S. 865 - Spill Response and Prevention Surety Act

116TH CONGRESS
1ST SESSION

S. 865

To amend the Oil Pollution Act of 1990 to establish an oil spill
response and prevention grant program and provide
for advances from the Oil Spill Liability Trust Fund, to amend
the Internal Revenue Code of 1986 to extend and modify
the application of the Oil Spill Liability Trust Fund
financing rate, and for other purposes.

IN THE SENATE OF THE UNITED STATES

MARCH 25, 2019

Mr. SULLIVAN introduced the following bill; which was read
twice and referred to the Committee on Finance

A BILL

To amend the Oil Pollution Act of 1990 to establish an oil spill response and prevention grant program and provide for advances from the Oil Spill Liability Trust Fund, to amend the Internal Revenue Code of 1986 to extend and modify the application of the Oil Spill Liability Trust Fund financing rate, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the "Spill Response and Prevention Surety Act".

SEC. 2. OIL SPILL RESPONSE AND PREVENTION.

(a) OIL SPILL RESPONSE AND PREVENTION GRANT PROGRAM. —

(1) IN GENERAL. — Subtitle A of title IV of the Oil Pollution Act of 1990 (Public Law 101–380; 104 Stat. 509) is amended by adding at the end the following:

"SEC. 4119. OIL SPILL RESPONSE AND PREVENTION GRANT PROGRAMS.

"(a) DEFINITIONS. — In this section:

"(1) COMMITTEE. — The term 'Committee' means the Interagency Coordinating Committee on Oil Pollution Research established by section 7001(a)(1).

"(2) ELIGIBLE ENTITY. — The term 'eligible entity' means an institution of higher education that —

"(A) is located in an eligible State in which oil spills present a real and constant threat;

"(B) has a broad base of competence in fields relating to —

"(i) ocean, coastal, river, or Great Lakes resources; or

"(ii) the modeling of, efficacy of responses to, and fates and effects of oil spills;

"(C) is located in an area in which —

"(i) academic, engineering, and infrastructure resources exist to adequately address ongoing and future threats of oil spills;

"(ii) Federal, State, industry, and academic resources are being directed to address threats of oil spills;

"(iii) planned future developments would intensify or exacerbate threats of oil spills; and

"(iv) research and development efforts would have the greatest impact on oil spill response and prevention;

"(D) if proposing to conduct research on oil spill response and prevention in an ice-impacted environment, has significant demonstrable experience in the conduct of research in ice-impacted environments; and

"(E) if proposing to conduct research in partnership with, or to subcontract work to, a foreign or private entity, is partnering with, or subcontracting to, a foreign or private entity that is uniquely equipped to support the research being proposed.

"(3) ELIGIBLE STATE. — The term 'eligible State' means a State —

"(A)(i) in which a marine oil terminal or transportation facility is located; or

"(ii) that the Secretary determines has a substantial risk of oil spills through any other means of transportation; and

"(B) with respect to which the Secretary has approved a proposal for the conduct of oil spill response or prevention activities or programs.

"(4) SECRETARY. — The term 'Secretary' means the Secretary of Homeland Security.

"(b) ESTABLISHMENT OF PROGRAMS. — To enable a better understanding of oil spills and oil spill response, and to prevent oil spills, there are established —

"(1) a program under which the Secretary shall biennially award grants to eligible entities for the conduct of oil spill response research and technology development activities and programs and oil spill prevention activities and programs that the Secretary determines to be of substantial merit, including the conduct of research on oil spill response and prevention in ice-impacted environments; and

"(2) a program under which the Secretary shall annually award grants to eligible States for the conduct of oil spill prevention activities and programs in the eligible States, including —

"(A) equipment and technology upgrades;

"(B) upgrades to, and promotion of optimal use of, spill prevention and response training facilities;

"(C) support of strategic plans to address aging bulk oil storage and transportation infrastructure;

"(D) risk assessments and studies; and

"(E) abandoned and derelict vessel identification, remediation, and removal.

"(c) APPLICATIONS. — To be eligible to receive a grant under the program established by paragraph (1) or (2) of subsection (b), an eligible entity or eligible State, as applicable, shall submit to the Secretary an application at such time, in such manner, and containing such information as the Secretary determines to be appropriate.

"(d) COORDINATION. —

"(1) ELIGIBLE ENTITY GRANT PROGRAM. —

"(A) IN GENERAL. — In coordinating, prioritizing, and awarding grants under the program established by subsection (b)(1), to ensure alignment with the principal objectives established in the Oil Pollution Research and Technology Plan of the Committee under section 7001(b), the Secretary shall coordinate with, and solicit recommendations from, the Committee.

"(B) RECOMMENDATIONS. — The recommendations provided by the Committee under subparagraph (A) shall incorporate feedback from —

"(i) oil and gas industry representatives with expertise in relevant oil spill response research; and

"(ii) members of academia with the expertise described in clause (i).

"(2) ELIGIBLE STATE GRANT PROGRAM. — In evaluating applications under the grant program established by subsection (b)(2), the Secretary may solicit recommendations from —

"(A) other relevant Federal departments and agencies; and

"(B) the Committee, with respect to any research activity or program relating to oil spill prevention proposed in such an application.

"(e) FUNDING. —

"(1) IN GENERAL. — Of the amount of interest produced by investments in the Fund —

"(A) $10,000,000, as indexed for United States dollar inflation from the date of enactment of this section (as measured by the Consumer Price Index), shall be available biennially, without further appropriation, to carry out the grant program established by subsection (b)(1); and

"(B) $25,000,000, as indexed for United States dollar inflation from the date of enactment of this section (as measured by the Consumer Price Index), shall be available annually, without further appropriation, to carry out the grant program established by subsection (b)(2).

"(2) ADMINISTRATIVE EXPENSES. — Of the amounts made available under subparagraphs (A) and (B) of paragraph (1) that are not otherwise appropriated, the Secretary may use not more than 2 percent for the administrative expenses of the Secretary in carrying out the grant programs established by paragraphs (1) and (2), respectively, of subsection (b) for each fiscal year.".

(2) CLERICAL AMENDMENT. — The table of contents of the Oil Pollution Act of 1990 (33 U.S.C. prec. 2701) is amended by inserting after the item relating to section 4118 the following:

"Sec. 4119. Oil spill response and prevention grant programs.".

(3) EXPENDITURE AUTHORITY. — Section 9509(c)(1) of the Internal Revenue Code of 1986 is amended —

(A) in the matter preceding subparagraph (A), by striking "section 6002(b)" and inserting "section 4119 or 6002(b)";

(B) in subparagraph (E), by striking "and" at the end;

(C) in subparagraph (F), by striking the period at the end and inserting ", and"; and

(D) by adding at the end the following:

"(G) for carrying out the grant programs under section 4119 of the Oil Pollution Act of 1990.".

(b) ADVANCES OF AMOUNTS FROM OIL SPILL LIABILITY TRUST FUND. — Section 6002(b) of the Oil Pollution Act of 1990 (33 U.S.C. 2752(b)) is amended —

(1) in the fourth sentence, by striking "Sums" and inserting the following:

"(4) AVAILABILITY OF AMOUNTS. — The amounts";

(2) in the third sentence —

(A) by striking "by the Coast Guard"; and

(B) by striking "Amounts advanced" and inserting the following:

"(3) REPAYMENT OF ADVANCED AMOUNTS. — Any amounts advanced under paragraph (2)";

(3) by striking the second sentence and inserting the following:

"(2) ADVANCE OF FUNDS. — To the extent that the amount under paragraph (1) is not adequate, the Coast Guard —

"(A) may obtain from the Fund one or more advances of such sums as may be necessary, up to a maximum of $100,000,000, with the total amount of all advances not to exceed the amounts available under section 9509(c)(2) of the Internal Revenue Code of 1986; and

"(B) not later than 30 days after the date on which each advance is obtained under subparagraph (A), and annually thereafter until all advances are repaid, shall submit to the Committees on Commerce, Science, and Transportation and Finance of the Senate and the Committees on Transportation and Infrastructure and Ways and Means of the House of Representatives a report that describes —

"(i) the amount advanced under that subparagraph; and

"(ii) the facts and circumstances necessitating, supporting, and justifying the advance."; and

(4) in the first sentence —

(A) by striking ", as amended by this Act" and inserting "(33 U.S.C. 1321(c))"; and

(B) by striking "Subsection (a) shall not apply to sections" and inserting the following:

"(1) IN GENERAL. — Subsection (a) shall not apply to section".

(c) APPLICABILITY OF OIL SPILL LIABILITY TRUST FUND FINANCING RATE. —

(1) PERMANENT EXTENSION AND PERIODIC SUSPENSION. — Subsection (f) of section 4611 of the Internal Revenue Code of 1986 is amended to read as follows:

"(f) APPLICATION OF OIL SPILL LIABILITY TRUST FUND FINANCING RATE. —

"(1) IN GENERAL. — The Oil Spill Liability Trust Fund financing rate under subsection (c) shall not apply during any period —

"(A) beginning on the day after the last day of any calendar quarter for which the Secretary estimates that, as of the close of that quarter, the unobligated balance in the Oil Spill Liability Trust Fund is more than $7,000,000,000, and

"(B) ending 30 days after the last day of any subsequent calendar quarter for which the Secretary estimates that, as of the close of that quarter, such unobligated balance is $5,000,000 or less.

"(2) INFLATION ADJUSTMENT. — In the case of any calendar year beginning after December 31, 2019, the $7,000,000,000 amount in paragraph (1)(A) and the $5,000,000,000 amount in paragraph (1)(B) shall each be increased by an amount equal to —

"(A) such dollar amount, multiplied by

"(B) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year, by substituting '2018' for '2016' in subparagraph (A)(ii) thereof. Any increase determined under the preceding sentence shall be rounded to the nearest multiple of $100,000,000.".

(2) EFFECTIVE DATE. — The amendment made by this subsection shall apply to crude oil received or petroleum products entered after the date that is 7 days after the date of the enactment of this Act.

(d) MODIFICATION OF LIMITATION ON OIL SPILL LIABILITY TRUST FUND EXPENDITURES. —

(1) IN GENERAL. — Subparagraph (A) of section 9509(c)(2) of the Internal Revenue Code of 1986 is amended —

(A) by striking "$1,000,000,000" in clause (i) and inserting "$2,000,000,000";

(B) by striking "$500,000,000" in clause (ii) and inserting "$1,000,000,000"; and

(C) by striking "1,000,000,000 PER INCIDENT, ETC" in the heading and inserting "PER INCIDENT LIMITATIONS".

(2) INFLATION ADJUSTMENT. — Section 9509(c)(2) of such Code is amended by adding at the end the following new subparagraph:

"(C) INFLATION ADJUSTMENTS. — In the case of any calendar year beginning after December 31, 2019, the $2,000,000,000 amount in subparagraph (A)(i) and the $1,000,000,000 amount in subparagraph (A)(ii) shall each be increased by an amount equal to —

"(i) such dollar amount, multiplied by

"(ii) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year, by substituting '2018' for '2016' in subparagraph (A)(ii) thereof.

Any increase determined under the preceding sentence shall be rounded to the nearest multiple of $100,000,000.".

(e) CLARIFICATION OF DEFINITION OF CRUDE OIL FOR EXCISE TAX PURPOSES. —

(1) DEFINITION OF CRUDE OIL. — Paragraph (1) of section 4612(a) of the Internal Revenue Code of 1986 is amended to read as follows:

"(1) CRUDE OIL. — The term 'crude oil' includes crude oil condensates, natural gasoline, any bitumen or bituminous mixture, any oil derived from a bitumen or bituminous mixture.".

(2) EFFECTIVE DATE. — The amendment made by this subsection shall apply to oil and petroleum products received or entered during calendar quarters beginning more than 60 days after the date of the enactment of this Act.