WSR 97-07-064

PROPOSED RULES

OFFICE OF

MARINE SAFETY

[Filed March 19, 1997, 8:58 a.m.]

Original Notice.

Preproposal statement of inquiry was filed as WSR 96-10-048.

Title of Rule: Proposing new chapter 317-50 WAC, establishing financial responsibility requirements for small tank barges, and exempting oil spill response barges from complying with RCW 88.40.020.

Purpose: To implement RCW 88.40.020 (2)(b) to establish lower financial responsibility requirements for tank barges 300 gross tons or less; and to implement RCW 88.40.020(5) to exempt oil spill response barges.

Other Identifying Information: See Emergency Rule WSR.

Statutory Authority for Adoption: RCW 88.40.020 (2)(b), (5), and 88.40.030.

Statute Being Implemented: RCW 88.40.020 (2)(b) for all proposed sections except WAC 317-50-060. RCW 88.40.020(5) for WAC 317-50-060.

Summary: The proposed rule reduces required financial responsibility for tank barges 300 gross tons or less and describes acceptable evidence of financial responsibility.

Reasons Supporting Proposal: The cost of meeting the $500 million financial responsibility requirement is unduly burdensome for small tank barge owners and operators.

Name of Agency Personnel Responsible for Drafting and Implementation: Jeff Fishel, Olympia, Washington, 664-9110; and Enforcement: Nina Carter, Olympia, Washington, 664-9110.

Name of Proponent: Office of Marine Safety, governmental.

Rule is not necessitated by federal law, federal or state court decision.

Explanation of Rule, its Purpose, and Anticipated Effects: The proposed rule allows owners and operators of small tank barges to purchase pollution liability coverage less than $500 million as currently required under RCW 88.40.020. Financial responsibility limits for small tank barges is proposed to be the greater of $2 million or $3,000 per barrel total capacity for persistent oil, or $1,500 per barrel total capacity for nonpersistent oil. Small tank barge owners and operators may meet the lower limits if they have an oil spill prevention plan on file with the office that has not been disapproved or voluntarily withdrawn. Acceptable evidence of financial responsibility is also described.

Proposal does not change existing rules.

No small business economic impact statement has been prepared under chapter 19.85 RCW. The rule reduces the cost of doing business in Washington state and therefore, a small business economic impact statement does not need to be done under RCW 19.85.030 (1)(a).

Section 201, chapter 403, Laws of 1995, does not apply to this rule adoption.

Hearing Location: Office of Marine Safety, Conference Room, 711 State Avenue N.E., 2nd Floor, Olympia, WA 98506, on April 23, 1997, at 9:00 - 12:00 p.m.

Assistance for Persons with Disabilities: Contact Teresa Hedblum by April 21, 1997, (360) 664-9110.

Submit Written Comments to: Jeff Fishel, Office of Marine Safety, P.O. Box 42407, Olympia, WA 98504-2407, FAX (360) 664-9184, by April 25, 1997.

Date of Intended Adoption: May 7, 1997.

March 17, 1997

Barbara Herman

Director

Chapter 317-50 WAC

Financial Responsibility for Small Tank Barges and Oil Spill Response Barges

NEW SECTION

WAC 317-50-010 Purpose. This chapter allows owners and operators of small tank barges to reduce their financial responsibility under RCW 88.40.020 (2)(b) without compromising protection of the states marine environments and public health and safety. This chapter also exempts tank barges solely used to carry oil recovered during an oil spill cleanup operation from the requirement to possess financial responsibility under RCW 88.40.020.

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NEW SECTION

WAC 317-50-020 Application. This chapter applies to any tank barge in state waters that is 300 gross tons or less or that is an oil spill response barge.

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NEW SECTION

WAC 317-50-030 Definitions. Unless the context clearly requires otherwise, the definitions in chapter 317-05 WAC and the following apply to this section:

(a) "Financial responsibility" means demonstrated capability to meet state and federal financial liability requirements for actual costs of oil spill removal, natural resource damages, and necessary expenses.

(b) "Oil spill response barge" means a tank barge solely used to carry recovered oil during an oil spill cleanup operation.

(c) "Nonpersistent oil" means a petroleum-based oil that, at the time of shipment, consists of hydrocarbon fractions where:

(i) At least 50 percent by volume distill at a temperature of 340 degrees Celsius (645 degrees Fahrenheit); and

(ii) At least 95 percent by volume distill at a temperature of 370 degrees Celsius (700 degrees Fahrenheit).

(d) "Persistent oil" means a petroleum-based oil that does not meet the distillation criteria for nonpersistent oil.

(e) "Small tank barge" means a tank barge three hundred gross tons or less.

(f) "State waters" means the navigable waters of the state as defined in WAC 317-05-020(10).

(g) "Tank barge" means a tank vessel without a means of self-propulsion or a self-propelled tank vessel less than forty meters (one hundred and thirty feet) in overall length.

(h) "Tank vessel" means a ship that is constructed or adapted to carry, or that carries, oil in bulk as cargo or cargo residue, and that:

(i) Operates on the waters of the state; or

(ii) Transfers oil in a port or place subject to the jurisdiction of this state.

A ship is constructed or adapted to carry oil in bulk as cargo or cargo residue if authorized to do so under the ships certification or classification. A vessel carries oil as cargo or cargo residue if the oil is carried for dispensing to other vessels or equipment off the vessel, or for delivery from point to point, regardless of whether direct compensation for carriage is involved. A vessel being used to collect spilled oil from the water, and that may have some recovered oil storage capacity, does not carry oil as cargo.

NEW SECTION

WAC 317-50-040 Financial responsibility for small tank barges. (1) An owner or operator of a small tank barge covered by an oil spill prevention plan on file with the office in compliance with chapter 317-21 WAC shall possess financial responsibility in the amount determined under subsection (2) of this section. If the owners or operators oil spill prevention plan is disapproved by the office or voluntarily withdrawn, the owner or operator shall possess financial responsibility in the amount of at least five hundred million dollars ($500,000,000).

(2) Financial responsibility for a small tank barge is the greater of two million dollars ($2,000,000) or:

(a) For tank barges certified to carry persistent oil, $3000 per barrel of the barges total capacity, or if assigned a load line under 46 CFR Parts 42 or 44, per barrel of allowed capacity; or

(b) For tank barges certified to carry nonpersistent oil, $1,500 per barrel of the barges total capacity, or if assigned a load line under 46 CFR Parts 42 or 44, per barrel of allowed capacity.

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NEW SECTION

WAC 317-50-050 Evidence of financial responsibility for small tank barges. Evidence of financial responsibility for a small tank barge may be one or combination of the following:

(1) A current and valid certificate of enrollment in a Protection and Indemnity Mutual Association.

(2) A current and valid Master Certificate of Financial Responsibility issued by the US Coast Guard under 33 CFR 138.110 and a copy of the letter of insurance, enrollment or other summary of coverage provided by the guarantor for which the Master Certificate is issued.

(3) Evidence of insurance from an insurance provider that is a member of the Water Quality Insurance Syndicate that includes at a minimum:

(a) The term of the policy;

(b) The amount of deductible or similar retention of liability; and

(c) A description of the coverage limits in relation to a vessel oil spill.

(4) The office may consider other evidence of financial responsibility if the owner or operator demonstrates the financial ability to meet state and federal financial liability for the actual costs for removal of oil spills, for natural resource damages, and necessary expenses. Acceptable evidence is a written opinion, based on Generally Accepted Accounting Principles in the United States (GAAP), signed by an independent certified public accountant licensed to practice in the United States that the coverage meets the standards of 33 CFR 138.80 for the amount required by WAC 317-50-040(2).

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NEW SECTION

WAC 317-50-060 Submitting evidence of financial responsibility. (1) A small tank barge owner or operator shall submit evidence that demonstrates financial responsibility under WAC 317-50-040 for each barge entering or operating in Washington waters. The evidence must be included in the oil spill prevention plan submitted under chapter 317-21 WAC and on file with the office twenty-four hours before the barge enters Washington waters.

(2) The following are considered significant changes for the purpose of updating a barges oil spill prevention plan under WAC 317-21-530:

(a) A change in the term or amount of coverage;

(b) A change in the type of coverage;

(c) Termination of coverage;

(d) A new coverage provider; and

(e) A change that may affect the opinion of the independent certified public accountant submitted to the office under WAC 317-50-050(4).

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NEW SECTION

WAC 317-50-070 Enforcement. A small tank barge owner or operator who fails to comply with the provisions of this chapter and any order or directive issued by the office requiring compliance with this chapter may be subject to any or all of the following:

(1) Assessment of a civil penalty of up to $100,000 per day for each day the owner or operators barge is found without evidence of financial responsibility required under this chapter;

(2) Disapproval of the owners or operators oil spill prevention plan under chapter 317-21 WAC;

(3) Referral for prosecution under RCW 88.46.080;

(4) Denial of entry into state waters.

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NEW SECTION

WAC 317-50-080 Financial responsibility for oil spill response barges. (1) An tank barge used solely as an oil spill response barge is not required to possess evidence of financial responsibility under RCW 88.40.020 if the owner or operator submits to the office a letter certifying that:

(a) The barge is used exclusively for oil spill response activities and will not be used to carry oil in bulk as cargo;

(b) The owner or operator is an approved response contractor under WAC 317-10-090; and

(c) The owner or operator is indemnified by plan holders for whom the owner or operator is a primary response contractor for liabilities that may arise under state and federal law.

(2) The letter must be in writing, on letterhead and signed by the chief executive officer of the owner or operator, or authorized representative. Identifying information for each tank barge covered by the letter must be provided and include at least the vessels name, Lloyds number or official number, country of registry, and gross tonnage.

(3) Any change in status of ownership, charter arrangement, classification, or use must be reported to the office within 10 working days of the change.

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Reviser's note: The typographical error in the above section occurred in the copy filed by the agency and appears in the Register pursuant to the requirements of RCW 34.08.040.

NEW SECTION

WAC 317-50-900 Severability. If any provision of this chapter or its application to any person or circumstance is held invalid, the remainder of the chapter or the application of the provision to other persons or circumstances is not affected.

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