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1 1 (April 3, 2019)

handle is hein.crs/govzam0001 and id is 1 raw text is: Corngrsioa Reeac Setc 0 April 3, 2019 The Oil Spill Liability Trust Fund Tax: Background and Reauthorization Issues in the 116th Congress The Oil Spill Liability Trust Fund (OSLTF) provides an immediate source of funds for federal responses to oil spills and compensation for certain damages. The regulatory procedures of the National Contingency Plan establish a framework for coordinating a federal response with state and local officials (40 C.F.R. Part 300). Historically, the OSLTF has been financed primarily by a per-barrel excise tax on domestic crude oil and imported petroleum products. As illustrated in Figure 1, the unappropriated balance of the trust fund increased five-fold over the last decade, largely through the accrual of receipts from the excise tax, which expired December 31, 2018. The President's FY2020 budget request proposed to reinstate the per-barrel tax. As Figure 1 indicates, if the tax were reinstated, the FY2020 end-of-year balance would increase by about $500 million. Figure I. OSLTF Year-End Unappropriated Balances Actual (FYI 991 -FY2018) and estimated (FY20I9-FY2020) Estimated balance if OSLTF $7.0tax reinstated in FY2020 $6.0 $4.0 $2,0 FY9 and FY20asneOMsfmates Source: Prepared by CRS; data from Office of Management and Budget, annual Budget of the United States Government, Appendices. OSLTF Background and Overview The 1989 Exxon Valdez oil spill led to questions in Congress regarding oil spill policy issues, including oil spill response, liability, and compensation. The Oil Pollution Act of 1990 (OPA, P.L. 101-380) established a new federal oil spill liability framework, replaced existing federal liability frameworks, and amended the Clean Water Act oil spill response authorities. In addition, OPA transferred monies into the OSLTF from existing liability funds: the Clean Water Act revolving fund (repealed), the Deepwater Port Liability Fund, the Trans-Alaska Pipeline Liability Fund, and the Offshore Oil Pollution Compensation Fund. Under OPA, parties responsible for an oil spill may be liable for cleanup costs, natural resource damages, and specific economic damages, including personal property damage and lost profits or earning capacity. OPA provides (1) limited defenses from liability-act of God, act of war, and act or omission of certain third parties-and (2) conditional liability limits (i.e., caps) for cleanup costs and other eligible damages. The Omnibus Budget Reconciliation Act of 1986 established the OSLTF (P.L. 99-509), but the act did not authorize appropriations for the fund or authorize its use. The 1986 act also included provisions to establish an excise tax to support the fund, but the tax did not take effect at the time, because a condition triggering the effective date of the tax authority was not met. Subsequent laws authorized the OSLTF taxing authority, appropriations from the fund, and eligible uses for the fund. The tax first took effect at 5 cents per barrel on January 1, 1990. The tax expired on December 31, 1994, and was not in effect until Congress reinstated the tax in 2006 through the Energy Policy Act of 2005 (P.L. 109-58). The Emergency Economic Stabilization Act of 2008 (P.L. 110-343) increased the tax rate to 8 cents per barrel through December 31, 2016, and to 9 cents per barrel starting in 2017. The rate was 9 cents per barrel when it expired in 2018. The OSLTF is subject to both permanent and discretionary appropriations. Discretionary appropriations from the OSLTF have provided funding to several agencies for oil- spill-related activities. The permanent appropriations are limited to a maximum of $150 million annually. Permanent appropriations provide an immediate funding source to pay for eligible activities, including federal response actions, eligible claims submitted by affected parties, and natural resource damages. The U.S. Coast Guard administers the OSLTF through its National Pollution Funds Center. OPA authorizes the federal government to recover costs, including response costs and damage claims, made from the OSLTF through the enforcement of liability against responsible parties. Recovered funds are to be deposited back into the trust fund. The responsible parties may also perform and pay for response actions with their own monies, subject to direction from the federal government's on-scene coordinator. If a responsible party's payments were to exceed its OPA liability limit, the party may seek reimbursement from the OSLTF for the difference. Since its inception, there has been a statutory limitation on expenditures from the fund that could be used for any https://crsreports.congress.gov

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