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1 | AN ACT concerning regulation.
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2 | Be it enacted by the People of the State of Illinois,
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3 | represented in the General Assembly:
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4 | Section 1. Short title. This Act may be cited as the Crude | |||||||||||||||||||
5 | Oil Pipeline Environmental Liability Insurance Act. | |||||||||||||||||||
6 | Section 5. Definitions. As used in this Act: | |||||||||||||||||||
7 | "Agency" means the Illinois Environmental Protection | |||||||||||||||||||
8 | Agency. | |||||||||||||||||||
9 | "Minimum amount of bitumen" means 100,000 barrels per day | |||||||||||||||||||
10 | of bitumen.
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11 | Section 10. Crude oil carriers.
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12 | (a) On and after the effective date of this Act, the owner | |||||||||||||||||||
13 | of a crude oil pipeline in the State transporting, in whole or | |||||||||||||||||||
14 | in part, more than the minimum amount of bitumen shall report | |||||||||||||||||||
15 | that pipeline to the Agency. If a pipeline that did not | |||||||||||||||||||
16 | transport more than the minimum amount of bitumen on the | |||||||||||||||||||
17 | reporting date does so later in the same year, or in any | |||||||||||||||||||
18 | following year, the owner of the pipeline shall amend its | |||||||||||||||||||
19 | report within 30 days to reflect its new status. | |||||||||||||||||||
20 | (b) On January 1, 2018, every owner of a crude oil pipeline | |||||||||||||||||||
21 | that transported, in whole or in part, more than the minimum | |||||||||||||||||||
22 | amount of bitumen at any time in the calendar year preceding |
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1 | and including January 1, 2018 shall maintain insurance coverage | ||||||
2 | in accordance with this Section and maintain that coverage at | ||||||
3 | all times for each pipeline where and when bitumen is being | ||||||
4 | transported. | ||||||
5 | (c) After January 1, 2018, in any year in which a pipeline | ||||||
6 | transports more than the minimum amount of bitumen, within 6 | ||||||
7 | months after reporting the transport of more than the minimum | ||||||
8 | amount of bitumen, the owner of the pipeline shall obtain | ||||||
9 | insurance coverage in accordance with subsection (d) of this | ||||||
10 | Section and maintain that coverage at all times for each | ||||||
11 | pipeline where and when bitumen is being transported. | ||||||
12 | (d) To satisfy the requirements of this Section, the owner | ||||||
13 | of a pipeline shall have environmental impairment liability | ||||||
14 | insurance or the equivalent that provides coverage for on-site | ||||||
15 | and off-site cleanup expenses, damages to natural resources, | ||||||
16 | emergency response costs up to at least $1,000,000, bodily | ||||||
17 | injury liability, and property damage liability for each | ||||||
18 | pipeline. | ||||||
19 | (1) The insurance shall be provided by an independent | ||||||
20 | third-party insurer with an A.M. Best Company, Inc. rating | ||||||
21 | of at least "A". | ||||||
22 | (2) The insurance may be secondary to any other | ||||||
23 | coverage maintained by the owner or provided by the federal | ||||||
24 | Oil Spill Liability Trust Fund, but primary and | ||||||
25 | non-contributory to any coverage maintained by the State or | ||||||
26 | units of local government. |
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1 | (3) The insurance shall be occurrence based. | ||||||
2 | (4) The State shall be listed as an additional insured | ||||||
3 | on the policy. | ||||||
4 | (5) The amount of insurance shall not be less than | ||||||
5 | $25,000,000 for each pipeline. The Agency, in consultation | ||||||
6 | with the Department of Insurance, shall require additional | ||||||
7 | coverage in accordance with this Section that the Agency | ||||||
8 | concludes would be necessary in a worst-case oil spill | ||||||
9 | scenario where the pipeline owner is not capable of paying | ||||||
10 | to remediate the site and compensate damages, including an | ||||||
11 | annual cost of remediation adjustment, to the maximum | ||||||
12 | available from the market for insurance. If the amount of | ||||||
13 | insurance found to be available in a year is not sufficient | ||||||
14 | to cover the worst-case oil spill scenario the Agency | ||||||
15 | shall: | ||||||
16 | (A) state the amount of the deficiency; and | ||||||
17 | (B) in each of the following years in which a | ||||||
18 | deficiency exists, review the insurance market to | ||||||
19 | determine whether the amount of coverage available has | ||||||
20 | increased, and adjust the coverage to the maximum | ||||||
21 | available up to the amount required to remediate the | ||||||
22 | site and compensate for damages in a worst case oil | ||||||
23 | spill.
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24 | (6) The Agency shall charge back the cost of making the | ||||||
25 | assessments of a worst-case accident and the availability | ||||||
26 | of the required insurance in the market in paragraph (5) to |
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1 | the owner of the pipeline. | ||||||
2 | (7) The policy shall obligate the insurer to provide 60 | ||||||
3 | days notice of cancellation or non-renewal to the Agency, | ||||||
4 | as well as to the owner who has purchased the policy. | ||||||
5 | (8) If the insured has received a 60-day notice of | ||||||
6 | cancellation under paragraph (7), it shall replace that | ||||||
7 | policy with a new policy in accordance with this Section | ||||||
8 | before its existing policy is terminated or otherwise it | ||||||
9 | shall cease transporting bitumen through the pipeline. If | ||||||
10 | the owner's policy has been terminated and not replaced | ||||||
11 | within 60 days, the owner may resume use of the pipeline | ||||||
12 | for transporting bitumen if it later purchases insurance in | ||||||
13 | accordance with this Section, submits proof to the Agency, | ||||||
14 | and receives an order from the Agency certifying the | ||||||
15 | subsequent insurance policy is current and complies with | ||||||
16 | this Section. | ||||||
17 | (9) At all times, the owner shall keep the Agency | ||||||
18 | informed in writing of all changes in the status of the | ||||||
19 | pipeline related to whether it transports more than the | ||||||
20 | minimum amount of bitumen, and, if so, whether it maintains | ||||||
21 | insurance in accordance with this Section. The owner of a | ||||||
22 | pipeline that transports more than the minimum amount of | ||||||
23 | bitumen for only part of the time in a calendar year may | ||||||
24 | elect to maintain its status as covered under this Section | ||||||
25 | as if it transported more than the minimum amount of | ||||||
26 | bitumen for the entire year.
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1 | Section 99. Effective date. This Act takes effect January | ||||||
2 | 1, 2018.
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