Requires the owner or operator of a vessel to establish and maintain with the department evidence of financial responsibility sufficient to meet the amount of liability.
STATE OF NEW YORK
________________________________________________________________________
6831
2025-2026 Regular Sessions
IN SENATE
March 25, 2025
___________
Introduced by Sen. HINCHEY -- read twice and ordered printed, and when
printed to be committed to the Committee on Environmental Conservation
AN ACT to amend the navigation law, in relation to financial responsi-
bility for the liability of a major facility or vessel
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Paragraph (e) of subdivision 3 of section 181 of the navi-
2 gation law, as amended by chapter 584 of the laws of 1992 and subpara-
3 graphs (ii) and (iii) as amended by chapter 585 of the laws of 1992 and
4 as further amended by section 104 of part A of chapter 62 of the laws of
5 2011, is amended and a new paragraph (f) is added to read as follows:
6 (e) (i) The owner or operator of a vessel shall establish and maintain
7 with the department evidence of financial responsibility sufficient to
8 meet the amount of liability established pursuant to paragraph (a) of
9 this subdivision. A person may not cause or permit the operation of a
10 vessel in the state until the person has furnished to the department,
11 and the department has approved such evidence. The owner or operator of
12 any vessel which demonstrates financial responsibility pursuant to the
13 requirements of the Federal Oil Pollution Act of 1990 (33 U.S.C. 2701 et
14 seq.), shall be deemed to have demonstrated financial responsibility in
15 accordance with this paragraph.
16 (ii) The commissioner in consultation with the superintendent of
17 financial services may promulgate regulations requiring the owner or
18 operator of a major facility other than a vessel to establish and main-
19 tain evidence of financial responsibility in an amount not to exceed
20 twenty-five dollars plus an annual inflation adjustment, determined by
21 the commissioner from the increase in the consumer price index in the
22 one-year period ending on the March thirty-first prior to such inflation
23 adjustment effective on the ensuing September first, per incident, for
24 each barrel of total petroleum storage capacity at the facility, subject
25 to a maximum of one million dollars per incident per facility in an
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD11301-01-5
S. 6831 2
1 aggregate not to exceed two million dollars plus an annual inflation
2 adjustment, determined by the commissioner from the increase in the
3 consumer price index in the one-year period ending on the March thirty-
4 first prior to such inflation adjustment effective on the ensuing
5 September first, per facility per year; provided, however, that if the
6 owner or operator establishes to the satisfaction of the commissioner
7 that a lesser amount will be sufficient to protect the environment and
8 public health, safety and welfare, the commissioner shall accept
9 evidence of financial responsibility in such lesser amount. In determin-
10 ing the sufficiency of the amount of financial responsibility required
11 under this section, the commissioner and the superintendent of financial
12 services shall take into consideration facility size, storage capacity,
13 throughput, proximity to environmentally sensitive areas, type of petro-
14 leum handled, and other factors relevant to the risks posed by the class
15 or category of facility, as well as the availability and affordability
16 of pollution liability insurance. Any regulations promulgated pursuant
17 to this subparagraph shall not take effect until forty-eight months
18 after the effective date of this section.
19 (iii) Financial responsibility under this paragraph may be established
20 by any one or a combination of the following methods acceptable to the
21 commissioner in consultation with the superintendent of financial
22 services: evidence of insurance, surety bonds, guarantee, letter of
23 credit, qualification as a self-insurer, or other evidence of financial
24 responsibility, including certifications which qualify under the Federal
25 Oil Pollution Act of 1990 (33 U.S.C. 2701 et seq.).
26 (iv) The liability of a third-party insurer providing proof of finan-
27 cial responsibility on behalf of a person required to establish and
28 maintain evidence of financial responsibility under this section is
29 limited to the type of risk assumed and the amount of coverage specified
30 in the proof of financial responsibility furnished to and approved by
31 the department. For the purposes of this section, the term "third-party
32 insurer" means a third-party insurer, surety, guarantor, person furnish-
33 ing a letter of credit, or other group or person providing proof of
34 financial responsibility on behalf of another person; it does not
35 include the person required to establish and maintain evidence of such
36 financial responsibility.
37 (f) (i) Acceptance of proof of financial responsibility shall expire:
38 (1) one year from its issuance for self-insurance;
39 (2) on the effective date of a change in the surety bond, guarantee,
40 insurance agreement, letter of credit, or other proof of financial
41 responsibility; or
42 (3) on the expiration or cancellation of the surety bond, guarantee,
43 insurance agreement, letter of credit, or other proof of financial
44 responsibility.
45 (ii) The person whose proof of financial responsibility is accepted by
46 the department under this section shall notify the department at least
47 thirty days before the effective date of a change, expiration or cancel-
48 lation in the surety bond, guarantee, insurance agreement, letter of
49 credit, or other proof of financial responsibility. Application for
50 renewal of acceptance of proof of financial responsibility under this
51 section must be filed at least thirty days before the date of expira-
52 tion.
53 (iii) The department, after notice and hearing, may revoke acceptance
54 of proof of financial responsibility if it determines that:
55 (1) acceptance was procured by fraud or misrepresentation; or
S. 6831 3
1 (2) a change of circumstance has occurred other than a change speci-
2 fied in clauses one through three of subparagraph (i) of this paragraph,
3 which would have warranted denial of the application.
4 (iv) Upon acceptance and approval of proof of financial responsibility
5 under this section, the department shall issue to the applicant a
6 certificate stating that the state's financial responsibility require-
7 ments have been satisfied. The certificate must include the name of the
8 major facility, vessel, or pipeline for which it is issued and the expi-
9 ration date of the certificate.
10 § 2. The navigation law is amended by adding a new section 181-f to
11 read as follows:
12 § 181-f. Railroad financial preparedness. 1. The department shall
13 annually require a railroad company that transports crude oil in the
14 state to submit information relating to the railroad company's ability
15 to pay in the event of a discharge involving the transport of crude oil.
16 The information submitted to the department must include a statement of
17 whether the railroad has the ability to pay for discharges resulting
18 from a reasonable worst case discharge as determined by the department
19 pursuant to rules and regulations. For the purposes of this section:
20 a. "Crude oil" shall mean any naturally occurring hydrocarbons coming
21 from the earth that are liquid at twenty-five degrees Celsius and one
22 atmosphere of pressure including, but not limited to, crude oil, bitumen
23 and diluted bitumen, synthetic crude oil, and natural gas well conden-
24 sate.
25 b. "Railroad" shall have the same meaning as provided in subdivision
26 twenty-four of section two of the transportation law.
27 c. "Railroad company" shall have the same meaning as provided in
28 subdivision twenty-five of section two of the transportation law.
29 d. "Street railroad" shall have the same meaning as provided in subdi-
30 vision twenty-nine of section two of the transportation law.
31 2. The department shall make such information available on its public
32 website not later than February first of each year. In addition, the
33 department shall also provide recommendations to the legislature on how
34 to address any financial deficiencies identified by railroad companies.
35 § 3. This act shall take effect on the one hundred twentieth day after
36 it shall have become a law.
