SENATE BILL REPORT

SB 6575

BYSenators 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)

                January 26, 1990

AS REPORTED BY COMMITTEE ON ENERGY & UTILITIES, JANUARY 26, 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 have to 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 failed 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 studies indicate a need for it.

SUMMARY:

The Director of the Department of Ecology is to periodically review the potential for environmental impairment as well as other damage from activities associated with low-level radioactive materials.  The director may, upon completion of each review, determine a minimum amount of liability coverage necessary to protect the state and its citizens, 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) indemnify and hold harmless the state from any damage, and (2) obtain and maintain liability insurance in an amount set by the director.

EFFECT OF PROPOSED SUBSTITUTE:

"Environmental impairment" is deleted from the types of liability insurance for which Ecology may establish requirements.

Appropriation:  none

Revenue:   none

Fiscal Note:    available

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