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1 1 (February 12, 2018)

handle is hein.crs/govchur0001 and id is 1 raw text is: &~ ~ riE SE .$rCh &~ ~ ~ Updated February 12, 2018 The Oil Spill Liability Trust Fund Tax: Reauthorization Issues and Legislation in the 115th Congress The Oil Spill Liability Trust Fund (OSLTF) provides immediate access to funds for a federal response to an oil spill and compensation for 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). 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 severalfold over the last decade, largely due to the tax receipts. The authority to collect the tax expired December 31, 2017. The Bipartisan Budget Act of 2018 (P.L. 115-123) reinstated the tax authority through December 31, 2018, with an effective date of March 1, 2018. Figure I. Oil Spill Liability Trust Fund End of Year Unappropriated Balances, FYI 991 -FY2019 .; ... . - - ...... ...... . . ... . ............. .... .. ...... Source: Prepared by CRS; data from Office of Management and Budget, annual Budget of the United States Government, Appendices. OS LTF ,.kr ,, n ,, , The 1989 Exxon Valdez oil spill led to questions in Congress regarding the effectiveness of federal oil spill response capabilities. 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, 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. In the intervening years, the taxing authority expired and was resumed, and the tax rate was adjusted. The current tax rate is 9 cents per barrel. 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 payments, including response costs and 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 up front 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 individual incident. Congress set this limit so that any one individual spill would not deplete the fund. OPA set the per-incident cap at $1 billion. Within this $1 billion limit, natural resource damage awards cannot exceed $500 million. Although the OSLTF per-incident cap has not been breached to date, some oil spills in recent years have .O 'T gognpo 'popmm- , goo g , q 'S a X 11LULANJILiN,

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