HOUSE BILL REPORT

SHB 1828

BYHouse Committee on Environmental Affairs (originally sponsored by Representatives Phillips, D. Sommers, Sayan, Winsley, Basich, Spanel, Rust, Brumsickle, Morris, Jones, Locke, Anderson, Jacobsen, Crane, Pruitt, Wineberry, Wang, P. King, Valle, Nelson, Cooper and G. Fisher) 

Prescribing financial responsibility for vessels that spill oil.

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)

AS PASSED HOUSE MARCH 14, 1989

BACKGROUND:

Under the federal Water Pollution Control Act, owners and operators of vessels over 300 gross tons are required to post evidence of financial responsibility to meet liability to the federal government for spills of oil and hazardous substances.  The amount required for inland barges is $125 per gross ton or $125,000, whichever is greater.  The amount required for all other vessels is $150 per gross ton or $250,000, whichever is greater.  Financial responsibility may be established by evidence of insurance, surety bonds, or qualification as a self-insurer.

Owners and operators who fail to comply with financial responsibility requirements are subject to a federal penalty of $10,000.  The Coast Guard may deny entry to any port or place in the United States, or detain at any port or place in the United States, any vessel which does not produce evidence of financial responsibility upon request.

According to a 1987 Environmental and Energy Study Conference Special Report, seven of the 24 coastal states have followed the lead of the federal government and enacted financial responsibility requirements for liability to the state for oil and hazardous substance spills.

SUMMARY:

Owners or operators of vessels over 300 gross tons that transport hazardous substances in the state are required to establish evidence of financial responsibility to cover liability to the state for cleanup, natural resource damages, and civil penalties and fines.  The amount required is $1 million or $150 per gross ton, whichever is greater.

Hazardous substances are defined to include oil and hazardous substances regulated under the federal clean water act.

Evidence of financial responsibility may be established by one or a combination of the following methods:  (1) Insurance; (2) surety bonds; (3) qualification as a self-insurer; or (4) other evidence acceptable to the director of Ecology.  Claims may be brought directly against the insurer or other person providing evidence of financial responsibility.

Owners or operators of barges and oil tankers must keep documentation of evidence of financial responsibility on the vessel and filed with Ecology.  Other vessel owners and operators must keep their Coast Guard certificate on the vessel.

The secretary of transportation is required to suspend the operating privileges of vessel owners or operators that do not meet financial responsibility requirements.  Failure to comply with financial responsibility requirements subjects the owner or operator of a vessel to a $10,000 civil penalty.

Fiscal Note:      Requested February 13, 1989.

House Committee ‑ Testified For:    Representative Larry Phillips; Greg Sorlie, Department of Ecology.

House Committee - Testified Against:      None Presented.

House Committee - Testimony For:    Those who profit from the transportation of oil and hazardous substances in the state should be responsible for the costs of spill cleanup.  This law will ensure that the state will be able to recover cleanup costs and compensate for damages to natural resources.

House Committee - Testimony Against:      None Presented.