§ 2716. — Financial responsibility.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 33USC2716]
TITLE 33--NAVIGATION AND NAVIGABLE WATERS
CHAPTER 40--OIL POLLUTION
SUBCHAPTER I--OIL POLLUTION LIABILITY AND COMPENSATION
Sec. 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
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\1\ So in original. No subsec. (d) has been enacted.
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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.
(Pub. L. 101-380, title I, Sec. 1016, Aug. 18, 1990, 104 Stat. 502; Pub.
L. 104-55, Sec. 2(d)(2), Nov. 20, 1995, 109 Stat. 547; Pub. L. 104-324,
title XI, Sec. 1125(a), Oct. 19, 1996, 110 Stat. 3981.)
References in Text
This Act, referred to in subsecs. (e), (f), (g), (h), and (i), is
Pub. L. 101-380, Aug. 18, 1990, 104 Stat. 484, as amended, known as the
Oil Pollution Act of 1990, which is classified principally to this
chapter. For complete classification of this Act to the Code, see Short
Title note set out under section 2701 of this title and Tables.
The effective date of this Act, referred to in subsec. (h), is the
effective date of Pub. L. 101-380 which is applicable to incidents
occurring after Aug. 18, 1990, see section 1020 of Pub. L. 101-380, set
out as an Effective Date note under section 2701 of this title.
Amendments
1996--Subsec. (c)(1). Pub. L. 104-324, Sec. 1125(a)(1), reenacted
heading without change and amended text generally. Prior to amendment,
text read as follows: ``Except as provided in paragraph (2), each
responsible party with respect to an offshore facility shall establish
and maintain evidence of financial responsibility of $150,000,000 to
meet the amount of liability to which the responsible party could be
subjected under section 2704(a) of this title in a case in which the
responsible party would be entitled to limit liability under that
section. In a case in which a person is the responsible party for more
than one facility subject to this subsection, evidence of financial
responsibility need be established only to meet the maximum liability
applicable to the facility having the greatest maximum liability.''
Subsec. (f). Pub. L. 104-324, Sec. 1125(a)(2), reenacted heading
without change and amended text generally. Prior to amendment, text read
as follows: ``Any 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 (1) all rights and defenses which would be
available to the responsible party under this Act, (2) any defense
authorized under subsection (e) of this section, and (3) 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.''
Subsec. (g). Pub. L. 104-324, Sec. 1125(a)(3), reenacted heading
without change and amended text generally. Prior to amendment, text read
as follows: ``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 required under
this Act which that guarantor has provided for a responsible party.''
1995--Subsec. (a). Pub. L. 104-55 substituted ``the responsible
party could be subjected under section 2704(a) or (d) of this title''
for ``, in the case of a tank vessel, the responsible party could be
subject under section 2704(a)(1) or (d) of this title, or to which, in
the case of any other vessel, the responsible party could be subjected
under section 2704(a)(2) or (d) of this title''.
Effective Date of 1996 Amendment
Section 1125(b) of Pub. L. 104-324 provided that: ``The amendment
made by subsection (a)(2) [amending this section] shall not apply to any
final rule issued before the date of enactment of this section [Oct. 19,
1996].''
Delegation of Functions
Specific functions of President under subsec. (e) of this section
delegated to Secretary of the Interior and Secretary of the Department
in which the Coast Guard is operating by section 5(a) of Ex. Ord. No.
12777, Oct. 18, 1991, 56 F.R. 54764, as amended, set out as a note under
section 1321 of this title.
Section Referred to in Other Sections
This section is referred to in sections 1503, 2705, 2715, 2716a,
2719 of this title; title 46 section 3715.
