Y 4.M53: 103-123

VESSEL CERTIFICATES OF FINANCIAL
RESPONSIBILITY

HEARING

BEFORE THE

SUBCOMMITTEE ON

COAST GUARD AND NAVIGATION

OF THE

COMMITTEE ON

MERCHANT MARINE AND FISHERIES
HOUSE OF REPRESENTATIVES

ONE HUNDRED THIRD CONGRESS

SECOND SESSION

ON

THE COAST GUARD'S INTERIM FINAL RULE ON RE-
QUIREMENTS FOR EVIDENCE OF FINANCIAL RE-
SPONSIBILITY UNDER THE OIL POLLUTION ACT OF

1990

JULY 21, 1994

Serial No. 103-123

Printed for the use of the Committee on Merchant Marine and Fisheries

Stanford Unveteny
Jonsson Library

Superintendent of Documents, Congressional Sales Office, Washington, DC 20402

ISBN 0-16-046179-0

COMMITTEE ON MERCHANT MARINE AND FISHERIES

GERRY E. STUDDS, Massachusetts, Chairman

CONTENTS

Page

1

.55, 61

232

.30, 33

138

Hearing held July 21, 1994

Statement of:

Aspland, Jerry A., President, Arco Marine, Inc., and chairman, API Gen-

eral Committee on Marine Transportation

Prepared statement

Bryant, Hugh, Chairman, Mutual Management, Ltd., on behalf of Shore-
line Mutual Insurance

Prepared statement

Coble, Hon. Howard, a U.S. Representative from North Carolina, and

Ranking Minority Member, Subcommittee on Coast Guard and Naviga-

tion

Coghlin, Terence G., Chairman, International Group of P&I Clubs
Prepared statement

288808

Fields, Hon. Jack, a U.S. Representative from Texas, and Ranking Minor-

ity Member, Committee on Merchant Marine and Fisheries

3

Horowitz, Robert, Chief, Regulation and Legislative Branch, National

Pollution Funds Center

4

Kramek, Adm. Robert E., Commandant, U.S. Coast Guard
Prepared statement

Kulukundis, Miles A., Chairman, International Association of Independ-

ent Tanker Owners

..55, 58

Prepared statement

Kulukundis, Stathes, Deputy Chairman, Greek Shipping Co-operation

Committee, London, U.K., on behalf of Greek, Norwegian and Swedish

shipowners

..30, 35

Prepared statement

Law, W. Bruce, Executive Vice President, Allied Towing Corporation,

representing The American Waterways Operators

Prepared statement

Marathon Oil Company (prepared statement)

Sheehan, Daniel, Director, National Pollution Funds Center, U.S. Coast

Guard

Speer, Lisa, Senior Policy Analyst, Natural Resources Defense Council .....55, 59

Prepared statement

Tauzin, Hon. W.J. (Billy), a U.S. Representative from Louisiana, and

Chairman, Subcommittee on Coast Guard and Navigation

1

Youell, J. Richard L., Marine Underwriter at Lloyd's of London, and

Director, Janson Green Ltd.

Clarification of the term "guarantor" and the methods for dem-

Committee Staff: Certificates of Financial Responsibility-A Cost Benefit

Discussion

267

Kulukundis, Stathes: Proposal for a Mandatory Excess Insurance Facil-

ity

189

Ryan, George J. (Lake Carriers' Assn.): Financial responsibility for water

pollution (vessels)

Page

Communications submitted:

Corrado, Ernest J. (AIMS): Letter of August 2, 1994, to Hon. W.J. (Billy)
Tauzin

237

Fitz-Hugh, R. Tucker (Intl. Sureties, Ltd.): Letter of July 27, 1994, to
Ms. Elizabeth Megginson

243

Horrocks, J.C.S. (Intl. Chamber of Shipping): Letter of July 29, 1994, to Hon. William Tauzin

240

Horner, Richard D. (AHL): Letter of August 22, 1994, to Hon. W.J.
Tauzin

253

Kramek. Adm. Robert E.: Letter of August 8, 1994, to Hon. W. J. (Billy)
Tauzin containing additional information

101

Kulukundis, Stathes (Greek Shipping): Letter of July 29, 1994, to Hon.
Billy Tauzin

260

Northmore, Michael J., D. Darby Duryea, and Graham D.R.D. Barnes (Johnson & Higgins): Letter of July 20, 1994, to Hon. W.J. (Billy) Tauzin

229

Patti, C. James (MIRAID): Letter of August 23, 1994, to Hon. Billy
Tauzin

252

Quarterman, Cynthia (Interior Dept.): Letter of August 31, 1994, to Hon.
Gene Taylor

271

Reeth, George P., Jr. (Willis Faber N.Am., Inc.): Letter of July 20, 1994, to Hugh Bryant

180

Sheehan, Daniel F. (Coast Guard): Letter of October 6, 1994, to Hon.
W.J. (Billy) Tauzin with use of OSLTF

262

Shane, Jeffrey N. (Shoreline): Letter of November 7, 1994, to Hon. W.
J. Tauzin with answers to questions submitted
Tauzin, Hon. W.J., Hon. Jack Fields, Hon. Solomon P. Ortiz, Hon. How-
ard Coble, Hon. Greg Laughlin, and Hon. Herbert H. Bateman: Letter
of November 2, 1994, to President William J. Clinton

256

264

VESSEL CERTIFICATES OF FINANCIAL

RESPONSIBILITY

THURSDAY, JULY 21, 1994

HOUSE OF REPRESENTATIVES,

SUBCOMMITTEE ON COAST GUARD AND NAVIGATION,
COMMITTEE ON MERCHANT MARINE AND FISHERIES,
Washington, DC.

The Subcommittee met, pursuant to call, at 10:00 a.m., in room 1334, Longworth House Office Building, Hon. W. J. (Billy) Tauzin (Chairman of the Subcommittee) presiding.

Present: Representatives Tauzin, Lancaster, Barlow, Pickett, Laughlin, Taylor, Coble, Bateman, and Gilchrest.

Staff Present: Subcommittee-Elizabeth Megginson, Catherine Tucker, Bill Wright, Jim Adams, Douglas Cheramie, Sharon Donald; Full Committee Tom Kitsos, Sue Waldron, Joan Bondareff, Lee Crockett; Minority-Harry Burroughs, Cyndi Wilkinson, Ed Lee, Rebecca Dye, and Margherita Woods.

STATEMENT OF HON. W.J. TAUZIN, A U.S. REPRESENTATIVE FROM LOUISIANA, AND CHAIRMAN, SUBCOMMITTEE ON COAST GUARD AND NAVIGATION

Mr. TAUZIN. The hearing will please come to order.

We may have a journal vote this morning. I think that is why Members are holding back. Mr. Coble and I will get our statements in and hopefully we will not have to interrupt the hearing in that regard.

We welcome you to this hearing of the Coast Guard and Navigation Subcommittee. The subject of this hearing is the Coast Guard's interim final rule on the requirements for evidence of financial responsibility under the Oil Pollution Act of 1990. We will focus on this rule, its impact, and the implementation of the regulation.

As I have stated before, I think it is important for this subcommittee not only to pass legislation, but also to oversee the implementation of the law through the regulatory process. When the Oil Pollution Act of 1990 was signed into law, we in Congress all shared the same goal of ensuring that oil spills are prevented. However, recognizing the inevitability of error in the event of an oil spill, we wanted to ensure that sufficient resources are available to promptly and fully respond.

As you may recall, this subcommittee held hearings on the proposed rule in November of 1991. It almost seems like ages ago. It seems like we were on the moon more recently than our last hearing.