senate Bill S1677

2013-2014 Legislative Session

Relates to increasing liability for petroleum discharge

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Archive: Last Bill Status - In Committee


  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
  • Signed/Vetoed by Governor

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Senate Actions - UPPERCASE
Jan 08, 2014 referred to environmental conservation
Jan 09, 2013 referred to environmental conservation

S1677 - Bill Details

Current Committee:
Senate Environmental Conservation
Law Section:
Navigation Law
Laws Affected:
Amd §181, Nav L
Versions Introduced in 2011-2012 Legislative Session:
S4551

S1677 - Bill Texts

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Relates to increasing liability for petroleum discharge.

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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.

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                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  1677

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                               (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;

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD04618-01-3

S. 1677                             2

  (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

S. 1677                             3

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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