A07625 Summary:

BILL NOA07625
 
SAME ASSAME AS S05751-A
 
SPONSORFahy
 
COSPNSRMcDonald, Steck, Ortiz, Galef, Brindisi, Mosley, Barrett, Gottfried, Duprey, Linares, Skoufis, Stirpe, Lopez, Rosenthal, Otis, Dinowitz, Thiele, Kavanagh, Hunter, Harris, Sepulveda
 
MLTSPNSRGlick, Lupardo, Simon
 
Amd S181, add S181-f, Nav L
 
Relates to financial liability for major facilities, vessels, and railroads.
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A07625 Actions:

BILL NOA07625
 
05/20/2015referred to environmental conservation
05/27/2015reported referred to codes
06/15/2015reported referred to ways and means
06/16/2015reported referred to rules
06/17/2015reported
06/17/2015rules report cal.572
06/17/2015ordered to third reading rules cal.572
06/24/2015passed assembly
06/24/2015delivered to senate
06/24/2015REFERRED TO RULES
01/06/2016DIED IN SENATE
01/06/2016RETURNED TO ASSEMBLY
01/06/2016ordered to third reading cal.304
03/29/2016passed assembly
03/29/2016delivered to senate
03/29/2016REFERRED TO ENVIRONMENTAL CONSERVATION
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A07625 Memo:

NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
submitted in accordance with Assembly Rule III, Sec 1(f)
 
BILL NUMBER: A7625                  Revised 05/26/16
 
SPONSOR: Fahy (MS)
  TITLE OF BILL: An act to amend the navigation law, in relation to financial responsi- bility for the liability of a major facility or vessel   PURPOSE OR GENERAL IDEA OF BILL: To require the owner or operator of a major facility or a vessel to establish and maintain with the department evidence of financial respon- sibility sufficient to meet the amount of liability.   SUMMARY OF SPECIFIC PROVISIONS: Section 1: amends paragraph (e) of subdivision 3 of section 181 of the navigation law and adds a new paragraph (f). Section 2: amends the navigation law by adding a new section 181-f to require railroad financial preparedness, and requires the department to make that information on its public website. Section 3: effective date   JUSTIFICATION: The Petroleum Storage Surety bill is in response to recent accidents resulting in substantial financial losses to both public and private entities due to injuries, loss of life, damages and clean up costs, all as a result of explosions and spills from improper handling of volatile and toxic crude oil shipments. This bill would apply to crude oil stored and transferred at all bulk storage facilities, vessels and railroads in New York State, and require financial security to meet all responsibil- ities for cleanup and decontamination costs associated with the release of such oil up to existing federal and state liability limits. The transport of crude oil by rail has increased exponentially nation- wide over the past five years, from over 9,000 carloads of crude oil in 2008 to over 400,000 in 2013, and the need for storage facilities has expanded accordingly. There is a heightened awareness of safety issues related to the transportation and storage of crude oil and the Petroleum Surety bill is one attempt to address the negative impacts of mishandl- ing and improper storage of crude oil. Rail transportation of crude oil is regulated by federal law whereas bulk storage of crude oil is governed by state law. It is necessary that financial surety measures be put in place to ensure that the public is not burdened with the high costs resulting from crude oil accidents. This may include evidence of insurance, a letter of cred- it, or a bond from a corporate surety licensed to do business in New York State. The Petroleum Storage Surety bill will ensure that any bulk petroleum storage facility, vessel, and railroad has the necessary financial secu- rity to balance the risk of any accident occurring that is directly related to storing crude oil.   PRIOR LEGISLATIVE HISTORY: 199: A9926/S 7718 - Passed Assembly   FISCAL IMPLICATIONS: None to the state   EFFECTIVE DATE: This act shall take effect on the sixtieth day after it shall have become a law
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A07625 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                          7625
 
                               2015-2016 Regular Sessions
 
                   IN ASSEMBLY
 
                                      May 20, 2015
                                       ___________
 
        Introduced  by  M. of A. FAHY, McDONALD, STECK -- read once and referred
          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 major facility or a vessel shall
     7  establish and maintain with the department evidence of financial respon-
     8  sibility sufficient to meet the amount of liability established pursuant
     9  to paragraph (a) of this subdivision. A person may not cause  or  permit
    10  the  operation  of  a  major  facility  or vessel in the state until the
    11  person has furnished to the department, and the department has  approved
    12  such  evidence.  The  owner or operator of any vessel which demonstrates
    13  financial responsibility pursuant to the requirements of the Federal Oil
    14  Pollution Act of 1990 (33 U.S.C. 2701 et seq.), shall be deemed to  have
    15  demonstrated financial responsibility in 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,  per  incident, for each barrel of total petroleum
    21  storage capacity at the facility, subject to a maximum  of  one  million
    22  dollars  per  incident  per  facility  in an aggregate not to exceed two
    23  million dollars per facility per year; provided, however,  that  if  the
    24  owner  or  operator  establishes to the satisfaction of the commissioner
    25  that a lesser amount will be sufficient to protect the  environment  and

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD10958-03-5

        A. 7625                             2

     1  public  health,  safety  and  welfare,  the  commissioner  shall  accept
     2  evidence of financial responsibility in such lesser amount. In determin-
     3  ing the sufficiency of the amount of financial  responsibility  required
     4  under this section, the commissioner and the superintendent of financial
     5  services  shall take into consideration facility size, storage capacity,
     6  throughput, proximity to environmentally sensitive areas, type of petro-
     7  leum handled, and other factors relevant to the risks posed by the class
     8  or category of facility, as well as the availability  and  affordability
     9  of  pollution  liability insurance. Any regulations promulgated pursuant
    10  to this subparagraph shall not  take  effect  until  forty-eight  months
    11  after the effective date of this section.
    12    (iii)]  Financial  responsibility  under  this paragraph may be estab-
    13  lished by any one or a combination of the following  methods  acceptable
    14  to the commissioner in consultation with the superintendent of financial
    15  services:  evidence  of  insurance,  surety  bonds, guarantee, letter of
    16  credit, qualification as a self-insurer, or other evidence of  financial
    17  responsibility, including certifications which qualify under the Federal
    18  Oil Pollution Act of 1990 (33 U.S.C. 2701 et seq.).
    19    [(iv)] (iii) The liability of a third-party insurer providing proof of
    20  financial responsibility on behalf of a person required to establish and
    21  maintain  evidence  of  financial  responsibility  under this section is
    22  limited to the type of risk assumed and the amount of coverage specified
    23  in the proof of financial responsibility furnished to  and  approved  by
    24  the  department. For the purposes of this section, the term "third-party
    25  insurer" means a third-party insurer, surety, guarantor, person furnish-
    26  ing a letter of credit, or other group  or  person  providing  proof  of
    27  financial  responsibility  on  behalf  of  another  person;  it does not
    28  include the person required to establish and maintain evidence  of  such
    29  financial responsibility.
    30    (f) (i) Acceptance of proof of financial responsibility shall expire:
    31    (1) one year from its issuance for self-insurance;
    32    (2)  on  the effective date of a change in the surety bond, guarantee,
    33  insurance agreement, letter of  credit,  or  other  proof  of  financial
    34  responsibility; or
    35    (3)  on  the expiration or cancellation of the surety bond, guarantee,
    36  insurance agreement, letter of  credit,  or  other  proof  of  financial
    37  responsibility.
    38    (ii) The person whose proof of financial responsibility is accepted by
    39  the  department  under this section shall notify the department at least
    40  thirty days before the effective date of a change, expiration or cancel-
    41  lation in the surety bond, guarantee,  insurance  agreement,  letter  of
    42  credit,  or  other  proof  of  financial responsibility. Application for
    43  renewal of acceptance of proof of financial  responsibility  under  this
    44  section  must  be  filed at least thirty days before the date of expira-
    45  tion.
    46    (iii) The department, after notice and hearing, may revoke  acceptance
    47  of proof of financial responsibility if it determines that:
    48    (1) acceptance was procured by fraud or misrepresentation; or
    49    (2)  a  change of circumstance has occurred other than a change speci-
    50  fied in clauses one through three of subparagraph (i) of this paragraph,
    51  which would have warranted denial of the application.
    52    (iv) Upon acceptance and approval of proof of financial responsibility
    53  under this section, the  department  shall  issue  to  the  applicant  a
    54  certificate  stating  that the state's financial responsibility require-
    55  ments have been satisfied. The certificate must include the name of  the

        A. 7625                             3
 
     1  major facility, vessel, or pipeline for which it is issued and the expi-
     2  ration date of the certificate.
     3    §  2.  The  navigation law is amended by adding a new section 181-f to
     4  read as follows:
     5    § 181-f. Railroad financial  preparedness.  1.  The  department  shall
     6  annually  require  a  railroad  company that transports crude oil in the
     7  state to submit information relating to the railroad  company's  ability
     8  to pay in the event of a discharge involving the transport of crude oil.
     9  The  information submitted to the department must include a statement of
    10  whether the railroad has the ability to  pay  for  discharges  resulting
    11  from  a  reasonable worst case discharge as determined by the department
    12  pursuant to rules and regulations. For the purposes of this section:
    13    a. "Crude oil" shall mean any naturally occurring hydrocarbons  coming
    14  from  the  earth  that are liquid at twenty-five degrees Celsius and one
    15  atmosphere of pressure including, but not limited to, crude oil, bitumen
    16  and diluted bitumen, synthetic crude oil, and natural gas  well  conden-
    17  sate.
    18    b.  "Railroad"  shall have the same meaning as provided in subdivision
    19  twenty-four of section two of the transportation law.
    20    c. "Railroad company" shall have  the  same  meaning  as  provided  in
    21  subdivision twenty-five of section two of the transportation law.
    22    d. "Street railroad" shall have the same meaning as provided in subdi-
    23  vision twenty-nine of section two of the transportation law.
    24    2.  The department shall make such information available on its public
    25  website not later than February first of each  year.  In  addition,  the
    26  department  shall also provide recommendations to the legislature on how
    27  to address any financial deficiencies identified by railroad companies.
    28    § 3. This act shall take effect on the one hundred twentieth day after
    29  it shall have become a law.
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