S T A T E   O F   N E W   Y O R K
       ________________________________________________________________________
                                        5751--A
                              2015-2016 Regular Sessions
                                   I N  S E N A T E
                                     June 2, 2015
                                      ___________
       Introduced  by  Sen.  AVELLA -- read twice and ordered printed, and when
         printed to be committed to the Committee on Environmental Conservation
         -- committee discharged, bill amended, ordered  reprinted  as  amended
         and recommitted to said committee
       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
        EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                             [ ] is old law to be omitted.
                                                                  LBD11295-04-5
       S. 5751--A                          2
    1  owner or operator establishes to the satisfaction  of  the  commissioner
    2  that  a  lesser amount will be sufficient to protect the environment and
    3  public  health,  safety  and  welfare,  the  commissioner  shall  accept
    4  evidence of financial responsibility in such lesser amount. In determin-
    5  ing  the  sufficiency of the amount of financial responsibility required
    6  under this section, the commissioner and the superintendent of financial
    7  services shall take into consideration facility size, storage  capacity,
    8  throughput, proximity to environmentally sensitive areas, type of petro-
    9  leum handled, and other factors relevant to the risks posed by the class
   10  or  category  of facility, as well as the availability and affordability
   11  of pollution liability insurance. Any regulations  promulgated  pursuant
   12  to  this  subparagraph  shall  not  take effect until forty-eight months
   13  after the effective date of this section.
   14    (iii)] Financial responsibility under this  paragraph  may  be  estab-
   15  lished  by  any one or a combination of the following methods acceptable
   16  to the commissioner in consultation with the superintendent of financial
   17  services: evidence of insurance,  surety  bonds,  guarantee,  letter  of
   18  credit,  qualification as a self-insurer, or other evidence of financial
   19  responsibility, including certifications which qualify under the Federal
   20  Oil Pollution Act of 1990 (33 U.S.C. 2701 et seq.).
   21    [(iv)] (III) The liability of a third-party insurer providing proof of
   22  financial responsibility on behalf of a person required to establish and
   23  maintain evidence of financial  responsibility  under  this  section  is
   24  limited to the type of risk assumed and the amount of coverage specified
   25  in  the  proof  of financial responsibility furnished to and approved by
   26  the department. For the purposes of this section, the term  "third-party
   27  insurer" means a third-party insurer, surety, guarantor, person furnish-
   28  ing  a  letter  of  credit,  or other group or person providing proof of
   29  financial responsibility on  behalf  of  another  person;  it  does  not
   30  include  the  person required to establish and maintain evidence of such
   31  financial responsibility.
   32    (F) (I) ACCEPTANCE OF PROOF OF FINANCIAL RESPONSIBILITY SHALL EXPIRE:
   33    (1) ONE YEAR FROM ITS ISSUANCE FOR SELF-INSURANCE;
   34    (2) ON THE EFFECTIVE DATE OF A CHANGE IN THE SURETY  BOND,  GUARANTEE,
   35  INSURANCE  AGREEMENT,  LETTER  OF  CREDIT,  OR  OTHER PROOF OF FINANCIAL
   36  RESPONSIBILITY; OR
   37    (3) ON THE EXPIRATION OR CANCELLATION OF THE SURETY  BOND,  GUARANTEE,
   38  INSURANCE  AGREEMENT,  LETTER  OF  CREDIT,  OR  OTHER PROOF OF FINANCIAL
   39  RESPONSIBILITY.
   40    (II) THE PERSON WHOSE PROOF OF FINANCIAL RESPONSIBILITY IS ACCEPTED BY
   41  THE DEPARTMENT UNDER THIS SECTION SHALL NOTIFY THE DEPARTMENT  AT  LEAST
   42  THIRTY DAYS BEFORE THE EFFECTIVE DATE OF A CHANGE, EXPIRATION OR CANCEL-
   43  LATION  IN  THE  SURETY  BOND, GUARANTEE, INSURANCE AGREEMENT, LETTER OF
   44  CREDIT, OR OTHER PROOF  OF  FINANCIAL  RESPONSIBILITY.  APPLICATION  FOR
   45  RENEWAL  OF  ACCEPTANCE  OF PROOF OF FINANCIAL RESPONSIBILITY UNDER THIS
   46  SECTION MUST BE FILED AT LEAST THIRTY DAYS BEFORE THE  DATE  OF  EXPIRA-
   47  TION.
   48    (III)  THE DEPARTMENT, AFTER NOTICE AND HEARING, MAY REVOKE ACCEPTANCE
   49  OF PROOF OF FINANCIAL RESPONSIBILITY IF IT DETERMINES THAT:
   50    (1) ACCEPTANCE WAS PROCURED BY FRAUD OR MISREPRESENTATION; OR
   51    (2) A CHANGE OF CIRCUMSTANCE HAS OCCURRED OTHER THAN A  CHANGE  SPECI-
   52  FIED IN CLAUSES ONE THROUGH THREE OF SUBPARAGRAPH (I) OF THIS PARAGRAPH,
   53  WHICH WOULD HAVE WARRANTED DENIAL OF THE APPLICATION.
   54    (IV) UPON ACCEPTANCE AND APPROVAL OF PROOF OF FINANCIAL RESPONSIBILITY
   55  UNDER  THIS  SECTION,  THE  DEPARTMENT  SHALL  ISSUE  TO THE APPLICANT A
   56  CERTIFICATE STATING THAT THE STATE'S FINANCIAL  RESPONSIBILITY  REQUIRE-
       S. 5751--A                          3
    1  MENTS  HAVE BEEN SATISFIED. THE CERTIFICATE MUST INCLUDE THE NAME OF THE
    2  MAJOR FACILITY, VESSEL, OR PIPELINE FOR WHICH IT IS ISSUED AND THE EXPI-
    3  RATION DATE OF THE CERTIFICATE.
    4    S  2.  The  navigation law is amended by adding a new section 181-f to
    5  read as follows:
    6    S 181-F. RAILROAD FINANCIAL  PREPAREDNESS.  1.  THE  DEPARTMENT  SHALL
    7  ANNUALLY  REQUIRE  A  RAILROAD  COMPANY THAT TRANSPORTS CRUDE OIL IN THE
    8  STATE TO SUBMIT INFORMATION RELATING TO THE RAILROAD  COMPANY'S  ABILITY
    9  TO PAY IN THE EVENT OF A DISCHARGE INVOLVING THE TRANSPORT OF CRUDE OIL.
   10  THE  INFORMATION SUBMITTED TO THE DEPARTMENT MUST INCLUDE A STATEMENT OF
   11  WHETHER THE RAILROAD HAS THE ABILITY TO  PAY  FOR  DISCHARGES  RESULTING
   12  FROM  A  REASONABLE WORST CASE DISCHARGE AS DETERMINED BY THE DEPARTMENT
   13  PURSUANT TO RULES AND REGULATIONS. FOR THE PURPOSES OF THIS SECTION:
   14    A. "CRUDE OIL" SHALL MEAN ANY NATURALLY OCCURRING HYDROCARBONS  COMING
   15  FROM  THE  EARTH  THAT ARE LIQUID AT TWENTY-FIVE DEGREES CELSIUS AND ONE
   16  ATMOSPHERE OF PRESSURE INCLUDING, BUT NOT LIMITED TO, CRUDE OIL, BITUMEN
   17  AND DILUTED BITUMEN, SYNTHETIC CRUDE OIL, AND NATURAL GAS  WELL  CONDEN-
   18  SATE.
   19    B.  "RAILROAD"  SHALL HAVE THE SAME MEANING AS PROVIDED IN SUBDIVISION
   20  TWENTY-FOUR OF SECTION TWO OF THE TRANSPORTATION LAW.
   21    C. "RAILROAD COMPANY" SHALL HAVE  THE  SAME  MEANING  AS  PROVIDED  IN
   22  SUBDIVISION TWENTY-FIVE OF SECTION TWO OF THE TRANSPORTATION LAW.
   23    D. "STREET RAILROAD" SHALL HAVE THE SAME MEANING AS PROVIDED IN SUBDI-
   24  VISION TWENTY-NINE OF SECTION TWO OF THE TRANSPORTATION LAW.
   25    2.  THE DEPARTMENT SHALL MAKE SUCH INFORMATION AVAILABLE ON ITS PUBLIC
   26  WEBSITE NOT LATER THAN FEBRUARY FIRST OF EACH  YEAR.  IN  ADDITION,  THE
   27  DEPARTMENT  SHALL ALSO PROVIDE RECOMMENDATIONS TO THE LEGISLATURE ON HOW
   28  TO ADDRESS ANY FINANCIAL DEFICIENCIES IDENTIFIED BY RAILROAD COMPANIES.
   29    S 3. This act shall take effect on the one hundred twentieth day after
   30  it shall have become a law.