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Calendar No. 858
110th Congress Report
2d Session 110-403
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originally enacted in 1990 following the Exxon Valdez spill in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
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 1. Audits and reports
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.
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
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
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.
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
S. 1566--A bill to amend the Oil Pollution Act of 1990 to improve that
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
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
* * * * * * *
OIL POLLUTION ACT OF 1990
* * * * * * *
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 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;
(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
(C) oil pollution research and development;
(D) other oil pollution-related activities;
(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
* * * * * * *