Coast Guard
                33 CFR Parts 135, 138, and 153
                [Docket No. USCG-2017-0788]
                RIN 1625-AC39
                Financial Responsibility--Vessels; Superseded Pollution Funds
                AGENCY: Coast Guard, DHS.
                ACTION: Final rule.
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                SUMMARY: The Coast Guard is issuing regulations to expand vessel
                financial responsibility to apply to all tank vessels greater than 100
                gross tons as required by statute, and to make other amendments that
                clarify and update reporting requirements, reflect current practice,
                and remove unnecessary regulations. These regulations ensure that the
                Coast Guard has current information when there are significant changes
                in a vessel's operation, ownership, or evidence of financial
                responsibility, and reflects current best practices in the Coast
                Guard's management of the Certificate of Financial Responsibility
                program.
                DATES: This final rule is effective January 3, 2022.
                ADDRESSES: To view documents mentioned in this preamble as being
                available in the docket, go to https://www.regulations.gov, type USCG-
                2017-0788 in the search box and click ``Search.'' Next, in the Document
                Type
                [[Page 68124]]
                column, select ``Supporting & Related Material.''
                FOR FURTHER INFORMATION CONTACT: For information about this document
                call or email Benjamin H. White, National Pollution Funds Center, Coast
                Guard; telephone 202-795-6066, email [email protected].
                SUPPLEMENTARY INFORMATION:
                Table of Contents for Preamble
                I. Abbreviations
                II. Basis and Purpose, and Regulatory History
                III. Discussion of Comments and Changes
                IV. Discussion of the Rule
                V. Regulatory Analyses
                 A. Regulatory Planning and Review
                 B. Small Entities
                 C. Assistance for Small Entities
                 D. Collection of Information
                 E. Federalism
                 F. Unfunded Mandates
                 G. Taking of Private Property
                 H. Civil Justice Reform
                 I. Protection of Children
                 J. Indian Tribal Governments
                 K. Energy Effects
                 L. Technical Standards
                 M. Environment
                I. Abbreviations
                311(k) Fund The fund established by Section 311(k) of the Federal
                Water Pollution Control Act
                CERCLA Comprehensive Environmental Response, Compensation, and
                Liability Act of 1980
                COFR Certificate of Financial Responsibility
                CFR Code of Federal Regulations
                CIMS Case Information Management System
                DHS Department of Homeland Security
                eCOFR Electronic Certificate of Financial Responsibility
                EEZ Exclusive Economic Zone
                FWPCA Federal Water Pollution Control Act
                GT Gross Tonnage
                IRFA Initial Regulatory Flexibility Analysis
                MISLE Marine Information for Safety and Law Enforcement
                NPFC National Pollution Funds Center
                NPRM Notice of proposed rulemaking
                OCSLA Fund Offshore Oil Pollution Compensation Fund
                OMB Office of Management and Budget
                OPA 90 Oil Pollution Act of 1990
                OSLTF Oil Spill Liability Trust Fund
                RA Regulatory Analysis
                SBA Small Business Administration
                U.S. United States
                U.S.C. United States Code
                Sec. Section
                II. Basis and Purpose, and Regulatory History
                 Responsible parties for certain vessels must establish and maintain
                evidence of financial responsibility, under both the Oil Pollution Act
                of 1990 (OPA 90), as amended, (specifically, 33 U.S.C. 2716) and the
                Comprehensive Environmental Response, Compensation, and Liability Act
                of 1980 (CERCLA) (specifically, 42 U.S.C. 9608). The evidence of
                financial responsibility must meet the maximum amount of liability
                under 33 U.S.C. 2704(a) or (d). Violators of those requirements are
                subject to various penalties under 33 U.S.C. 2716a and 42 U.S.C. 9609.
                 The 2010 Coast Guard Authorization Act (Pub. L. 111-281, 124 Stat.
                2988 (October 15, 2010)) expands OPA 90 by adding any tank vessel
                greater than 100 gross tons but less than or equal to 300 gross tons
                using any place subject to U.S. jurisdiction to the population of
                vessels subject to the evidence of financial responsibility
                requirements. The Coast Guard is amending the Code of Federal
                Regulations (CFR) to reflect that statutory change.
                 The Coast Guard had previously issued Certificate of Financial
                Responsibility (COFR) regulations at 33 CFR part 138, subpart A, which
                apply to vessels over 300 gross tons, as well as certain other vessels
                depending on how and where they are operated. The Coast Guard has
                modernized and simplified its COFR program since those regulations were
                established. Certain aspects of the COFR program are improved,
                particularly in the COFR requirements for reporting changes in vessel
                operation, ownership, or evidence of financial responsibility that
                affected the basis of the Coast Guard's decision to issue a COFR.
                Finally, the structure of the COFR regulations and some of their
                provisions, including the rules for applying vessel gross tonnage, have
                been modernized to reflect changes in the law and Coast Guard practice,
                since OPA 90's initial legislation.\1\ These changes increase
                flexibility for operators and remove unnecessary administrative
                paperwork burdens to the public and to National Pollution Funds Center
                (NPFC).
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                 \1\ This final rule conforms the COFR regulatory text to the
                Coast Guard's ``Tonnage Regulations Amendments'' final rule (81 FR
                18701, March 31, 2016), which amended the U.S. tonnage regulations
                in 46 CFR part 69.
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                A. Purpose of COFR Regulations
                 Under OPA 90, each responsible party (owners, operators, and demise
                charters) for a vessel 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 (EEZ), is
                jointly and severally liable for the specified removal costs and
                damages up to prescribed limits of liability.\2\ Similar requirements
                pertaining to hazardous substances apply to owners and operators of
                vessels and facilities under 42 U.S.C. 9607 of CERCLA.
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                 \2\ OPA 90 defines ``liable'' and ``liability'' as ``the
                standard of liability which obtains under section 1321 of this title
                [Section 311 of the FWCPA].'' 33 U.S.C. 2701(17). Liability under
                Section 311, in turn, ``has been determined repeatedly to be strict,
                joint and several.'' H.R.Rep. No. 101-653, at 780 (1990), reprinted
                in 1990 U.S.C.C.A.N. 779, 780, 1990 WL132747.
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                 Under OPA 90 and CERCLA, the responsible parties for certain
                categories of vessels must establish and maintain evidence of financial
                responsibility in accordance with regulations promulgated by the
                Secretary. The purpose of this requirement is to ensure that, in
                advance of an oil pollution incident or a hazardous substance release,
                the responsible parties for the vessels in the specified categories
                have the financial ability to meet their potential liabilities under
                OPA 90 and CERCLA up to the applicable limits of liability.
                 Under 33 U.S.C. 2716 evidence of financial responsibility is
                required for the following categories:
                 (1) Vessels greater than 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.
                 (2) Vessels using the waters of the EEZ to transship or lighter oil
                destined for a place subject to the jurisdiction of the United States
                (U.S.).
                 (3) Tank vessels greater than 100 gross tons using any place
                subject to the jurisdiction of the United States.
                B. History of COFR Regulations
                 Initially, the Coast Guard established COFR regulations in 33 CFR
                part 138 with an interim rule published July 1, 1994 (59 FR 34210)
                followed by a final rule published March 7, 1996 (61 FR 9264). In 2008
                the Coast Guard amended the COFR regulations and placed them in a newly
                created subpart A of part 138 (73 FR 53691, September 17, 2008).\3\ In
                addition to making several other changes, that final rule removed a
                requirement that responsible parties carry an original or authorized
                copy of the current COFR aboard each covered vessel, because improved
                technology enabled the Coast Guard to view vessel COFRs electronically.
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                 \3\ That rule expanded part 138's heading to ``Financial
                Responsibility for Water Pollution (Vessels) and OPA 90 Limits of
                Liability (Vessels and Deepwater Ports)'' and dedicated subpart B to
                the last half of the revised heading--limits of liability for
                vessels and deepwater ports under OPA 90.
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                 This 2021 rule follows our consideration of comments on a Notice of
                Proposed Rulemaking (NPRM) published on May 13, 2020 (85 FR
                [[Page 68125]]
                28802) proposing further changes to part 138, subpart A. Six comments
                were received that raised seven issues. No public meeting was requested
                and none was held.
                C. History of Fund Regulations in 33 CFR Part 135 and Subpart D of 33
                CFR Part 153
                 The Coast Guard added part 135, titled ``Offshore Oil Pollution
                Compensation Fund,'' to 33 CFR in 1979 (44 FR 16860, March 19, 1979)
                and it added subpart D, titled ``Administration of the Pollution
                Fund,'' to 33 CFR part 153 in 1971 (36 FR 7009, April 13, 1971). This
                rule removes 33 CFR part 135 and subpart D of 33 CFR part 153, which
                concern management of two pollution funds for which OPA 90 repealed the
                authorities. The two defunct funds are the Offshore Oil Pollution
                Compensation Fund (OSCLA Fund) in 33 CFR part 135 and the Federal Water
                Pollution Control Act (FWPCA) Section 311(k) Fund (311(k) Fund) in
                subpart D of 33 CFR part 153.
                 On November 1, 2011, the Coast Guard published a notice of inquiry
                (76 FR 67385) soliciting public comment on whether to remove 33 CFR
                part 135.\4\ We received no adverse comments; there were three comments
                supporting the removal of part 135. No comments were received during
                the 2020 NPRM comment period addressing the removal of either 33 CFR
                part 135 or subpart D of 33 CFR part 153. This rule removes those
                portions of the CFR.
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                 \4\ The notice of inquiry was initially published as part of the
                Coast Guard's Claims Procedures Under the Oil Pollution Act of 1990
                rulemaking. However, this rulemaking was closer to completion, so
                the removal of 33 CFR part 135 has been included with this
                rulemaking.
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                III. Discussion of Comments and Changes
                 The Coast Guard received six comment submissions raising seven
                issues during the 90-day public comment period for the proposed rule,
                which closed on August 11, 2020. The letters we received during the
                public comment period were from three COFR guarantors, a regional
                citizen group, an insurance trade association and an insurance
                underwriter. The following discussion summarizes the public comments we
                received and our responses to the comments. In general, commenters were
                very supportive of the changes. Three regulatory changes from those we
                proposed were made based on the comments received.
                 Supportive comments. One commenter generally supports proposed
                changes that would assist vessel operators and the U.S. Coast Guard
                National Pollution Funds Center (NPFC) in effectively managing the
                Certificate of Financial Responsibility Program. Another commenter
                further supports reporting GT tonnage measurement systems and
                submitting the GT certifying document upon request.
                 Terminology comments. Two commenters addressed terminology
                clarifications in section 138.30 of the proposed rule. While one
                commenter was supportive of terminology clarifications, the other
                commenter cited the term ``responsible party'' as an example of
                terminology that could lead to confusion if the definitions were not
                compatible with the relevant statutes. The Coast Guard agrees with this
                commenter and as proposed, had modified some definitions to cross
                reference to the relevant statutes but notes that the definition of
                ``responsible party'' had non-substantive changes in the proposed rule
                to better align with OPA 90.
                 Improved technology comments. A commenter supports our proposed
                revisions to the COFR regulations to incorporate improved management
                practices and technological advances in 138.60. The changes include
                several minor changes in 138.60 to make it easier for operators to file
                information electronically, by explicitly allowing scanned documents
                and email or faxed submissions. The rule also modifies past technical
                amendments to implement Electronic COFRs, which makes it easier to keep
                COFR information updated as vessel operations change. This will
                increase flexibility for operators and remove unnecessary
                administrative paperwork burdens to the public.
                 Director's discretion to grant a waiver comment. One commenter
                notes that proposed section 138.60(e) appears to restrict the
                discretion available to the Director in the granting of exceptions, and
                does not permit the granting of a waiver if an application is made
                where a vessel is set to arrive within 21 days from the application
                date. Accordingly, the commenter recommends that a variation of the
                original ``discretion'' language contained in the existing rule be
                retained for the proposed Section 138.150 prior notice requirements. We
                agree with the commenter that the discretionary language is too
                restrictive, and are removing the written request requirement for
                requesting an exception under 138.60(e). The phrase ``only upon written
                request, submitted as provided in paragraph (c) and (d) of this
                section, in advance of the deadline and'', has been removed from the
                regulatory text, as well as the sentence: ``the Director will not grant
                a deadline exception request that does not set forth the reasons for
                the request and that does not give NPFC sufficient time to consider and
                act on an Application or a request for COFR renewal before the COFR is
                required.'' The Director may now grant an exception for good cause
                shown.
                 Surety Bonds comment. One commenter expressed concern with removing
                the reference to surety bonds from section 138.110, stating that they
                disagree with the assertion that a surety is unnecessary because it has
                rarely been used to meet the financial responsibility requirement. We
                disagree with this commenter. While this final rule removes the surety
                bond as a specifically mentioned method for establishing and
                maintaining evidence of financial responsibility, surety bonds are
                still a viable option. They have not been eliminated as an acceptable
                method; they may still be permitted under the ``other guaranty methods
                for establishing evidence of financial responsibility'' provided that
                the COFR Operator completes the requirements 138.110(f) and upon the
                Director's acceptance of that method. We did not make a change from the
                proposed rule based on this comment.
                 Reason for termination of guaranty comments. One commenter supports
                the inclusion of the reporting requirement of the reason for
                termination of a guaranty by a guarantor in 138.110(a)(3)(i). Another
                commenter disagrees, stating that requiring guarantors to report
                information, such as reasons for canceling a guaranty would make them
                become an enforcement mechanism for the Coast Guard, and would require
                them to breach non-disclosure agreements with customers. We disagree
                with the latter commenter. The regulatory text in 138.110(a)(3)(i)
                requests the guarantor provide NPFC the reason for termination, if
                known. It is not intended to make the guarantor engage in any type of
                an enforcement mechanism on behalf of the Coast Guard. We did not make
                a change from the proposed rule based on this comment.
                 Evidence of financial responsibility comments. One commenter seeks
                clarification on the new provisions in section 138.110(b)(2)(i)--in
                particular, they ask what evidence is actually required to establish
                ability to issue COFR guarantees and to what levels? The regulation is
                not specific as to what evidence is required, nor should it be. It
                offers a few items as examples that will influence the decision, but
                largely maintains NPFC's discretion. The purpose and focus of the
                regulation is to provide general guidelines, but also allow for
                flexibility, subject to the Director's discretion. The commenter
                [[Page 68126]]
                further states that when and if these rule changes take effect, it
                would appear that a request for initial determination of acceptability
                to serve as COFR Insurance Guarantor must be made 90 days before
                issuing a guaranty. That statement is correct. Finally, the commenter
                asks whether this is only for a new guarantor. That is, will existing
                approvals be grandfathered in or is the new provision essentially a
                revocation of all existing guarantors who must restart the process
                before the rule can take effect? Under the final rule, prior COFR
                insurance guarantors do not lose their status and do not have to
                restart the process. It was never NPFC's intention to revoke all
                existing guarantors and start over; those guarantors already approved
                will continue to be approved. We did not make a change from the
                proposed rule based on this comment.
                 The same commenter states that while it has no objection to having
                to establish continued acceptability of asset levels each year as set
                forth in section 138.110(b)(2)(ii), any requirement that guarantors
                report on themselves is vague and nebulous. Without guidance in the
                proposed rule, guarantors will be unable to determine what constitutes
                material changes in financial condition that need to be reported. We
                disagree with this commenter. A guarantor should know if their
                financial situation has changed or if other major changes have occurred
                that should be reported, such as a change that would impair their
                ability to fully satisfy their financial responsibility obligations
                under OPA 90, or a material condition that affects their ability to pay
                claims, or incur the expense of paying for cleanup. If there is no
                change, the guarantor should be able to report ``no change.''
                 Withdrawal of application comments. Two commenters note that a COFR
                Operator is permitted under proposed section 138.140(a) to withdraw an
                Application for a COFR at any time prior to issuance of a COFR and
                suggests that section should be amended to include and permit the
                withdrawal of any Application made on behalf of the COFR Operator or
                responsible party, including by a COFR guarantor. We agree that a COFR
                Guarantor should also have the ability to withdraw an application for a
                COFR at any time prior to its issuance. As a result, we will be
                revising the regulatory text in 138.140(a) to add the clause ``or
                anyone authorized to act on their behalf'' after ``A COFR Operator.''
                Section 138.140(a) will now read: A COFR Operator, or anyone authorized
                to act on their behalf, may withdraw an Application at any time prior
                to issuance of the COFR.
                 Reporting requirements comments. While two commenters support the
                changes in 138.150, several commenters oppose them. An opposing
                commenter believes these requirements are unrealistic, unreasonable,
                and impracticable and thus should be revised to deal with the realities
                of the industry without compromising the purposes for which COFR
                guaranties are issued. That same commenter continues by stating that
                the 21-day and 3-day prior reporting requirements are in many cases
                unrealistic and unworkably inconsistent with how vessels are scheduled
                to call in the United States. The commenter gave an example of a
                foreign vessel without a COFR which suddenly must make a call to a U.S.
                port, either for a repair or a spot charter to receive goods from a
                U.S. port, causing that vessel to apply for a COFR opportunistically.
                 We disagree with this commenter. The scenario that this commenter
                describes does not apply to the revised 138.150. The 21-day
                notifications in 138.150(b) requiring issuance of a new COFR and 3-day
                notification in 138.150(c) not requiring issuance of a new COFR refer
                to pre-existing COFRs, which must now be either replaced, or updated,
                based on a change of circumstances in the pre-existing COFR. The
                scenario of a foreign vessel without a COFR requiring a COFR prior to
                entry into a U.S. port will follow the procedures set forth in 138.60
                and 138.70 for issuance of a new COFR. A ``waiver'' is still available
                under 138.60(e)(3), permitting the Director to grant an exception to a
                deadline for good cause shown.
                 Two commenters allege that the reporting requirements in 138.150(b)
                are duplicative. One commenter states that COFR guarantors should not
                be required to report changes that have already been reported to the
                Director by a COFR Operator, even though the COFR guarantor will
                receive notice of such changes (and thus in the ordinary course of its
                business) pursuant to section 138.150(b). Otherwise an unnecessary
                double reporting requirement will exist in the new regulations. The
                other commenter almost reiterates the previous commenter, stating that
                it is noted that COFR Operators are required by section 138.150(b) to
                give notice to their COFR guarantors, at the same time that they give
                notice to the Director, of changes that may require issuance of a new
                COFR. The commenter continues by saying that COFR guarantors should not
                be required to report the same changes, which have already been
                reported to the Director by a COFR Operator. Finally, the commenter
                says that otherwise, an unnecessary and redundant reporting requirement
                will exist in the new regulations. The commenters presume that the
                operator has reported the information to the Coast Guard. If the Coast
                Guard receives the information from two different sources, it will
                validate the information received.
                 Four commenters expressed concern with the reporting requirement
                imposed on them in proposed section 138.150(d). The commenters'
                principal concern is that the new reporting requirement requires
                guarantors to report changes to vessels that the guarantor can't
                possibly give notice until they themselves are given notice by the
                vessel operator. A secondary concern held by the commenters is that the
                new reporting requirement will require guarantors to breach non-
                disclosure agreements in place with customers should it take effect.
                NPFC agrees with the group of commenters regarding section 138.150(d).
                As a result, we are amending the regulatory text to limit a guarantor's
                obligation to report material changes in prior COFR Applications to
                information of which it becomes aware in the ordinary course of its
                business. We have inserted ``once known, or should have known, in the
                ordinary course of business,'' after the phrase ``explaining the reason
                for the intended termination.'' The final sentence ``In addition, each
                guarantor (or, if there are multiple guarantors, each lead guarantor)
                must give the Director notice by email or other electronic means as
                soon as possible before any other change occurs that would require new
                evidence of financial responsibility or issuance of a new COFR under
                paragraph (b) of this section.'' has been deleted.
                 Several suggestions were made that were outside of the scope of
                this rulemaking, and therefore we will not address them here.
                IV. Discussion of the Rule
                 After considering these comments received on the NPRM published May
                13, 2020 (85 FR 28802), we are issuing this final rule that revises 33
                CFR part 138, subpart A, and removes the superseded regulations in 33
                CFR parts 135 and 153. We explain specific changes this final rule
                introduces below.
                A. Overview of Changes to Existing COFR Regulations
                 Following is an overview of revisions to 33 CFR part 138, subpart
                A:
                 (1) Evidence of financial responsibility for tank vessels greater
                than 100 gross tons but less than or equal to 300 gross tons. As
                required by 33 U.S.C. 2716(a)(3), we extend the
                [[Page 68127]]
                regulatory requirement to establish and maintain evidence of financial
                responsibility to any tank vessel greater than 100 gross tons but less
                than or equal to 300 gross tons using any place subject to the
                jurisdiction of the United States.
                 (2) Reporting requirements. We also reorganize, clarify, and update
                the reporting requirements for submitting a COFR Application. Examples
                of new requirements include documenting evidence of financial
                responsibility submitted in support of an Application or a request for
                COFR renewal and adding into regulatory text the current practice of
                guarantor notification.
                 This set of changes--including Sec. 138.150, which is dedicated to
                reporting requirements and expressly links those requirements to
                enforcement provisions--aims to address instances in which COFR
                Operators fail to report changes to their status, as was previously
                required by 33 CFR 138.90(e). These failures included failing to report
                a vessel's financial changes in a timely manner, failing to report a
                vessel transfer to a new owner, and failing to secure a guaranty and
                apply for a new COFR--and had resulted in compliance gaps. These
                previous gaps compromised emergency responses where an inability to
                confirm financial responsibility had caused untimely responses to oil
                spills and undermined the COFR program.
                 Lastly, these revisions ensure that the Director receives the most
                current and accurate information when issuing a COFR. These revisions
                improve the Coast Guard's ability to verify vessel compliance with COFR
                regulations. For example, if an owner sells a vessel located in a place
                subject to U.S. jurisdiction, the new owner is now a responsible party
                and is immediately subject to the COFR program. However, enforcing
                compliance with the COFR program's requirements depends on the Coast
                Guard knowing about the vessel transfer. The regulatory revisions
                mitigate the risk of uninsured responsible parties and derelict
                vessels.
                 (3) Revise COFR regulations to incorporate improved management
                practices and technological advancements. We also amend the COFR
                regulations to reflect changes in the NPFC's management of the COFR
                program. The revisions include the following:
                 Expressly authorizes COFR Operators, guarantors, and
                agents for service of process to submit signed scanned documents;
                 Permits COFR Operators submitting Applications or requests
                for COFR renewal by email or fax to pay the COFR Application and
                certification fees up to 21 days after submission. This method replaces
                the requirement to pay certification fees before the NPFC issues the
                COFR;
                 Updates and simplifies the provisions that detail how to
                apply gross tonnage assigned under different measurement systems. This
                reflects changes in the law since OPA 90's initial legislation and
                conforms the regulatory text to the Coast Guard's ``Tonnage Regulations
                Amendments'' final rule (81 FR 18701, March 31, 2016), which amended
                the U.S. tonnage regulations in 46 CFR part 69;
                 Adds new provisions describing the COFR program's
                procedures for determining the acceptability of COFR guarantors; and
                 Implements the Electronic COFR (eCOFR). These regulatory
                changes help manage the COFR program more effectively, reduce the
                burden to the public, and accommodate the frequent changes in vessel
                operation during the normal course of maritime commerce.
                 (4) Clarifies terminology. Terminology in COFR regulations is now
                consistent with applicable law and COFR program business practices.
                These changes included using terms of art consistently and simplifying
                terminology.
                B. Discussion of Specific Changes to Existing COFR Regulations
                 Table 1 provides a section-number crosswalk between the existing
                COFR regulations and those in this final rule. The crosswalk assists
                the reader in comparing those currently in the CFR with those that will
                become effective January 3, 2022. Following table 1 is a discussion of
                the substantive changes, including new requirements or updates to the
                rule that match current Coast Guard practice. We applied plain language
                doctrine required by Executive Order 13563 to make these regulations
                easier to understand.
                 Table 1--Crosswalk of Existing COFR Regulations and Those in This Final
                 Rule
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                 Existing COFR regulations Final rule COFR regulations
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                Part 138--Financial Responsibility for Part 138--Evidence of Financial
                 Water Pollution (Vessels) and OPA 90 Responsibility for Water
                 Limits of Liability (Vessels, Pollution (Vessels) and OPA 90
                 Deepwater Ports and Onshore Limits of Liability (Vessels,
                 Facilities). Deepwater Ports and Onshore
                 Facilities).
                Subpart A--Financial Responsibility for Subpart A--Evidence of
                 Water Pollution (Vessels). Financial Responsibility for
                 Water Pollution (Vessels).
                Sec. 138.10 Scope.................... Sec. 138.10 Scope and
                 purpose.
                Sec. 138.15 Applicability............ Sec. 138.20 Applicability.
                Sec. 138.20 Definitions.............. Sec. 138.30 Definitions.
                Sec. 138.30 General.................. Sec. 138.40 General
                 requirements.
                Sec. 138.30(c) through (f)........... Sec. 138.50 How to apply
                 vessel gross tonnages.
                Sec. 138.40 Forms.................... Sec. 138.60 Forms and
                 submissions; ensuring
                 submission timeliness.
                Sec. 138.45 Where to apply for and Sec. 138.60 Forms and
                 renew Certificates. submissions; ensuring
                 submission timeliness.
                Sec. 138.50 Time to apply............ Sec. 138.80 Applying for
                 COFR.
                Sec. 138.60 Applications, general Sec. 138.80 Applying for
                 instructions. COFR.
                Sec. 138.65 Issuance of Certificates. Sec. 138.70 Issuance and
                 renewal of COFR.
                Sec. 138.70 Renewal of Certificates.. Sec. 138.90 Renewing COFR.
                Sec. 138.80 Financial responsibility, Sec. 138.110 How to establish
                 how established. and maintain evidence of
                 financial responsibility.
                Sec. Sec. 138.80(f) [untitled] and Sec. 138.100 How to calculate
                 138.85 Implementation schedule for a total applicable amount.
                 amendments to applicable amounts by
                 regulation.
                Sec. 138.90(a)-(c) Individual and Sec. 138.80 Applying for
                 Fleet Certificates. COFR.
                Sec. 138.90(d) and (e), untitled..... Sec. 138.150 Reporting
                 requirements.
                Sec. 138.100 Non-owning operator's Sec. 138.160 Non-owning COFR
                 responsibility for identification. Operator's responsibility for
                 identification.
                Sec. 138.110 Master Certificates..... Sec. 138.80 Applying for
                 COFR.
                Sec. 138.120 Certificates, denial or Sec. 138.140 Application
                 revocation. withdrawals, COFR denials and
                 revocations.
                Sec. 138.130 Fees.................... Sec. 138.120 Fees.
                [[Page 68128]]
                
                Sec. 138.140 Enforcement............. Sec. 138.170 Enforcement.
                Sec. 138.150 Service of process...... Sec. 138.130 Designating
                 agents for service of process.
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                Sec. 138.10 Scope and Purpose
                 The scope of subpart A Sec. 138.10(a)(2) includes the standards
                and procedures the Coast Guard uses to determine guarantor
                acceptability. In addition, the scope of subpart A Sec. 138.10(a)(3)
                includes the reporting requirements for guarantors. These changes for
                submitting evidence of financial responsibility on behalf of the COFR
                Operator reflect current practice.
                Sec. 138.20 Applicability
                 As required by statute, Sec. 138.20(a)(1) extends the
                applicability of the rule to include tank vessels greater than 100
                gross tons but less than or equal to 300 gross tons, regardless of
                whether it is transshipping or lightering oil. This provision expands
                the population of vessels under 300 gross tons that are required to
                establish and maintain evidence of financial responsibility under 33
                U.S.C. 2716. The existing regulation includes any tank vessel using the
                waters of the EEZ to transship or lighter oil destined for a place
                subject to the jurisdiction of the United States, but if a tank vessel
                is not engaged in transshipping or lightering, the existing regulation
                has an exception for those that are 300 gross tons or less.
                 In Sec. 138.20(a)(2) through (a)(4), we extend the applicability
                of the rule to include guarantors, responsible parties other than the
                COFR Operator, and agents of process. This action is in accordance with
                current practice.
                Sec. 138.30 Definitions
                 We cross-referenced additional statutory and regulatory
                definitions, added new regulatory definitions, amended regulatory
                definitions, and removed definitions that were not used.
                 The following definitions reflect substantive changes from existing
                regulations:
                 Applicant and certificant: We replaced the confusing terms
                ``applicant'' and ``certificant'' with the term ``COFR Operator''
                throughout the COFR regulations. This action promotes consistency with
                the COFR program's business practice that authorizes the COFR Operator
                designated in the ``Application'' to represent the responsible parties
                for purposes of compliance with the COFR program.
                 COFR Operator: We redefined ``COFR Operator'' to clarify when we
                are referring to the operator who is liable in the event of an incident
                or a release. We also replaced the previous term ``Operator'' with the
                term ``responsible party.'' This rule defines the term ``responsible
                party,'' for purposes of OPA 90 and CERCLA evidence of responsibility,
                by cross-reference to the relevant statute, and includes all those
                persons who meet the definition. This replacement of the term
                ``operator'' with the terms ``responsible party'' and ``COFR Operator''
                makes clear that the designation of a ``COFR Operator'' to act on
                behalf of the responsible parties for purposes of the COFR program does
                not limit or preclude other responsible parties from being operators
                within the meaning of OPA 90 or CERCLA. We also expressly clarify that,
                when there is more than one responsible party, the COFR Operator is the
                operator designated and authorized by all the vessel's responsible
                parties to act on their behalf to comply with the COFR program.
                 Fleet Certificate and Individual Certificate: A new definition for
                the term ``Fleet Certificate'' parallels the definition of ``Master
                Certificate,'' and a new definition for the term ``Individual
                Certificate,'' so that COFR regulations will include definitions for
                all three types of Certificates issued by the Director.
                 Financial guarantor: We revise the definition to make clear that a
                financial guarantor cannot also be a self-insurer of a vessel, but that
                it is possible for the self-insurer of one vessel to be the financial
                guarantor for a different vessel.
                 Owner: We remove the prior regulatory definition of ``owner.'' It
                did not accurately reflect current law, and it was not clear that a
                separate regulatory definition of ``owner'' is needed or helpful, as
                both OPA 90 and CERCLA define the term ``owner'' and we now cross-
                reference those definitions.
                 Tank vessel: We removed the regulatory definition of ``tank
                vessel,'' cross-referencing the OPA 90 statutory definition in Sec.
                138.30(a), and moved the exceptions to applicability to Sec.
                138.20(d)(3).
                 Vessel: We removed the regulatory definition of ``vessel'' and
                cross-reference in Sec. 138.30(a) the statutory definitions that
                appear in OPA 90 and CERCLA. This is because there are slight
                differences in the OPA 90 and CERCLA definitions, specifically in the
                reference to public vessels in OPA 90. Therefore, although other
                provisions of the existing COFR regulations resolve these differences,
                we believe the better way to resolve the wording differences is to
                cross-reference the statutory definitions. This approach ensures that
                COFR-regulation definitions will always be consistent with OPA 90 and
                CERCLA.
                Sec. 138.50 How To Apply Vessel Gross Tonnages
                 The previous COFR regulations provided instructions to apply
                different gross tonnage measurements for three different purposes: (1)
                To determine whether a tonnage threshold applies; (2) to calculate a
                vessel's OPA 90 and CERCLA applicable amounts of financial
                responsibility; and (3) to determine the vessel's OPA 90 and COFR
                limits of liability. However, these provisions were complex, and had
                been difficult to apply, in part because they were developed and
                established prior to the full coming into force of the International
                Convention on Tonnage Measurement of Ships (June 23, 1969) on July 18,
                1994. Furthermore, the 2010 Coast Guard Authorization Act included
                amendments that updated, clarified, and eliminated inconsistencies in
                the tonnage measurement law. The Coast Guard implemented these
                amendments in the 2016 rule,\5\ which also incorporated changes to help
                provide a suitable framework for tonnage-based regulations, allowing
                the Coast Guard to specify tonnage thresholds more clearly. This rule
                maintains the purposes of applying gross tonnage measurements explained
                in the COFR regulations.
                ---------------------------------------------------------------------------
                 \5\ ``Tonnage Regulations Amendments'' final rule (81 FR 18701,
                March 31, 2016).
                ---------------------------------------------------------------------------
                 This rule separates provisions for applying vessel gross tonnage in
                Sec. 138.50 and clarifies and simplifies the language while conforming
                with the 2016 amendments to the U.S. tonnage regulations. We added a
                table to illustrate use of gross tonnages assigned under the two
                overarching tonnage measurement systems provided for by U.S. law.\6\
                ---------------------------------------------------------------------------
                 \6\ These systems are under the Convention Measurement System,
                which expresses gross tonnage as ``GT ITC,'' and the Regulatory
                Measurement System, which expresses gross tonnage as ``GRT.''
                ---------------------------------------------------------------------------
                [[Page 68129]]
                 In Sec. 138.50(f), regardless of the tonnage reported on the
                Application, the appropriate tonnage-certifying document as provided
                for under the U.S. tonnage regulations, such as a tonnage certificate
                or completed Simplified measurement application, governs in determining
                the evidence of financial responsibility applicable amounts, except
                when the responsible parties or guarantors knew or should have known
                that the applicable tonnage certificate was incorrect. In the event of
                an oil pollution incident or hazardous substance release, the tonnage-
                certifying document governs the applicable limit of liability. This
                information is vital to the COFR program because the guaranty is to the
                certified tonnage at the time of the incident, and addresses what
                happens if a vessel undergoes a modification that affects the tonnage
                after a COFR Operator submits an Application. This approach also
                creates certainty by removing the implication that a tonnage re-
                measurement at the time of an incident can supersede liability and
                financial responsibility as reflected on the tonnage-certifying
                document.
                 The addition in Sec. 138.50(g) also requires COFR Operators to
                submit, upon request, the original or a copy of the tonnage certifying
                document(s). The rule captures the fact that, in some circumstances,
                vessels may be assigned tonnage under both measurement systems.
                Sec. 138.60 Forms and Submissions; Ensuring Submission Timeliness
                 To remain consistent with current practice, Sec. 138.60(a) notes
                that forms can be completed online or downloaded. This is the Coast
                Guard's preference for submitting eCOFR Applications. If you submit
                electronic images, please note that, currently, our system only accepts
                the following imaging programs: PDF, JPEG, and TIFF. Because of delays
                associated with mail processing and security, submission of forms by
                mail is discouraged.
                 Section 138.60(c)(2) also removes the option for hand-delivering
                submissions because of the prohibition of hand delivery under U.S.
                Government mail security restrictions. Also, Sec. 138.60(e) makes
                clear that the timeliness of submissions is solely the responsibility
                of the person making the submission.
                 Section 138.60(e)(3) was revised after comment to continue waivers,
                which permit the Director to grant an exception to a deadline for good
                cause shown.
                Sec. 138.70 Issuance and Renewal of COFR
                 Section 138.70(b) removes the express requirement to pay fees
                before the issuance of a COFR. This reflects the NPFC's current
                business practice when the COFR Operator submits the application via
                fax or email.
                 Section 138.70(e) states that certain tonnage information will be
                posted to the NPFC's COFR website, including the measurement system(s)
                used, which under Sec. 138.80(a)(1), the applicant is required to
                provide.
                Sec. 138.80 Applying for COFRs
                 Section 138.80 reflects the removal of a requirement to pay fees
                before the issuance of a COFR when Applications are submitted by email
                or fax by cross-referencing Sec. 138.120's new paragraph (a)(3)(i)
                that allows payment to be made within 21 days of the Application. This
                allows flexibility for the Director to issue COFRs when the Application
                is complete and evidence of financial responsibility has been
                established, and before the NPFC receives payment. The COFR Operator
                must, however, ensure the fees are paid within 21 days of submission of
                the Application to avoid adverse consequences specified in Sec.
                138.120(a)(4).
                 Section 138.80(a)(1)(i)(C) also clarifies that Master Certificates
                do not name any specific vessel, but do state the maximum tonnages for
                the largest vessel for which the COFR Operator may be responsible.
                Without that requirement, we will not have a record of coverage if an
                incident occurs in the intervening period between the Application and
                the first periodic report of covered vessels.
                 Section 138.80(a)(1)(iv) requires the COFR Operator to include a
                report with the Application providing information on the vessels
                covered by the Master Certificate. The rule also explains what
                information the COFR Operator must provide to the Director if a vessel
                has been assigned tonnages under both measurement systems. The
                inclusion of both assigned tonnages for vessels with more than one
                should avoid delay of the application process and the effective date of
                the guaranty.
                 Additionally, Sec. 138.80(a)(1)(iv)(B) requires that certain
                Master Certificate application information be updated, including a
                listing of vessels that are no longer covered. This establishes the
                termination of the guaranty date. Finally, to assist in keeping this
                information up to date, if during a 6-month reporting period a vessel
                is transferred to another responsible party, the updated report must
                list the date and place of transfer and the contact information of the
                responsible party to whom the vessel was transferred.
                 Unlike the previous application instruction section, Sec. 138.60,
                Sec. 138.80(d) does not require an original signature page for
                applications submitted by email or fax. Instead, the COFR Operator may
                submit a legible scan of the signature page.
                Sec. 138.100 How To Calculate a Total Applicable Amount
                 Section 138.100(c) states that when statute or regulation adjusts
                limits of liability, the COFR Operator must establish and maintain
                evidence of financial responsibility in an amount equal to or greater
                than the amended total applicable amount, as provided in Sec.
                138.240(a).
                Sec. 138.110 How To Establish and Maintain Evidence of Financial
                Responsibility
                 The rule removes from the regulation the surety bond as a
                specifically mentioned method for establishing and maintaining evidence
                of financial responsibility. This method is still permitted as falling
                under the ``other method'' provision in paragraph (f).
                 Section 138.110(a) explains that the guarantor continues to be
                liable and must provide coverage for 30 days following NPFC receipt of
                a notice of cancellation and not from the date the guarantor issues the
                notice. The rule moves this provision previously contained on the COFR
                guaranty forms into the regulation and reflects a current and important
                NPFC business practice. The guarantor will provide the reason for
                termination as part of its notice of cancellation, if known.
                Additionally, Sec. 138.110(a) requires COFR Operators, guarantors, and
                self-insurers to notify the Director of any material change in
                submitted information, including any material change in the guarantor
                or self-insurer's financial position. A material change is a change
                that will affect the basis of the Director's approval of the guarantor
                or evidence of financial responsibility. This notification is required
                immediately when a change occurs, rather than within 10 days of the
                change as specified in the previous rule.
                 Section 138.110(b) describes the current practice for establishing
                and maintaining the acceptability of COFR insurance guarantors. This
                will entail the guarantor submitting information on its structure,
                business practices, history, financial strength, and other information
                as requested by the Director. This process involves an initial
                determination followed by annual submission by each COFR insurance
                guarantor.
                [[Page 68130]]
                 Section 138.110(c) clarifies the net worth and working capital
                requirements for financial guarantors to reflect current practice.
                Previously, the NPFC did not add the total applicable amount of each
                vessel owned by one operator; rather, it based evidence of financial
                responsibility on the operator's vessel with the greatest total
                applicable amount. This rule requires net worth and working capital be
                based on the aggregate total applicable amounts.
                 Section 138.110(f) changes the submission date for requesting
                another guaranty method for establishing evidence of financial
                responsibility from 45 to 90 days prior to the date the COFR is
                required. The NPFC needs this additional 45 days to review the
                financial documentation and communicate with the potential guarantor.
                Sec. 138.120 Fees
                 Section 138.120 eliminates a previous requirement that the
                application fee must be paid before the Director will issue a COFR.
                This adds flexibility and convenience for COFR Operators, especially if
                they are underway and want to enter U.S. navigable waters or U.S. EEZ.
                It further explains that failure to pay fees in a timely manner may
                result in denial or revocation of COFR, debt collection, or other
                enforcement. Finally, it amends the fee refund procedures in the case
                of overpayment. The Director will refund overpayments, because the NPFC
                will not credit overpayments for the operator's future use or for
                transfer to another operator anymore.
                Sec. 138.130 Designating Agents for Service of Process
                 Section 138.130(d) shortens the notification period for a COFR
                Operator or Guarantor to notify the Director of a new agent for service
                of process from 10 days to 5 days. This shortened period reflects
                efficiencies relating to electronic notifications in place of mailed
                notifications.
                Sec. 138.140 Application Withdrawals, COFR Denials and Revocations
                 Section 138.140 is revised to reflect current business practice. It
                adds a provision noting that the COFR Operator, or anyone authorized to
                act on their behalf, may withdraw an Application at any time before
                issuance of the COFR. It also includes the failure to designate and
                maintain a U.S. agent for service of process to the list of cases in
                which the Director may deny an Application or revoke a COFR. The
                section revision also clarifies that the Director may deny an
                Application or revoke a COFR after obtaining additional information,
                such as transfer to a new operator, vessel renaming, guaranty
                termination or cancellation, or disapproval of the guarantor, and it
                adds a duty to remedy violations where a COFR for a vessel expires.
                Finally, it adds a provision specifying that where a COFR is revoked
                because 30 days have elapsed following the date the Director receives a
                guarantor's notice of termination, the Director may reinstate the COFR
                if the guarantor promptly notifies the Director that the guarantor
                rescinded the termination and there was no gap in coverage. This will
                align the regulation to the COFR guaranty forms.
                Sec. 138.150 Reporting Requirements
                 The rule merges reporting requirements into this one section. It
                also revises the regulatory text to emphasize prior notices of changes
                that will require a new COFR before the change occurs. Section 138.150
                identifies the information that must be reported to the Director no
                later than 21 business days before a new COFR is required for permanent
                vessel transfers and other changes requiring issuance of a new COFR,
                and information that need only be reported 3 business days before
                implementing the change for changes not requiring issuance of a new
                COFR. Changes that require issuance of a new COFR include, but are not
                limited to: A permanent vessel transfer, change of COFR Operator,
                vessel name change, change in the vessel's gross tonnage, or
                termination of guaranty. As a result of comments, Sec. 138.150(d) was
                revised to require that each guarantor (or, if there are multiple
                guarantors, each lead guarantor) must give the Director 30 days notice
                before terminating a guaranty as provided in Sec. 138.110(a)(3),
                explaining the reason for the intended termination, once known, or
                should have known, in the ordinary course of business. The further
                requirement to give the Director notice before any other change occurs
                that will require new evidence of financial responsibility or issuance
                of a new COFR under paragraph (b) has been eliminated.
                C. Removal of 33 CFR 138.90(f)
                 Existing paragraph Sec. 138.90(f) contains a non-regulatory
                provision dealing with the temporary transfer of custody of an unmanned
                barge that has a COFR issued under subpart A of part 138. The COFR
                Operator who transfers the barge continues to be liable under OPA 90,
                CERCLA, or both, and continues to maintain on file with the Director
                acceptable evidence of financial responsibility with respect to the
                barge. The provision encourages the temporary transferee to require the
                transferring COFR Operator to acknowledge in writing that the
                transferring COFR Operator agrees to remain responsible for pollution
                liabilities. Since we received no adverse comments, we have removed
                Sec. 138.90(f) because the existing COFR remains in effect in respect
                to that vessel, and a temporary new COFR is not required.
                D. Removal of 33 CFR Part 135 and Subpart D of 33 CFR Part 153
                 This document removes 33 CFR part 135 and subpart D of 33 CFR part
                153 because OPA 90 repealed the legal authorities for them. These rules
                are outdated and are removed.
                V. Regulatory Analyses
                 We developed this rule after considering numerous statutes and
                Executive orders related to rulemaking. Below we summarize our analyses
                based on these statutes or Executive orders.
                A. Regulatory Planning and Review
                 Executive Orders 12866 (Regulatory Planning and Review) and 13563
                (Improving Regulation and Regulatory Review) direct agencies to assess
                the costs and benefits of available regulatory alternatives and, if
                regulation is necessary, to select regulatory approaches that maximize
                net benefits (including potential economic, environmental, public
                health and safety effects, distributive impacts, and equity). Executive
                Order 13563 emphasizes the importance of quantifying both costs and
                benefits, of reducing costs, of harmonizing rules, and of promoting
                flexibility. The Office of Management and Budget (OMB) has not
                designated this rule a significant regulatory action under section 3(f)
                of Executive Order 12866. Accordingly, OMB has not reviewed it. A
                regulatory analysis (RA) follows.
                 As explained in this section, this rule imposes some quantified
                costs, and create qualitative benefits, which the Coast Guard believes
                justifies the costs.
                1. Analysis of Alternatives
                 Alternative 1: No action.
                 The ``No Action'' alternative makes no regulatory changes to the
                evidence of financial responsibility regulations in 33 CFR part 138,
                subpart A. The ``No Action'' alternative is not viable because the
                statute requires evidence of financial responsibility regulations for
                tank vessels greater than 100 gross tons but less than or equal to 300
                gross tons. At a minimum, a regulation implementing this requirement is
                required. This alternative reflects the status quo and
                [[Page 68131]]
                therefore has no regulatory cost or benefit.
                 Alternative 2: Promulgate evidence of financial responsibility
                regulations for tank vessels greater than 100 gross tons but less than
                or equal to 300 gross tons (statutory requirement).
                 Alternative 2 reflects the absolute minimum rulemaking effort to
                address the statutory requirement in Section 712 of the Coast Guard
                Authorization Act of 2010. However we did not choose this alternative
                because, there are other aspects of the Coast Guard's evidence of
                financial responsibility program that the Coast Guard wants to address
                such as removing outdated regulatory text, providing updates that
                reflect current practices and taking into account technological
                improvements that will provide better clarity to the public as well as
                reduce confusion. This alternative has the least net benefits of all of
                the proposed alternatives. This alternative reflects the most costly
                aspect of the rulemaking and is included in all of the proposed
                alternatives because it is a statutory provision.
                 Alternative 3: Promulgate evidence of financial responsibility
                regulations for tank vessels greater than 100 gross tons but less than
                or equal to 300 gross tons (statutory requirement) and for deepwater
                ports (discretionary requirement).
                 Alternative 3 adds promulgating evidence of financial
                responsibility regulations for deepwater ports to Alternative 2. The
                Coast Guard considered proposing financial responsibility regulations
                for deepwater ports as part of this rulemaking. The deepwater port
                industry is experiencing increased activity in the liquefied natural
                gas deepwater port industry sector, raising questions about how
                existing laws and policies regarding these facilities would apply.
                These issues do not impact vessel evidence of financial responsibility,
                however, and could create complexity and potentially delay the mandated
                regulation of tank vessels greater than 100 gross tons but less than or
                equal to 300 gross tons. In addition, currently only one liquefied
                natural gas deepwater port is in operation and it uses less than 100
                gallons of oil, whereas other designs might pose a greater risk of oil
                spills. Additional time is necessary to analyze the effects of
                liquefied natural gas regulation on the economy, maritime safety, and
                the environment. The only other deepwater port in operation, an oil
                deepwater port called the Louisiana Offshore Oil Port, is self-insured,
                and provides evidence of financial responsibility sufficient to meet
                its maximum liability under OPA 90 under grandfathered requirements of
                the Deepwater Port Act of 1974.
                 After evaluating this alternative, the Coast Guard decided not to
                develop deepwater port financial responsibility regulations at this
                time. Postponing evidence of financial responsibility regulations for
                deepwater ports will not impact maritime safety or the environment.
                Currently, there is no established market that provides and maintains
                evidence of financial responsibility for deepwater ports. If the market
                decides to pursue these ventures in the future, the costs and benefits
                will be analyzed accordingly as part of a future rulemaking.
                 Alternative 4 (Preferred alternative) Promulgate evidence of
                financial responsibility regulations for tank vessels greater than 100
                gross tons but less than or equal to 300 gross tons (statutory
                requirement); require COFR Operators and guarantors to submit
                additional information to the Coast Guard; make conforming amendments
                reflect current practices (discretionary requirement); and remove
                subpart D of 33 CFR part 153 D and 33 CFR part 135 from the CFR
                (discretionary requirement).
                 Alternative 4 addresses the statutory requirement to require tank
                vessels greater than 100 gross tons but less than or equal to 300 gross
                tons to establish and maintain financial responsibility. It also
                provides necessary updates to the current financial responsibility
                regulations to reflect current practices that have evolved over the
                past two decades, taking into account technological improvements as
                well as changes in policy. Lastly, this alternative removes 33 CFR part
                135 and subpart D of 33 CFR part 153, both of which regulate two
                defunct funds, the OCSLA Fund and the 311(k) Fund.
                 In addition to the regulatory costs and benefits associated with
                Alternative 2, this alternative adds two aspects with no cost:
                Conforming regulations to current practice and removing two defunct
                portions of the CFR, providing intangible benefits of eliminating
                confusion for the public, as well as ensuring that the regulations
                reflect how the Coast Guard's financial responsibility program
                currently operates. Additionally, a small amount of regulatory cost is
                associated with the requirement to require COFR Operators and
                guarantors to provide additional information to the Coast Guard.
                Although the benefits of this alternative are qualitative, they will
                help to eliminate confusion and provide more clarity to the public
                while providing much needed information to the Coast Guard.
                2. Regulatory Changes
                 We are amending the vessel evidence of financial responsibility
                regulations at 33 CFR part 138, subpart A, to:
                 1. Require financial responsibility to now include all tank vessels
                greater than 100 gross tons but less than or equal to 300 gross tons.
                 2. Require additional information from the COFR Operator and
                guarantor. The revisions include:
                 Reporting of gross tonnage measurement system used and
                submission of a copy of the tonnage certifying document, upon request;
                 Electronic submissions;
                 Reporting of reason for termination of guaranty by a
                guarantor, if known; and
                 Reporting vessel name change and increased reporting on
                location of vessel when there is a change in ownership on date of
                change.
                 3. Conform regulations to current practice. The revisions include:
                 How to apply vessel gross tonnages;
                 Removal of requirement to pay fees before issuance of a
                COFR;
                 Moving surety bond method to ``other methods'' for
                establishing and maintaining evidence of financial responsibility;
                 Clarification on continuation of guarantor's liability and
                requirement to provide coverage for 30 days after cancellation of
                guaranty; and
                 Process for establishing and maintaining acceptability of
                COFR insurance guarantors.
                 In addition, for the reasons discussed above, we are removing 33
                CFR part 135 and subpart D of 33 CFR part 153 which concern management
                of two defunct pollution funds.
                 Table 2 shows whether a category of regulatory amendments have a
                regulatory cost, regulatory benefit, or both. Those amendments that
                have a regulatory cost or benefit are discussed in detail following the
                table.
                [[Page 68132]]
                 Table 2--Summary of Regulatory Amendment Impacts
                ------------------------------------------------------------------------
                 Regulatory cost Regulatory benefit
                ------------------------------------------------------------------------
                Require financial responsibility
                 for tank vessels greater than
                 100 gross tons but less than or
                 equal to 300 gross tons to
                 establish and maintain evidence
                 of financial responsibility
                 (Statutory):
                 Application and Yes Yes
                 certification costs.
                 COFR premium costs.......... Yes Yes
                Require Additional Information
                 from the COFR Operator and
                 guarantor (Discretionary):
                 Reporting of gross tonnage Yes Yes
                 measurement systems used
                 and submission of a copy of
                 the tonnage certifying
                 document, upon request.
                 Electronic submissions...... No \7\ Yes
                 Reporting of reason for Yes Yes
                 termination of guaranty by
                 a guarantor.
                 Reporting vessel name change Yes Yes
                 and increased reporting on
                 location of vessel when
                 there is a change in
                 ownership on date of change.
                Conform regulations to current
                 Practice (Discretionary):
                 How to apply vessel gross No Yes
                 tonnages.
                 Removal of requirement to No Yes
                 pay fees before issuance of
                 a COFR.
                 Moving Surety Bond method to No Yes
                 ``other methods'' for
                 establishing and
                 maintaining evidence of
                 financial responsibility.
                 Clarification on No Yes
                 continuation of guarantor's
                 liability and requirement
                 to provide coverage for 30
                 days after cancellation of
                 guaranty.
                 Process for establishing and No Yes
                 maintaining acceptability
                 of COFR insurance
                 guarantors.
                Removal of 33 CFR part 135 and
                 subpart D of 33 CFR part 153
                 (Discretionary):
                 Removal of 33 CFR part 135.. No \8\ Yes
                 Removal of subpart D of 33 No \9\ Yes
                 CFR part 153.
                ------------------------------------------------------------------------
                3. Regulatory Costs
                ---------------------------------------------------------------------------
                 \7\ Electronic submissions creates cost savings.
                 \8\ Removal of superseded regulatory requirements have no cost.
                The OCSLA Fund was subsumed by the Oil Spill Liability Trust Fund.
                 \9\ Removal of superseded regulatory requirements have no cost.
                The 311(k) Fund was subsumed by the Oil Spill Liability Trust Fund.
                ---------------------------------------------------------------------------
                 There are two regulatory costs identified for this rule:
                 Regulatory Cost 1: Require the additional tank vessels
                greater than 100 gross tons but less than or equal to 300 gross tons to
                establish and maintain evidence of financial responsibility (statutory
                requirement).
                 Regulatory Cost 2: Require additional information from the
                COFR Operator and guarantor (discretionary requirement).
                Discussion of Regulatory Cost 1
                 The rule requires tank vessels greater than 100 gross tons but less
                than or equal to 300 gross tons to establish and maintain evidence of
                financial responsibility.\10\ These vessels are required to have COFRs,
                which results in two types of costs:
                ---------------------------------------------------------------------------
                 \10\ Regulatory Cost 1 does not include vessels greater than 300
                gross tons that are already required to have a COFR.
                ---------------------------------------------------------------------------
                 Application and certification costs; and
                 COFR premium costs.
                 Application and Certification Costs: In the first year of the
                analysis period, the COFR Operator is required to pay an Application
                fee of $200 and a Certification fee of $100 for each vessel requiring a
                COFR. A new Certification fee is required every 3 years to renew the
                COFR.
                 COFR Premium Costs: The additional operators of tank vessels
                greater than 100 gross tons but less than or equal to 300 gross tons
                have to establish and maintain evidence of financial responsibility
                using one of these several methods: Insurance, Self-insurance, or
                Financial Guaranty.\11\
                ---------------------------------------------------------------------------
                 \11\ Historically, the surety bond method has been used in a
                very few instances. This rule moves this method to the ``other
                methods'' category of financial responsibility under Sec.
                138.110(f).
                ---------------------------------------------------------------------------
                 Affected Population: According to the Coast Guard's Marine
                Information for Safety and Law Enforcement (MISLE) database, there are
                an average of 465 tank vessels using U.S. navigable waters or U.S. EEZ
                from 2016-2020 that are greater than 100 gross tons but less than or
                equal to 300 gross tons. Table 3 shows the number of tank vessels
                greater than 100 gross tons but less than or equal to 300 gross tons
                per year (2016-2020). Note the data used for the NPRM was 2014-2018.
                Hence the final rule has updated the data period to most current data.
                 Table 3--Number of Tank Vessels Greater Than 100 Gross Tons but Less
                 Than or Equal to 300 Gross Tons
                ------------------------------------------------------------------------
                 Number of
                 Year vessels
                ------------------------------------------------------------------------
                2016.................................................... 477
                2017.................................................... 474
                2018.................................................... 474
                2019.................................................... 449
                2020.................................................... 449
                 ---------------
                 Average (2016-2020)................................. 465
                ------------------------------------------------------------------------
                [[Page 68133]]
                Cost Summary Regulatory Cost 1
                 Application and Certification Costs: We assumed the number of
                future COFR Applications and Certifications, based on the historical
                average number of vessels in the population from 2016 to 2020 (465
                vessels) are constant for the 10-year analysis period.\12\ We also
                assumed that all vessels renew their COFRs every 3 years through the
                full 10-year analysis period. In the first year of the analysis period,
                COFR Operators pay an Application fee ($200) and a Certification fee
                ($100) when applying for a COFR for their vessels. Every 3 years
                thereafter, COFR Operators pay a Certification fee ($100) when renewing
                their COFRs. In the first year of the analysis period, the annual cost
                is calculated by multiplying the number of vessels applying for COFRs
                (465 vessels) by the cost of the Application ($200) and adding the
                number of vessels requesting certification (465) multiplied by the cost
                of certification ($100) to equal $139,500. Every third year thereafter,
                the cost is calculated by multiplying the number of vessels (465)
                requesting certification for renewal of their COFRs by the cost of the
                certification ($100) to equal $46,500.
                ---------------------------------------------------------------------------
                 \12\ This estimate, based on COFR trends for currently COFRed
                vessels, was validated by subject matter expert in Coast Guard's
                Vessel Certification Division.
                ---------------------------------------------------------------------------
                 COFR Premium Costs: It is possible for vessel operators to choose
                to use the Self-insurance or Financial Guaranty methods of establishing
                their evidence of financial responsibility, which allows them to use
                their U.S. business assets. Alternatively, in the case of the Financial
                Guaranty method, vessels may use the U.S. business assets of a parent,
                affiliate, or special purpose company as evidence that they are capable
                of paying for removal costs and damages up to the applicable limit of
                liability. In those cases, they have made a business decision that the
                cost of the assuming liability risk under OPA 90 is less than the
                premium charged by commercial insurance companies. This assessment of
                OPA 90 risk is company-specific and not quantifiable. Therefore, for
                the purposes of this analysis, we have assumed that the responsible
                parties use the Insurance method of establishing and maintaining their
                evidence of financial responsibility. We received estimates of COFR
                insurance premium amounts for tank vessels greater than 100 gross tons
                but less than or equal to 300 gross tons from 4 COFR insurance
                companies representing over 90 percent of existing COFRs.\13\ Based on
                this survey of guarantors, we estimated that the premiums per vessel
                range between $300 and $1,000 per year.
                ---------------------------------------------------------------------------
                 \13\ Source: NPFC's COFR database.
                ---------------------------------------------------------------------------
                 Vessel Premium Low Range Cost Estimate: The Coast Guard calculated
                the vessel premium low range cost estimate by using the following
                formula:
                Number of vessels x cost of premium per vessel per year:
                465 vessels x $300 per vessel per year = $139,500 per year
                 Vessel Premium High Range Cost Estimate: The Coast Guard calculated
                the vessel premium high range cost estimate by using the following
                formula:
                Number of vessels x the cost of premium per vessel per year:
                465 vessels x the $1,000 per vessel per year = $465,000 per year
                Discussion of Regulatory Cost 2
                 This rule requires additional information from the COFR Operator
                and guarantor that result in three types of costs:
                 Reporting of gross tonnage measurement systems used and
                submission of copy of tonnage certifying document, upon request;
                 Reporting of reason for termination of guaranty by a
                guarantor, if known; and
                 Reporting vessel name change and increased reporting on
                location of vessel when there is a change in ownership on date of
                change.
                 Reporting of Gross Tonnage Measurement Systems Used and Submission
                of a Copy of Tonnage Certifying Document, upon request--Affected
                Population: All COFR Operators, including those for the tank vessels
                greater than 100 gross tons but less than or equal to 300 gross tons,
                will report the gross tonnage measurement systems used when applying
                for and/or renewing a COFR. The Coast Guard's COFR database indicates
                that there are 26,163 currently COFRed vessels. Adding the 465 COFRed
                tank vessels greater than 100 gross tons but less than or equal to 300
                gross tons in Regulation Cost 1, and assuming the number of COFRed
                vessels remains constant during the analysis period, the total number
                of COFRed vessels equals 26,628.
                 Master Certificate and Fleet Certificate holders also are required
                to provide the gross tonnage measurement systems used for the largest
                vessel covered by the Application. According to the COFR database,
                there are currently 8 Master Certificates and 12 Fleet Certificates.
                 COFR Operators also provide a copy of the tonnage certifying
                document, upon request. We assume that the Coast Guard may request a
                copy of the tonnage certifying document when there is an incident.
                According to incident data from the Coast Guard's Case Information
                Management System (CIMS) database, there was an average of 12 incidents
                per year involving vessels with COFRs and vessels that are required to
                have COFRs under this rule over the five year period 2016-2020. We
                assume that for the analysis period, the number of incidents remains
                constant with this average.
                 Reporting of Reason for Termination of Guaranty by a Guarantor--
                Affected Population: Based on NPFC Vessel Certification Program data on
                the historical number of annual notices of guaranty termination by
                guarantors, the Coast Guard estimates that there will be 4,000 per year
                for the 10-year analysis period.
                 Reporting Vessel Name Change and Increased Reporting on Location of
                Vessel When There is a Change in Ownership on Date of change--Affected
                Population: Based on NPFC Vessel Certification Program historical data,
                the Coast Guard estimates that there will be 1,000 submissions per
                year.
                Cost Summary Regulatory Cost 2
                 Reporting of Gross Tonnage Measurement Systems Used and Submission
                of Copy of Tonnage Certifying Document, upon request: Reporting the
                gross tonnage measurement systems used with the application and/or
                requests for COFR renewal results in a negligible cost impact (less
                than one minute of time) to the COFR Operator and is completed with the
                Application for the COFR. We do not quantify this cost because it is
                negligible.
                 Based on estimates received from COFR insurance guarantors who will
                submit, upon request, a copy of the tonnage certifying document on
                behalf of the COFR Operator, COFR Operators requires 15 minutes (0.25
                hours) per submission.
                Number of submissions per year x number of hours x the labor cost per
                hour:
                12 x 0.25 hours per submission = 3 hours
                3 hours per year x $36.64 per hour \14\ = $110 per year
                ---------------------------------------------------------------------------
                 \14\ Total employer compensation costs for private industry
                workers averaged, $36.64 per hour worked, found at Employer Costs
                for Employee Compensation--March 2021 (bls.gov). Bureau of Labor
                Statistics Economic News Release Employer Costs for Employee
                Compensation news release text. Thursday, March 18, 2021. This wage
                rate was selected because it is the most general and reflects that
                the person submitting the information could be any worker whether an
                administrative assistant or a Chief Executive Officer of a company.
                Note this wage was adjusted from the NPRM which used a hourly wage
                rate from December 2017.
                [[Page 68134]]
                ---------------------------------------------------------------------------
                 Reporting of reason for termination of guaranty by a guarantor: We
                estimated that it will take 5 minutes (0.08 hours) for the guarantor to
                add the reason why the guaranty was terminated to the information they
                already provide to the Coast Guard when they terminate a guaranty.
                Number of terminations per year x number of hours per submission x
                labor cost per hour:
                4,000 submissions per year x 0.08 hours per submission x $36.64 per
                hour = $11,725 per year
                 Reporting Vessel Name Change and Increased Reporting on Location of
                Vessel When There is a Change in Ownership on Date of Change: We
                estimated that it takes an additional 5 minutes (0.08 hours) per
                submission to provide additional information that is not already
                required under the current rule.
                Number of submissions per year x number of hours per submission x the
                labor cost per hour:
                1,000 submissions per year x the 0.08 hours/submission x the $36.64 per
                hour \15\ = $2,931 per year
                ---------------------------------------------------------------------------
                 \15\ See footnote 8.
                 Present Value Regulatory Costs (Low Range): We estimated that the
                10-year present value of the rule, at a 3-percent discount rate, is
                $1.6 million. We estimated that the 10-year present value of the rule,
                at a 7-percent discount rate, is $1.3 million. The estimated annualized
                discounted cost of the rule, at a 3-percent discount rate, is $189,100.
                The estimated annualized discounted cost of the rule, at a 7-percent
                discount rate, is $191,100.
                 Present Value Regulatory Costs (High Range): We estimated the 10-
                year present value of the rule, at a 3-percent discount rate, to be
                $4.5 million. We estimated the 10-year present value of the rule, at a
                7-percent discount rate, to be $3.7 million. The estimated annualized
                discounted cost of the rule, at a 3-percent discount rate, is $525,800.
                The estimated annualized discounted cost of the rule, at a 7-percent
                discount rate, is $527,800.
                4. Regulatory Benefits
                 There are four qualitative benefits identified for this rule:
                 Regulatory Benefit 1: Require Tank Vessels Greater than
                100 Gross Tons to 300 Gross Tons to Establish and Maintain Evidence of
                Financial Responsibility (statutory requirement).
                 Regulatory Benefit 2: Require additional information from
                the COFR Operator and guarantor (discretionary requirement).
                 Regulatory Benefit 3: Conform Regulations to Current
                Practice (discretionary requirement).
                 Regulatory Benefit 4: Removal of 33 CFR part 135 and
                subpart D of 33 CFR part 153 (discretionary requirement).
                Discussion of Regulatory Benefit 1
                 Oil pollution removal costs and damages for incidents have
                substantially increased since 1990, even for relatively small-sized
                discharges. When there is no evidence of financial responsibility, it
                becomes more likely that the OSLTF will have to pay for at least some
                of the costs resulting from the incident.\16\ When vessels have COFRs,
                the incident cost amount paid by the responsible party is higher than
                for vessels that do not have COFRs. This rule adds tank vessels greater
                than 100 gross tons but less than or equal to 300 gross tons to the
                vessels that are already required to establish and maintain evidence of
                financial responsibility.
                ---------------------------------------------------------------------------
                 \16\ Lawrence I. Kiern, ``Liability, Compensation, and Financial
                Responsibility Under the Oil Pollution Act of 1990: A review of the
                Second Decade.'' 36 Tulane Maritime Law Journal. 23-24 (2011).
                ---------------------------------------------------------------------------
                 Of the 10,000 incidents sampled from the Coast Guard's CIMS
                database during the ``1990 to 2020'' period, 4.99 percent were COFRed
                vessels and 30.27 percent were non-COFRed vessels.\17\ Coast Guard CIMS
                data show that the Coast Guard recovers 88.64 percent of costs when a
                vessel was COFRed, and only 17.45 percent of costs when it was not
                COFRed.
                ---------------------------------------------------------------------------
                 \17\ The remaining 64.74 percent of incidents were either
                facility incidents or incidents where the Coast Guard could not
                identify the source.
                ---------------------------------------------------------------------------
                 The requirement ensures that the costs are internalized because
                parties responsible for oil spills are more fully responsible for
                (moving from less than \1/3\ to nearly 100 percent) paying for the oil
                pollution removal costs and damages and help correct this market
                failure.\18\ Increased recovered cost rates shift the risk and actual
                costs from the OSLTF to the polluting responsible party.
                ---------------------------------------------------------------------------
                 \18\ See OMB Circular A-4, page 4 dated September 17, 2003 for a
                short discussion on market failures and externalities such as
                environmental problems.
                ---------------------------------------------------------------------------
                Discussion of Regulatory Benefit 2
                 Reporting of Gross Tonnage Measurement Systems Used and Submission
                of copy of Tonnage Certifying Document, upon request: COFR Operators
                must submit a copy of the tonnage certifying document upon request.
                 Providing this additional information with respect to gross tonnage
                allows the Coast Guard to determine more effectively the limit of
                liability and applicable amounts of financial responsibility for the
                incident. In some cases, vessels have tonnage determined under more
                than one measurement system, depending on a variety of factors,
                including the vessel's flag, length, voyage type, keel laid, or
                substantial alteration date, and whether it is self-propelled. This has
                caused confusion with respect to which measurement system to use to
                determine the limit of liability and amount of financial
                responsibility.
                 Regardless of the tonnage reported on the Application, the tonnage
                certifying document governs the required evidence of financial
                responsibility and the limit of liability at the time of the incident
                (except when the responsible parties or guarantors knew or should have
                known that the tonnage certificate information was incorrect). Using
                the tonnage certifying document provides the following benefits: (1) It
                ensures that the Coast Guard has the most accurate tonnage
                measurements; (2) it provides the method used to determine tonnage, as
                well as the tonnage amount; (3) it provides information for foreign
                flagged vessels that is oftentimes difficult to obtain; and (4) without
                the applicable tonnage certifying document, if an incident occurred, a
                re-measurement of tonnage could alter the already determined financial
                responsibility and limit of liability.
                 Electronic submissions: The rule allows COFR Operators, guarantors,
                and agents for service of process to submit signed scanned images,
                emails, or faxes instead of hard copy signed-in-ink originals. The
                Coast Guard receives approximately ten of the CG-5586 forms by mail
                annually. Allowing electronic submissions creates minimal cost savings;
                however, it provides increased flexibility to COFR Operators, and
                enhances Coast Guard's recordkeeping goals. This works towards the
                OMB's goal to maximize the use of electronic technology for collection
                of information from the public, demonstrated in OMB memorandum M-19-21.
                 Reporting of reason for termination of guaranty by guarantor: The
                rule requires the guarantor to include the reason for termination, if
                known, with the notification for termination of the guaranty. This
                information provides the Coast Guard with new information about the
                COFR Operator in the event there is an incident.
                 Reporting vessel name change and increased reporting on location of
                vessel when there is a change in ownership on date of change: The rule
                ensures that the Coast Guard has the most current information when
                initially issuing a COFR--especially concerning vessels that, over
                time, become derelict while in
                [[Page 68135]]
                U.S. navigable waters or U.S. EEZ. The revisions also improve the Coast
                Guard's ability to establish compliance with COFR regulations by more
                effectively ensuring the responsible party is able to pay its liability
                and mitigate risks to the OSLTF. For example, if a vessel is sold while
                using a place subject to U.S. jurisdiction, the new responsible parties
                become immediately subject to the COFR program. These changes are to
                ensure that, while the Coast Guard still has regulatory authority over
                a responsible party and the financial assurances of the guarantor, the
                Coast Guard receives information relevant to continued compliance
                before problems arise. However, enforcing compliance with the COFR
                program's requirements depends on the Coast Guard knowing about the
                vessel transfer. The regulatory revisions ensure that the Coast Guard
                receives this information and to mitigate the risk of uninsured
                responsible parties and derelict vessels.
                Discussion of Regulatory Benefit 3
                 How to apply vessel gross tonnages: This rule updates and
                simplifies the provisions respecting how to apply gross tonnage
                measurement methods to reflect changes in the law since OPA 90 was
                first enacted. This rule is consistent with the Coast Guard's tonnage
                regulation at 46 CFR part 69 ``Tonnage Regulations Amendments'' (81 FR
                18701, March 31, 2016). Hence the update on how gross tonnage
                measurement is performed simplifies an administrative burden on the
                COFR Operator.
                 Removal of requirement to pay fees before issuance of a COFR: The
                rule allows the COFR Operator to pay the COFR Application and
                Certification fees up to 21 days after submitting their COFR
                Application. This adds flexibility and convenience for COFR Operators,
                especially if they are underway and want to enter U.S. navigable waters
                or U.S. EEZ.
                 Moving surety bond method to ``other methods'' for establishing and
                maintaining evidence of financial responsibility: The rule no longer
                specifically discusses the surety bond method in the regulations
                because it is rarely, if ever, used. However, the surety bond method is
                still available under the ``other methods'' provision in the rule.
                 Clarification on continuation of guarantor's liability and
                requirement to provide coverage for 30 days after cancellation of
                guaranty: The rule explains that the guarantor continues to be liable
                and must provide coverage for 30 days following NPFC receipt of a
                notice of cancellation. This requirement is currently contained on the
                COFR form and reflects a current and important NPFC business practice.
                 Process for establishing and maintaining acceptability of COFR
                insurance guarantors: The rule moves the current process for
                establishing and maintaining acceptability of COFR insurance guarantors
                into the regulations to make it more transparent to the public. The
                Coast Guard's longstanding business practice under the existing COFR
                regulations for determining the acceptability of guarantors is the
                basis of the procedures set forth in the rule. The rule also provides a
                process through which a COFR operator may provide new evidence of
                financial responsibility and obtain approval or continuation of the
                COFR where the Coast Guard disapproves a guarantor (for example, due to
                guarantor fraud or financial failure). The provision applies to pending
                Applications and following the issuance of a COFR.
                Discussion of Regulatory Benefit 4
                 These regulations concern management of two pollution funds--the
                Offshore Oil Pollution Compensation Fund and the FWPCA Section 311(k)
                Fund. These provisions are no longer authorized. On November 1, 2011,
                the Coast Guard published a notice of inquiry (76 FR 67385) soliciting
                public comment on removing 33 CFR part 135 and we received no adverse
                comments. This aspect of the rulemaking is necessary to remove
                unauthorized regulatory requirements and to eliminate potential
                confusion to the public.
                B. Small Entities
                 Under the Regulatory Flexibility Act, 5 U.S.C. 601-612, we have
                considered whether this rule will 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.
                 An Initial Regulatory Flexibility Analysis (IRFA) was developed in
                the NPRM (85 FR 28802). There were no public comments received on the
                IRFA.
                 The IRFA determined that there are two potential direct costs to
                small entities that result from this rule:
                 Regulatory Cost 1: Require Tank Vessels Greater than 100
                Gross Tons to 300 Gross Tons to Establish and Maintain Evidence of
                Financial Responsibility (Statutory Requirement).
                 Regulatory Cost 2: Require Additional Information from
                COFR Operators and Guarantors (Discretionary Requirement).
                 The number of small entities affected by Regulatory Cost 1 of the
                rule and the respective impact on their annual revenue was determined
                in the IRFA and is summarized in Table 4 below.
                 Table 4--Economic Impact to Small Entities--Regulatory Cost 1
                ------------------------------------------------------------------------
                 Number of Percent of
                 Percent of annual revenue small entities small entities
                ------------------------------------------------------------------------
                1% to 2%................................ 0 0
                https://www.reginfo.gov/public/do/PRAViewICR?ref_nbr=201909-1625-002.
                ---------------------------------------------------------------------------
                 Summary of the Collection of Information: This rule adds additional
                collection of information requirements to existing OMB Control Number
                1625-0046 for: COFR Operators to report gross tonnage and gross tonnage
                measurement systems used, and submit a copy of their tonnage certifying
                document, upon request; guarantors to report the reason for termination
                of a guaranty; and COFR Operators to report vessel name changes and
                increase reporting on location of vessel when there is a change in
                ownership on date of change.
                 Need for Information:
                 Reporting of gross tonnage measurement systems used and submission
                of copy of the tonnage certifying document, upon request.
                 Providing tonnage measurement systems used and submitting the
                tonnage certifying document, upon request, in the rule, with respect to
                gross tonnage allows the Coast Guard to determine more effectively the
                limit of liability and applicable amounts of financial responsibility
                for the incident. In some cases, the vessel may be assigned tonnage
                under more than one measurement system depending on a variety of
                factors including the vessel's flag, length, voyage type, keel laid, or
                substantial alteration date, and whether it is a self-propelled vessel.
                This has caused confusion with respect to which method to use to
                determine limit of liability and amount of financial responsibility.
                 Regardless of the tonnage reported on the Application, the tonnage
                certifying document governs the required evidence of financial
                responsibility and the limit of liability at the time of the incident
                (except when the responsible parties or guarantors knew or should have
                known that the tonnage certifying document or certificate of registry
                was incorrect). Using the tonnage certifying document provides the
                following benefits: It ensures that the Coast Guard has the most
                accurate tonnage measurements; it provides the method used to determine
                tonnage, as well as the tonnage amount; it provides information for
                foreign flagged vessels that is oftentimes difficult to obtain; and
                without the applicable tonnage certifying document, if an incident
                occurred, a re-measurement of tonnage could alter the already
                determined financial responsibility and limit of liability.
                 Reporting of reason for termination of guaranty by a guarantor.
                 The rule requires that the guarantor include the reason for
                termination, if known, with the notification for termination of the
                guaranty. This information provides the Coast Guard with information
                about the COFR Operator that otherwise is not known in the event there
                is an incident.
                 Reporting vessel name change and increased reporting on location of
                vessel when there is a change in ownership on date of change.
                 The additional collection of information in the rule ensures the
                information the Coast Guard relies on when initially issuing a COFR is
                up to date and remains current--especially concerning vessels that,
                over time, become derelict while in U.S. navigable waters or U.S. EEZ.
                The revisions also improve the Coast Guard's ability to establish
                compliance with COFR regulations by more effectively ensuring that the
                responsible party is able to pay its liability and mitigate risks to
                the OSLTF. For example, if a vessel is sold while using a place subject
                to U.S. jurisdiction, the new responsible parties become immediately
                subject to the COFR program. These changes ensure that, while the Coast
                Guard still has regulatory authority over a responsible party and the
                financial assurances of the guarantor, the Coast Guard receives
                information material to continued compliance before problems arise.
                Enforcing compliance with the COFR program's requirements, however,
                depends on the Coast Guard knowing about the vessel transfer. The
                regulatory revisions seek to ensure that the Coast Guard receives this
                information and to mitigate the risk of uninsured responsible parties
                and derelict vessels.
                 Use of Information:
                 Reporting of gross tonnage measurement systems used and submission
                of copy of the tonnage certifying document, upon request.
                 The Coast Guard uses the additional collection of information in
                the rule to ensure that the gross tonnage of a vessel involved in an
                incident is accurate to determine its limit of liability and applicable
                amount of financial responsibility.
                 Reporting of reason for termination of guaranty by a guarantor.
                 The Coast Guard uses the additional collection of information in
                the rule to learn more about a vessel and its COFR Operators in the
                event of an incident. This new requirement to provide the reason for
                guaranty termination will reduce the possibility that a guarantor will
                cancel the guaranty to simply shield themselves from potential
                liability in the event of an incident.
                 Reporting vessel name change and increased reporting on location of
                vessel when there is a change in ownership on date of change.
                 The Coast Guard uses the additional collection of information in
                the rule to identify a responsible party in the event there is an
                incident.
                 Description of the Respondents: The respondents are COFR Operators
                of vessels and OPA 90 COFR insurance guarantors.
                 Number of Respondents: The additional collection of information in
                this rule affects 761 COFR Operators and 14 OPA 90 COFR insurance
                guarantors.
                 Frequency of Response:
                 Reporting of gross tonnage measurement systems used and submission
                of copy of the tonnage certifying document.
                 All COFR Operators, including those for the tank vessels greater
                than 100 gross tons but less than or equal to 300 gross tons in this
                rule, must report the gross tonnage measurement systems used when
                applying for a COFR. The Coast Guard's COFR database indicates that
                there are 26,163 currently COFRed vessels. Adding the 465 COFRed tank
                vessels greater than 100 gross tons but less than or equal to 300 gross
                tons in Regulation Cost 1, and assuming the number of COFRed vessels
                remains constant during the analysis period the total number of COFRed
                vessels equals 26,628.
                 Master Certificate and Fleet Certificate holders will also be
                required to provide the gross tonnage measurement systems used for the
                largest vessel covered by the Application.
                 The Coast Guard estimated that COFR Operators will provide
                information on \1/3\ of the vessels with COFRs each year due to the 3-
                year cycle of the Application process.
                [[Page 68137]]
                 Individual Certificates--The Coast Guard's COFR database indicates
                that, currently, there are 26,163 COFRed vessels. Adding the 465 COFRed
                tank vessels greater than 100 gross tons to 300 gross tons in
                Regulation Cost 1 equals 26,628 COFRed vessels.
                 26,628 COFRed vessels / 3 = 8,876 COFRed vessels per year that will
                require the submission of the gross tonnage measurement systems used.
                 Masters Certificates--According to the COFR database, there are
                currently 8 Master Certificates.
                 8 Master Certificates / 3 = 3 Master Certificates per year that
                will require the submission of the gross tonnage measurement systems
                used for the largest vessel covered by the Application.
                 Fleet Certificates--According to the COFR database, there are
                currently 12 Fleet Certificates.
                 12 Fleet Certificates / 3 = 4 Fleet Certificates per year that will
                require the submission of the gross tonnage measurement systems used
                for the largest vessel covered by the Application.
                 COFR Operators will also provide a copy of the tonnage certifying
                document, upon request. We assume that the Coast Guard will request a
                copy of the tonnage certifying document when there is an incident.
                According to incident data from the Coast Guard's CIMS database, there
                are an average of 12 incidents per year involving vessels with COFRs
                and vessels that will be required to have COFRs under this rule over
                the five year period 2016-2020. We assume that for the analysis period,
                the number of incidents will remain constant with this average.
                 Reporting of reason for termination of guaranty by a guarantor.
                 Based on NPFC Vessel Certification Program data on the historical
                number of annual notices of guaranty termination by guarantors, the
                Coast Guard estimates that there will be 4,000 vessels per year for the
                10-year analysis period.
                 Reporting vessel name change and increased reporting on location of
                vessel when there is a change in ownership on date of change.
                 Based on NPFC Vessel Certification Program historical data, the
                Coast Guard estimates that there will be 1,000 submissions on vessel
                name changes and change in location when there is a change in ownership
                per year.
                 Burden of Response:
                 Reporting of gross tonnage measurement systems used and submission
                of copy of the tonnage certifying document, upon request.
                 Reporting the gross tonnage measurement systems used with the
                application and/or requests for COFR renewal will result in a
                negligible burden (less than one minute of time) to the COFR Operator
                and will be completed with the Application for or request for renewal
                of the COFR.
                 Based on estimates received from COFR insurance guarantors who will
                submit, upon request, a copy of the tonnage certifying document on
                behalf of the COFR Operator, COFR Operators will require 15 minutes
                (0.25 hours) per submission.
                 Reporting of reason for termination of guaranty by a guarantor.
                 The Coast Guard estimated that it will take 5 minutes (0.08 hours)
                for the guarantor to add the reason why the guaranty was terminated to
                the information they provide to the Coast Guard already when he or she
                terminates a guaranty.
                 Reporting vessel name change and increased reporting on location of
                vessel when there is a change in ownership on date of change.
                 The Coast Guard estimated that it will take an additional 5 minutes
                (0.08 hours) per submission to provide additional information that is
                not already required under the current rule.
                 Estimate of Total Annual Burden:
                 Reporting of gross tonnage measurement systems used and submission
                of copy of the tonnage certifying document, upon request.
                 As stated above in the cost benefit analysis section of the
                preamble, we do not quantify the cost impact of reporting the gross
                tonnage measurement systems used because it is negligible and is
                provided as part of the Application and/or request for COFR renewal.
                 The cost burden associated with COFR Operators providing, upon
                request, their tonnage certifying document is calculated as follows:
                Number submissions per year x Number of hours x labor cost per hour:
                12 x 0.25 hours per submission = 3 hours
                3 hours per year x $36.64 per hour = $110 per year
                 Reporting of reason for termination of guaranty by a guarantor.
                Number of terminations per year x number of hours per submission x
                labor cost per hour:
                4,000 submissions per year x 0.08 hours per submission x $36.64 per
                hour = $11,725 per year
                 Reporting vessel name change and increased reporting on location of
                vessel when there is a change in ownership on date of change.
                Number of submissions per year x number of hours per submission x labor
                cost per hour:
                1,000 submissions per year x 0.08 hours per submission x $36.64 per
                hour = $2,931 per year
                Summary of Information Collection Burden
                 Table 6 shows the incremental collection burden of the proposed
                rule and the total proposed collection of information burden for OMB
                Control Number 1625-0046.
                 Table 6--Incremental Collection of Information Burden of the Rule and
                 the Total Collection of Information Burden for OMB Control Number 1625-
                 0046
                ------------------------------------------------------------------------
                 Dollars
                 Hours (annual)
                ------------------------------------------------------------------------
                 Incremental Collection of Information of the Rule
                ------------------------------------------------------------------------
                Reporting of gross tonnage measurement 3 $110
                 systems used, and submission of copy of
                 the tonnage certifying document........
                ------------------------------------------------------------------------
                Reporting of reason for termination of 320 11,725
                 guaranty by a guarantor................
                Reporting vessel name change and 80 2,931
                 increased reporting on location of
                 vessel when there is a change in
                 ownership on date of change............
                 -------------------------------
                 Total............................... 403 14,766
                ------------------------------------------------------------------------
                [[Page 68138]]
                
                 Total Proposed Collection of Information for OMB Control Number 1625-
                 0046 (Approved Collection of Information + Incremental Collection of
                 Information of the Rule
                ------------------------------------------------------------------------
                Approved Collection of Information OMB 3,400 88,500
                 Control Number-0046....................
                ------------------------------------------------------------------------
                Incremental Collection of Information of 403 14,766
                 the Rule...............................
                 -------------------------------
                 Total............................... 3,803 103,266
                ------------------------------------------------------------------------
                 As required by 44 U.S.C. 3507(d), we will submit a copy of this
                rule to OMB for its review of the collection of information.
                 You are not required to respond to a collection of information
                unless it displays a currently valid OMB control number. OMB has not
                yet completed its review of this collection. Before the Coast Guard
                could enforce the collection of information requirements in this rule,
                OMB would need to approve the Coast Guard's request associated with
                this rule to collect this information. After OMB completes action on
                our information collection request, we will publish a Federal Register
                notice describing OMB's decision.
                E. Federalism
                 A rule has implications for federalism under Executive Order 13132
                (Federalism) if it has a substantial direct effect on States, on the
                relationship between the National Government and the States, or on the
                distribution of power and responsibilities among the various levels of
                government. We have analyzed this rule under Executive Order 13132 and
                have determined that it is consistent with the fundamental federalism
                principles and preemption requirements described in Executive Order
                13132. Our analysis follows.
                 It is well settled that States may not regulate in categories
                reserved for regulation by the Coast Guard. It is also well settled
                that the categories covered in 46 U.S.C. 3306, 3703, 7101, and 8101
                (design, construction, alteration, repair, maintenance, operation,
                equipping, personnel qualification, and manning of vessels), as well as
                the reporting of casualties and any other category in which Congress
                intended the Coast Guard to be the sole source of a vessel's
                obligations, are within the field foreclosed from regulation by the
                States. See the Supreme Court's decision in United States v. Locke and
                Intertanko v. Locke, 529 U.S. 89, 120 S.Ct. 1135 (2000). Therefore,
                because the States may not regulate within these categories, this rule
                is consistent with the fundamental federalism principles and preemption
                requirements described in Executive Order 13132. Our analysis follows.
                 This rulemaking is based on provisions in OPA 90 and CERCLA; 33
                U.S.C. 2716 and 42 U.S.C. 9608, respectively. This rule amends Coast
                Guard regulations on vessel evidence of financial responsibility and
                removes certain unnecessary pollution fund regulations. The OPA 90
                contains a savings clause that saves to the States the ability to
                regulate activities contained in Title I of OPA 90, including vessel
                evidence of financial responsibility requirements. See 33 U.S.C. 2718;
                United States v. Locke and Intertanko v. Locke, 529 U.S. 89, 105, 120
                S.Ct. 1135, 1146 (2000). Thus, nothing in this rule preempts states
                from regulating vessel evidence of financial responsibility
                requirements for oil pollution. However, CERCLA contains an express
                preemption provision which prohibits States, except under limited
                circumstances, from requiring vessels to establish or maintain evidence
                of financial responsibility in connection with liability for the
                release of a hazardous substance if those vessels maintain evidence of
                the financial responsibility required under that subchapter (42 U.S.C.
                9614(d)). Thus, except under limited circumstances, States cannot
                regulate requirements for vessel evidence of financial responsibility
                requirements for hazardous material pollution. The removal of 33 CFR
                part 135 and subpart D of part 153 removes certain federal pollution
                fund's regulatory requirements that were superseded by OPA 90 and
                subsumed by the OSLTF. As the rule clarifies but does not alter the
                existing, applicable federal law relating to pollution funds, it will
                not have preemptive impact. Therefore, this rule is consistent with the
                fundamental federalism principles and preemption requirements described
                in Executive Order 13132.
                F. Unfunded Mandates
                 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 (adjusted for
                inflation) or more in any one year. Although this rule will not result
                in such expenditure, we do discuss the effects of this rule elsewhere
                in this preamble.
                G. Taking of Private Property
                 This rule will not cause 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 will not create an
                environmental risk to health or risk to safety that might
                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 will 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
                [[Page 68139]]
                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, codified as a
                note to 15 U.S.C. 272, directs agencies to use voluntary consensus
                standards in their regulatory activities unless the agency provides
                Congress, through OMB, with an explanation of why using these standards
                will be inconsistent with applicable law or otherwise impractical.
                Voluntary consensus standards are technical standards (e.g.,
                specifications of materials, performance, design, or operation; test
                methods; sampling procedures; and related management systems practices)
                that are developed or adopted by voluntary consensus standards bodies.
                 This 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 Department of Homeland Security
                Management Directive 023-01, Rev. 1, associated implementing
                instructions, and Environmental Planning COMDTINST 5090.1 (series),
                which guide the Coast Guard in complying with the National
                Environmental Policy Act of 1969 (42 U.S.C. 4321-4370f), and have made
                a determination that this action is one of a category of actions that
                do not individually or cumulatively have a significant effect on the
                human environment. A Record of Environmental Consideration supporting
                this determination is available in the docket. For instructions on
                locating the docket, see the ADDRESSES section of this preamble. This
                rule is categorically excluded under paragraph L53 of Appendix A, Table
                1 of DHS Instruction Manual 023-01-001-01, Rev 1. Paragraph L53
                pertains to congressionally mandated regulations designed to improve or
                protect the environment. This rule involves expanding vessel financial
                responsibility to include tank vessels greater than 100 gross tons but
                less than or equal to 300 gross tons, clarifying and updating the
                rule's reporting requirements, conforming the rule to current practice,
                and removing two superseded regulations.
                List of Subjects
                33 CFR Part 135
                 Administrative practice and procedure, Continental shelf,
                Insurance, Oil pollution, Reporting and recordkeeping requirements.
                33 CFR Part 138
                 Hazardous materials transportation, Insurance, Oil pollution,
                Reporting and recordkeeping requirements, Vessels, Water pollution
                control.
                33 CFR Part 153
                 Hazardous substances, Oil pollution, Reporting and recordkeeping
                requirements, Water pollution control.
                 For the reasons discussed in the preamble, the Coast Guard amends
                33 CFR chapter 1 as follows:
                PART 135--[REMOVED]
                0
                1. Under the authority of 14 U.S.C. 503, part 135 is removed.
                PART 138--EVIDENCE OF FINANCIAL RESPONSIBILITY FOR WATER POLLUTION
                (VESSELS) AND OPA 90 LIMITS OF LIABILITY (VESSELS, DEEPWATER PORTS
                AND ONSHORE FACILITIES)
                0
                2. The authority citation for part 138 is revised to read as follows:
                 Authority: 6 U.S.C. 552(d); 33 U.S.C. 2704, 2716, 2716a; 42
                U.S.C. 9608, 9609; E.O. 12580, Sec. 7(b), 3 CFR, 1987 Comp., p. 193;
                E.O. 12777, Secs. 4 and 5, 3 CFR, 1991 Comp., p. 351, as amended by
                E.O. 13286, Sec. 89, 3 CFR, 2004 Comp., p. 166, and by E.O. 13638,
                Sec. 1, 3 CFR, 2014 Comp., p.227; Department of Homeland Security
                Delegation Nos. 00170.1, Revision 01.2 and 5110, Revision 01.
                Section 138.40 also issued under the authority of 46 U.S.C. 2103 and
                14302.
                0
                3. Revise the part heading to read as set forth above.
                0
                4. Revise subpart A to read as follows:
                Subpart A--Evidence of Financial Responsibility for Water Pollution
                (Vessels)
                Sec.
                138.10 Scope and purpose.
                138.20 Applicability.
                138.30 Definitions.
                138.40 General requirements.
                138.50 How to apply vessel gross tonnages.
                138.60 Forms and submissions; ensuring submission timeliness.
                138.70 Issuance and renewal of COFRs.
                138.80 Applying for COFRs.
                138.90 Renewing COFRs.
                138.100 How to calculate a total applicable amount.
                138.110 How to establish and maintain evidence of financial
                responsibility.
                138.120 Fees.
                138.130 Agents for Service of process.
                138.140 Application withdrawals, COFR denials and revocations.
                138.150 Reporting requirements.
                138.160 Non-owning COFR Operator's responsibility for
                identification.
                138.170 Enforcement.
                Subpart A--Evidence of Financial Responsibility for Water Pollution
                (Vessels)
                Sec. 138.10 Scope and purpose.
                 (a) Scope. This subpart sets forth--
                 (1) The requirements and procedures each COFR Operator (as defined
                in Sec. 138.30(b)) must use to establish and maintain the evidence of
                financial responsibility required by the OPA 90 and CERCLA (both
                defined in Sec. 138.30), and to obtain Certificates of Financial
                Responsibility (COFR);
                 (2) The standards and procedures the Coast Guard uses to determine
                the acceptability of guarantors;
                 (3) The procedures guarantors must use to submit evidence of
                financial responsibility on behalf of the responsible parties for
                vessels to which this subpart applies;
                 (4) The requirements for designating and maintaining U.S. agents
                for service of process;
                 (5) The requirements for reporting changes affecting compliance
                with this subpart; and
                 (6) The enforcement actions that may result from non-compliance
                with this subpart or OPA 90, CERCLA, or both, referenced in paragraph
                (a)(1) of this section.
                 (b) Purpose. These requirements ensure that the responsible parties
                for vessels to which this subpart applies, have sufficient available
                financial resources to cover their potential liabilities to the United
                States and other claimants in the following scenarios:
                 (1) Under OPA 90 in the event of a discharge, or substantial threat
                of a discharge, of oil; and
                 (2) In the case of vessels greater than 300 gross tons, under
                CERCLA in the event of a release, or threatened release, of a hazardous
                substance.
                Sec. 138.20 Applicability.
                 (a) Applicability generally. This subpart applies--
                 (1) To the COFR Operator of--
                 (i) Any vessel over 300 gross tons (except a vessel listed in
                paragraph (d)(1) or (2) of this section) using the navigable waters of
                the United States, or any port or other place subject to the
                [[Page 68140]]
                jurisdiction of the United States, including any such vessel using a
                deepwater port or other offshore facility subject to the jurisdiction
                of the United States;
                 (ii) Any vessel of any size (except a vessel listed in paragraph
                (d)(1) or (3) of this section) 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
                 (iii) Any tank vessel over 100 gross tons (except a vessel listed
                in paragraph (d)(1) or (3) of this section) using the navigable waters
                of the United States, or any port or other place subject to the
                jurisdiction of the United States, including any such tank vessel using
                a deepwater port or other offshore facility subject to the jurisdiction
                of the United States;
                 (2) To a guarantor providing evidence of financial responsibility
                under this subpart on behalf of one or more of a vessel's responsible
                parties;
                 (3) To responsible parties other than the COFR Operator designated
                to represent the responsible parties for purposes of this subpart; and
                 (4) To any person serving as a U.S. agent for service of process
                under this subpart.
                 (b) How to apply this part to mobile offshore drilling units. For
                the purposes of applying the evidence of financial responsibility
                required under OPA 90 and this subpart and the limits of liability set
                forth in subpart B of this part, and in addition to any OPA 90 offshore
                facility evidence of financial responsibility requirements that may
                apply under 30 CFR part 553, a mobile offshore drilling unit is treated
                as--
                 (1) A tank vessel when it is being used as an offshore facility;
                and
                 (2) A vessel other than a tank vessel when it is not being used as
                an offshore facility.
                 (c) How to apply CERCLA evidence of financial responsibility to
                self-propelled vessels. For the purposes of applying the evidence of
                financial responsibility required under CERCLA and for vessels
                identified in paragraph (a)(1)(i) of this section, this subpart applies
                to a self-propelled vessel over 300 gross tons even if it does not
                carry hazardous substances.
                 (d) Exceptions. (1) This subpart does not apply to public vessels.
                 (2) Paragraph (a)(1)(i) of this section does not apply to any non-
                self-propelled barge that does not carry oil as cargo or fuel and does
                not carry hazardous substances as cargo.
                 (3) Paragraphs (a)(1)(ii) and (iii) of this section do not apply
                to: any offshore supply vessel; any fishing vessel or fish tender
                vessel of 750 gross tons or less that transfers fuel without charge to
                a fishing vessel owned by the same person; any towing or pushing vessel
                (tug) simply because it has in its custody a tank barge; or any tank
                vessel that only carries, or is adapted to carry, non-liquid hazardous
                material in bulk as cargo or cargo residue.
                Sec. 138.30 Definitions.
                 (a) As used in this subpart, the following terms have the meanings
                set forth in--
                 (1) OPA 90 (specifically in 33 U.S.C. 2701): Claim, claimant,
                damages, deepwater port, discharge, Exclusive Economic Zone, facility,
                incident, liable or liability, mobile offshore drilling unit, navigable
                waters, offshore facility, oil, owner or operator, person, remove,
                removal, removal costs, responsible party, tank vessel, United States,
                and vessel; and
                 (2) CERCLA (42 U.S.C. 9601): Claim, claimant, damages, facility,
                hazardous substance, liable or liability, navigable waters, offshore
                facility, owner or operator, person, remove, removal, United States,
                and vessel.
                 (3) 46 CFR 69.9: Convention Measurement System, foreign-flag
                vessel, gross tonnage ITC (GT ITC) \1\ and gross register tonnage
                (GRT), tonnage, and U.S.-flag vessel.
                ---------------------------------------------------------------------------
                 \1\ The acronym ``ITC'' refers to the International Tonnage
                Convention. GT ITC, as defined in 46 CFR 69.9 means the gross
                tonnage measurement of a vessel as applied under the Convention
                Measurement System.
                ---------------------------------------------------------------------------
                 (b) As used in this subpart--
                 Applicable amount means an OPA 90 or CERCLA evidence of financial
                responsibility amount determined to apply to a vessel as provided under
                Sec. 138.100.
                 Application means an ``Application for Vessel Certificate of
                Financial Responsibility (Water Pollution)'', which the COFR Operator
                for one or more vessels has completed and verified in eCOFR, as
                provided in Sec. 138.60(c)(1)(i), or signed, dated, and submitted to
                the NPFC by one of the submission methods specified in Sec.
                138.60(c)(1)(ii) through (iv).
                 Cargo means goods or materials carried 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 the Comprehensive Environmental Response,
                Compensation, and Liability Act of 1980, as amended (42 U.S.C. 9601, et
                seq.).
                 COFR means a current Certificate of Financial Responsibility (Water
                Pollution) issued by the Director, under this subpart, as provided in
                Sec. 138.70, and posted on the NPFC COFR program website https://npfc.uscg.mil/cofr/default.aspx.
                 COFR Operator means a responsible party who conducts, or has
                responsibility for, the operation of a vessel to which this subpart
                applies--that is, a person who is an operator as defined in OPA 90 and
                CERCLA, and, when there is more than one responsible party (including
                more than one operator), is the operator designated and authorized by
                all the vessel's responsible parties to act on their behalf for the
                purpose of complying with this subpart, including submitting (or
                causing to be submitted) all Applications and requests for COFR
                renewal, evidence of financial responsibility and reports, and payment
                of all fees required by Sec. 138.120.
                 (i) If a vessel has one owner and is operated by that owner, or the
                owner controls and is responsible for the vessel's operation, the owner
                is the COFR Operator. In all other cases the person who operates, or
                controls and is principally responsible for the operation of, the
                vessel (for example, the demise charterer) is the COFR Operator.
                 (ii) A person who is responsible, or who agrees by contract to
                become responsible, for a vessel in the capacity of a builder,
                repairer, or scrapper, or for the purpose of holding the vessel out for
                sale or lease, is the COFR Operator. A person who takes possession of,
                or responsibility for, a newly built, modified, or repaired vessel from
                a builder or repairer, or who purchases and operates or becomes a
                demise charterer of a vessel held out for sale or lease, is the COFR
                Operator.
                 (iii) A time or voyage charterer who does not assume responsibility
                for the operation of a vessel is not a COFR Operator for purposes of
                this subpart.
                 (iv) The designation of an operator to act as the COFR Operator on
                behalf of a vessel's responsible parties for purposes of this subpart
                does not limit who may be determined to be an operator under OPA 90,
                CERCLA, or both, in the event of an incident or a release.
                 Day or days means calendar days unless otherwise specified.
                 Director means the person in charge of the U.S. Coast Guard,
                National Pollution Funds Center (NPFC), or that person's authorized
                representative.
                 eCOFR means the electronic Certificate of Financial Responsibility
                web-based process located on the NPFC COFR program website, https://npfc.uscg.mil/cofr/default.aspx, and is
                [[Page 68141]]
                the process COFR Operators may use to apply for and renew COFRs.
                 Evidence of financial responsibility means the demonstration of the
                financial ability of the responsible parties for a vessel to which this
                subpart applies to meet their potential liabilities under OPA 90,
                CERCLA, or both, up to the total applicable amount determined as
                provided under Sec. 138.100.
                 Financial guarantor is a type of guarantor and means a business
                entity or other person providing a financial guaranty under Sec.
                138.110(c). A financial guarantor is distinct from a COFR insurance
                guarantor, a self-insurer, or a surety. A self-insurer, however, may
                also serve as a financial guarantor for others.
                 Fish tender vessel and fishing vessel have the same meanings as set
                forth in 46 U.S.C. 2101.
                 Fleet Certificate means a COFR issued by the Director under this
                subpart to the COFR Operator of a fleet of 2 or more unmanned, non-
                self-propelled barges that are not tank vessels and that, from time to
                time, may be subject to this subpart (for example, a hopper barge over
                300 gross tons when carrying oily metal shavings or similar cargo). A
                Fleet Certificate covers, automatically, all unmanned, non-self-
                propelled, non-tank barges for which the COFR Operator may from time to
                time be responsible that does not exceed the maximum gross tonnage
                indicated on the Fleet Certificate.
                 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 no more than 5 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 who has been determined to be acceptable
                by the Director, as provided in Sec. 138.110, and who is providing
                evidence of financial responsibility on behalf of one or more of a
                vessel's responsible parties, other than as a responsible party
                providing self-insurance under Sec. 138.110(d).
                 Hazardous material has the same meaning as set forth in 46 U.S.C.
                2101.
                 Individual Certificate means a COFR issued by the Director under
                this subpart to the COFR Operator for a single vessel.
                 Insurance guarantor is a type of guarantor and means an insurance
                company, association of underwriters, ship owners' protection and
                indemnity association, or other person, serving as a guarantor under
                Sec. 138.110(b). An insurance guarantor is distinct from a self-
                insurer, a financial guarantor, or a surety.
                 Master Certificate means a COFR issued by the Director under this
                subpart to the COFR Operator of one or more vessels that are under the
                custody of such person solely in the capacity of a builder, repairer,
                or scrapper, or for the purpose of holding vessels out for sale or
                lease, where such person does not physically operate the vessels. A
                Master Certificate covers, automatically, all of the vessels subject to
                this subpart held by the COFR Operator solely for purposes of
                construction, repair, scrapping, sale or lease. A vessel which is being
                operated commercially in any business venture, including the business
                of building, repairing, scrapping, leasing, or selling (for example, a
                slop barge used by a shipyard) cannot be covered by a Master
                Certificate and must have either a current Individual Certificate or,
                if applicable, a current Fleet Certificate.
                 Net worth means the amount of all assets located in the United
                States, less all liabilities anywhere in the world.
                 NPFC means the U.S. Coast Guard, National Pollution Funds Center.
                NPFC is the U.S. Government office responsible for administering the
                OPA 90 and CERCLA vessel COFR program.
                 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, as amended (33 U.S.C.
                2701, et seq.).
                 Public vessel means a vessel owned or demise chartered and operated
                by the United States, by a State or political subdivision thereof, or
                by a foreign nation, except when the vessel is engaged in commerce.
                 Release, for purposes of this subpart, means a release as defined
                in CERCLA (specifically, 42 U.S.C. 9601), or a threatened release, of a
                hazardous substance.
                 Responsible party, for purposes of OPA 90 evidence of financial
                responsibility, has the same meaning as defined at 33 U.S.C. 2701; and,
                for purposes of CERCLA evidence of financial responsibility, means any
                person who is an ``owner or operator,'' as defined at 42 U.S.C. 9601,
                including any person chartering a vessel by demise.
                 Self-insurer means a COFR Operator providing evidence of financial
                responsibility as the responsible party of the subject vessel, as
                provided under Sec. 138.110(d). A self-insurer is distinct from a
                guarantor.
                 Total applicable amount means an evidence of financial
                responsibility amount that must be demonstrated under this subpart,
                determined as provided in Sec. 138.100.
                 Working capital means the amount of current assets located in the
                United States, less all current liabilities anywhere in the world.
                Sec. 138.40 General requirements.
                 (a) Requirement to establish and maintain evidence of financial
                responsibility. The COFR Operator of a vessel must establish and
                maintain (or cause to be established and maintained) evidence of
                financial responsibility acceptable to the Director using any one of
                the methods specified in Sec. 138.110, in an amount equal to or
                greater than the total applicable amount determined under Sec. 138.100
                and, in the case of a financial guarantor, as further provided under
                Sec. 138.110(c)(2) (aggregation of total applicable amounts). The
                evidence of financial responsibility required by this paragraph must
                be--
                 (1) Established as of the date they become a responsible party; and
                 (2) Continuously maintained for so long as they remain a
                responsible party.
                 (b) Requirement to have a COFR and report changes. The COFR
                Operator must apply for and ensure the vessel is covered at all times
                by a current COFR, by complying with the requirements and procedures
                set forth in this subpart, including the reporting requirements in
                Sec. 138.150.
                Sec. 138.50 How to apply vessel gross tonnages.
                 (a) Purpose. This section sets forth the methods for applying
                vessel gross tonnage to--
                 (1) Determine whether a vessel exceeds the 100 or 300 gross ton
                threshold under Sec. 138.20 and OPA 90, CERCLA, or both;
                 (2) Calculate the OPA 90 and CERCLA applicable amounts of financial
                responsibility required, as provided in Sec. 138.100; and
                 (3) Determine the OPA 90 limit of liability under subpart B of this
                part in the event of an oil pollution incident, and the CERCLA limit of
                liability under 42 U.S.C. 9607 in the event of a hazardous substance
                release.
                 (b) Both GT ITC and GRT assigned. For a vessel assigned both gross
                tonnage ITC (GT ITC) and gross register tonnage (GRT) under 46 CFR part
                69, apply the tonnage thresholds in Sec. 138.20 using the assigned GRT
                tonnage, and determine the applicable amounts of financial
                responsibility and the limits of liability using the assigned GT ITC
                tonnage.
                 (c) GT ITC or GRT assigned. For a vessel assigned only a GT ITC or
                a GRT tonnage under 46 CFR part 69, apply the tonnage thresholds in
                Sec. 138.20, and
                [[Page 68142]]
                determine the applicable amounts of evidence of financial
                responsibility and the limits of liability using the assigned GT ITC or
                GRT tonnage.
                 (d) High or low GRT assigned. For a vessel assigned a high and low
                GRT tonnage under 46 CFR part 69, subpart D (Dual Regulatory
                Measurement System), apply the tonnage thresholds in Sec. 138.20, and
                determine the applicable amounts of financial responsibility and the
                limits of liability, using the high GRT tonnage.
                 (e) Summary. The use of assigned gross tonnages, as required by
                paragraphs (b) through (d) of this section, is summarized in the
                following table.
                 Table 1 to Sec. 138.50(e)--Use of Assigned Gross Tonnages
                ----------------------------------------------------------------------------------------------------------------
                 Assigned tonnage
                 ---------------------------------------------------------------------------------
                 Category To apply the tonnage thresholds in Sec. To determine applicable amounts under
                 138.20 Sec. 138.100 and limits of liability
                ----------------------------------------------------------------------------------------------------------------
                Vessels Assigned Both GT ITC GRT.................................... GT ITC.
                 and GRT.
                Vessels Assigned--
                 GT ITC only............... GT ITC................................. GT ITC.
                GRT only...................... GRT.................................... GRT.
                ----------------------------------------------------------------------------------------------------------------
                 (f) Certified gross tonnage governs. In the event of an incident or
                release, the responsible parties and guarantors are governed by the
                vessel's assigned gross tonnage on the date of the incident. This is as
                determined under paragraphs (b) through (e) of this section and
                evidenced on the appropriate tonnage certifying document as provided
                for under the U.S. tonnage regulations or international conventions
                (for example, tonnage certificate or completed Simplified measurement
                application, International Tonnage Certificate (1969)), regardless of
                what gross tonnage is specified in the Application or guaranty form
                submitted under this subpart, except when the responsible parties or
                guarantors knew or should have known that the tonnage certificate
                information was incorrect (see also Sec. 138.110(h)(1)(iii)).
                 (g) Requirement to present tonnage certifying document(s). Each
                COFR Operator must submit to the Director, or other authorized United
                States Government official, upon request, for examination and copying,
                the original or an unaltered and legible electronic copy of the
                vessel's applicable tonnage certifying document(s).
                Sec. 138.60 Forms and submissions; ensuring submission timeliness.
                 (a) Where to obtain forms. All forms referred to in this subpart
                are available at the NPFC COFR program website, https://npfc.uscg.mil/cofr/default.aspx, and may be completed online or downloaded.
                 (b) Where to obtain information. Direct all questions concerning
                the requirements of this subpart to the NPFC at one of the addresses in
                paragraphs (c)(1)(ii) through (iv) of this section or by calling the
                NPFC at 202-795-6130.
                 (c) How to present Applications and other required submissions. (1)
                Provide all submissions required by this subpart to the Director, by
                one of the following four methods:
                 (i) Electronically, using the eCOFR process (located at https://npfc.uscg.mil/cofr/default.aspx);
                 (ii) By email, sent to such email address as the Director may
                specify, attaching legible electronic images scanned in a format
                acceptable to the Director;
                 (iii) By fax, sent to 202-795-6123 with a cover sheet specifying
                the total number of pages, the sender's telephone number, and
                referencing NPFC telephone number 202-795-6130; or
                 (iv) By mail, addressed to--
                 Director, National Pollution Funds Center, ATTN: VESSEL
                CERTIFICATION, U.S. Coast Guard Stop 7605, 2703 Martin Luther King Jr.
                Ave. SE, Washington, DC 20593-7605.
                 (2) Submissions may not be hand delivered to the NPFC.
                 (3) Do not present submissions by more than one method.
                 (d) Required contents of submissions. Unless otherwise instructed
                by the Director, all submissions required by this subpart must--
                 (1) Set forth, in full, the correct legal name of the COFR Operator
                to whom the COFR is to be, or has been, issued;
                 (2) Be in English, and
                 (3) Express all monetary terms in United States dollars.
                 (e) Ensuring the timeliness of submissions; requesting deadline
                exceptions. (1) Compliance with a submission deadline will be
                determined based on the day the submission is received by NPFC. If a
                deadline specified in this subpart falls on a weekend or Federal
                holiday, the deadline will occur on the next business day.
                 (2) Ensuring the timeliness of the submissions is the sole
                responsibility of the person making the submission.
                 (3) The Director may, in the Director's sole discretion, grant an
                exception to a deadline specified in this subpart for good cause shown.
                 (f) Public access to information. Financial data and other
                information submitted to the Director 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. 552(a)).
                Sec. 138.70 Issuance and renewal of COFRs.
                 (a) Types of COFRs. The Director issues the following three types
                of COFRs as provided further in Sec. 138.80: Individual Certificates,
                Fleet Certificates and Master Certificates.
                 (b) Requirements before issuance and renewal of COFRs. The Director
                will issue or renew a COFR only after NPFC receives a completed
                Application or request for COFR renewal, and satisfactory evidence of
                financial responsibility.
                 (c) COFRs are issued only to designated COFR Operators. Each COFR
                of any type is issued only in the name of the COFR Operator designated
                in the Application or request for COFR renewal.
                 (d) Form of issuance. All COFRs are issued by the Director in
                electronic form on NPFC's COFR program website (https://npfc.uscg.mil/cofr/default.aspx) for a term of no more than 3 years from the date of
                issuance.
                 (e) Information included in COFRs. The following information is
                available on NPFC's COFR program website for each COFR issued by the
                Director:
                 (1) The name of the COFR Operator;
                 (2) The date of COFR expiration;
                 (3) The COFR number;
                 (4) For an Individual Certificate, the name of the covered vessel,
                and the
                [[Page 68143]]
                vessel's gross tonnage information, including the measurement system(s)
                used;
                 (5) For a Fleet Certificate, the gross tons of the largest
                unmanned, non-self-propelled, non-tank barge within the fleet,
                including the measurement systems(s) used; and
                 (6) For a Master Certificate, the gross tons of the largest tank
                vessel and largest vessel other than a tank vessel eligible for
                coverage by the Master Certificate, including the measurement
                systems(s) used.
                Sec. 138.80 Applying for COFRs.
                 (a) How to apply for a COFR. To apply for a COFR of any type, the
                COFR Operator must--
                 (1) Submit, or cause to be submitted, to the Director, by one of
                the submission methods provided in Sec. 138.60(c):
                 (i) An Application;
                 (A) For an Individual Certificate, list the name of the covered
                vessel, and the vessel's gross tonnage information, including the
                measurement system(s) used on the application;
                 (B) For a Fleet Certificate, instead of listing each individual
                barge, mark the box with the following statement: ``This is an
                Application for a Fleet Certificate. The largest unmanned, non-self-
                propelled, non-tank barge to be covered by this Application is [INSERT
                APPLICABLE GROSS TONS] GT ITC and [INSERT GROSS TONNAGE] GRT''; and
                 (C) For a Master Certificate, instead of listing each individual
                vessel, mark the box with the following statement: ``This is an
                Application for a Master Certificate. The largest tank vessel to be
                covered by this Application is [INSERT APPLICABLE GROSS TONS] GT ITC
                and [INSERT APPLICABLE GROSS TONS] GRT, as applicable. The largest
                vessel other than a tank vessel to be covered by this Application is
                [INSERT APPLICABLE GROSS TONS] GT ITC and [INSERT APPLICABLE GROSS
                TONS] GRT, as applicable.''
                 (ii) The evidence of financial responsibility using one of the
                guaranty methods provided in Sec. 138.110;
                 (A) For a Fleet Certificate, the evidence of financial
                responsibility must be in the total applicable amount, determined as
                provided in Sec. 138.100, for the largest unmanned, non-self-
                propelled, non-tank barge to be covered.
                 (B) For a Master Certificate, the evidence of financial
                responsibility must be in the total applicable amount determined as
                provided in Sec. 138.100 for the largest tank vessel and largest non-
                tank vessel to be covered by the Master Certificate.
                 (iii) The agent for service of process designations required by
                Sec. 138.130; and
                 (iv) All other supporting documentation required by this subpart.
                 (A) At the time of Application for a Master Certificate, the COFR
                Operator must submit a report to the Director, indicating: the name;
                previous name, if applicable; type; gross tonnage and measurement
                system(s) used, for each vessel covered by the Master Certificate,
                indicating which vessels, if any, are tank vessels. If a vessel has
                both a GT ITC and GRT tonnage, specify both gross tonnages.
                 (B) Six months after receiving a Master Certificate, and every 6
                months thereafter, each COFR Operator must submit to the Director, an
                updated report, separately listing the vessels no longer covered by
                that Master Certificate. If a vessel has both a GT ITC and GRT, both
                gross tonnages must be specified. If a vessel has been transferred to
                another responsible party and the COFR Operator to whom the Master
                Certificate was issued ceases to be the vessel's operator, the COFR
                Operator must report the date and place of the transfer, and the name
                and contact information of the responsible party to whom the vessel was
                transferred. If the vessels covered by the Master Certificate have not
                changed from the previous report, the COFR Operator may submit an
                updated report that indicates no change from previous report.
                 (2) Pay, or cause to be paid, all fees required by Sec. 138.120.
                 (b) Application deadline. The Director must receive the
                Application, evidence of financial responsibility, and other required
                supporting documentation, at least 21 days prior to the date the
                Certificate is required. The COFR Operator may seek an exception to the
                21-day submission deadline only as provided in Sec. 138.60(e)(3).
                 (c) Where to obtain Application forms. COFR Operators may create an
                Application using the online eCOFR web process (located at https://npfc.uscg.mil/cofr/default.aspx) or, if not using eCOFR, may obtain an
                ``Application for Vessel Certificate of Financial Responsibility (Water
                Pollution)'' at the same website.
                 (d) Requirement to verify, or sign and date, the Application. (1)
                The COFR Operator must complete and either verify the Application in
                eCOFR as provided in Sec. 138.60(c)(1)(i) or, if not using eCOFR, sign
                and date the hard-copy signature page of the Application and submit the
                signed Application to the Director, by one of the methods specified in
                Sec. 138.60(c)(1)(ii) through (iv).
                 (2) The Application must include the title of the person signing
                it.
                 (3) If the person signing the Application is acting under a Power
                of Attorney, they must include a copy of the Power of Attorney with the
                Application.
                 (e) Requirement to update Applications. The COFR Operator must
                report any changes to the Application to the Director in writing, no
                later than 5 business days after discovery of the change. The Director
                may require that the COFR Operator submit a revised Application and
                provide additional evidence of financial responsibility, and pay any
                additional fees required by Sec. 138.120.
                 (f) Amending Fleet and Master Certificates. Before operating a
                barge or vessel that exceeds the maximum gross tonnage indicated on the
                COFR, the COFR Operator must:
                 (1) Submit a new or amended Application, or a written request to
                supplement the Application, to reflect the new maximum gross tonnages
                on the COFR;
                 (2) Unless the COFR Operator qualifies as a self-insurer at the
                higher total applicable amount, submit, or cause to be submitted,
                evidence of financial responsibility using one of the guaranty methods
                provided in Sec. 138.110 to the Director, demonstrating increased
                coverage based on the new maximum gross tonnage; and
                 (3) Pay a new certification fee, as required by Sec. 138.120.
                Sec. 138.90 Renewing COFRs.
                 (a) The COFR Operator must submit a request for COFR renewal to the
                NPFC at least 21 days, but no earlier than 90 days, before the
                expiration date of the current COFR.
                 (b) The COFR Operator may seek an exception to the 21-day request
                for COFR renewal submission deadline in paragraph (a) of this section
                only as provided in Sec. 138.60(e)(3).
                 (c) The COFR Operator must identify in the request for COFR renewal
                all changes to the information contained in the initial Application,
                including the gross ton measurement system(s) used (if not previously
                provided), the evidence of financial responsibility, and all other
                supporting documentation previously submitted to the Director, as
                provided in Sec. 138.150.
                Sec. 138.100 How to calculate a total applicable amount.
                 The total applicable amount is the sum of the OPA 90 applicable
                amount determined under paragraph (a) of this section plus the CERCLA
                applicable amount determined under paragraph (b) of this section.
                [[Page 68144]]
                 (a) OPA 90 applicable amount. The applicable amount under OPA 90 is
                equal to the applicable limit of liability determined as provided in
                subpart B of this part.
                 (b) CERCLA applicable amount. The applicable amount under CERCLA is
                determined as follows:
                 (1) For a vessel over 300 gross tons carrying a hazardous substance
                as cargo, and for any vessel covered under Sec. 138.110(c)(3) or
                (d)(2)(ii) (calculation of CERCLA applicable amounts for financial
                guarantors and self-insurers), the greater of $5,000,000 or $300 per
                gross ton.
                 (2) For any other vessel over 300 gross tons, the greater of
                $500,000 or $300 per gross ton.
                 (c) Amended applicable amounts. If an applicable amount determined
                under paragraph (a) or (b) of this section is amended by statute or
                regulation, the COFR Operator must establish and maintain evidence of
                financial responsibility in an amount equal to or greater than the
                amended total applicable amount, as provided in Sec. 138.240(a).
                 (d) OPA 90 and CERCLA applicable amounts and limits of liability.
                The responsible parties are strictly, jointly and severally liable, for
                the costs and damages resulting from an incident or a release, but
                together they need only establish and maintain an amount of financial
                responsibility equal to the single limit of liability per incident or
                release. Only that portion of the evidence of financial responsibility
                under this subpart with respect to--
                 (1) OPA 90 is required to be made available by a guarantor for the
                costs and damages related to an incident where there is not also a
                release; and
                 (2) CERCLA is required to be made available by a guarantor for the
                costs and damages related to a release where there is not also an
                incident. A guarantor (or a self-insurer for whom the exceptions to a
                limitations of liability are not applicable), therefore, is not
                required to apply the entire amount of financial responsibility to an
                incident involving oil alone or a release involving a hazardous
                substance alone.
                Sec. 138.110 How to establish and maintain evidence of financial
                responsibility.
                 (a) General requirement; guaranty effective date and termination
                date. The COFR Operator of each vessel must submit, or cause to be
                submitted, to the Director, the evidence of financial responsibility
                required by Sec. 138.40(a) using one of the methods specified in this
                section.
                 (1) If submitted on behalf of the COFR Operator, the guarantor must
                provide evidence of financial responsibility to the Director.
                 (2) The effective and termination dates are as follows:
                 Table 1 to Sec. 138.110(a)(2)--Effective and Termination Dates
                ------------------------------------------------------------------------
                 Type of certificate Effective date Termination date
                ------------------------------------------------------------------------
                Individual................... Guaranty form 30 days after the
                Fleet........................ submission date. date the Director
                 Guaranty form and the COFR
                 submission date or Operator receive
                 date COFR Operator written notice
                 becomes a from the guarantor
                 Responsible Party that the guarantor
                 for the vessel. intends to cancel
                 the guaranty for
                 that vessel.
                Master....................... Guaranty form
                 submission date or
                 date COFR Operator
                 becomes a
                 Responsible Party
                 for the vessel.
                ------------------------------------------------------------------------
                 (3) Termination provisions:
                 (i) The guarantor must specify the reason for terminating the
                guaranty in the notice required by this paragraph, if known.
                 (ii) Termination of the guaranty as to any covered vessel will not
                affect the liability of the guarantor in connection with an incident or
                release commencing or occurring prior to the effective date of the
                guaranty termination.
                 (4) If, at any time, the information contained in the evidence of
                financial responsibility submitted under this section changes, or there
                is a material change in a guarantor or self-insurer's financial
                position, the guarantor or COFR Operator or self-insurer (as
                applicable), must report the change to the Director, as provided in
                Sec. 138.150.
                 (b) Insurance guaranty method. The COFR Operator may establish and
                maintain evidence of financial responsibility using the insurance
                guaranty method by submitting an Insurance Guaranty Form to the
                Director.
                 (1) Each form must be executed by no more than four COFR insurance
                guarantors accepted by the Director. A lead underwriter is considered
                one of the COFR insurance guarantors.
                 (2) The process for establishing and maintaining the acceptability
                of a COFR insurance guarantor is as follows:
                 (i) The COFR insurance guarantor must request an initial
                determination by the Director of the COFR insurance guarantor's
                acceptability to serve as a COFR insurance guarantor under this
                subpart, at least 90 days before the date a COFR is required, by
                submitting information describing the COFR insurance guarantor's
                structure, business practices, history, and financial strength, and
                such other information as may be requested by the Director.
                 (ii) The Director reviews the continued acceptability of COFR
                insurance guarantors annually. Each COFR insurance guarantor must
                submit updates to the initial request submitted under paragraph
                (b)(2)(i) of this section, annually, within 90 days after the close of
                the COFR insurance guarantor's fiscal year, describing any material
                changes to the COFR insurance guarantor's legal status, structure,
                business practices, history, and financial strength, since the previous
                year's submission, and providing such other information as may be
                requested by the Director.
                 (c) Financial guaranty method. The COFR Operator may establish and
                maintain evidence of financial responsibility using the financial
                guaranty method by submitting a Financial Guaranty Form to the
                Director.
                 (1) Each form must be executed by no more than four financial
                guarantors accepted by the Director, at least one of which must be a
                parent or affiliate of the COFR Operator. (See paragraph (g) of this
                section for additional requirements if more than one financial
                guarantor signs the form.)
                 (2) The process for establishing and maintaining the acceptability
                of a financial guarantor is as follows:
                 (i) The financial guarantor must comply with the self-insurance
                provisions in paragraph (d) of this section, and the periodic reporting
                requirements in paragraphs (e)(1) through (4) of this section.
                 (ii) The financial guarantor must also demonstrate that it
                maintains net worth and working capital, each in amounts equal to or
                greater than--
                 (A) The aggregate total applicable amounts, calculated for each
                COFR Operator vessel for which the financial guaranty is being
                provided, based on
                [[Page 68145]]
                each such COFR Operator's vessel with the greatest total applicable
                amount, plus--
                 (B) 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.
                 (3) In the case of a vessel greater than 300 gross tons, calculate
                the CERCLA applicable amount under Sec. 138.100(b)(1) based on a
                vessel carrying hazardous substances as cargo.
                 (d) Self-insurance method. The COFR Operator may establish and
                maintain evidence of financial responsibility using the self-insurance
                method as follows:
                 (1) Submit to the Director the financial statements specified in
                paragraphs (e)(1) through (4) of this section for the fiscal year
                preceding the date the COFR Operator signs the Application or request
                for COFR renewal.
                 (2) Demonstrate that the COFR Operator maintains, in the United
                States, working capital and net worth, each in amounts equal to or
                greater than the total applicable amount, calculated as follows:
                 (i) If the self-insurer has multiple vessels, calculate the total
                applicable amount based on the vessel with the greatest total
                applicable amount.
                 (ii) In the case of a vessel greater than 300 gross tons, calculate
                the CERCLA applicable amount under Sec. 138.100(b)(1) based on a
                vessel carrying hazardous substances as cargo.
                 (e) Reporting requirements for self-insurers and financial
                guarantors. (1) Each self-insurer and financial guarantor must submit
                the following reports to the Director with the Application and annually
                thereafter, within the deadlines specified in paragraph (e)(4) of this
                section:
                 (i) Submit the self-insurer or financial guarantor's 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.
                 (ii) Accompany the financial statements with a declaration from the
                self-insurer or financial guarantor's chief financial officer,
                treasurer, or equivalent official, certifying the amount of the self-
                insurer or financial guarantor's current assets, and the amount of the
                self-insurer or financial guarantor's total assets included in the
                accompanying balance sheet, which are located in the United States.
                 (iii) If the financial statements cannot be submitted in non-
                consolidated form, submit a consolidated statement accompanied by an
                additional declaration prepared by the same Certified Public
                Accountant--
                 (A) Verifying the amount by which the total assets located in the
                United States exceed the self-insurer or financial guarantor's total
                (worldwide) liabilities, and the self-insurer or financial guarantor's
                current assets located in the United States exceed the self-insurer or
                financial guarantor's total (worldwide) current liabilities;
                 (B) Specifically naming the self-insurer or financial guarantor;
                 (C) Confirming that the amounts so verified relate only to the
                self-insurer or financial guarantor, apart from any parent or other
                affiliated entity; and
                 (D) Identifying the consolidated financial statement to which it
                applies.
                 (2) When the self-insurer or financial guarantor's demonstrated net
                worth is not at least ten times the cumulative total applicable
                amounts, their chief financial officer, treasurer, or equivalent
                official must submit to the Director with the Application and semi-
                annually thereafter, within the deadline specified in paragraph (e)(4)
                of this section, an affidavit stating that neither their working
                capital nor net worth fell during the first 6 months of the self-
                insurer or financial guarantor's current fiscal year, below the
                cumulative total applicable amounts.
                 (3) All self-insurers and financial guarantors must--
                 (i) Submit, upon the Director's request, additional financial
                information within the time specified; and
                 (ii) Notify the Director in writing within 5 days following the
                date the self-insurer or financial guarantor knows, or has reason to
                know, that its working capital or net worth has fallen below the total
                applicable amounts.
                 (4) All required annual financial statements and declarations must
                be submitted to the Director within 90 days after the close of the
                self-insurer or financial guarantor's fiscal year. All required semi-
                annual financial statements and declarations must be submitted to the
                Director within 30 days after the close of the applicable 6-month
                period. The Director will grant an extension of the time limits for
                submissions under this paragraph only as provided in Sec. 138.60(e).
                 (5) A failure by a self-insurer or financial guarantor to timely
                submit to the Director any statement, data, notification, or other
                submission required may result in the Director denying or revoking the
                COFR, and may prompt enforcement action as provided under Sec.
                138.170.
                 (6) The Director may waive the working capital requirement for any
                self-insurer or financial guarantor that--
                 (i) 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 the Internal Revenue Code (26
                U.S.C. 501(c)), provided that the self-insurer or financial guarantor
                demonstrates in writing that the waiver would benefit a local public
                interest; or
                 (ii) Demonstrates in writing that working capital is not a
                significant factor in the self-insurer or financial guarantor's
                financial condition, in which case the self-insurer or financial
                guarantor's net worth in relation to the required cumulative total
                applicable amounts, and a history of stable operations, are the major
                elements considered by the Director.
                 (f) Other guaranty methods for establishing evidence of financial
                responsibility. (1) The COFR Operator may request that the Director
                accept a guaranty method for establishing evidence of financial
                responsibility that is different from one of the methods described in
                paragraphs (b) through (e) of this section as follows:
                 (i) The COFR Operator must submit the request to the Director in
                writing, at least 90 days prior to the date the COFR is required.
                 (ii) The request must describe in detail: The method proposed; the
                reasons why the COFR Operator does not wish to (or is unable to) use
                one of the methods described in paragraphs (b) through (e) of this
                section; and how the proposed guaranty method assures that the vessel's
                responsible parties have the financial ability to meet their potential
                liabilities under OPA 90 and CERCLA in the event of an incident or a
                release.
                 (iii) Each COFR Operator making a request under this paragraph must
                provide the Director a proposed guaranty form that includes all the
                elements described in paragraphs (g) and (h) of this section.
                 (2) The Director will not accept a self-insurance method other than
                the one described in paragraph (d) of this section. The Director also
                will not accept a guaranty method under this paragraph that merely
                deletes or alters a requirement or provision of one of the guaranty
                methods described in paragraphs (b) through (e) of this section (for
                example, one that alters the termination clause of the Insurance
                Guaranty).
                 (3) A Director's decision to accept an alternative guaranty method
                of establishing evidence of financial responsibility under this
                paragraph is final agency action.
                [[Page 68146]]
                 (g) Additional rules regarding multiple guarantors. If more than
                one guarantor executes the relevant guaranty form, the following rules
                apply:
                 (1) If a guarantor's percentage of vertical participation is
                specified on the relevant guaranty form, the guarantor is subject to
                direct action and is liable for the payment of costs and damages under
                OPA 90 or CERCLA, as applicable, only in accordance with the percentage
                of vertical participation so specified for that guarantor.
                 (2) Participation in the form of layering (tiers, one in excess of
                another) is not permitted. Only vertical participation on a percentage
                basis and participation with no specified percentage allocation is
                acceptable.
                 (3) If no percentage of vertical participation is specified for a
                guarantor on the relevant guaranty form, the guarantor's liability is
                joint and several for the total of the unspecified portion.
                 (4) The participating guarantors must designate a lead guarantor
                having authority to bind all of the participating guarantors for
                actions required of guarantors under OPA 90 or CERCLA and this subpart,
                including but not limited to reporting changes in the evidence of
                financial responsibility as provided in Sec. 138.150(d), receipt of
                source designations, advertisement of source designations and the
                responsible party's claims procedures, and receipt and settlement of
                claims.
                 (h) Direct action. (1) Each guarantor providing evidence of
                financial responsibility must submit to the Director a written
                acknowledgment by the guarantor that a claimant (including a claimant
                by right of subrogation) may assert any claim for costs or damages
                arising under OPA 90, CERCLA, or both, directly against the guarantor,
                regardless of whether the claim is asserted in an action in court or
                other proceeding. The guarantor must also acknowledge that, in the
                event a claim is asserted directly against the guarantor under OPA 90,
                CERCLA, or both, the guarantor may invoke only the following rights and
                defenses--
                 (i) The incident, release, or both, were caused by the willful
                misconduct of a responsible party for whom the guaranty was provided;
                 (ii) All rights and defenses, which would be available to the
                responsible party under OPA 90, CERCLA, or both, as applicable;
                 (iii) A defense that the amount of the claim, or all claims
                asserted with respect to the same incident or release, whether asserted
                in court or in any other proceeding, exceeds the amount of the
                guaranty, except when the guaranty is based on the gross tonnage of the
                vessel (instead of the statutory minimums) and the guarantor knew or
                should have known that the applicable tonnage certificate was incorrect
                (see Sec. 138.50(f)); and
                 (iv) The claim is not one made under OPA 90, CERCLA, or both.
                 (2) Except when the guaranty is based on the gross tonnage of the
                vessel (instead of the statutory minimums) and the guarantor knew or
                should have known that the evidence of financial responsibility or
                applicable tonnage certificate is incorrect (see Sec. 138.50(f)), a
                guarantor who provides evidence of financial responsibility under this
                subpart will be liable, with respect to any one incident or release, or
                both, as applicable, only for the amount of costs and damages specified
                in the evidence of financial responsibility.
                 (3) A guarantor will not be considered to have consented to direct
                action under any law other than OPA 90 or CERCLA, or to unlimited
                liability under any law or in any venue, solely because the guarantor
                has provided evidence of financial responsibility under this subpart.
                 (4) In the event of any finding that the liability of a guarantor
                under OPA 90 or CERCLA exceeds the amount of the guaranty provided
                under this subpart, that guaranty is considered null and void with
                respect to that excess.
                 (i) Process upon disapproval of guarantor. If the Director intends
                to disapprove or revoke the approval of a guarantor (for example, due
                to the guarantor's change in financial position), the Director will
                notify the COFR Operator of the need to establish new evidence of
                financial responsibility within a specified period.
                 (1) If the COFR Operator establishes, or causes to be established,
                new acceptable evidence of financial responsibility within the period
                specified by the Director in the notice, the Application if otherwise
                complete will be approved or the COFR will remain in effect, and the
                COFR Operator will not have to pay a new Application fee or
                certification fee.
                 (2) If the COFR Operator fails to establish, or cause to be
                established, new acceptable evidence of financial responsibility within
                the period specified by the Director in the notice, the Director may
                deny or revoke the COFR and, if revoked, the COFR Operator will have to
                apply for a new COFR and pay a new certification fee. The COFR
                Operator's failure to establish, or cause to be established, new
                acceptable evidence of financial responsibility within the period
                specified by the Director may also result in enforcement as provided
                under Sec. 138.170.
                Sec. 138.120 Fees.
                 (a) Fee payment methods. Each COFR Operator applying for a COFR, or
                requesting a COFR renewal, must pay the fees required by paragraphs (b)
                and (c) of this section as follows:
                 (1) All fees required by this section must be paid in United States
                dollars.
                 (2) For COFR Operators using eCOFR as provided under Sec.
                138.60(c)(1)(i), credit card payment is required.
                 (3) For COFR Operators submitting Applications and requests for
                COFR renewal under Sec. 138.60(c)(1)(ii) through (iv) (email, fax, and
                mail submissions), the fees must be paid by a check, cashier's check,
                draft, or postal money order, made payable to the ``U.S. Coast Guard''.
                Cash payments will not be accepted.
                 (i) For Applications and requests for COFR renewal submitted under
                Sec. 138.60(c)(1)(ii) and (iii) (email and fax submissions,
                respectively), all fee payments must be received by the Director no
                later than 21 days following submission of the Application or request
                for COFR renewal.
                 (ii) For Applications and requests for COFR renewal submitted under
                Sec. 138.60(c)(1)(iv) (mail submissions), all fee payments must be
                enclosed with the Application or request for COFR renewal.
                 (4) Any failure to timely pay the fees required by this section may
                result in COFR denial or revocation, debt collection (see 6 CFR part
                11, 44 CFR part 11, and 31 CFR parts 285, and 900 through 904), and
                such other enforcement under Sec. 138.170 as may be appropriate.
                 (b) Application fee. (1) Except as provided in paragraph (b)(2) of
                this section, the COFR Operator must pay a non-refundable Application
                fee of $200 for each Application submitted under this subpart (for each
                Application for one or more Individual Certificates, for a Fleet
                Certificate, or for a Master Certificate).
                 (2) An Application fee is not required when the COFR Operator
                submits--
                 (i) A request for an additional Individual Certificate under an
                existing Application;
                 (ii) A request to amend an Application;
                 (iii) A request for Certificate renewal; or
                 (iv) A request to reinstate a Certificate, if submitted within 90
                days following the Certificate's revocation.
                 (c) Certification fees. In addition to the Application fees
                required by paragraph (b) of this section, each COFR
                [[Page 68147]]
                Operator who submits an Application or request for COFR renewal must
                pay the following certification fees:
                 (1) $100 for each vessel listed in, or added to, an Application for
                one or more Individual Certificates;
                 (2) $100 for each Application for a Fleet Certificate or Master
                Certificate; and
                 (3) $100 for each request for renewal of an Individual Certificate,
                a Fleet Certificate or a Master Certificate.
                 (d) Fee refunds. (1) A certification fee will be refunded, upon
                receipt by the Director of a written request, if the Application or
                request for COFR renewal is denied by the Director, or if the
                Application is withdrawn by the COFR Operator before the Director
                issues the COFR.
                 (2) Overpayments of Application and certification fees will be
                refunded to the COFR Operator.
                Sec. 138.130 Agents for Service of process.
                 (a) Designation of U.S. agents for service of process. Each COFR
                Operator and guarantor must designate on the forms submitted a person
                located in the United States as its U.S. agent for service of process
                and (in the event of an incident, a release, or both) for receipt of
                notices of source designation, claims presented under OPA 90, CERCLA,
                or both, and lawsuits brought under OPA 90, CERCLA, or both.
                 (b) U.S. agent for service of process acknowledgment. Each U.S.
                agent for service of process designated under paragraph (a) must
                acknowledge the agency designation in writing unless the agent has
                already submitted a written master (that is, blanket) agency
                acknowledgment to the Director showing that the agent has agreed in
                advance to act as the U.S. agent for service of process for the COFR
                Operator or guarantor in question.
                 (c) How to change the U.S. agent for service of process. A COFR
                Operator or guarantor may change a designated U.S. agent for service of
                process, at any time and for any reason, by submitting a new U.S. agent
                for service of process designation in accordance with the procedure in
                paragraph (a), and by causing the new U.S. agent for service of process
                to submit the agency acknowledgment required by paragraph (b) of this
                section.
                 (d) Replacement of unavailable U.S. agent for service of process.
                In the event a designated U.S. agent for service of process becomes
                unavailable at any time, for any reason, the COFR Operator or guarantor
                must designate a new U.S. agent for service of process in accordance
                with the procedures in paragraph (a), within 5 days of the COFR
                Operator or guarantor becoming aware of such unavailability. In
                addition, the new U.S. agent for service of process must submit to the
                Director the agency acknowledgment required by paragraph (b) of this
                section.
                 (e) Service on the Director. If a designated U.S. agent for service
                of process cannot be served, then service of process on the Director,
                as provided in this paragraph, will constitute valid service of process
                on the COFR Operator or guarantor. Service of process on the Director
                will not be effective unless the server--
                 (1) Has sent a copy of each document served on the Director to the
                COFR Operator or guarantor, as applicable, by registered mail, at the
                COFR Operator or guarantor's last known address on file with the
                Director;
                 (2) Indicates, at the time process is served upon the Director,
                that the purpose of the mailing is to effect service of process on the
                COFR Operator or guarantor; and
                 (3) Provides evidence acceptable to the Director at the time
                process is served upon the Director, that service was attempted on the
                designated U.S. agent for service of process but failed, stating the
                reasons why service on the U.S. agent for service of process was not
                possible, and that the document was sent to the COFR Operator or
                guarantor, as required by paragraph (e)(1) of this section.
                Sec. 138.140 Application withdrawals, COFR denials and revocations.
                 (a) Application withdrawal. A COFR Operator, or anyone authorized
                to act on their behalf, may withdraw an Application at any time prior
                to issuance of the COFR.
                 (b) Application denials and COFR revocations. The Director may deny
                an Application or revoke a COFR, and the United States may initiate
                enforcement under Sec. 138.170, for any failure to comply with the
                requirements of this subpart, including--
                 (1) If the COFR Operator, or other person acting on the COFR
                Operator's behalf, makes a false statement in, or in connection with,
                any submission required by this subpart;
                 (2) If the COFR Operator, or other person acting on the COFR
                Operator's behalf, fails to establish or maintain acceptable evidence
                of financial responsibility, as required by this subpart;
                 (3) If the COFR Operator fails to pay the Application and
                certification fees required by Sec. 138.120;
                 (4) If the COFR Operator or guarantor fails to designate and
                maintain a U.S. agent for service of process as required by Sec.
                138.130;
                 (5) If the COFR Operator, or other person acting on the COFR
                Operator's behalf, fails to comply with, or respond to, lawful
                inquiries, regulations, or orders of the U.S. Coast Guard pertaining to
                the activities subject to this subpart;
                 (6) If the COFR Operator, or other person acting on the COFR
                Operator's behalf, fails to timely report information required to be
                reported to the Director under this subpart, including failing to
                timely submit to the Director statements, data, financial information,
                notifications, affidavits, or other submissions required by this
                subpart; or
                 (7) If the Director obtains information indicating that the
                Application should be denied or that a new COFR is required (for
                example, a permanent vessel transfer, new COFR Operator, vessel
                renaming, guaranty termination, disapproval of a guarantor).
                 (c) Procedure for reinstating COFRs following termination of
                guaranties. If a COFR is revoked by the Director under paragraph (b)(2)
                of this section based on the expiration of 30 days following the date
                the Director receives a guarantor's notice of termination as provided
                under Sec. Sec. 138.110(a)(3) and 138.150(d), the Director may
                reinstate the COFR if the guarantor promptly notifies the Director
                following the revocation that the guarantor rescinded the termination
                and that there was no gap in guarantor coverage.
                 (d) Notice to COFR Operator of intent to deny an Application or
                revoke a COFR. If the Director obtains information indicating that an
                Application should be denied or that a COFR should be revoked for
                reasons that the COFR Operator may not be aware of, the Director will
                notify the COFR Operator, in writing, stating the reason for the
                intended action.
                 (1) A notice from the Director that an Application is incomplete
                will be considered a denial unless the Application is completed by the
                COFR Operator within the period specified in the notice. A COFR subject
                to revocation remains valid until the COFR is revoked as provided in
                Sec. 138.140(d)(2) and (3).
                 (2) If the Director issues a notice of intent to deny an
                Application or revoke a COFR due to a violation under paragraph (b) of
                this section, the COFR Operator may demonstrate compliance to the
                Director in writing by no later than the date specified by the Director
                in the notice. If the COFR Operator demonstrates compliance by that
                date, the Application will remain under consideration, and any current
                COFR will remain in effect, unless and until
                [[Page 68148]]
                the Director issues a written decision denying the Application or
                revoking the COFR, as applicable. Otherwise, the Application denial or
                COFR revocation is effective as of the date specified by the notice.
                 (3) The denial of an Application or revocation of a COFR does not
                terminate the guaranty.
                 (e) Request for reconsideration. (1) A COFR Operator may ask the
                Director to reconsider a denial of the COFR Operator's Application or
                the revocation of a COFR as follows:
                 (i) The COFR Operator must submit the request for reconsideration,
                in writing, to the Director no later than 21 days after the date of the
                denial or revocation.
                 (ii) The submission must state the COFR Operator's reasons for
                requesting reconsideration and include all supporting documentation.
                 (2) A decision by the Director on reconsideration of an Application
                denial or a COFR revocation is final agency action. If the Director
                does not issue a written decision on the request for reconsideration
                within 30 days after its submission, the request for reconsideration
                will be deemed to have been denied, and the Application denial or COFR
                revocation will be deemed to have been affirmed as a matter of final
                agency action. Unless the Director issues a decision reversing the
                revocation, the COFR revocation remains in effect.
                 (f) Duty to remedy violations. If the COFR for a vessel expires or
                is revoked while the vessel is located in the navigable waters, at any
                port or other place subject to the jurisdiction of the United States,
                or in the Exclusive Economic Zone, the COFR Operator and the vessel's
                other responsible parties will be deemed in violation of this subpart.
                In such event, the COFR Operator or, if unavailable or no longer
                operating the vessel, the vessel's current responsible parties, must
                notify the Director within 24 hours, by email or other electronic
                means. The notice must include the information required by Sec.
                138.150(b) and must establish new evidence of financial responsibility,
                designate a new COFR Operator if applicable, and cure any other
                violation of this subpart.
                Sec. 138.150 Reporting requirements.
                 (a) Report changes of submitted information. When there is a change
                in any of the facts contained in an Application, a request for COFR
                renewal, evidence of financial responsibility, or other submission made
                under this subpart, the change must be reported, in writing, to the
                Director. The reports required by this section may be submitted with,
                but are in addition to, other submissions required by this subpart (for
                example, Applications, requests for COFR renewal, semi-annual and
                annual financial reports, Master Certificate reports).
                 (b) A 21-day prior reporting requirement of permanent vessel
                transfers and other changes requiring issuance of a new COFR. Current
                COFR Operators of vessels, and owners or operators of vessels not
                currently in U.S. navigable waters or the U.S. Exclusive Economic Zone,
                must report to the Director, and (if applicable) to the guarantor, the
                following information, no later than 21 business days before the new
                COFR is required:
                 (1) The number of the current COFR;
                 (2) The name of the covered vessel;
                 (3) The type of change planned;
                 (4) The date the change will take place;
                 (5) The reason for the change;
                 (6) For a vessel that will be located in U.S. navigable waters or
                U.S. Exclusive Economic Zone on the date the change is scheduled to
                take place, where the vessel will be located on that date (for example,
                name and location of port);
                 (7) For a vessel name change, the vessel's new legal name;
                 (8) For the planned transfer of a vessel to a new responsible
                party, and even if the transferee's intent is to scrap or otherwise
                dispose of the vessel, the name and contact information of the
                responsible party to whom the vessel is being transferred;
                 (9) For a change of COFR Operator, the name and contact information
                of the person who will replace the COFR Operator; and
                 (10) Any other changes in the information previously submitted to
                ensure the information on record at the NPFC is current.
                 (c) Three-day prior reporting of changes not requiring issuance of
                a new COFR. In addition to the prior reporting required by paragraph
                (b) of this section, the COFR Operator must report any change to
                information contained in a submission to the Director that does not
                require issuance of a new COFR, by no later than 3 business days before
                implementing the change, including, but not limited to: Changes to the
                U.S. agent for service of process (other than termination), a change of
                a non-operator vessel owner, new contact information, and changes in
                vessel particulars (for example, flag, measurement, type, and scheduled
                vessel scrapping).
                 (d) Reporting by guarantors. Each guarantor (or, if there are
                multiple guarantors, each lead guarantor) must give the Director 30
                days notice before terminating a guaranty as provided in Sec.
                138.110(a)(3), explaining the reason for the intended termination, once
                known, or should have known, in the ordinary course of business.
                 (e) Enforcement; deadline exceptions. A failure to timely submit
                the reports required by this section may result in enforcement actions
                as provided in Sec. 138.170. Exceptions to the reporting deadlines
                will only be granted as provided in Sec. 138.60(e).
                Sec. 138.160 Non-owning COFR Operator's responsibility for
                identification.
                 (a) Each COFR Operator of a vessel with a COFR, other than an
                unmanned, non-self-propelled barge, who is not also an owner of the
                vessel must ensure that the original or a legible copy of the vessel's
                demise charter-party (or other written document on the owner's
                letterhead, signed by the vessel owner, which specifically identifies
                the COFR Operator named on the COFR) 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 the Director or other United States
                Government official.
                Sec. 138.170 Enforcement.
                 (a) Applicability. Any person who fails to comply with the
                requirements of this subpart, including the reporting requirements in
                Sec. 138.150, may be subject to enforcement as provided in this
                section, including if--
                 (1) The COFR Operator fails to maintain acceptable evidence of
                financial responsibility as required;
                 (2) The name of a covered vessel is changed without reporting the
                change to the Director as required in Sec. 138.150;
                 (3) The COFR Operator ceases, for any reason, to be an operator of
                a covered vessel, including when a vessel is scrapped or transferred to
                a new owner or operator, and a new Application and report have not been
                submitted to the Director as required by Sec. Sec. 138.80 and 138.150;
                or
                 (4) The COFR Operator fails to maintain a U.S. agent for service of
                process.
                 (b) Non-compliance. During a period of non-compliance with this
                subpart, all use by the vessel of the navigable waters of the United
                States, of any port or other place subject to the jurisdiction of the
                United States, or of the Exclusive Economic Zone to transship or
                lighter oil destined for a place subject to the jurisdiction of the
                United States, is forbidden.
                 (c) Withholding and revoking vessel clearance. The Secretary of the
                [[Page 68149]]
                Department of Homeland Security will withhold or revoke the clearance
                required by 46 U.S.C. 60105 of any vessel subject to this subpart that
                does not have a COFR or for which the evidence of financial
                responsibility required has not been established and maintained.
                 (d) Denying vessel entry, and detention. The U.S. Coast Guard may
                deny entry to any port or other place in the United States or the
                navigable waters, and may detain at any port or other place in the
                United States in which it is located, any vessel subject to this
                subpart, which does not have a COFR or for which the evidence of
                financial responsibility required by this subpart has not been
                established and maintained.
                 (e) Seizure and forfeiture. In accordance with OPA 90, any vessel
                subject to this subpart which is found in the navigable waters without
                a COFR, or for which the necessary evidence of financial responsibility
                has not been established and maintained as required, is subject to
                seizure by, and forfeiture to, the United States.
                 (f) Administrative and judicial penalties and other relief. (1) Any
                person who fails to comply with the requirements of this subpart or the
                evidence of financial responsibility requirements of OPA 90, CERCLA, or
                both, including a failure to comply with the reporting requirements in
                Sec. 138.150, is subject to civil administrative and judicial
                penalties under OPA 90 and CERCLA, as applicable. In addition, under
                OPA 90, the Attorney General may secure such relief as may be necessary
                to compel compliance with OPA 90 and this subpart, including
                termination of operations.
                 (2) Under 18 U.S.C. 1001, any person making a false statement in,
                or in connection with, a submission under OPA 90 or CERCLA or this
                subpart is subject to prosecution.
                 (3) Any person who fails to timely pay the fees required by Sec.
                138.120 or any other amounts due under OPA 90 or CERCLA or this subpart
                may also be subject to Federal debt collection under 6 CFR part 11, 44
                CFR part 11 and 31 CFR parts 285, and 900 through 904.
                PART 153--CONTROL OF POLLUTION BY OIL AND HAZARDOUS SUBSTANCES,
                DISCHARGE REMOVAL
                0
                5. The authority citation for part 153 continues to read as follows:
                 Authority: 14 U.S.C. 503; 33 U.S.C. 1321, 1903, 1908; 42 U.S.C.
                9615; 46 U.S.C. 6101; E.O. 12580, 3 CFR, 1987 Comp., p. 193; E.O.
                12777, 3 CFR, 1991 Comp., p. 351; Department of Homeland Security
                Delegation No. 0170.1.
                Subpart D--[Removed]
                0
                6. Subpart D, consisting of Sec. Sec. 153.401 through 153.417, is
                removed.
                 Dated: 22 November 2021.
                Mark J. Fedor,
                Rear Admiral, U.S. Coast Guard, Assistant Commandant for Resources.
                [FR Doc. 2021-26046 Filed 11-30-21; 8:45 am]
                BILLING CODE 9110-04-P
                

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