On May 13, 2020, the USCG published a Notice of Proposed Rulemaking advising of its intent to amend and update the regulations governing financial responsibility for environmental pollution under OPA 90 and CERCLA. Triggering these changes include a desire to close compliance gaps that cause untimely responses to oil spills due to operators failings to timely report certain changes relevant to financial responsibility. The USCG also aims to improve its ability to verify vessel compliance with COFR Regulations. In the USCG’s own words: “These changes are necessary to 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.” Additional revisions focus on the National Pollution Fund Center’s administration of the COFR program, including a technologically-competent update regarding electronic record keeping. Highlights of the proposed changes include:

  • 33 CFR Part 138, Subpart A: Extending the regulatory requirement to establish and maintain evidence of financial responsibility to any tanker vessel between 100 and 300 gross tons.
    • Expands the population of vessels under 300 gross tons that are required to establish and maintain evidence of financial responsibility under 33 USC 2716, by removing an exception for vessels not engaged in transshipping or lightering.
  • New regulatory text expressly authorizing COFR Operators, guarantors, and agents for service of process to submit signed scanned documents.
  • Permitting COFR Operators submitting Applications or requests for COFR renewal by email or fax to pay COFR Application and certification fees up to 21 days after submission;
    • This method would replace the current rule’s requirement to pay certification fees before the NPFC issues the COFR.
    • 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.
    • Requires the COFR Operator to include a report with the Application providing information on the vessels covered by the Master Certificate.
    • Add a new requirement that certain Master Certificate application information be updated.
  • Updating and simplifying 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 “Measurement of Vessels” final rule (81 FR 18701, March 31, 2016), which amended the U.S. Tonnage regulations in 46 CFR part 69;
    • Requires reporting of the gross tonnage measurement system used and submission of a copy of the tonnage certifying document, upon request;
  • Adding new provisions describing the COFR program’s current procedures for determining the acceptability of COFR guarantors.
    • Modifying past technical amendments to implement the Electronic COFR (eCOFR).
    • Removes surety bonds as a specifically mentioned method for establishing and maintaining evidence of financial responsibility, because it falls under the “other method” provision.
    • Formalizes the current NPFC practice of guarantor liability for 30 days following NPFC receipt of notice of cancellation.
    • Describes current practice for establishing and maintaining the acceptability of COFR insurance guarantors;
    • Clarifies the net worth and working capital requirements for financial guarantors to reflect current practice, which requires net worth and working capital to be based on the aggregate total applicable amounts of each vessel owned by one operator.
  • Revises reporting requirements to emphasize prior notices of change that will require a new COFR before the change occurs;
    • Changes that will 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.
  • The proposed revisions also clarify and simplify terminology for consistency with law and COFR business practices.
  • Removes 33 CFR part 135 (OCLSA Fund) and subpart D of 33 CFR Part 153 (311(k) Fund) because OPA 90 repealed the legal authorities for them.

The USCG and OMB will collect public comments on the proposed rulemaking on the Federal Register’s Website, which will be open until August 11, 2020.