S T A T E   O F   N E W   Y O R K
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                                  7625

                       2015-2016 Regular Sessions

                          I N  A S S E M B L Y

                              May 20, 2015
                               ___________

Introduced  by  M. of A. FAHY, McDONALD, STECK -- read once and referred
  to the Committee on Environmental Conservation

AN ACT to amend the navigation law, in relation to  financial  responsi-
  bility for the liability of a major facility or vessel

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. Paragraph (e) of subdivision 3 of section 181 of the  navi-
gation  law,  as amended by chapter 584 of the laws of 1992 and subpara-
graphs (ii) and (iii) as amended by chapter 585 of the laws of 1992  and
as further amended by section 104 of part A of chapter 62 of the laws of
2011, is amended and a new paragraph (f) is added to read as follows:
  (e)  (i)  The  owner or operator of a MAJOR FACILITY OR A vessel shall
establish and maintain with the department evidence of financial respon-
sibility sufficient to meet the amount of liability established pursuant
to paragraph (a) of this subdivision. A PERSON MAY NOT CAUSE  OR  PERMIT
THE  OPERATION  OF  A  MAJOR  FACILITY  OR VESSEL IN THE STATE UNTIL THE
PERSON HAS FURNISHED TO THE DEPARTMENT, AND THE DEPARTMENT HAS  APPROVED
SUCH  EVIDENCE.  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  dollars,  per  incident, for each barrel of total petroleum
storage capacity at the facility, subject to a maximum  of  one  million
dollars  per  incident  per  facility  in an aggregate not to exceed two
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

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD10958-03-5
              

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public  health,  safety  and  welfare,  the  commissioner  shall  accept
evidence of financial responsibility in such lesser amount. In determin-
ing 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 environmentally sensitive areas, type of petro-
leum 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 insurance. 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 estab-
lished 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)] (III) The liability of a third-party insurer providing proof of
financial 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.
  (F) (I) ACCEPTANCE OF PROOF OF FINANCIAL RESPONSIBILITY SHALL EXPIRE:
  (1) ONE YEAR FROM ITS ISSUANCE FOR SELF-INSURANCE;
  (2)  ON  THE EFFECTIVE DATE OF A CHANGE IN THE SURETY BOND, GUARANTEE,
INSURANCE AGREEMENT, LETTER OF  CREDIT,  OR  OTHER  PROOF  OF  FINANCIAL
RESPONSIBILITY; OR
  (3)  ON  THE EXPIRATION OR CANCELLATION OF THE SURETY BOND, GUARANTEE,
INSURANCE AGREEMENT, LETTER OF  CREDIT,  OR  OTHER  PROOF  OF  FINANCIAL
RESPONSIBILITY.
  (II) THE PERSON WHOSE PROOF OF FINANCIAL RESPONSIBILITY IS ACCEPTED BY
THE  DEPARTMENT  UNDER THIS SECTION SHALL NOTIFY THE DEPARTMENT AT LEAST
THIRTY DAYS BEFORE THE EFFECTIVE DATE OF A CHANGE, EXPIRATION OR CANCEL-
LATION IN THE SURETY BOND, GUARANTEE,  INSURANCE  AGREEMENT,  LETTER  OF
CREDIT,  OR  OTHER  PROOF  OF  FINANCIAL RESPONSIBILITY. APPLICATION FOR
RENEWAL OF ACCEPTANCE OF PROOF OF FINANCIAL  RESPONSIBILITY  UNDER  THIS
SECTION  MUST  BE  FILED AT LEAST THIRTY DAYS BEFORE THE DATE OF EXPIRA-
TION.
  (III) THE DEPARTMENT, AFTER NOTICE AND HEARING, MAY REVOKE  ACCEPTANCE
OF PROOF OF FINANCIAL RESPONSIBILITY IF IT DETERMINES THAT:
  (1) ACCEPTANCE WAS PROCURED BY FRAUD OR MISREPRESENTATION; OR
  (2)  A  CHANGE OF CIRCUMSTANCE HAS OCCURRED OTHER THAN A CHANGE SPECI-
FIED IN CLAUSES ONE THROUGH THREE OF SUBPARAGRAPH (I) OF THIS PARAGRAPH,
WHICH WOULD HAVE WARRANTED DENIAL OF THE APPLICATION.
  (IV) UPON ACCEPTANCE AND APPROVAL OF PROOF OF FINANCIAL RESPONSIBILITY
UNDER THIS SECTION, THE  DEPARTMENT  SHALL  ISSUE  TO  THE  APPLICANT  A
CERTIFICATE  STATING  THAT THE STATE'S FINANCIAL RESPONSIBILITY REQUIRE-
MENTS HAVE BEEN SATISFIED. THE CERTIFICATE MUST INCLUDE THE NAME OF  THE

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MAJOR FACILITY, VESSEL, OR PIPELINE FOR WHICH IT IS ISSUED AND THE EXPI-
RATION DATE OF THE CERTIFICATE.
  S  2.  The  navigation law is amended by adding a new section 181-f to
read as follows:
  S 181-F. RAILROAD FINANCIAL  PREPAREDNESS.  1.  THE  DEPARTMENT  SHALL
ANNUALLY  REQUIRE  A  RAILROAD  COMPANY THAT TRANSPORTS CRUDE OIL IN THE
STATE TO SUBMIT INFORMATION RELATING TO THE RAILROAD  COMPANY'S  ABILITY
TO PAY IN THE EVENT OF A DISCHARGE INVOLVING THE TRANSPORT OF CRUDE OIL.
THE  INFORMATION SUBMITTED TO THE DEPARTMENT MUST INCLUDE A STATEMENT OF
WHETHER THE RAILROAD HAS THE ABILITY TO  PAY  FOR  DISCHARGES  RESULTING
FROM  A  REASONABLE WORST CASE DISCHARGE AS DETERMINED BY THE DEPARTMENT
PURSUANT TO RULES AND REGULATIONS. FOR THE PURPOSES OF THIS SECTION:
  A. "CRUDE OIL" SHALL MEAN ANY NATURALLY OCCURRING HYDROCARBONS  COMING
FROM  THE  EARTH  THAT ARE LIQUID AT TWENTY-FIVE DEGREES CELSIUS AND ONE
ATMOSPHERE OF PRESSURE INCLUDING, BUT NOT LIMITED TO, CRUDE OIL, BITUMEN
AND DILUTED BITUMEN, SYNTHETIC CRUDE OIL, AND NATURAL GAS  WELL  CONDEN-
SATE.
  B.  "RAILROAD"  SHALL HAVE THE SAME MEANING AS PROVIDED IN SUBDIVISION
TWENTY-FOUR OF SECTION TWO OF THE TRANSPORTATION LAW.
  C. "RAILROAD COMPANY" SHALL HAVE  THE  SAME  MEANING  AS  PROVIDED  IN
SUBDIVISION TWENTY-FIVE OF SECTION TWO OF THE TRANSPORTATION LAW.
  D. "STREET RAILROAD" SHALL HAVE THE SAME MEANING AS PROVIDED IN SUBDI-
VISION TWENTY-NINE OF SECTION TWO OF THE TRANSPORTATION LAW.
  2.  THE DEPARTMENT SHALL MAKE SUCH INFORMATION AVAILABLE ON ITS PUBLIC
WEBSITE NOT LATER THAN FEBRUARY FIRST OF EACH  YEAR.  IN  ADDITION,  THE
DEPARTMENT  SHALL ALSO PROVIDE RECOMMENDATIONS TO THE LEGISLATURE ON HOW
TO ADDRESS ANY FINANCIAL DEFICIENCIES IDENTIFIED BY RAILROAD COMPANIES.
  S 3. This act shall take effect on the one hundred twentieth day after
it shall have become a law.