Bill Text: IA SF129 | 2015-2016 | 86th General Assembly | Introduced
Bill Title: A bill for an act requiring proof of financial assurance relating to accidental hazardous pipeline discharge damage claims, and including effective and applicability date provisions.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2015-02-03 - Subcommittee, Bolkcom, Anderson, Bertrand, McCoy, and Petersen. S.J. 207. [SF129 Detail]
Download: Iowa-2015-SF129-Introduced.html
Senate File 129 - Introduced SENATE FILE BY HOGG A BILL FOR 1 An Act requiring proof of financial assurance relating to 2 accidental hazardous pipeline discharge damage claims, and 3 including effective and applicability date provisions. 4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: TLSB 1479XS (4) 86 rn/nh PAG LIN 1 1 Section 1. Section 479B.2, Code 2015, is amended by adding 1 2 the following new subsection: 1 3 NEW SUBSECTION. 1A. "Financial assurance instrument" 1 4 means an instrument submitted by an applicant to ensure the 1 5 applicant's financial capability to respond as provided in 1 6 section 479B.13A, in the form of one or more of the following: 1 7 a. The establishment of a secured trust fund. 1 8 b. The use of a cash or surety bond. 1 9 c. The obtaining of insurance. 1 10 d. The satisfaction of a corporate financial test. 1 11 e. The satisfaction of a local government financial test. 1 12 f. The obtaining of a corporate guarantee. 1 13 g. The obtaining of a local government guarantee. 1 14 h. The use of a local government dedicated fund. 1 15 i. The obtaining of an irrevocable letter of credit. 1 16 Sec. 2. Section 479B.13, Code 2015, is amended to read as 1 17 follows: 1 18 479B.13 Financial condition of permittee == construction, 1 19 maintenance, or operation damages == bond. 1 20 Before a permit is granted under this chapter the applicant 1 21 must satisfy the board that the applicant has property within 1 22 this state other than pipelines or underground storage 1 23 facilities, subject to execution of a value in excess of two 1 24 hundred fifty thousand dollars, or the applicant must file 1 25 and maintain with the board a surety bond in the penal sum 1 26 of two hundred fifty thousand dollars with surety approved 1 27 by the board, conditioned that the applicant will pay any 1 28 and all damages legally recovered against it growing out of 1 29 the construction, maintenance, or operation of its pipeline 1 30 or underground storage facilities in this state. When the 1 31 pipeline company deposits with the board security satisfactory 1 32 to the board as a guaranty for the payment of the damages, or 1 33 furnishes to the board satisfactory proofs of its solvency and 1 34 financial ability to pay the damages, the pipeline company is 1 35 relieved of the provisions requiring bond. 2 1 Sec. 3. NEW SECTION. 479B.13A Financial condition of 2 2 permittee == damages for discharge. 2 3 1. Before a permit is granted under this chapter for a 2 4 pipeline to be constructed on or after January 1, 2015, and in 2 5 addition to the requirements of section 479B.13, an applicant 2 6 must provide to the board a financial assurance instrument 2 7 verifying that the applicant has the financial capability to 2 8 provide reasonable and necessary remedial response and to 2 9 respond in damages for claims arising from the accidental 2 10 discharge of hazardous liquid. The financial assurance 2 11 instrument shall meet all requirements adopted by rule by the 2 12 board, and shall not be issued, canceled, revoked, disbursed, 2 13 released, or allowed to terminate without board approval. 2 14 2. For the first calendar year during which hazardous liquid 2 15 is shipped, the amount of financial assurance required pursuant 2 16 to this section shall be two hundred fifty thousand dollars 2 17 per mile of pipeline. For the second calendar year during 2 18 which hazardous liquid is shipped, and every calendar year 2 19 thereafter, the amount of financial assurance required shall 2 20 be the greater of one dollar per barrel of hazardous liquid 2 21 shipped per calendar year by the applicant based on the most 2 22 recent calendar year for which such information is available 2 23 to the applicant, or two hundred fifty thousand dollars per 2 24 mile of pipeline. In no event shall the amount of financial 2 25 assurance required pursuant to this section in any calendar 2 26 year be less than two hundred fifty thousand dollars. 2 27 Sec. 4. Section 479B.14, unnumbered paragraph 6, Code 2015, 2 28 is amended to read as follows: 2 29 A pipeline company may petition the board for an extension 2 30 of a permit granted under this section by filing a petition 2 31 containing the information required by section 479B.5, 2 32 subsections 1 through 5, and meeting the requirements of 2 33sectionsections 479B.13 and 479B.13A. 2 34 Sec. 5. EFFECTIVE UPON ENACTMENT. This Act, being deemed of 2 35 immediate importance, takes effect upon enactment. 3 1 Sec. 6. RETROACTIVE APPLICABILITY. This Act applies 3 2 retroactively to January 1, 2015. 3 3 EXPLANATION 3 4 The inclusion of this explanation does not constitute agreement with 3 5 the explanation's substance by the members of the general assembly. 3 6 This bill requires the submission of proof of financial 3 7 assurance prior to issuance of a permit to construct, maintain, 3 8 and operate a hazardous liquid pipeline by the Iowa utilities 3 9 board. 3 10 Current provisions contained in Code section 479B.13 3 11 require an applicant to satisfy the board that the applicant 3 12 has property within Iowa other than pipelines or underground 3 13 storage facilities subject to execution of a value in excess 3 14 of $250,000, or requires the applicant to file and maintain a 3 15 surety bond in that amount. These provisions relate to damages 3 16 attributable to the construction, maintenance, or operation of 3 17 the pipeline or underground storage facility. 3 18 The bill creates a new Code section 479B.13A which 3 19 requires that before a permit is granted for a pipeline to be 3 20 constructed on or after January 1, 2015, and in addition to 3 21 the requirements of Code section 479B.13, an applicant must 3 22 provide to the board a financial assurance instrument verifying 3 23 that the applicant has the financial capability to provide 3 24 reasonable and necessary remedial response and to respond in 3 25 damages for claims arising from the accidental discharge of 3 26 hazardous liquid. The bill states that the financial assurance 3 27 instrument shall meet all requirements adopted by rule by the 3 28 board, and shall not be issued, canceled, revoked, disbursed, 3 29 released, or allowed to terminate without board approval. 3 30 The bill defines a "financial assurance instrument" to mean 3 31 one or a combination of establishing a secured trust fund, 3 32 using a cash or surety bond, obtaining insurance, satisfying 3 33 a corporate or local government financial test, obtaining 3 34 a corporate or local government guarantee, using a local 3 35 government dedicated fund, or obtaining an irrevocable letter 4 1 of credit. 4 2 The bill provides that the amount of financial assurance 4 3 required for accidental hazardous liquid discharge liability 4 4 for the first calendar year during which hazardous liquid is 4 5 shipped, and shall be $250,000 per mile of pipeline. For 4 6 the second calendar year during which hazardous liquid is 4 7 shipped, and every calendar year thereafter, the amount of 4 8 financial assurance required shall be the greater of $1 per 4 9 barrel of hazardous liquid shipped per calendar year by the 4 10 applicant based on the most recent calendar year for which such 4 11 information is available to the applicant, or $250,000 per mile 4 12 of pipeline. The bill states that in no event shall the amount 4 13 of financial assurance required in any calendar year be less 4 14 than $250,000. 4 15 The bill takes effect upon enactment and is retroactively 4 16 applicable to January 1, 2015. LSB 1479XS (4) 86 rn/nh
