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U.S. Code as of:
01/19/04
Section 2716. Financial responsibility
(a) Requirement
The responsible party for -
(1) any vessel over 300 gross tons (except a non-self-propelled
vessel that does not carry oil as cargo or fuel) using any place
subject to the jurisdiction of the United States; or
(2) any vessel using the waters of the exclusive economic zone
to transship or lighter oil destined for a place subject to the
jurisdiction of the United States;
shall establish and maintain, in accordance with regulations
promulgated by the Secretary, evidence of financial responsibility
sufficient to meet the maximum amount of liability to which the
responsible party could be subjected under section 2704(a) or (d)
of this title, in a case where the responsible party would be
entitled to limit liability under that section. If the responsible
party owns or operates more than one vessel, evidence of financial
responsibility need be established only to meet the amount of the
maximum liability applicable to the vessel having the greatest
maximum liability.
(b) Sanctions
(1) Withholding clearance
The Secretary of the Treasury shall withhold or revoke the
clearance required by section 91 of title 46, Appendix, of any
vessel subject to this section that does not have the evidence of
financial responsibility required for the vessel under this
section.
(2) Denying entry to or detaining vessels
The Secretary may -
(A) deny entry to any vessel to any place in the United
States, or to the navigable waters, or
(B) detain at the place,
any vessel that, upon request, does not produce the evidence of
financial responsibility required for the vessel under this
section.
(3) Seizure of vessel
Any vessel subject to the requirements of this section which is
found in the navigable waters without the necessary evidence of
financial responsibility for the vessel shall be subject to
seizure by and forfeiture to the United States.
(c) Offshore facilities
(1) In general
(A) Evidence of financial responsibility required
Except as provided in paragraph (2), a responsible party with
respect to an offshore facility that -
(i)(I) is located seaward of the line of ordinary low water
along that portion of the coast that is in direct contact
with the open sea and the line marking the seaward limit of
inland waters; or
(II) is located in coastal inland waters, such as bays or
estuaries, seaward of the line of ordinary low water along
that portion of the coast that is not in direct contact with
the open sea;
(ii) is used for exploring for, drilling for, producing, or
transporting oil from facilities engaged in oil exploration,
drilling, or production; and
(iii) has a worst-case oil spill discharge potential of
more than 1,000 barrels of oil (or a lesser amount if the
President determines that the risks posed by such facility
justify it),
shall establish and maintain evidence of financial
responsibility in the amount required under subparagraph (B) or
(C), as applicable.
(B) Amount required generally
Except as provided in subparagraph (C), the amount of
financial responsibility for offshore facilities that meet the
criteria of subparagraph (A) is -
(i) $35,000,000 for an offshore facility located seaward of
the seaward boundary of a State; or
(ii) $10,000,000 for an offshore facility located landward
of the seaward boundary of a State.
(C) Greater amount
If the President determines that an amount of financial
responsibility for a responsible party greater than the amount
required by subparagraph (B) is justified based on the relative
operational, environmental, human health, and other risks posed
by the quantity or quality of oil that is explored for, drilled
for, produced, or transported by the responsible party, the
evidence of financial responsibility required shall be for an
amount determined by the President not exceeding $150,000,000.
(D) Multiple facilities
In a case in which a person is a responsible party for more
than one facility subject to this subsection, evidence of
financial responsibility need be established only to meet the
amount applicable to the facility having the greatest financial
responsibility requirement under this subsection.
(E) Definition
For the purpose of this paragraph, the seaward boundary of a
State shall be determined in accordance with section 1301(b) of
title 43.
(2) Deepwater ports
Each responsible party with respect to a deepwater port shall
establish and maintain evidence of financial responsibility
sufficient to meet the maximum amount of liability to which the
responsible party could be subjected under section 2704(a) of
this title in a case where the responsible party would be
entitled to limit liability under that section. If the Secretary
exercises the authority under section 2704(d)(2) of this title to
lower the limit of liability for deepwater ports, the responsible
party shall establish and maintain evidence of financial
responsibility sufficient to meet the maximum amount of liability
so established. In a case in which a person is the responsible
party for more than one deepwater port, evidence of financial
responsibility need be established only to meet the maximum
liability applicable to the deepwater port having the greatest
maximum liability.
(e) (!1) Methods of financial responsibility
Financial responsibility under this section may be established by
any one, or by any combination, of the following methods which the
Secretary (in the case of a vessel) or the President (in the case
of a facility) determines to be acceptable: evidence of insurance,
surety bond, guarantee, letter of credit, qualification as a
self-insurer, or other evidence of financial responsibility. Any
bond filed shall be issued by a bonding company authorized to do
business in the United States. In promulgating requirements under
this section, the Secretary or the President, as appropriate, may
specify policy or other contractual terms, conditions, or defenses
which are necessary, or which are unacceptable, in establishing
evidence of financial responsibility to effectuate the purposes of
this Act.
(f) Claims against guarantor
(1) In general
Subject to paragraph (2), a claim for which liability may be
established under section 2702 of this title may be asserted
directly against any guarantor providing evidence of financial
responsibility for a responsible party liable under that section
for removal costs and damages to which the claim pertains. In
defending against such a claim, the guarantor may invoke -
(A) all rights and defenses which would be available to the
responsible party under this Act;
(B) any defense authorized under subsection (e) of this
section; and
(C) the defense that the incident was caused by the willful
misconduct of the responsible party.
The guarantor may not invoke any other defense that might be
available in proceedings brought by the responsible party against
the guarantor.
(2) Further requirement
A claim may be asserted pursuant to paragraph (1) directly
against a guarantor providing evidence of financial
responsibility under subsection (c)(1) of this section with
respect to an offshore facility only if -
(A) the responsible party for whom evidence of financial
responsibility has been provided has denied or failed to pay a
claim under this Act on the basis of being insolvent, as
defined under section 101(32) of title 11, and applying
generally accepted accounting principles;
(B) the responsible party for whom evidence of financial
responsibility has been provided has filed a petition for
bankruptcy under title 11; or
(C) the claim is asserted by the United States for removal
costs and damages or for compensation paid by the Fund under
this Act, including costs incurred by the Fund for processing
compensation claims.
(3) Rulemaking authority
Not later than 1 year after October 19, 1996, the President
shall promulgate regulations to establish a process for
implementing paragraph (2) in a manner that will allow for the
orderly and expeditious presentation and resolution of claims and
effectuate the purposes of this Act.
(g) Limitation on guarantor's liability
Nothing in this Act shall impose liability with respect to an
incident on any guarantor for damages or removal costs which
exceed, in the aggregate, the amount of financial responsibility
which that guarantor has provided for a responsible party pursuant
to this section. The total liability of the guarantor on direct
action for claims brought under this Act with respect to an
incident shall be limited to that amount.
(h) Continuation of regulations
Any regulation relating to financial responsibility, which has
been issued pursuant to any provision of law repealed or superseded
by this Act, and which is in effect on the date immediately
preceding the effective date of this Act, is deemed and shall be
construed to be a regulation issued pursuant to this section. Such
a regulation shall remain in full force and effect unless and until
superseded by a new regulation issued under this section.
(i) Unified certificate
The Secretary may issue a single unified certificate of financial
responsibility for purposes of this Act and any other law.
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