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IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2000

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46-12.7-1. Purpose. -- (a) The legislature finds and declares that the release of oil or hazardous substances into the environment presents a real and substantial threat to the public health and welfare, to the environment, and to the economy of the state. The legislature therefore concludes that it is in the best interest of the state and its citizens to provide a readily available fund for the payment of expenses that the department of environmental management incurs in the protection of the environment of the state from the release of oil. The legislature further recognizes the considerable hardships which may be incurred by the citizens of the state as a direct result of the release of oil into the marine environment, and therefore the legislature concludes that it is in the best interest of the state to expand the scope of the fund to allow claims from citizens, in certain instances, and to provide for the disbursal of emergency loans from the fund. The legislature lastly concludes that preparedness is an essential component of prevention of and response to oil spill events and therefore the purpose of the fund shall be further expanded to support the development of safety committees, response teams, and other discreet units whose activities will directly benefit the state in the event of future oil spill events.

(b) Bay and coastal habitat, namely salt marshes, historic fish runs, and eel grass beds, are threatened or have been destroyed by historic pollution, incompatible development or neglect. Since healthy and diverse habitats are more resistant to the environmental insult of pollution events such as oil spills, an investment by the State of Rhode Island in planning and implementing measures to restore bay and coastal habitats is vital to the survival and sustainability of these habitats. The state's economy is also directly dependent on the health and productivity of Rhode Island's coastal water's including Narragansett Bay and the coastal ponds.

46-12.7-4.1. Uniform oil response and prevention fee. -- (1) A uniform oil spill response and prevention fee in an amount not exceeding five cents ($0.05) for each barrel of petroleum products, as set by the director pursuant to subsection (4) of this section, shall be imposed upon every person owning petroleum products at the time the petroleum products are received at a marine terminal within this state by means of a vessel from a point of origin outside this state. The fee shall be remitted to the division of taxation on the 30th day of each month based upon the number of barrels of petroleum products received during the preceding month.

(2) Every owner of petroleum products shall be liable for the fee until it has been paid to the state, except that payment to a marine terminal operator registered under this chapter is sufficient to relieve the owner from further liability for the fee.

(3) Whenever the director, in consultation with the department and the division of taxation, estimates that the amount in the fund will reach the amount specified in subsection (5) of this section, and the money in the fund is not required for the purposes specified in section 46-12.7-5.1, the director shall instruct the division of taxation to cease collecting the fee.

(4) The director shall set the amount of the oil spill prevention and response fees. The fees shall be imposed on all feepayers in the same amount. The administrator shall not set the amount of the fee at less than five cents ($0.05) for each barrel of petroleum products or crude oil, unless the director finds that the assessment of a lesser fee will cause the fund to reach the designated amount within six (6) months.

(5) For the purposes of this chapter, "designated amount" means an amount equal to ten million dollars ($10,000,000), adjusted for inflation after January 1, 1998, according to an index which the director may reasonably choose.

(6) All fees collected pursuant to this section shall be deposited in the oil spill prevention, administration, and response fund, and shall be disbursed according to the purposes expressed in section 46-12.7-5.1.

(h) Ethanol (Denatured ethyl alcohol).

46-12.7-5.1. Purposes of the fund. -- The director may use money from the fund to:

(1) Provide funds to cover promptly the costs of response, containment, and cleanup of oil spills into marine or estuarine waters, including but not limited to damage assessment costs, and wildlife rehabilitation as defined in this section.

(2) Site evaluation activities. These activities shall include, but not be limited to, site mapping, installation of wells and equipment, collection, monitoring, and analysis of samples of air, soil, and/or water, and evaluation of the impacts of contamination of marine and terrestrial environments, production of reports, and implementation and maintenance of necessary technology, and equipment for complete remedial action;

(3) Provide emergency loans and to cover response and cleanup costs and other damages suffered by the state or other persons or entities from oil spills or threatened oil spills, which cannot otherwise be compensated by responsible parties or the federal government;

(4) To pay for claims for damages pursuant to section 46-12.7-8.1;

(5) Provide emergency loans to affected workers ineligible for unemployment insurance;

(6) Pay for structural improvements to vulnerable coastal features;

(7) Pay for habitat restoration, where necessary and appropriate; or for the restoration of degraded marine habitats as described in section 46-12.7-1;

(8) Pay for response training and equipment; and

(9) Pay for large-scale personnel drills and exercises.; and

(10) Pay for research and development and activities as outlined in section 46-12.7-13.

46-12.7-8.1. Expenditure of fund money. -- (1) The director may only expend money from the fund if a discharge of oil has occurred, or the threat of a discharge has led the state to take appropriate response or persons have received the approval for all, or a portion of a habitat restoration project, and the following determinations have been made:

(a) A responsible party does not exist or the responsible party is unable or unwilling to provide adequate and timely cleanup and to pay for the damages resulting from the spill. The director shall make a reasonable effort to have the responsible party remove the oil or agree to pay for any actions resulting from the spill that may be required by law, provided that the efforts are not detrimental to fish, plant, animal, or bird life in the affected waters. The reasonable effort of the director shall include attempting to access the responsible party's insurance or other proof of financial responsibility.

(b) Federal oil spill funds are not available or will not be available in an adequate period of time. Notwithstanding this paragraph, the director may expend money from the fund for authorized expenditures when a reimbursement procedure is in place to receive reimbursements from federal oil spill funds.

(2) Disbursements shall be made from the fund for the following purposes:

(a) Administrative expenses, personnel expenses and equipment costs of the department related to the enforcement of this subchapter; activities authorized in section 46-12.7-5.3;

(b) All costs, including without limitation personnel undertaking oil spill response activities and equipment expenses, involved in the removal of oil, the abatement of pollution and the implementation of remedial measures including restoration of water supplies, related to the release of oil, petroleum products, and their by-products covered by this subchapter;

(c) Sums allocated to research and development in accordance with this section;

(d) Payment of all damage claims awarded in accordance with this section;

(e) Payment of costs of arbitration and arbitrators in accordance with this section;

(f) Payment of costs of insurance by the state to extend or implement the benefits of the fund; and

(g) Payment of costs for the collection of overdue reimbursements.

46-12.7-10. Claims against the fund. -- (1) Any person may apply to the fund for compensation for damages and losses suffered as a result of an oil spill under any of the following conditions:

(a) The responsible party or parties cannot be ascertained.

(b) A responsible party is not liable for non-economic damages caused by another.

(c) Federal oil spill funds are not available or will not be available in an adequate period of time. Notwithstanding this paragraph, the director may expend money from the fund for authorized expenditures when a reimbursement procedure is in place to receive reimbursements from federal oil spill funds.

(3) Awards from the fund on damage claims may not include any amount the claimant has recovered, on account of the same damage, by way of settlement with the responsible party or the responsible party's representatives or judgment of a court of competent jurisdiction against the responsible party to the extent these amounts are duplicative.

(4) The director shall pay only those claims which are approved pursuant to this section.

(5) A responsible party is not eligible for compensation under this subsection for costs, expenses, or damages related to the specific discharge for which the responsible party is determined responsible.

(6) Damage claims may not include expenditures for the preparation and prosecution of the damage claim, such as legal fees or real estate appraisal fees.

(7) No claims may be submitted for the recovery of damages under this chapter unless the claim is presented within three (3) years after the date on which the injury and its connection with the oil spill in question were reasonably discoverable with the exercise of due care.

46-12.7-12. Recovery of expenditures from fund. -- The attorney general, in consultation with the director, shall undertake actions to recover all costs to the funds from any responsible party for an oil spill into marine or estuarine waters for which expenditures are made from the fund. Payment of any claim or obligation from the fund shall be subject to the government of Rhode Island acquiring by subrogation all rights of this claimant to recover from the responsible party or the federal Oil Pollution Liability Trust Fund. The recovery of costs pursuant to this section shall not foreclose the attorney general from any other actions allowed by law.

SECTION 2. Chapter 46-12.7 of the General Laws entitled "Oil Spill Prevention, Administration and Response Fund" is hereby amended by adding thereto the following sections:

46-12.7-5.2. Allocation of the fund. -- Section 46-12.7-5.1 outlines ten activities which may be eligible for payments from the fund. These activities fall into three categories, post spill, pre-spill and research and development.

a) Post-spill activities include: response, natural resource damage assessment and restoration, loans to individuals and businesses affected by a spill, and claims for damages suffered as a result of a spill or the threat of a spill.

c) Research and development into the causes, effects and removal of oil from the marine environment includes: the mapping of sensitive areas and management of its data; the development of more effective containment and removal techniques and; the acquisition and maintenance of scientific equipment necessary to measure oil contamination and its fate and effects.

46-12.7-5.3. Apportionment of the fund -- Reserve fund. -- Since post-spill activities will require the maintenance of sufficient monies in the fund; and, since there is currently an annual infusion into the fund from the uniform oil response and prevention fee, one half of the annual collections of the fee shall be reserved in the fund for post-spill activities. The apportionment of this fund reflects current experience as to the nature of the post-spill costs:

It is recognized that oil spills are extremely variable and it may be necessary to draw larger amounts from one or another of these reserve categories for any individual spill. All reserve amounts will therefore be available for any of these purposes and an expenditure cap is hereby authorized for the amounts currently in the fund as delineated herein. All costs recoveries resulting from a particular spill will be used to restore the balances of the reserve amounts.

46-12.7-5.4. Apportionment of the fund -- Pre-spill activities. -- (1) One half of the fee, annually, as well as any fines or penalties recovered under the provision of chapter 12.5 of this title, shall be available for pre-spill activities. These include the restoration of degraded marine habitats, the design and construction of improvements that will protect vulnerable coastal features, the acquisition and maintenance of response equipment, the implementation of training including the periodic participation in large scale exercises, and the administrative expenses, personnel expenses and equipment costs of the department related to the activities authorized in this section.

46-12.7-15. Oil Spill Response Oversight Commission. -- (a) There is hereby established an oversight commission to be known as the oil spill response oversight commission. (b) The commission shall consist of nine (9) members all of whom shall be citizens and residents of this state; three (3) of whom shall be from the house of representatives, to be appointed by the speaker; two (2) of whom shall be members of the senate, to be appointed by the senate majority leader; one (1) of whom shall be a representative of the governor's office, to be appointed by the governor; one (1) of whom shall be the chairperson of the Coastal Resource Management Council or his or her designee; and two (2) of whom shall be a representative of the general public, to be appointed by the speaker.

(g) The purpose of the commission shall be to recommend and advise the director of the department of environmental management as to the approval of pre-spill projects and oversee the expenditure of money from the fund established pursuant to this chapter.

SECTION 4. This act shall take effect upon passage.

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LC01939
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EXPLANATION
BY THE LEGISLATIVE COUNCIL
OF

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This act authorizes the expenditure of money from the oil spill response fund for habitat restoration projects and establishes an oversight commission to oversee and approve the expenditure of money from the oil response fund.

This act also makes technical changes to the law relating to the oil spill response fund.

This act would take effect upon passage.