S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   1773
 
                        2017-2018 Regular Sessions
 
                           I N  A S S E M B L Y
 
                             January 13, 2017
                                ___________
 
 Introduced  by  M.  of  A.  FAHY, STECK, ORTIZ, GALEF, BRINDISI, MOSLEY,
   BARRETT, GOTTFRIED, SKOUFIS, STIRPE, LOPEZ, ROSENTHAL, OTIS, DINOWITZ,
   THIELE, KAVANAGH, HUNTER, HARRIS -- Multi-Sponsored by  --  M.  of  A.
   GLICK,  LUPARDO,  McDONALD,  SIMON  --  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:
 
   Section 1. Paragraph (e) of subdivision 3 of section 181 of the  navi-
 gation  law,  as amended by chapter 584 of the laws of 1992 and subpara-
 graphs (ii) and (iii) as amended by chapter 585 of the laws of 1992  and
 as further amended by section 104 of part A of chapter 62 of the laws of
 2011, is amended and a new paragraph (f) is added to read as follows:
   (e)  (i)  The  owner or operator of a MAJOR FACILITY OR A vessel shall
 establish and maintain with the department evidence of financial respon-
 sibility sufficient to meet the amount of liability established pursuant
 to paragraph (a) of this subdivision. A PERSON MAY NOT CAUSE  OR  PERMIT
 THE  OPERATION  OF  A  MAJOR  FACILITY  OR VESSEL IN THE STATE UNTIL THE
 PERSON HAS FURNISHED TO THE DEPARTMENT, AND THE DEPARTMENT HAS  APPROVED
 SUCH  EVIDENCE.  The  owner or operator of any vessel which demonstrates
 financial responsibility pursuant to the requirements of the Federal Oil
 Pollution Act of 1990 (33 U.S.C. 2701 et seq.), shall be deemed to  have
 demonstrated financial responsibility in accordance with this paragraph.
   (ii)  [The  commissioner  in  consultation  with the superintendent of
 financial services may promulgate regulations  requiring  the  owner  or
 operator  of a major facility other than a vessel to establish and main-
 tain evidence of financial responsibility in an  amount  not  to  exceed
 twenty-five  dollars,  per  incident, for each barrel of total petroleum
 storage capacity at the facility, subject to a maximum  of  one  million
 dollars  per  incident  per  facility  in an aggregate not to exceed two

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

                                                            LBD01216-01-7

 A. 1773                             2

 million dollars per facility per year; provided, however,  that  if  the
 owner  or  operator  establishes to the satisfaction of the commissioner
 that a lesser amount will be sufficient to protect the  environment  and
 public  health,  safety  and  welfare,  the  commissioner  shall  accept
 evidence of financial responsibility in such lesser amount. In determin-
 ing the sufficiency of the amount of financial  responsibility  required
 under this section, the commissioner and the superintendent of financial
 services  shall take into consideration facility size, storage capacity,
 throughput, proximity to environmentally sensitive areas, type of petro-
 leum handled, and other factors relevant to the risks posed by the class
 or category of facility, as well as the availability  and  affordability
 of  pollution  liability insurance. Any regulations promulgated pursuant
 to this subparagraph shall not  take  effect  until  forty-eight  months
 after the effective date of this section.
   (iii)]  Financial  responsibility  under  this paragraph may be estab-
 lished by any one or a combination of the following  methods  acceptable
 to the commissioner in consultation with the superintendent of financial
 services:  evidence  of  insurance,  surety  bonds, guarantee, letter of
 credit, qualification as a self-insurer, or other evidence of  financial
 responsibility, including certifications which qualify under the Federal
 Oil Pollution Act of 1990 (33 U.S.C. 2701 et seq.).
   [(iv)] (III) The liability of a third-party insurer providing proof of
 financial responsibility on behalf of a person required to establish and
 maintain  evidence  of  financial  responsibility  under this section is
 limited to the type of risk assumed and the amount of coverage specified
 in the proof of financial responsibility furnished to  and  approved  by
 the  department. For the purposes of this section, the term "third-party
 insurer" means a third-party insurer, surety, guarantor, person furnish-
 ing a letter of credit, or other group  or  person  providing  proof  of
 financial  responsibility  on  behalf  of  another  person;  it does not
 include the person required to establish and maintain evidence  of  such
 financial responsibility.
   (F) (I) ACCEPTANCE OF PROOF OF FINANCIAL RESPONSIBILITY SHALL EXPIRE:
   (1) ONE YEAR FROM ITS ISSUANCE FOR SELF-INSURANCE;
   (2)  ON  THE EFFECTIVE DATE OF A CHANGE IN THE SURETY BOND, GUARANTEE,
 INSURANCE AGREEMENT, LETTER OF  CREDIT,  OR  OTHER  PROOF  OF  FINANCIAL
 RESPONSIBILITY; OR
   (3)  ON  THE EXPIRATION OR CANCELLATION OF THE SURETY BOND, GUARANTEE,
 INSURANCE AGREEMENT, LETTER OF  CREDIT,  OR  OTHER  PROOF  OF  FINANCIAL
 RESPONSIBILITY.
   (II) THE PERSON WHOSE PROOF OF FINANCIAL RESPONSIBILITY IS ACCEPTED BY
 THE  DEPARTMENT  UNDER THIS SECTION SHALL NOTIFY THE DEPARTMENT AT LEAST
 THIRTY DAYS BEFORE THE EFFECTIVE DATE OF A CHANGE, EXPIRATION OR CANCEL-
 LATION IN THE SURETY BOND, GUARANTEE,  INSURANCE  AGREEMENT,  LETTER  OF
 CREDIT,  OR  OTHER  PROOF  OF  FINANCIAL RESPONSIBILITY. APPLICATION FOR
 RENEWAL OF ACCEPTANCE OF PROOF OF FINANCIAL  RESPONSIBILITY  UNDER  THIS
 SECTION  MUST  BE  FILED AT LEAST THIRTY DAYS BEFORE THE DATE OF EXPIRA-
 TION.
   (III) THE DEPARTMENT, AFTER NOTICE AND HEARING, MAY REVOKE  ACCEPTANCE
 OF PROOF OF FINANCIAL RESPONSIBILITY IF IT DETERMINES THAT:
   (1) ACCEPTANCE WAS PROCURED BY FRAUD OR MISREPRESENTATION; OR
   (2)  A  CHANGE OF CIRCUMSTANCE HAS OCCURRED OTHER THAN A CHANGE SPECI-
 FIED IN CLAUSES ONE THROUGH THREE OF SUBPARAGRAPH (I) OF THIS PARAGRAPH,
 WHICH WOULD HAVE WARRANTED DENIAL OF THE APPLICATION.
   (IV) UPON ACCEPTANCE AND APPROVAL OF PROOF OF FINANCIAL RESPONSIBILITY
 UNDER THIS SECTION, THE  DEPARTMENT  SHALL  ISSUE  TO  THE  APPLICANT  A

 A. 1773                             3
 
 CERTIFICATE  STATING  THAT THE STATE'S FINANCIAL RESPONSIBILITY REQUIRE-
 MENTS HAVE BEEN SATISFIED. THE CERTIFICATE MUST INCLUDE THE NAME OF  THE
 MAJOR FACILITY, VESSEL, OR PIPELINE FOR WHICH IT IS ISSUED AND THE EXPI-
 RATION DATE OF THE CERTIFICATE.
   §  2.  The  navigation law is amended by adding a new section 181-f to
 read as follows:
   § 181-F. RAILROAD FINANCIAL  PREPAREDNESS.  1.  THE  DEPARTMENT  SHALL
 ANNUALLY  REQUIRE  A  RAILROAD  COMPANY THAT TRANSPORTS CRUDE OIL IN THE
 STATE TO SUBMIT INFORMATION RELATING TO THE RAILROAD  COMPANY'S  ABILITY
 TO PAY IN THE EVENT OF A DISCHARGE INVOLVING THE TRANSPORT OF CRUDE OIL.
 THE  INFORMATION SUBMITTED TO THE DEPARTMENT MUST INCLUDE A STATEMENT OF
 WHETHER THE RAILROAD HAS THE ABILITY TO  PAY  FOR  DISCHARGES  RESULTING
 FROM  A  REASONABLE WORST CASE DISCHARGE AS DETERMINED BY THE DEPARTMENT
 PURSUANT TO RULES AND REGULATIONS. FOR THE PURPOSES OF THIS SECTION:
   A. "CRUDE OIL" SHALL MEAN ANY NATURALLY OCCURRING HYDROCARBONS  COMING
 FROM  THE  EARTH  THAT ARE LIQUID AT TWENTY-FIVE DEGREES CELSIUS AND ONE
 ATMOSPHERE OF PRESSURE INCLUDING, BUT NOT LIMITED TO, CRUDE OIL, BITUMEN
 AND DILUTED BITUMEN, SYNTHETIC CRUDE OIL, AND NATURAL GAS  WELL  CONDEN-
 SATE.
   B.  "RAILROAD"  SHALL HAVE THE SAME MEANING AS PROVIDED IN SUBDIVISION
 TWENTY-FOUR OF SECTION TWO OF THE TRANSPORTATION LAW.
   C. "RAILROAD COMPANY" SHALL HAVE  THE  SAME  MEANING  AS  PROVIDED  IN
 SUBDIVISION TWENTY-FIVE OF SECTION TWO OF THE TRANSPORTATION LAW.
   D. "STREET RAILROAD" SHALL HAVE THE SAME MEANING AS PROVIDED IN SUBDI-
 VISION TWENTY-NINE OF SECTION TWO OF THE TRANSPORTATION LAW.
   2.  THE DEPARTMENT SHALL MAKE SUCH INFORMATION AVAILABLE ON ITS PUBLIC
 WEBSITE NOT LATER THAN FEBRUARY FIRST OF EACH  YEAR.  IN  ADDITION,  THE
 DEPARTMENT  SHALL ALSO PROVIDE RECOMMENDATIONS TO THE LEGISLATURE ON HOW
 TO ADDRESS ANY FINANCIAL DEFICIENCIES IDENTIFIED BY RAILROAD COMPANIES.
   § 3. This act shall take effect on the one hundred twentieth day after
 it shall have become a law.