§ 553.703 What is the procedure for calculating the limit of liability adjustment for inflation?

The procedure for calculating limit of liability adjustments for inflation is as follows: (a) Formula for calculating a cumulative percent change in the Annual CPI-U. BOEM calculates the cumulative percent change in the Annual CPI-U from the year the limit of liability was established by statute, or last adjusted by regulation, whichever is later (i.e., the Previous Period), to the year in which the Annual CPI-U is most recently published (i.e., the Current Period), using the following formula: Percent change in the Annual CPI-U = [(Annual CPI-U for Current Period − Annual CPI-U for Previous Period) ÷ Annual CPI-U for Previous Period] × 100. This cumulative percent change value is rounded to one decimal place. (b) Significance threshold. (1) A cumulative increase in the Annual CPI-U equal to three percent or more constitutes a significant increase in the Consumer Price Index within the meaning of 33 U.S.C. 2704(d)(4). (2) Not later than every three years from the year the limit of liability was last adjusted for inflation, BOEM will evaluate whether the cumulative percent change in the Annual CPI-U since that year has reached a significance threshold of three percent or greater. (3) For any three-year period evaluated under paragraph (b)(2) of this section in which the cumulative percent increase in the Annual CPI-U is less than three percent, if BOEM has not issued an inflation adjustment during that period, BOEM will publish a notice of no inflation adjustment to the offshore facility limit of liability for damages in the Federal Register. (4) Once the three-percent threshold is reached, BOEM will increase by final rule the offshore facility limit of liability for damages in § 553.702 by an amount equal to the cumulative percent change in the Annual CPI-U from the year the limit was established by statute, or last adjusted by regulation, whichever is later. After this adjustment is made, BOEM will resume its process of conducting a review every three years. (5) Nothing in this section will prevent BOEM, in BOEM's sole discretion, from adjusting the offshore facility limit of liability for damages for inflation by regulation issued more frequently than every three years. (c) Formula for calculating inflation adjustments. BOEM calculates adjustments to the offshore facility limit of liability in 30 CFR 553.702 for inflation using the following formula: