35 Ocean & Coastal L. Memo 1 (1990)

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Ocean and Coastal




                        aw Memo


Issue 35  July 1990


Recent Developments in Ocean and Coastal Law, 1989


I.  Oil Spill Legislation

A.  Compensation funds

    H.R. 3394, a composite oil
spill bill introduced in October
1989, would substantially increase
federal liability limits for oil
spills and create a federal com-
pensation fund offering $1 billion
per incident for cleanup and
resource damage costs not paid
for by the spiller.

    It is unclear exactly how the
$1 billion compensation fund will
be financed. Under the 1986
Budget Reconciliation Act, pas-
sage of oil spill legislation would
trigger a 1.3 cent per barrel tax,
activating a $300 million compen-
sation fund. Sponsors of H.R.
3394 are seeking support for a 5
cent per barrel tax to finance the
compensation fund.

    The House bill limits pre-
emption of state laws. State
compensation funds, state taxes
to finance those funds, and state
laws regarding personal injury or
wrongful death actions are not
affected. H.R. 3394 directs that


except as allowed in its provi-
sions, no action arising out of a
discharge of oil may be brought
in any [state court]. The Senate
version does not preempt state
law.

    In addition, H.R. 3394 sets
forth how the 1984 International
Maritime Organization protocols
will be implemented, preparing
for U.S. participation in the
international liability and com-
pensation system.

    Title III of H.R. 3394 states
that during any period in which
the Civil Liability Convention
and Fund  Convention are in
force with respect to the United
States the international liability
limits would govern incidents to
which the Convention applies.
To meet compensation  require-
ments arising under domestic law
that exceed the international
liability limits, the International
Fund would  automatically
indemnify and defend the
shipowner responsible for the
spill. H.R. 3394 recognizes the
International Fund as a legal
person under U.S. law.


    The 1984 protocols quad-
rupled both the 1969 inter-
national liability limit under the
International Convention on Civil
Liability for Oil Pollution
Damage  and the 1971 compen-
sation fund under the Inter-
national Convention on the
Establishment of an International
Fund  for Compensation for Oil
Pollution Damage.

    In discussions of oil spill
legislation, federal officials are
expected to consider whether
double bottoms or double hulls
would prevent disasters like the
Exxon  Valdez spill in Alaska.

B.  Preemption

    In November, the U.S. House
of Representatives voted not to
preempt state oil spill laws,
reversing its historical stand and
removing an obstacle that
blocked enactment of compre-
hensive oil spill liability and
compensation legislation. The
House  approved its comprehen-
sive oil spill bill, H.R. 1465. The
Senate earlier approved a similar
bill, S. 686. The bills then went
into conference.


Distributed by: Oregon State University Extension . Sea Grant Program   Corvallis  OR

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