Federal Register - December 1, 2021
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Source: Federal Register
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Federal Register / Vol. 86, No. 228 / Wednesday, December 1, 2021 / Rules and Regulations 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 10year 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.
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 12 This estimate, based on COFR trends for currently COFRed vessels, was validated by subject matter expert in Coast Guards Vessel Certification Division.
13 Source: NPFCs COFR database.
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the premiums per vessel range between $300 and $1,000 per year.
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 cost of premium per vessel per year:
465 vessels $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 the cost of premium per vessel per year:
465 vessels 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 Guards 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
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is an incident. According to incident data from the Coast Guards 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 20162020. 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 GuarantorAffected 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 changeAffected 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
number of hours the labor cost per hour:
12 0.25 hours per submission = 3
hours 3 hours per year $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 CompensationMarch 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.
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