[Senate Report 109-272]
[From the U.S. Government Publishing Office]



                                                       Calendar No. 502
109th Congress                                                   Report
                                 SENATE
 2nd Session                                                    109-272

======================================================================



 
  TO AMEND THE OIL POLLUTION ACT OF 1990 TO IMPROVE THAT ACT, AND FOR 
                            OTHER PURPOSES.

                                _______
                                

                 June 29, 2006.--Ordered to be printed

                                _______
                                

    Mr. Inhofe, from the Committee on Environment and Public Works, 
                        submitted the following

                              R E P O R T

                         [to accompany S. 2023]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Environment and Public Works, to which was 
referred a bill (S. 2023) to amend the Oil Pollution Act of 
1990 to improve that Act, and for other purposes, having 
considered the same, reports favorably thereon and recommends 
that the bill, as amended, do pass.

                    General Statement and Background

    The Oil Pollution Act (33 U.S.C. 2701 et seq.) was 
originally enacted in 1990 following the Exxon Valdez spill in 
Alaska's Prince William Sound. The Act authorized expenditures 
from the Oil Spill Liability Trust Fund (Fund) that was 
established by Congress in 1986. The Fund, which is managed by 
the Coast Guard through the National Pollution Funds Center, 
was capitalized by a $0.05 tax on each barrel of oil produced 
or imported in the United States. The tax sunsetted in 1995 
once the Fund reached $1 billion.
    In a report to Congress on May 12, 2005 the Coast Guard 
expressed concern that the Fund could run out of money in 2009. 
In response to the Coast Guard report, the Energy Policy Act of 
2005 reinstated the barrel tax effective April 2006 with the 
understanding that it will expire in either 2014, or in any 
calendar quarter when the balance of the Fund exceeds $2.7 
billion. In April of 2006, the balance in the Fund was $662 
million. The National Pollution Funds Center estimates that the 
reinstated tax revenue will raise that balance to $829 million 
in 2014. The tax is estimated to raise $88 million in fiscal 
year 2006 to a high of $244 million in fiscal year 2013 before 
expiring in 2014. This estimate, however, does not account for 
claims arising from two hurricanes that struck the Gulf Coast 
in 2005, Hurricane Katrina and Hurricane Rita.
    The Fund consists of two components, the Emergency Fund and 
the Principal Fund. The Emergency Fund is authorized each year 
and makes $50 million available to the President to respond to 
spills without congressional appropriation. Further, the 
Emergency Fund is used by the Federal trustees to initiate 
natural resource damage assessments.
    The Principal Fund is capitalized through four mechanisms: 
the barrel tax, interest on the Fund, cost recoveries, and 
penalties. The Fund reimburses States who are usually the first 
on scene and engage in the initial cleanup of the site. The 
Fund then seeks reimbursement from parties found to be 
responsible for spills. Finally, several Federal statutes 
impose penalties upon responsible parties. Such penalties are 
paid into the Fund. The Oil Pollution Act includes statutory 
liability limits for responsible parties of up to $350 million 
for any onshore facility or deepwater port. For spills 
occurring at offshore facilities other than deepwater ports, 
responsible parties are liable for the total of all removal 
costs plus $75 million. Further, there are specific limits for 
tank vessels based on the size of those vessels. Any cleanup 
costs above these limits are paid by the Fund.
    The Principal Fund's two primary expenses include claims by 
any person or entity that has incurred removal costs or damages 
due to an oil spill, and appropriations to Federal agencies and 
other organizations, including the Denali Commission and the 
Prince William Sound Oil Spill Recovery Institute. Agency 
disbursements are intended to fund research and development, as 
well as oil-spill statute administration and enforcement.

                      Section-by-Section Analysis

Section 1. Audits and reports

                                Summary

    (a) Audits--Beginning April 30th of the year enacted, and 
every 2 years thereafter, the President will provide the Senate 
Committees on Commerce, Science, Transportation, and 
Environment and Public Works, as well as the House of 
Representatives Committee on Transportation and Infrastructure, 
with an audit conducted by the Comptroller General of the 
United States. This audit shall include a detailed accounting 
of all disbursements exceeding $100,000, made by the National 
Pollution Funds Center from the Fund and which are administered 
and managed by the receiving agencies, including final payments 
made through agencies, contractors, and subcontractors.
    (b) Reports--Beginning February 28th of the fiscal year 
enacted and each February 28th thereafter, the Secretary, the 
Secretary of Interior, the Secretary of Transportation, the 
Administrator of the EPA, and the heads of other Federal 
agencies that receive in excess of $100,000 from the Fund 
during the preceding fiscal year shall report to the President, 
describing how they used those funds for oil pollution 
liability, compensation, prevention, preparedness and removal, 
natural resource damage assessment and restoration, oil 
pollution research and development, and other oil pollution 
related activities. The report shall be made available to the 
public through the National Pollution Funds Center Website.
    (c) Authorization of Appropriations--The bill authorizes 
such sums as are necessary to carry out such audits.

                               Discussion

    The Fund is dispersed to a variety of Federal agencies, as 
well as private entities, to reimburse or finance expenditures 
related specifically to responding to and preventing oil 
spills; therefore, it is necessary to track disbursements from 
the fund in order to insure that the funds are being properly 
utilized. The legislation will provide transparency as to how 
the Fund's disbursements are being spent.

                          Legislative History

    On November 16, 2005, Senator Inhofe introduced S. 2023, 
which was cosponsored by Senator Thune. The bill was received, 
read twice and referred to the Senate Committee on Environment 
and Public Works. The committee met on May 23, 2006 to consider 
the bill. During consideration of the bill, an amendment in the 
nature of a substitute offered by Senator Inhofe was agreed to 
by voice vote. S. 2023 was ordered favorably reported, as 
amended, by voice vote.

                                Hearings

    No committee hearings were held on S. 2023.

                             Rollcall Votes

    The Committee on Environment and Public Works met to 
consider S. 2023 on May 23, 2006. During consideration of the 
bill, an amendment in the nature of a substitute offered by 
Senator Inhofe was agreed to by voice vote. The bill was 
ordered favorably reported, as amended, by voice vote. No roll 
call votes were taken.

                      Regulatory Impact Statement

    In compliance with Section 11(b) of rule XXVI of the 
Standing Rules of the Senate, the committee finds that S. 2023 
does not create any additional regulatory burdens, nor will it 
cause any adverse impact on the personal privacy of 
individuals.

                          Mandates Assessment

    In compliance with the Unfunded Mandates Reform Act of 1995 
(Public Law 104-4), the committee finds that S. 2023 would not 
impose Federal intergovernmental unfunded mandates on State, 
local or tribal governments.

                          Cost of Legislation

    Section 403 of the Congressional Budget and Impoundment 
Control Act requires that a statement of the cost of the 
reported bill, prepared by the Congressional Budget Office, be 
included in the report. That statement follows:
                              ----------                              

S. 2023, A bill to amend the Oil Pollution Act of 1990 to improve that 
        act, As ordered reported by the Senate Committee on Environment 
        and Public Works on May 23, 2006
    S. 2023 would require the President to provide the Congress 
with a biennial audit (to be conducted by the Comptroller 
General) of certain expenditures from the Oil Spill Liability 
Trust Fund. Based on the costs of other audits of this scope, 
CBO estimates that preparing the required reports and audits 
would cost the Government Accountability Office, the United 
States Coast Guard, and other Federal agencies a total of about 
$500,000 every 2 years. We estimate that enacting the bill 
would not affect revenues or direct spending.
    The bill contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act and 
would impose no costs on State, local, or tribal governments.
    The CBO staff contact for this estimate is Deborah Reis. 
This estimate was approved by Peter H. Fontaine, Deputy 
Assistant Director for Budget Analysis.

                        Changes in Existing Law

    In compliance with section 12 of rule XXVI of the Standing 
Rules of the Senate, changes in existing law made by the bill 
as reported are shown as follows: Existing law proposed to be 
omitted is enclosed in [black brackets], new matter is printed 
in italic, existing law in which no change is proposed is shown 
in roman:
                              ----------                              


                       OIL POLLUTION ACT OF 1990

AN ACT To establish limitations on liability for damages resulting from 
oil pollution, to establish a fund for the payment of compensation for 
                 such damages, and for other purposes.

    Be it enacted by the Senate and House of Representatives of 
the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Oil Pollution Act of 1990''.

 H4  deg.SEC. 2. TABLE OF CONTENTS.

  The contents of this Act are as follows:

            TITLE I--OIL POLLUTION LIABILITY AND COMPENSATION

Sec. 1001. Definitions.
Sec. 1002. Elements of liability.
Sec. 1003. Defenses to liability.
Sec. 1004. Limits on liability.
Sec. 1005. Interest.
Sec. 1006. Natural resources.
Sec. 1007. Recovery by foreign claimants.
Sec. 1008. Recovery by responsible party.
Sec. 1009. Contribution.
Sec. 1010. Indemnification agreements.
Sec. 1011. Consultation on removal actions.
Sec. 1012. Uses of the Fund.
Sec. 1013. Claims procedure.
Sec. 1014. Designation of source and advertisement.
Sec. 1015. Subrogation.
Sec. 1016. Financial responsibility.
Sec. 1017. Litigation, jurisdiction, and venue.
Sec. 1018. Relationship to other law.
Sec. 1019. State financial responsibility.
Sec. 1020. Application.
Sec. 1021. Audits and reports.
      * * * * * * *

           TITLE I--OIL POLLUTION LIABILITY AND COMPENSATION

SEC. 1001. DEFINITIONS.

           * * * * * * *

SEC. 1020. APPLICATION.

  This Act shall apply to an incident occurring after the date 
of the enactment of this Act.

SEC. 1021. AUDITS AND REPORTS.

    (a) Audits.--Not later than April 30 of the fiscal year in 
which this section is enacted, and every 2 years thereafter, 
the President shall provide to the Committees on Commerce, 
Science, and Transportation and Environment and Public Works of 
the Senate and the Committee on Transportation and 
Infrastructure of the House of Representatives an audit 
conducted by the Comptroller General of the United States that 
includes a detailed accounting of all funds from the Fund in 
excess of $100,000 that are--
            (1) disbursed by the National Pollution Funds 
        Center; and
            (2) administered and managed by the receiving 
        agencies, including final payments made through 
        agencies, contractors, and subcontractors.
    (b) Reports.--Not later than February 28 of the fiscal year 
in which this section is enacted, and every February 28 
thereafter, the Secretary, the Secretary of the Interior, the 
Secretary of Transportation, the Administrator of the 
Environmental Protection Agency, and the heads of any other 
Federal agencies that, during the preceding fiscal year, 
received funds from the Fund in excess of $100,000, shall--
            (1) provide to the President a report accounting 
        for the uses of the funds by the Federal agency, 
        including a description of ways in which those uses 
        relate to--
                    (A) oil pollution liability, compensation, 
                prevention, preparedness, and removal;
                    (B) natural resource damage assessment and 
                restoration;
                    (C) oil pollution research and development; 
                and
                    (D) other oil pollution-related activities; 
                and
            (2) make each report available to the public and 
        other interested parties via the Internet website of 
        the National Pollution Funds Center.
    (c) Authorization of Appropriations.--There are authorized 
to be appropriated such sums as are necessary to carry out this 
section.
           * * * * * * *

                                 
