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U.S. Code as of:
01/19/04
Section 2704. Limits on liability
(a) General rule
Except as otherwise provided in this section, the total of the
liability of a responsible party under section 2702 of this title
and any removal costs incurred by, or on behalf of, the responsible
party, with respect to each incident shall not exceed -
(1) for a tank vessel the greater of -
(A) $1,200 per gross ton; or
(B)(i) in the case of a vessel greater than 3,000 gross tons,
$10,000,000; or
(ii) in the case of a vessel of 3,000 gross tons or less,
$2,000,000;
(2) for any other vessel, $600 per gross ton or $500,000,
whichever is greater;
(3) for an offshore facility except a deepwater port, the total
of all removal costs plus $75,000,000; and
(4) for any onshore facility and a deepwater port,
$350,000,000.
(b) Division of liability for mobile offshore drilling units
(1) Treated first as tank vessel
For purposes of determining the responsible party and applying
this Act and except as provided in paragraph (2), a mobile
offshore drilling unit which is being used as an offshore
facility is deemed to be a tank vessel with respect to the
discharge, or the substantial threat of a discharge, of oil on or
above the surface of the water.
(2) Treated as facility for excess liability
To the extent that removal costs and damages from any incident
described in paragraph (1) exceed the amount for which a
responsible party is liable (as that amount may be limited under
subsection (a)(1) of this section), the mobile offshore drilling
unit is deemed to be an offshore facility. For purposes of
applying subsection (a)(3) of this section, the amount specified
in that subsection shall be reduced by the amount for which the
responsible party is liable under paragraph (1).
(c) Exceptions
(1) Acts of responsible party
Subsection (a) of this section does not apply if the incident
was proximately caused by -
(A) gross negligence or willful misconduct of, or
(B) the violation of an applicable Federal safety,
construction, or operating regulation by,
the responsible party, an agent or employee of the responsible
party, or a person acting pursuant to a contractual relationship
with the responsible party (except where the sole contractual
arrangement arises in connection with carriage by a common
carrier by rail).
(2) Failure or refusal of responsible party
Subsection (a) of this section does not apply if the
responsible party fails or refuses -
(A) to report the incident as required by law and the
responsible party knows or has reason to know of the incident;
(B) to provide all reasonable cooperation and assistance
requested by a responsible official in connection with removal
activities; or
(C) without sufficient cause, to comply with an order issued
under subsection (c) or (e) of section 1321 of this title or
the Intervention on the High Seas Act (33 U.S.C. 1471 et seq.).
(3) OCS facility or vessel
Notwithstanding the limitations established under subsection
(a) of this section and the defenses of section 2703 of this
title, all removal costs incurred by the United States Government
or any State or local official or agency in connection with a
discharge or substantial threat of a discharge of oil from any
Outer Continental Shelf facility or a vessel carrying oil as
cargo from such a facility shall be borne by the owner or
operator of such facility or vessel.
(4) Certain tank vessels
Subsection (a)(1) of this section shall not apply to -
(A) a tank vessel on which the only oil carried as cargo is
an animal fat or vegetable oil, as those terms are used in
section 2720 of this title; and
(B) a tank vessel that is designated in its certificate of
inspection as an oil spill response vessel (as that term is
defined in section 2101 of title 46) and that is used solely
for removal.
(d) Adjusting limits of liability
(1) Onshore facilities
Subject to paragraph (2), the President may establish by
regulation, with respect to any class or category of onshore
facility, a limit of liability under this section of less than
$350,000,000, but not less than $8,000,000, taking into account
size, storage capacity, oil throughput, proximity to sensitive
areas, type of oil handled, history of discharges, and other
factors relevant to risks posed by the class or category of
facility.
(2) Deepwater ports and associated vessels
(A) Study
The Secretary shall conduct a study of the relative
operational and environmental risks posed by the transportation
of oil by vessel to deepwater ports (as defined in section 1502
of this title) versus the transportation of oil by vessel to
other ports. The study shall include a review and analysis of
offshore lightering practices used in connection with that
transportation, an analysis of the volume of oil transported by
vessel using those practices, and an analysis of the frequency
and volume of oil discharges which occur in connection with the
use of those practices.
(B) Report
Not later than 1 year after August 18, 1990, the Secretary
shall submit to the Congress a report on the results of the
study conducted under subparagraph (A).
(C) Rulemaking proceeding
If the Secretary determines, based on the results of the
study conducted under this (!1) subparagraph (A), that the use
of deepwater ports in connection with the transportation of oil
by vessel results in a lower operational or environmental risk
than the use of other ports, the Secretary shall initiate, not
later than the 180th day following the date of submission of
the report to the Congress under subparagraph (B), a rulemaking
proceeding to lower the limits of liability under this section
for deepwater ports as the Secretary determines appropriate.
The Secretary may establish a limit of liability of less than
$350,000,000, but not less than $50,000,000, in accordance with
paragraph (1).
(3) Periodic reports
The President shall, within 6 months after August 18, 1990, and
from time to time thereafter, report to the Congress on the
desirability of adjusting the limits of liability specified in
subsection (a) of this section.
(4) Adjustment to reflect Consumer Price Index
The President shall, by regulations issued not less often than
every 3 years, adjust the limits of liability specified in
subsection (a) of this section to reflect significant increases
in the Consumer Price Index.
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