II 

111TH CONGRESS 

2D SESSION S. 3514 

To amend the Outer Continental Shelf Lands Act to prohibit a person 

from entering into any Federal oil or gas lease or contract unless the 

person pays into an Oil Spill Recovery Fund, or posts a bond, in an 

amount equal to the total of the outstanding liability of the person 

and any removal costs incurred by, or on behalf of, the person with 

respect to any oil discharge for which the person has outstanding liability, 

and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

JUNE 21, 2010 

Mr. BEGICH (for himself, Mr. WYDEN, and Ms. KLOBUCHAR) introduced the 

following bill; which was read twice and referred to the Committee on Environment and Public Works 

A BILL 

To amend the Outer Continental Shelf Lands Act to prohibit 

a person from entering into any Federal oil or gas lease 

or contract unless the person pays into an Oil Spill 

Recovery Fund, or posts a bond, in an amount equal 

to the total of the outstanding liability of the person 

and any removal costs incurred by, or on behalf of, 

the person with respect to any oil discharge for which 

the person has outstanding liability, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 


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1 SECTION 1. SHORT TITLE. 

2 This Act may be cited as the ‘‘Guaranteed Oil Spill 

3 Compensation Act of 2010’’. 

4 SEC. 2. FINDINGS. 

5 Congress finds that— 

6 (1) the Oil Pollution Act of 1990 (33 U.S.C. 

7 2701 et seq.)— 

8 (A) was passed directly in response to the 

9 Exxon Valdez oil spill; 

10 (B) establishes strict liability for parties 

11 responsible for the discharge of oil into navi12 gable waters, shorelines, or the exclusive eco13 nomic zone; 

14 (C) establishes liability for damages, in15 cluding damages related to all cleanup and re16 moval costs, natural resources, real or personal 

17 property, subsistence use of natural resources, 

18 government revenues, diminished profit and 

19 earning capacity, and increased public services; 

20 and 

21 (D) limits the liability of responsible par22 ties for damages beyond removal costs by vessel 

23 and facility type; 

24 (2) the annual report of the Coast Guard on li25 ability limits under the Oil Pollution Act of 1990 

26 (33 U.S.C. 2701 et seq.) for fiscal year 2009 indiVerDate Mar 15 2010 02:03 Jun 22, 2010 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S3514.IS S3514

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1 cates that 51 vessel oil spills since the date of enact2 ment of that Act caused damages that exceeded the 

3 liability limits for the applicable class of vessel; 

4 (3) in the Coast Guard and Maritime Transpor5 tation Act of 2006 (Public Law 109–241; 120 Stat. 

6 516), Congress increased the liability limits under 

7 the Oil Pollution Act of 1990 (33 U.S.C. 2701 et 

8 seq.) for single- and double-hulled vessels and gave 

9 the Coast Guard the ability to further adjust those 

10 limits for inflation; 

11 (4) the Internal Revenue Service estimated the 

12 balance of the Oil Spill Liability Trust Fund estab13 lished by section 9509 of the Internal Revenue Code 

14 of 1986 to be $1,700,000,000 at the end of fiscal 

15 year 2009, pending resolution of outstanding claims 

16 against the Fund; 

17 (5)(A) the cleanup of the oil spill resulting from 

18 the grounding of the Exxon Valdez on Bligh Reef in 

19 Prince William Sound on March 24, 1989, was de20 clared complete in 1992 by the Coast Guard and the 

21 State of Alaska and cost Exxon $2,000,000,000; 

22 (B) in a settlement approved by a United 

23 States district court on October 9, 1991, Exxon paid 

24 the State of Alaska and the Federal Government the 

25 equivalent of $900,000,000 (made in annual payVerDate Mar 15 2010 03:25 Jun 22, 2010 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S3514.IS S3514

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1 ment over 10 years) to settle the civil claims associ2 ated with the Exxon Valdez oil spill, of which a por3 tion was made for reimbursement for cleanup costs; 

4 (C) under a separate settlement of Federal 

5 criminal charges, Exxon also paid $25,000,000 in 

6 fines and $100,000,000, divided equally between the 

7 United States and Alaska, as restitution for criminal 

8 conduct by Exxon; 

9 (D) in a case consolidated into the case styled 

10 Exxon Shipping Co. v. Baker (128 S. Ct. 2605 

11 (2008)), a jury awarded $287,000,000 for damages 

12 to private parties and an additional $5,000,000,000 

13 in punitive damages; and 

14 (E) after nearly 2 decades of appeals, on June 

15 25, 2008, the Supreme Court issued a judgment lim16 iting punitive damages to compensatory damages, 

17 calculated at $507,500,000, a reduction to essen18 tially 10 percent of the initial jury award; 

19 (6) as of June 16, 2010, a scientific team 

20 under the direction of Secretary of Energy Steven 

21 Chu, Secretary of the Interior Ken Salazar, and the 

22 Chair of the National Incident Command’s Flow 

23 Rate Technical Group, Dr. Marcia McNutt (Director 

24 of the United States Geological Survey), announced 

25 an estimated flow rate of between 35,000 and 


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1 60,000 barrels per day of hydrocarbons into the Gulf 

2 of Mexico from the Macondo Prospect well, known 

3 as MC 252, resulting from the blowout and explo4 sion of the mobile offshore drilling unit Deepwater 

5 Horizon that occurred on April 20, 2010, and result6 ing hydrocarbon releases into the environment; 

7 (7) that estimate greatly exceeds the estimated 

8 10,800,000 gallons (250,000 barrels) spilled by the 

9 grounding of the Exxon Valdez on Bligh Reef in 

10 Prince William Sound on March 24, 1989, and is 

11 now the largest known oil spill in United States wa12 ters; 

13 (8) the Gulf Coast region produced 

14 1,273,424,000 pounds of seafood in 2008 worth 

15 $697,591,000 to the fishermen in the Gulf of Mex16 ico, which is the second most productive fishing re17 gion in the United States, boasting 4 of the top-10 

18 commercial fishing ports of the United States in 

19 Empire-Venice, Intracoastal City, and Cameron, 

20 Louisiana, and Pascagoula-Moss Point, Mississippi; 

21 (9) recreational fisheries are important to the 

22 Gulf Coast economy, with (according to the National 

23 Marine Fisheries Service) 3,200,000 individuals tak24 ing 25,000,000 recreational fishing trips in the Gulf 


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1 region in 2008 in which 194,000,000 fish were land2 ed; 

3 (10) as of June 7, 2010, the National Oceanic 

4 and Atmospheric Administration closed 78,264 

5 square miles of the Gulf of Mexico to fishing, an 

6 area equivalent to 32.3 percent of the total exclusive 

7 economic zone of the Gulf; and 

8 (11) commercial sectors employing a wide spec9 trum of the Gulf Coast population (including resi10 dents involved in tourism, oil and gas exploration, 

11 and a host of support and service industries) are ex12 periencing a severe economic disruption due to the 

13 blowout and explosion of the mobile offshore drilling 

14 unit Deepwater Horizon that occurred on April 20, 

15 2010, and resulting hydrocarbon releases into the 

16 environment. 

17 SEC. 3. OIL SPILL RECOVERY FUND. 

18 (a) IN GENERAL.—The Outer Continental Shelf 

19 Lands Act is amended by inserting after section 8 (43 

20 U.S.C. 1337) the following: 

21 ‘‘SEC. 8A. OIL SPILL RECOVERY FUND. 

22 ‘‘(a) DEFINITION OF FUND.—In this section, the 

23 term ‘Fund’ means the Oil Spill Recovery Fund estab24 lished under subsection (c). 


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1 ‘‘(b) COVERAGE OF OUTSTANDING INCIDENT LIABIL2 ITY.— 

3 ‘‘(1) IN GENERAL.—No person shall be eligible 

4 to enter into any Federal oil or gas lease or contract 

5 after the date of enactment of this section unless the 

6 person pays into the Fund, or posts a bond, in an 

7 amount equal to the difference between, as deter8 mined by the Secretary as of the date of the applica9 tion for the lease or contract— 

10 ‘‘(A) the total of the outstanding liability 

11 of the person under section 1002 of the Oil Pol12 lution Act of 1990 (33 U.S.C. 2702) (without 

13 regard to any liability limit under section 1004 

14 of that Act (33 U.S.C. 2704)) and any removal 

15 costs incurred by, or on behalf of, the person, 

16 with respect to any incident occurring before, 

17 on, or after the date of enactment of this sec18 tion for which the person has outstanding liabil19 ity; and 

20 ‘‘(B) the outstanding balance in the Oil 

21 Spill Liability Trust Fund established by sec22 tion 9509 of the Internal Revenue Code of 

23 1986, that is attributable to the person. 

24 ‘‘(2) NO EFFECT ON OTHER LIABILITY.—Pay25 ment into the Fund or posting of a bond in accordVerDate Mar 15 2010 02:03 Jun 22, 2010 Jkt 089200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S3514.IS S3514

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1 ance with paragraph (1) does not, with respect to 

2 the applicable incident— 

3 ‘‘(A) limit any civil or criminal liability of 

4 the person; or 

5 ‘‘(B) determine or affect an appropriate 

6 level of claims or damages. 

7 ‘‘(c) ESTABLISHMENT OF FUND.—There is estab8 lished in the Treasury of the United States a fund to be 

9 known as the ‘Oil Spill Recovery Fund’ to be administered 

10 by the Secretary, to be available without fiscal year limita11 tion and without being subject to appropriation, for pay12 ment of covered removal costs and damages described in 

13 section 1002 of the Oil Pollution Act of 1990 (33 U.S.C. 

14 2702) associated with any incident. 

15 ‘‘(d) TRANSFERS TO FUND.— 

16 ‘‘(1) IN GENERAL.—The Fund shall consist of 

17 such amounts as are appropriated to the Fund 

18 under paragraph (2). 

19 ‘‘(2) FEES.—There are appropriated to the 

20 Fund, out of funds of the Treasury not otherwise 

21 appropriated, amounts equivalent to amounts col22 lected as fees and received in the Treasury under 

23 subsection (b)(1). 

24 ‘‘(e) REPAYMENT.— 


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1 ‘‘(1) IN GENERAL.—In the case of any person 

2 who has paid into the Fund under subsection (b), on 

3 the date described in paragraph (2), the Secretary 

4 shall transfer to the person an amount equal to— 

5 ‘‘(A) the amount of unexpended funds of 

6 the person in the Fund; plus 

7 ‘‘(B) any accumulated interest on those 

8 funds. 

9 ‘‘(2) DATE.—The date on which amounts de10 scribed under paragraph (1) shall be repaid is the 

11 earlier of— 

12 ‘‘(A) 5 years after the date on which the 

13 amounts were paid into the Fund; and 

14 ‘‘(B) the date on which the Secretary 

15 makes a formal determination that all Federal 

16 and State natural resource damage assessments 

17 and all outstanding civil claims relating to the 

18 incident for which the amounts were paid have 

19 been satisfied. 

20 ‘‘(f) PROHIBITION.—Amounts in the Fund may not 

21 be made available for any purpose other than a purpose 

22 described in subsection (c). 

23 ‘‘(g) QUARTERLY REPORTS.— 

24 ‘‘(1) IN GENERAL.—Not later than 4 times dur25 ing of each fiscal year beginning with fiscal year 


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1 2010, the Secretary shall submit to the Committee 

2 on Appropriations of the House of Representatives, 

3 the Committee on Appropriations of the Senate, the 

4 Committee on Energy and Natural Resources of the 

5 Senate, and the Committee on Resources of the 

6 House of Representatives a report on the operation 

7 of the Fund during the fiscal year. 

8 ‘‘(2) CONTENTS.—Each report shall include, for 

9 the fiscal year covered by the report, the following: 

10 ‘‘(A) A statement of the amounts deposited 

11 into the Fund. 

12 ‘‘(B) A description of the expenditures 

13 made from the Fund for the fiscal year, includ14 ing the purpose of the expenditures. 

15 ‘‘(C) Recommendations for additional au16 thorities to fulfill the purpose of the Fund. 

17 ‘‘(D) A statement of the balance remaining 

18 in the Fund at the end of the fiscal year. 

19 ‘‘(E) A statement of amount of out20 standing liability determined under subsection 

21 (b) as compared to the balance remaining in the 

22 Oil Spill Liability Trust Fund established by 

23 section 9509 of the Internal Revenue Code of 

24 1986 at the end of the fiscal year.’’. 


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1 (b) SEPARATE APPROPRIATIONS ACCOUNT.—Section 

2 1105(a) of title 31, United States Code, is amended— 

3 (1) by redesignating paragraphs (35) and (36) 

4 as paragraphs (36) and (37), respectively; 

5 (2) by redesignating the second paragraph (33) 

6 (relating to obligational authority and outlays re7 quested for homeland security) as paragraph (35); 

8 and 

9 (3) by adding at the end the following: 

10 ‘‘(38) a separate statement for the Oil Spill Re11 covery Fund established under section 8A(c) of the 

12 Outer Continental Shelf Lands Act, which shall in13 clude the estimated amount of deposits into the 

14 Fund, obligations, and outlays from the Fund.’’. 

Æ 


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