[Senate Report 110-403]
[From the U.S. Government Publishing Office]



                                                       Calendar No. 858
110th Congress                                                   Report
                                 SENATE
 2d Session                                                     110-403

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

                                _______
                                

                 June 27, 2008.--Ordered to be printed

                                _______
                                

    Mrs. Boxer, from the Committee on Environment and Public Works, 
                        submitted the following

                              R E P O R T

                         [To accompany S. 1566]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Environment and Public Works, to which was 
referred a bill (S. 1566) to amend the Oil Pollution Act of 
1990 to improve that Act, and for other purposes, having 
considered the same, reports favorably thereon without 
amendment and recommends that the bill 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originally enacted in 1990 following the Exxon Valdez spill in 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 sunset in 1995; at 
the time the Fund reached $1 billion. In 2005, the Energy 
Policy Act reauthorized collection of the tax, in response to 
recent major spills, including potential claims arising from 
spills caused by Hurricane Katrina that could have threatened 
to drain the Fund's balance.
    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 
vessels based on the type and size of those vessels. Any 
cleanup costs above these limits are eligible to be 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 
related to oil spill prevention and response, as well as oil-
spill statute administration and enforcement.

                      Section-by-Section Analysis


Section 1. Audits and reports

            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.
            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.
            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 ensure that the funds are being properly 
utilized. While the Coast Guard tracks disbursements it makes 
from the Fund, each federal agency receiving the disbursements 
is responsible for its own accounting of how the funds are 
actually spent, and private entities. The legislation will 
provide transparency as to how the Fund's disbursements are 
spent.

                      Regulatory Impact Statement

    In compliance with section 11 (b)(2) of rule XXVI of the 
Standing Rules of the Senate, the Committee states that there 
are not expected to be significant costs to private entities 
under this legislation, and the Committee agrees with the 
Congressional Budget Office, which has concluded that the bill 
will not establish any private-sector mandates.

                          Mandates Assessment

    In compliance with the Unfunded Mandates Reform Act of 1995 
(Public Law 104-4), the Committee finds, consistent with the 
determination of the Congressional Budget Office, that S. 1566 
would impose no Federal intergovernmental unfunded mandates on 
State, local or tribal governments. The Committee further 
agrees with the Congressional Budget Office that the bill does 
not impose private sector mandates.

               Congressional Budget Office Cost Estimate

    In compliance with paragraph 11(a) of rule XXVI of the 
Standing Rules of the Senate and section 403 of the 
Congressional Budget Act of 1974, the Committee provides the 
following cost estimate, prepared by the Congressional Budget 
Office:

S. 1566--A bill to amend the Oil Pollution Act of 1990 to improve that 
        act

    S. 1566 would establish additional reporting and auditing 
requirements for spending from the Oil Spill Liability Trust 
Fund (OSLTF). Under the bill, federal agencies that receive 
over $100,000 a year from the fund would report to the 
President on how that money is used. In addition, the 
Comptroller General would conduct audits of all expenditures in 
excess of that amount made by the National Pollution Funds 
Center of the U.S. Coast Guard, which administers the fund. The 
OSLTF covers the costs of cleaning up oil spills.
    Based on the costs of other audits and reports of this 
scope, CBO estimates that implementing S. 1566 would cost the 
Government Accountability Office, the Coast Guard, and other 
federal agencies a total of about $500,000 every two years. 
Enacting the bill would not affect revenues or direct spending.
    S. 1566 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act and 
would not affect the budgets of state, local, or tribal 
governments.
    The CBO staff contact for this estimate is Deborah Reis. 
The estimate was approved by Peter H. Fontaine, 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:

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OIL POLLUTION ACT OF 1990

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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.

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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 Committee on 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.

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