FINAL BILL REPORT

SSB 5315

FULL VETO

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

House Committe on Environmental Affairs

AS PASSED LEGISLATURE

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.

The ocean sea floor and resources off Washington's coast are owned by the state from extreme low tide seaward three miles, and by the federal government seaward from three miles to 200 miles.  There are few statewide regulations, guidelines or policies for the use or development of coastal resources.  While the Shoreline Management Act of 1971 (SMA) and various other laws could be used to regulate coastal resources, local coastal governments have done little to address coastal resource management.

The federally owned waters off Washington's coast are governed by many federal laws and agencies.  The Mineral Management Service (MMS) is responsible for the development of mineral and other resources within federally owned ocean waters.  The MMS is authorized to lease ocean areas for purposes of exploration, development, and extraction of mineral resources.  MMS is required under the Outer Continental Shelf Lands Act (OCSLA) to develop five-year oil and gas lease plans.

The MMS's current five-year lease plan provides for a lease sale of ocean areas off the coasts of Washington and Oregon in April of 1992.  As preliminary steps to the sale, MMS will request statements of interest from the oil industry in 1989 and will identify the sale area in 1990.

Under the OCSLA, the Secretary of the Interior must consider recommendations from an adjacent state's governor concerning the size, location, and timing of a proposed lease sale.  The federal Coastal Zone Management Act (CZMA) and current court case law do not provide for any state input in deciding when or whether a lease sale should be held, nor in deciding what areas will be included in the lease sale.  The CZMA does, however, provide for some state input after the lease sale.  The CZMA directs that federal agencies conduct and support activities directly affecting the coastal zone to the extent practicable, consistent with approved state management programs.  It also provides that any applicant for a federal license to conduct an activity affecting land or water uses in the coastal zone of a state must provide a state-approved certification of consistency with that state's management program.  This requirement of certification also applies to any plans for exploration or development of, or production from, any area which has been leased under the OCSLA.

The approved state management program consists of the adjacent state's "coastal authorities," laws and regulations that have been approved by the Secretary of Commerce.  At present, the approved coastal authorities for Washington include the SMA and county and city master programs, certain environmental laws, and the energy facility siting act.

Because of this system, any exploration, development, or production activities conducted or permitted by MMS must be consistent with Washington law.  There is, however, dispute as to what is meant by "consistent" and as to the extent to which actions must be consistent.

In 1987, due to concern over the upcoming lease sale, the Legislature and the Governor took several actions.  The Governor wrote to the Department of Interior suggesting that the lease sale may need to be delayed, and that he does not support leasing north of the 47th parallel or within 12 miles of Grays Harbor, Willapa Bay, and Columbia River estuaries.  Further, several committees and task forces were formed and/or asked to conduct studies on aspects of the proposed lease sale.  These groups included the Joint Select Committee on Marine and Ocean Resources and the University of Washington Sea Grant program.  The Joint Select Committee on Marine and Ocean Resources developed proposed legislation.

Finally, if the 1992 lease sale is held, oil is found, and production takes place, the oil could be shipped from the production platforms to locations within the state by pipeline.  Under Washington's current system, pipelines of different diameters and lengths are regulated under different statutes and by different agencies.

SUMMARY:

Any vessel over 300 gross tons that transports oil over 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.

At least until July 1, 1995, a moratorium is placed on oil and gas tract leasing of Washington marine waters.  These waters, as well as the waters of Grays Harbor, Willapa Bay, and those downstream from the Columbia River's Longview bridge, are defined as tidal and submerged lands.  Agencies and committees described in this act will investigate uses of Washington marine resources and update shoreline master plans accordingly.  Based upon the information, the 1995 Legislature will determine whether or not to continue the moratorium.

Underlying the studies, master plan updates, and future lease decisions are criteria giving renewable resources priority over nonrenewable ones.  The criteria are as follows:  proof of significant national and state need for the resource; no reasonable alternative; no long-term adverse impact on marine resources; reasonable steps to avoid adverse environmental impacts; steps to minimize adverse economic impacts to fishing, tourism, and navigation; compliance with state, community and federal regulations; sufficient performance bonding for site rehabilitation; and compensation to mitigate adverse impact on coastal resources.  Unless information suggests otherwise, these criteria will not apply to fishing or current commercial marine resource practices.

By April 1990, with the assistance of the Department of Ecology, state and coastal governments will finalize ocean use guidelines and policy.  Revised shoreline master plans must be submitted to the department by the end of June 1991.

The joint select committee will continue until September 1994.  It will complete its original task and undertake new ones including analyzing the use of the Energy Facilities Site Locations Act for making decisions on onshore energy facilities.

By September 1994, with direction from the joint select committee, the Departments of Natural Resources and Ecology will conduct a legislative study on all aspects of state aquatic land oil and gas leases. 

Up to $180,000 is appropriated to the Department of Ecology, of which up to $120,000 will go to the coastal governments for shoreline master plan updates.  The joint select committee will receive up to a $100,000 appropriation for its continuing role in meeting the 1994 deadlines.  Appropriations will be minimized by any available federal grants.

It is the state's policy to conserve liquid fossil fuels and to seek alternate methods of encouraging such conservation.  By September 1994, the State Energy Office will prepare a legislative report on the state's liquid fossil fuel supply, demand and conservation strategies.

Recognizing the states's role in federally-managed offshore marine resource use, the Department of Ecology will fully consult with state agencies, coastal governments, the public and tribes prior to responding to federal coastal zone management consistency certifications.

Appropriation:  $280,000

VOTES ON FINAL PASSAGE:

     Senate   47    0

     House 97  0 (House amended)

     Senate   42    0(Senate concurred)

FULL VETO:  (See VETO MESSAGE)