HOUSE BILL REPORT

ESHB 1853

As Amended by the Senate

BYHouse Committee on Environmental Affairs (originally sponsored by Representatives Jones, Hargrove, Rust, Winsley, Haugen, Spanel, Basich, R. King, Belcher, Cole, Jacobsen, Pruitt, P. King, Valle and Nelson)

Providing for oil spill damage assessments.

House Committe on Environmental Affairs

Majority Report:  The substitute bill be substituted therefor and the substitute bill do pass.  (12)

      Signed by Representatives Rust, Chair; Valle, Vice Chair; D. Sommers, Ranking Republican Member; Brekke, G. Fisher, Fraser, Phillips, Pruitt, Schoon, Sprenkle, Van Luven and Walker.

House Staff:Bonnie Austin (786-7107)

Rereferred House Committee on Appropriations

Majority Report:  The substitute bill by Committee on Environmental Affairs as amended by Committee on Appropriations be substituted therefor and the substitute bill as amended do pass.  (24)

      Signed by Representatives Locke, Chair; Grant, Vice Chair; H. Sommers, Vice Chair; Silver, Ranking Republican Member; Appelwick, Belcher, Bowman, Braddock, Brekke, Dorn, Ebersole, Hine, May, McLean, Nealey, Padden, Peery, Rust, Sayan, Spanel, Sprenkle, Valle, Wang and Wineberry.

House Staff:      Nancy Stevenson (786-7136)

AS PASSED HOUSE MARCH 9, 1989

BACKGROUND:

Four major oil spills have occurred in Washington waters over the last five years:  the SS Mobil Oil spill near the mouth of the Columbia river in March, 1984; a spill of unknown origin on the shores of Whidbey Island in December, 1985; the grounding of the Arco Anchorage near Port Angeles in December, 1985; and the spill from the Nestucca barge in Grays Harbor in December, 1988.

Under current state law, damage assessment studies are conducted to determine the damages to natural resources that result from oil spills.  Although damage assessment studies have been conducted in the past, this method of assessing damages has been criticized because the studies can cost more than the damages actually claimed.  For instance, the 1984 Mobil oil spill resulted in $181,000 in assessment study costs and $35,000 in damages claimed.  The 1985 Arco oil spill resulted in $285,000 in assessment study costs and $33,000 in damages claimed.  Another criticism of current damage assessment methods is that damages to natural resources are underestimated.

In 1986 the Legislature responded to oil spill concerns by directing the Department of Ecology (Ecology) to establish an Oil Spill Advisory Committee to study existing oil spill prevention, containment and clean-up provisions.  Along with other oil spill recommendations, this committee recommended that the legislature consider the enactment of legislation similar to Alaska's which imposes a monetary charge per gallon of oil spilled.

The 1987 Legislature directed Ecology to contract with the University of Washington to conduct a study of the state's oil spill damage assessment methods and develop a recommended damage assessment methodology.  Preliminary recommendations were submitted to the Environmental Affairs Committee in October of 1988.  These recommendations included the establishment of preassessment screening committees to determine whether damage assessment studies should be conducted, and the creation of a compensation schedule to be used when assessment studies should not be conducted.

SUMMARY:

Ecology is directed to adopt an oil spill compensation schedule by July 1, 1991.  The schedule will be designed to compensate the state for oil spill damages that are unquantifiable or damages that are not quantifiable at a reasonable cost.  The schedule will set up a ranking system that takes into account factors such as the toxicity of the oil, the sensitivity of the affected areas, and actions taken by the spiller that mitigate or exacerbate the damage.  The amount of compensation assessed under the schedule will range from no less than $1 per gallon of oil spilled to no greater than $50 per gallon of oil spilled.  A scientific advisory board will assist in the development of the schedule.

For each oil spill, a formal preassessment screening committee will be convened to determine whether a damage assessment study should be conducted or whether the compensation schedule should be used.  Damage assessment studies may only be conducted if the committee determines that the damages are quantifiable at a reasonable cost and that the proposed studies are clearly linked to quantification of the damages incurred.  The compensation schedule will be used if the committee determines that restoration of the injured resources is not technically feasible and that damages are not quantifiable at a reasonable cost. Liable parties may propose restoration projects in lieu of damage assessment studies or the compensation schedule.

Monies received from the compensation schedule will go into the coastal protection fund and be dedicated to the following uses: (1) Environmental restoration and enhancement projects; (2) investigations of the long-term effects of oil spills; and (3) reimbursement of agencies for reconnaissance and damage assessment costs.  A steering committee consisting of the Departments of Ecology, Fisheries, Wildlife, and the Parks and Recreation Commission will authorize the expenditure of these monies.

Ecology will report on implementation of the compensation schedule to the legislature for the next five years.

Any person who intentionally or recklessly causes an oil spill is subject to a civil penalty of up to $100,000.

EFFECT OF SENATE AMENDMENTS:  The civil penalty for the discharge of oil into state waters may be assessed for each day the spill poses risks to the environment, as determined by the director of Ecology.  Language is deleted allowing the assessment of the penalty for each day of a continuing violation.

Appropriation:    $75,000 from the State Toxics Control Account to the Department of Ecology.

Fiscal Note:      Available.

House Committee ‑ Testified For:    (Environmental Affairs) Steve Hunter, Department of Ecology; David McCraney, Department of Fisheries; Brian Hauger, Department of Wildlife; Randy Ray, Puget Sound Steamship Operators Association; and Elizabeth Tabbutt, Washington Environmental Council.

(Appropriations) None Presented.

House Committee - Testified Against:      (Environmental Affairs) None Presented.

(Appropriations) None Presented.

House Committee ‑ Testified For:    (Environmental Affairs) Current damage assessment methods greatly underestimate damages to the state's natural resources.  The compensation schedule is an excellent alternative to conducting damage assessment studies.  It is practical, efficient and gives the industry more certainty even though it may cost the industry more than the studies.  The state will be more fully compensated for damages to natural resources.

(Appropriations) None Presented.

House Committee - Testimony Against:      (Environmental Affairs) None Presented.

(Appropriations) None Presented.

VOTE ON FINAL PASSAGE:

      Yeas 95; Excused 3

Excused:    Hankins, Pruitt and Todd