HOUSE BILL REPORT

SSB 5315

As Amended by the House

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.

House Committe on Environmental Affairs

Majority Report:  Do pass with amendments.  (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 APRIL 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.

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.  Although the state Water Pollution Control Act does impose liability for spills, it does not contain financial responsibility requirements.

SUMMARY:

Owners or operators of vessels over 300 gross tons that transport petroleum products 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.

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.

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 indicating compliance with federal requirements 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.

Legislative policies regarding coastal waters off Washington are adopted.  These policies will guide the decision-making process for the management, conservation, use, and development of natural resources in Washington's coastal waters. Among these policies are the following:  (1) No leasing of state-owned tidal or submerged lands along the Washington coast from Cape Flattery south to Cape Disappointment, nor in Grays Harbor, Willapa Bay, and the Columbia river downstream from the Longview bridge, for purposes of oil or gas exploration, development, or production.  This policy will end on July 1, 1995, unless the legislature extends it before then.  The decision on whether to extend this policy shall be based on the information available at that time, including several reports and studies which are to be prepared and presented to the legislature no later than September 1, 1994. (2)  If conflicts arise, priority shall be given to resource uses and activities that will not adversely impact renewable resources over uses which are likely to have an adverse impact on renewable resources.  (3)  The state shall actively encourage the conservation of liquid fossil fuels and explore available methods of encouraging such conservation.  (4) Generally, fishing and currently existing commercial uses are excluded from having to meet the planning and project review criteria.  (5) The state shall participate to the maximum extent possible in federal ocean and marine resource decisions.

Planning and project review criteria are established.  These set the minimum standards which must be met before the state may support any activities that are likely to have an adverse impact on marine life, fishing, aquaculture, recreation, navigation, air or water quality, or other existing ocean or coastal uses.  The criteria include a demonstrated significant need for the activity; no reasonable alternative to the activity; no likely long-term significant adverse impacts to coastal or marine resources or uses; minimization of adverse environmental and social impacts; compensation for adverse impacts; plans and sufficient performance bonding to ensure site rehabilitation; and compliance with all applicable laws.

The Departments of Natural Resources and Ecology shall complete an analysis of the potential positive and negative impacts of leasing state coastal waters for oil and gas development.  This analysis shall be done at the direction of the Joint Select Committee on Marine and Ocean Resources, and it shall be presented to the legislature no later than September 1, 1994.  Two hundred thousand dollars is appropriated from the general fund to the Joint Select Committee to use in contracting with these departments for this analysis.

Local governments are directed to review and amend their shoreline master programs to ensure that they conform with the policies and intent of this bill.  One hundred eighty thousand dollars is appropriated from the general fund to the Department of Ecology for this process, with $120,000 of that to go to the local governments.

The Washington State Energy Office is directed to prepare a report on liquid fossil fuel supply and demand, on strategies for conserving those fuels, and on ways of implementing those strategies.

The Shoreline Management Act is amended to direct the Department of Ecology to consult with affected state agencies, local governments, Indian tribes, and the public prior to responding to federal coastal zone management consistency certifications.

The Joint Select Committee on Marine and Ocean Resources is extended until June 30, 1994, and it is assigned additional tasks.

Fiscal Note:      Requested March 27, 1989.

House Committee ‑ Testified For:    Janet Sawaya, Office of Senator Bender; Jim Oberlander, Department of Ecology; Randy Ray, Puget Sound Steamship Operators Association.

House Committee - Testified Against:      None Presented.

House Committee - Testimony For:    This bill is necessary to ensure that the state will be compensated for cleanup costs and damages to natural resources. The federal law requires this for federal cleanups.  This takes care of the federal loophole for inland barges.

House Committee - Testimony Against:      None Presented.