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Coast Guard plans to raise monetary thresholds for casualty reporting

May 2, 2017 02:36 PM

The U.S. Coast Guard is proposing to raise the monetary thresholds for reporting property damage resulting from a marine casualty and serious marine incident (SMI), both to mitigate any undue liability vessel owners and operators face and to temper the resources expended by the service to investigate these incidents.

The current thresholds for marine casualty reporting were implemented back in the 1980s and have not been amended. Thus, values have not kept pace with inflation. As a result, vessel personnel must fill out a CG-2692 marine incident report on relatively minor casualties that often prompt a Coast Guard investigation.

Coast Guard spokeswoman Amy Midgett said the service periodically reviews regulations “to ensure they are appropriate and effective.” In line with that policy, in January 2014 the service announced the availability of a Navigation and Vessel Inspection Circular (NVIC) addressing marine casualty reporting procedures. Since that time, the Coast Guard has invited public input “on its efforts to provide amplifying guidance on incidents that constitute reportable marine casualties,” she said.

“Several industry groups identified the lack of inflation adjustment for the regulatory thresholds that required Coast Guard notification and mandatory post-casualty chemical testing,” Midgett said.

Capt. Al Bernstein, owner of BB Riverboats in Cincinnati, Ohio, said he took the initiative to address the Department of Homeland Security and the Coast Guard early on about the need for updating the thresholds. “For a long time, I have been pleading with the Coast Guard to increase the dollar thresholds that trigger reporting requirements for a marine casualty and serious marine incident,” he said.

Currently, a marine casualty amounting to $25,000 or more necessitates a Coast Guard investigation. “As a result,” Bernstein said, “mariners have had to submit numerous unnecessary casualty reports, an administrative burden which takes away from our core missions and exposes vessel operators to potentially costly legal and media scrutiny.”

A Notice of Proposed Rulemaking (NPRM) posted in the Federal Register in January of this year indicated that the Coast Guard is working toward updating monetary property damage thresholds from $25,000 to $72,000 for reporting a marine casualty, and from $100,000 to $200,000 for an SMI. Purportedly, these changes could save industry stakeholders and the federal government an estimated $6.8 million over 10 years.

Midgett said an adjustment for inflation will bring thresholds in line with the initial regulatory intent to require chemical testing for the more serious incidents. The regulations, as proposed, “would allow both industry and Coast Guard personnel to focus upon higher-consequence incidents that are more likely to produce lessons learned that will assist in the prevention of accidents in the future,” she said.

“It now appears that our hard work is paying off,” Bernstein said. Yet, while he welcomed the modifications, he also had hoped the proposal would have an automatic indexing feature. “This would ensure that future threshold adjustments will account for increases in the consumer price index without going through the formal rulemaking process,” Bernstein said. “The proposed rule does not do this, and we should continue to strongly encourage it.”

The period for public comment on the NPRM closed on March 24. Midgett said the timeline for the final rule will be determined “based upon public feedback (the Coast Guard) receives and future agency considerations.”

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