Bill S1677-2013

Relates to increasing liability for petroleum discharge

Relates to increasing liability for petroleum discharge.

Details

Actions

  • Jan 8, 2014: REFERRED TO ENVIRONMENTAL CONSERVATION
  • Jan 9, 2013: REFERRED TO ENVIRONMENTAL CONSERVATION

Memo

BILL NUMBER:S1677

TITLE OF BILL: An act to amend the navigation law, in relation to increasing liability for the discharge of petroleum

PURPOSE OR GENERAL IDEA OF BILL: The purpose of this bill is to update certain liability provisions of the State Oil Spill fund.

SUMMARY OF SPECIFIC PROVISIONS: This bill would increase the ability of the oil spill to recover clean up costs and damages that are caused by an oil spill.

EFFECTS OF PRESENT LAW WHICH THIS BILL WOULD ALTER: Amends § 181(3) of the Navigation Law.

JUSTIFICATION: The New York Environmental Protection and Spill Compensation Fund, commonly referred to as the Oil Spill Fund, was established in 1977 to expedite clean ups and address oil spills not covered by the federal legislation.

The Federal Oil Pollution Act of 1990 established liability limits for entities subject to the federal reporting requirements and included a provision to update liability limits automatically based on changes in the Consumer Price Index. The accompanying regulation indicated that such changes were necessary to "preserve the deterrent effect and polluter pays principle embodied in the OPA 90 liability provisions."

The State provisions establishing liability limits for petroleum discharges not resulting from negligence were last amended in 1992. This legislation would update those limits, based on the adjustments to the Consumer Price Index since 1992, to reflect inflation. An update to the State's liability provision will serve the same purpose.

PRIOR LEGISLATIVE HISTORY:

S.4551 of 2011-2012; Referred to Environmental Conservation

FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS: None to the State.

EFFECTIVE DATE: This act shall take effect immediately.


Text

STATE OF NEW YORK ________________________________________________________________________ 1677 2013-2014 Regular Sessions IN SENATE (PREFILED) January 9, 2013 ___________
Introduced by Sen. GRISANTI -- read twice and ordered printed, and when printed to be committed to the Committee on Environmental Conservation AN ACT to amend the navigation law, in relation to increasing liability for the discharge of petroleum THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Subdivision 3 of section 181 of the navigation law, as amended by chapter 584 of the laws of 1992, subparagraphs (ii) and (iii) of paragraph (e) as amended by chapter 585 of the laws of 1992 and such subparagraphs as further amended by section 104 of part A of chapter 62 of the laws of 2011, is amended to read as follows: 3. (a) The owner or operator of a major facility or vessel which has discharged petroleum shall be strictly liable, without regard to fault, subject to the defenses enumerated in subdivision four of this section, for all cleanup and removal costs and all direct and indirect damages paid by the fund. However, the cleanup and removal costs and direct and indirect damages which may be recovered by the fund with respect to each incident shall not exceed: (i) for a tank vessel, the greater of: (1) [one] TWO thousand [two hundred] dollars per gross ton; or (2) (A) in the case of a vessel greater than three thousand gross tons, [ten] SIXTEEN million dollars; or (B) in the case of a vessel [or] OF three thousand gross tons or less, [two] THREE million dollars; (ii) for any other vessel subject to the liability limits set forth in the Federal Oil Pollution Act of 1990 (33 U.S.C. 2701 et seq.), [six hundred] ONE THOUSAND dollars per gross ton or [five] EIGHT hundred thousand dollars, whichever is greater;
(iii) for any other vessel not subject to the liability limits set forth in the Federal Oil Pollution Act of 1990 (33 U.S.C. 2701 et seq.), [three] FIVE hundred dollars per gross ton for each vessel; (iv) for a major facility that is defined as an "onshore facility" and covered by the liability limits established under the Federal Oil Pollution Act of 1990 (33 U.S.C. 2701 et seq.), [three] FIVE hundred fifty million dollars. This liability limit shall not be considered to increase the liability above the federal limit of three hundred fifty million dollars per incident[.]; (v) for a major facility not covered in subparagraph (iv) of this paragraph, [fifty] SEVENTY-FIVE million dollars. (b) The liability limits established in subparagraphs (i) and (ii) of paragraph (a) of this subdivision shall not be considered to increase liability above the federal limits for tank vessels or vessels as defined in the Federal Oil Pollution Act of 1990 (33 U.S.C. 2701 et seq.). (c) (i) The department shall establish, by regulation, a limit of liability under this subdivision of less than [three] FIVE hundred fifty million dollars but not less than [eight] TWELVE million dollars, for major facilities defined as "onshore facilities" under the Federal Oil Pollution Act of 1990 (33 U.S.C. 2701 et seq.), taking into account facility size, storage capacity, throughput, proximity to environ- mentally sensitive areas, type of petroleum handled, and other factors relevant to risks posed by the class or category of facility. (ii) The department shall establish, by regulation, a limit of liabil- ity under this subdivision of [fifty] SEVENTY-FIVE million dollars or less for major facilities other than vessels that are not defined as "onshore facilities" under the Federal Oil Pollution Act of 1990 (33 U.S.C. 2701 et seq.), taking into account facility size, storage capaci- ty, throughput, proximity to environmentally sensitive areas, type of petroleum handled, and other factors relevant to risks posed by the class or category of facility. (d) The provisions of paragraph (a) of this subdivision shall not apply and the owner or operator shall be liable for the full amount of cleanup and removal costs and damages if it can be shown that the discharge was the result of (i) gross negligence or willful misconduct, within the knowledge and privity of the owner, operator or person in charge, or (ii) a gross or willful violation of applicable safety, construction or operating standards or regulations. In addition, the provisions of paragraph (a) of this subdivision shall not apply if the owner or operator fails or refuses: (1) to report the discharge as required by section one hundred seven- ty-five of this article and the owner or operator knows or had reason to know of the discharge; or (2) to provide all reasonable cooperation and assistance requested by the federal on-scene coordinator or the commissioner or his designee in connection with cleanup and removal activities. (e) (i) The owner or operator of a vessel shall establish and maintain with the department evidence of financial responsibility sufficient to meet the amount of liability established pursuant to paragraph (a) of this subdivision. The owner or operator of any vessel which demonstrates financial responsibility pursuant to the requirements of the Federal Oil Pollution Act of 1990 (33 U.S.C. 2701 et seq.), shall be deemed to have demonstrated financial responsibility in accordance with this paragraph. (ii) The commissioner in consultation with the superintendent of financial services may promulgate regulations requiring the owner or
operator of a major facility other than a vessel to establish and main- tain evidence of financial responsibility in an amount not to exceed [twenty-five] FORTY dollars, per incident, for each barrel of total petroleum storage capacity at the facility, subject to a maximum of one million SIX HUNDRED dollars per incident per facility in an aggregate not to exceed [two] THREE million dollars per facility per year; provided, however, that if the owner or operator establishes to the satisfaction of the commissioner that a lesser amount will be sufficient to protect the environment and public health, safety and welfare, the commissioner shall accept evidence of financial responsibility in such lesser amount. In determining the sufficiency of the amount of financial responsibility required under this section, the commissioner and the superintendent of financial services shall take into consideration facility size, storage capacity, throughput, proximity to environ- mentally sensitive areas, type of petroleum handled, and other factors relevant to the risks posed by the class or category of facility, as well as the availability and affordability of pollution liability insur- ance. Any regulations promulgated pursuant to this subparagraph shall not take effect until forty-eight months after the effective date of this section. (iii) Financial responsibility under this paragraph may be established by any one or a combination of the following methods acceptable to the commissioner in consultation with the superintendent of financial services: evidence of insurance, surety bonds, guarantee, letter of credit, qualification as a self-insurer, or other evidence of financial responsibility, including certifications which qualify under the Federal Oil Pollution Act of 1990 (33 U.S.C. 2701 et seq.). (iv) The liability of a third-party insurer providing proof of finan- cial responsibility on behalf of a person required to establish and maintain evidence of financial responsibility under this section is limited to the type of risk assumed and the amount of coverage specified in the proof of financial responsibility furnished to and approved by the department. For the purposes of this section, the term "third-party insurer" means a third-party insurer, surety, guarantor, person furnish- ing a letter of credit, or other group or person providing proof of financial responsibility on behalf of another person; it does not include the person required to establish and maintain evidence of such financial responsibility. S 2. This act shall take effect immediately.

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