SENATE BILL REPORT

SSB 5315

BYSenate Committee on Environment & Natural Resources (originally sponsored by Senators Bender, Conner, DeJarnatt, Talmadge, Owen, Metcalf, Vognild, Murray, Bauer, Niemi, Kreidler, McMullen and Sutherland)

Prescribing financial responsibility for vessels that spill oil.

Senate Committee on Environment & Natural Resources

Senate Hearing Date(s):February 8, 1989; March 1, 1989

Majority Report:  That Substitute Senate Bill No. 5315 be substituted therefor, and the substitute bill do pass.

      Signed by Senators Metcalf, Chairman; Amondson, Vice Chairman; Benitz, Kreidler, Owen, Patterson, Sutherland.

Senate Staff:Gary Wilburn (786-7453)

                  April 17, 1989

House Committe on Environmental Affairs

AS PASSED SENATE, MARCH 8, 1989

BACKGROUND:

The cleanup of oil spills from vessels is commonly a cooperative effort between state and federal response authorities.  The federal Clean Water Act requires that vessels over 300 gross tons maintain evidence of financial responsibility to meet the liability to the United States to which the vessel could be subjected for cleanup of oil or hazardous substance spills.  Liability under that act includes cleanup costs, civil penalties, and the cost of restoration or replacement of natural resources.  In the case of vessels other than inland oil barges, minimum coverage must be maintained of $150 per gross ton or $250,000, whichever is greater. 

The state Water Pollution Control Act prohibits the discharge of oil or other pollutants to state waters, and authorizes the Department of Ecology to respond to oil spills.  That act provides for liability by those causing the spills for the state's cleanup costs, for damages to natural resources, and for civil penalties.  There is no state law which requires vessels to maintain liability insurance to cover an oil or hazardous substance spill.

SUMMARY:

Any vessel over 300 gross tons that transports oil or other designated hazardous substances and uses Washington State waters must establish evidence of financial responsibility to meet liability to the state for actual cleanup costs, civil penalties, and natural resource damages.  Financial responsibility must be for either $1 million or $150 per gross ton of vessel, whichever is greater, and may be established through insurance, surety bonds, self-insurance, or other method approved by the Department of Ecology.

Barges or tank vessels transporting oil as cargo must maintain evidence of financial responsibility on board and file it with the Department of Transportation.  Other vessels must carry the certificate issued by the United States Coast Guard which evidences compliance with the federal requirements for financial responsibility.

The Secretary of Transportation is to suspend the privilege of operating the vessel in state waters where such financial responsibility is not maintained.  The owner or operator of a vessel not in compliance with the act may be subject to civil penalties not exceeding $10,000.  Claims by the state may be brought directly against the insurer.

Appropriation:    none

Revenue:    none

Fiscal Note:      none requested

Effective Date:The bill contains an emergency clause and takes effect immediately.

Senate Committee - Testified: Randy Ray, Northwest Tourboat Association (con); Senator Rick Bender (pro); Greg Sorlie, Department of Ecology (pro); Charles Helget, ARCO (pro)

HOUSE AMENDMENT:

Coverage of hazardous substances under the financial responsibility provisions of the bill is deleted.

A provision allowing direct action against insurers is deleted.

Added to the bill are the following provisions regarding oil and gas extraction in marine waters:

      (1)Legislative findings are made regarding the economic and environmental qualities of Washington's coastal waters and shorelines.

      (2)Leasing of tidal or submerged lands under state jurisdiction from Cape Flattery to Cape Disappointment for purposes of oil or gas exploration or production is prohibited until at least July 1, 1995.

      (3)Certain activities in coastal waters must meet specified criteria, such as public need for the activity, lack of a reasonable alternative, long-term significant adverse impacts, site rehabilitation measures, and mitigation of environmental, social and economic impacts.

      (4)Under the direction of the Joint Select Committee on Marine and Ocean Resources, the Departments of Natural Resources and Ecology are to prepare an analysis of oil and gas leasing impacts no later than September 1, 1994.

      (5)The Department of Ecology is to adopt ocean use guidelines, and local governments are to review their shoreline master programs to conform them to these guidelines.

      (6)The State Energy Office shall prepare by September 1, 1994 a report on strategies for conservation of liquid fossil fuels.

      (7)The Department of Ecology is to consult with other affected agencies and the public prior to responding to certain federal coastal zone management consistency certifications.

      (8)The authority for the Joint Select Committee on Marine and Ocean Resources is extended to June 30, 1994.

      (9)Appropriations are made to the Department of Ecology ($180,000) and to the Joint Select Committee on Marine and Ocean Resources ($100,000) for certain purposes under the bill.

The emergency clause is applicable only to the financial responsibility portions of the bill.