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.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A9213A
SPONSOR: Fahy 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 to require the owner or operator of a vessel to provide
evidence of financial responsibility to the department in order to oper-
ate and to establish an annual inflation adjustment for the maximum
amount of financial responsibility required for major facilities. Adds a
new paragraph (f) to define the procedure of notification of financial
responsibility to the department.
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:
This legislation 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.
Over the past decade, the rate of railroad accidents and derailments has
worsened nationally, when factoring in the distance freight travels.
Railroad accidents involving crude oil or other hazardous material have
devastating impacts on the soil, water, and air of surrounding communi-
ties. After last year's tragic derailment in East Palestine, Ohio, for
example, the clean-up cost has already surpassed $1.1 billion. There is
a heightened awareness of safety issues related to the transportation
and storage of crude oil, and this legislation is one attempt to address
the negative impacts of mishandling and improper transport or 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.
This bill would require vessels, including railroads, that transport
petroleum in New York State to maintain financial security to meet all
responsibilities for clean-up and decontamination costs associated with
the release of such oil up to existing federal and state liability
limits. For major facilities for bulk petroleum storage, this legis-
lation establishes that the maximum amount of financial security
required shall be annually adjusted for inflation, as defined by the
consumer price index, to ensure that they continue to maintain financial
responsibility sufficient to cover the costs of potential accidents.
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.
This bill will ensure that any bulk petroleum storage facility, vessel,
and railroad has the necessary financial security to balance the risk of
any accident occurring that is directly related to storing crude oil.
PRIOR LEGISLATIVE HISTORY:
2017/18: A1773/S1515 - Passed Assembly
2015/16: A7625/55751-A - Passed Assembly
FISCAL IMPLICATIONS:
None to the state
EFFECTIVE DATE:
This act shall take effect on the one hundred twentieth day after it
shall have become a law.
