Coast Guard raises casualty damage threshold to $75,000

The following are excerpts of a final rule published in the Federal Register:

(WASHINGTON) — The Coast Guard is amending the monetary property damage threshold amounts for reporting a marine casualty and for reporting a type of marine casualty called a “serious marine incident” (SMI). The original regulations that set these dollar threshold amounts were written in the 1980s and have not been updated since that time. Because the monetary thresholds for reporting have not kept pace with inflation, vessel owners and operators have been required to report relatively minor casualties. Additionally, the original regulations require mandatory drug and alcohol testing following a serious marine incident. As a result, vessel owners and operators are conducting testing for casualties that are less significant than those intended to be captured by the original regulations. Updating the original regulations will reduce the burden on vessel owners and operators, and will also reduce the amount of Coast Guard resources expended to investigate these incidents.

This final rule is effective April 18, 2018.


As described in greater detail in the notice of proposed rulemaking (NPRM), there is Coast Guard and stakeholder consensus that the 1980s property damage monetary threshold amounts listed in 46 CFR 4.03-2 and 4.05-1 have not kept pace with inflation. Over time, this has resulted in the reporting of a greater number of casualties involving relatively minor property damage. It was never our intent to require owners or operators to notify us of casualties involving relatively minor property damage. Consequently, we are amending the property damage monetary threshold amounts to eliminate the reporting of insignificant property damage incidents.

Additionally, because the regulations require mandatory drug and alcohol testing following an SMI, current regulations require chemical testing of crewmembers for casualties that reach a minimum threshold of $100,000 in property damage. Because of cost increases caused by inflation, however, casualties that result in property damage between $100,000 and $200,000 are no longer representative of a “serious” incident. The lack of inflation updates to our marine casualty regulations has resulted in an additional administrative and financial burden on vessel owners and operators, as well as on Coast Guard resources used to investigate these incidents.

Discussion of final rule

This final rule changes the reportable marine casualty property damage threshold amount in 46 CFR 4.05-1(a)(7) from $25,000 to $75,000. In the notice of proposed rulemaking (NPRM), we proposed to make this threshold $72,000, but chose $75,000 for reasons explained in the next section of this preamble. This final rule also changes the SMI property damage threshold in 46 CFR 4.03-2(a)(3) from $100,000 to $200,000. This change is the same as that proposed in the NPRM.

With the dollar amount thresholds updated to account for inflation, we expect there will be a decrease in the number of commercial vessel casualties reported to the Coast Guard. The updates in this final rule will also likely decrease the number of casualties that fall within the definition of an SMI, and thereby reduce the number of chemical tests administered following an SMI that results in $100,000.01 to $200,000 worth of property damage. However, mandatory chemical testing will still be required if the property damage meets the updated dollar threshold amount (in excess of $200,000) established in this final rule. Our intent in setting a dollar amount threshold in our marine casualty reporting regulation and within the definition of “serious marine incident” was, and remains, to ensure that the Coast Guard is aware of those incidents that could be indicative of more serious problems that may be averted in the future with timely intervention.

We expect that this final rule will result in an estimated annual cost savings to industry of $40,809 due to a reduction in the hourly burden of reporting and recordkeeping for both marine casualties and SMIs, and an estimated annual cost savings of $4,751 for chemical testing for marine casualties designated as SMIs. This final rule will also result in cost savings to the Coast Guard by reducing the hourly burden costs to investigate marine casualties, as well as the costs associated with processing marine casualty forms. As a result, the maritime industry and Coast Guard resources will be able to focus their efforts on higher consequence incidents.

Finally, this final rule makes several nonsubstantive changes throughout 46 CFR part 4 to account for Office of Management and Budget (OMB)-approved updates to forms that the maritime industry uses to report on marine casualties and SMIs. The Coast Guard provides further detail of these non-substantive changes below in Part V.G, Discussion of Comments and Changes.

Click here to view the complete final rule.

By Professional Mariner Staff