NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A9926
SPONSOR: Rules (Fahy) TITLE OF BILL: An act to amend the environmental conservation law, in
relation to global financial surety
PURPOSE OR GENERAL IDEA OF BILL:
To require petroleum bulk storage facilities to provide a surety to be
used in the case of a necessary cleanup and decontamination.
SUMMARY OF SPECIFIC PROVISIONS:
Section 1: amends the environmental conservation law by adding a new
section 17-1019 Section 2; 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
at all bulk storage facilities in New York State and require financial
security to meet all responsibilities for cleanup and decontamination
costs associated with the release of such oil.
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 has the necessary financial security to balance the
risk of any accident occurring that is directly related to storing crude
oil.
PRIOR LEGISLATIVE HISTORY:
New Bill
FISCAL IMPLICATIONS:
None to the state.
EFFECTIVE DATE:
This act shall take effect on the sixtieth day after it shall have
become a law.
STATE OF NEW YORK
________________________________________________________________________
9926
IN ASSEMBLY
May 29, 2014
___________
Introduced by COMMITTEE ON RULES -- (at request of M. of A. Fahy, McDo-
nald, Sweeney, Steck) -- read once and referred to the Committee on
Environmental Conservation
AN ACT to amend the environmental conservation law, in relation to
global financial surety
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. The environmental conservation law is amended by adding a
2 new section 17-1019 to read as follows:
3 § 17-1019 Financial security.
4 1. For the purposes of this section, the following terms shall be
5 defined as follows:
6 a. "cleanup and decontamination" means activities undertaken to perma-
7 nently eliminate, remove, abate, control or monitor health and/or envi-
8 ronmental hazards or potential hazards.
9 b. "cleanup and decontamination costs" mean all costs associated with
10 the cleanup and decontamination of contamination including relocation
11 costs incurred by the state or its political subdivisions or their
12 agents or any person with approval of the department.
13 c. "contamination" means any damage to any property or the environ-
14 ment, including, but not limited to, a public or private water supply,
15 any threat to public health, or any hazardous condition that prevents
16 the use of property or that requires relocation of people or property to
17 prevent harm resulting from the release of any substance.
18 d. "environment" means any water including, but not limited to, a
19 stream, pond, lake, river, water course, aquifer, wetland, or reservoir,
20 any land including, but not limited to, a land surface or subsurface,
21 air, fish, wildlife, biota and all other natural resources.
22 2. In addition to any other existing requirements, the department
23 shall require all petroleum bulk storage facilities that store Bakken
24 crude oil or Bitumen crude oil to provide financial security to meet all
25 responsibilities for cleanup and decontamination costs associated with
26 the release of such oil. Financial security may be evidenced by one or
27 a combination of the following methods acceptable to the commissioner in
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD15386-03-4
A. 9926 2
1 consultation with the superintendent of financial services: evidence of
2 insurance, guarantee, letter of credit, or a bond from a corporate sure-
3 ty licensed to do business as such in the state. Such financial security
4 shall remain in full force and effect for the duration of the registra-
5 tion. If the financial security shall for any reason be cancelled, with-
6 in seven days after receiving notice thereof, a valid replacement shall
7 be provided under the same conditions. Failure to provide a replacement
8 within such period shall result in the immediate suspension of the
9 facility's registration by the department. No person shall engage in the
10 storage of Bakken crude oil or Bitumen crude oil with an API gravity
11 equal or less than ten without complying with this requirement.
12 § 2. This act shall take effect on the sixtieth day after it shall
13 have become a law.
