SENATE BILL REPORT

SSB 6575

BYSenate Committee on Energy & Utilities (originally sponsored by Senators Benitz and Williams; by request of Department of Ecology)

Revising liability requirements for nuclear operations.

Senate Committee on Energy & Utilities

Senate Hearing Date(s):January 25, 1990; January 26, 1990

Majority Report:     That Substitute Senate Bill No. 6575 be substituted therefor, and the substitute bill do pass.

     Signed by Senators Benitz, Chairman; Bluechel, Vice Chairman; Metcalf, Nelson, Owen, Stratton, Sutherland, Williams.

Senate Staff:David Monthie (786-7198)

                March 1, 1990

House Committe on Energy & Utilities

AS PASSED SENATE, FEBRUARY 12, 1990

BACKGROUND:

Legislation enacted in 1986 requires that firms that have state licenses or permits to package, ship, transport, treat, store, or dispose of commercial low-level nuclear materials bear the risk of potential injury or damage by (1) holding the state harmless from injuries or damage, and (2) maintaining liability insurance in an amount to be determined by the Department of Ecology by December 1, 1987.  Persons applying for such licenses or permits must demonstrate compliance with the insurance requirements.  Both the Department of Ecology and the Department of Health are required to suspend the license or permit of any person that fails to demonstrate compliance, and not reinstate it until insurance is obtained.  The department is directed to require the maximum amount of liability coverage available from private sources.

After a number of studies and reports, the Department of Ecology has concluded that no additional liability coverage should be required because (1) existing coverage is adequate under general liability policies, (2) coverage is already required in sufficient amounts under other regulatory authority (e.g., federal Motor Carrier Act), (3) available insurance is costly and economically unfeasible for small companies, and (4) the risk to the state from accidents is small.  Based on these conclusions, it is felt that the mandatory nature of the existing language should be modified to permit Ecology to require additional liability insurance only when its future studies indicate a need for it.  The law requires such studies and a report to the Legislature every five years.

SUMMARY:

The Director of the Department of Ecology may, upon completion of a periodic review, determine a minimum amount of liability coverage necessary to protect the state and its citizens from damage arising from activities associated with low level commercial radioactive waste, and may require such liability coverage.  The Department of Ecology may require that a person holding or applying for a license or permit to use the Hanford low-level waste site (1) reimburse the state for any compensation the state must pay to third persons because of the permittee's or licensee's activities (indemnify), and not hold the state liable for the permittee's or licensee's own injuries or damages (hold harmless), and (2) obtain and maintain liability insurance in an amount set by the director.

Appropriation:  none

Revenue:   none

Fiscal Note:    available

Senate Committee - Testified:   Barry Bede, U.S. Ecology: Terry Husseman, Ecology

HOUSE AMENDMENT:

The Director of Ecology and the Secretary of Health are separately responsible for determining (1) appropriate amount of liability coverage to be maintained by their respective permittees or licensees, and (2) whether to exempt from such requirements any class of, or individual, permittees or licensees where such an exemption will pose neither a significant risk to persons or property nor a substantial financial risk to the state.  All licensees or permittees must indemnify and hold harmless the state from any claims or damages arising out of their authorized activities.  The Departments of Ecology and Health are to study and report to the Energy and Utilities Committees of both houses of the Legislature no later than December 1, 1990, on methods by which licensees and permittees who are unable to obtain liability coverage may obtain such coverage.