33 U.S.C. § 2716 — Financial responsibility

Page 892 TITLE 33—NAVIGATION AND NAVIGABLE WATERS § 2715 § 2715. Subrogation (a) In general Any person, including the Fund, who pays compensation pursuant to this Act to any claim- ant for removal costs or damages shall be sub- rogated to all rights, claims, and causes of ac- tion that the claimant has under any other law. (b) Interim damages (1) In general If a responsible party, a guarantor, or the Fund has made payment to a claimant for in- terim, short-term damages representing less than the full amount of damages to which the claimant ultimately may be entitled, subroga- tion under subsection (a) shall apply only with respect to the portion of the claim reflected in the paid interim claim. (2) Final damages Payment of such a claim shall not foreclose a claimant’s right to recovery of all damages to which the claimant otherwise is entitled under this Act or under any other law. (c) Actions on behalf of Fund At the request of the Secretary, the Attorney General shall commence an action on behalf of the Fund to recover any compensation paid by the Fund to any claimant pursuant to this Act, and all costs incurred by the Fund by reason of the claim, including interest (including prejudg- ment interest), administrative and adjudicative costs, and attorney’s fees. Such an action may be commenced against any responsible party or (subject to section 2716 of this title) guarantor, or against any other person who is liable, pursu- ant to any law, to the compensated claimant or to the Fund, for the cost or damages for which the compensation was paid. Such an action shall be commenced against the responsible foreign government or other responsible party to re- cover any removal costs or damages paid from the Fund as the result of the discharge, or sub- stantial threat of discharge, of oil from a foreign offshore unit or other facility located seaward of the exclusive economic zone. (d) Authority to settle The head of any department or agency respon- sible for recovering amounts for which a person is liable under this subchapter may consider, compromise, and settle a claim for such amounts, including such costs paid from the Fund, if the claim has not been referred to the Attorney General. In any case in which the total amount to be recovered may exceed $500,000 (ex- cluding interest), a claim may be compromised and settled under the preceding sentence only with the prior written approval of the Attorney General. (Pub. L. 101–380, title I, § 1015, Aug. 18, 1990, 104 Stat. 502; Pub. L. 104–324, title XI, § 1142(d), Oct. 19, 1996, 110 Stat. 3991; Pub. L. 108–293, title VII, § 706, Aug. 9, 2004, 118 Stat. 1076; Pub. L. 115–91, div. C, title XXXV, § 3508(b)(1)(B), Dec. 12, 2017, 131 Stat. 1916.) Editorial Notes REFERENCES IN TEXT This Act, referred to in text, is Pub. L. 101–380, Aug. 18, 1990, 104 Stat. 484, 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. AMENDMENTS 2017—Subsec. (c). Pub. L. 115–91 inserted ‘‘or other fa- cility located seaward of the exclusive economic zone’’ after ‘‘foreign offshore unit’’. 2004—Subsec. (d). Pub. L. 108–293 added subsec. (d). 1996—Subsecs. (b), (c). Pub. L. 104–324 added subsec. (b) and redesignated former subsec. (b) as (c). § 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; (2) any vessel using the waters of the exclu- sive economic zone to transship or lighter oil destined for a place subject to the jurisdiction of the United States; or (3) any tank vessel over 100 gross tons using any place subject to the jurisdiction of the United States; shall establish and maintain, in accordance with regulations promulgated by the Secretary, evi- dence 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 es- tablished only to meet the amount of the max- imum liability applicable to the vessel having the greatest maximum liability. (b) Sanctions (1) Withholding clearance The Secretary of the Treasury shall with- hold or revoke the clearance required by sec- tion 60105 of title 46 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 wa- ters, or (B) detain at the place, any vessel that, upon request, does not produce the evidence of financial responsi- bility required for the vessel under this sec- tion. (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 fi- nancial responsibility for the vessel shall be subject to seizure by and forfeiture to the United States. Page 893 TITLE 33—NAVIGATION AND NAVIGABLE WATERS § 2716 1 So in original. No subsec. (d) has been enacted. (c) Offshore facilities (1) In general (A) Evidence of financial responsibility re- quired Except as provided in paragraph (2), a re- sponsible party with respect to an offshore facility that— (i)(I) is located seaward of the line of or- dinary 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 por- tion of the coast that is not in direct con- tact with the open sea; (ii) is used for exploring for, drilling for, producing, or transporting oil from facili- ties 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 deter- mines that the risks posed by such facility justify it), shall establish and maintain evidence of fi- nancial responsibility in the amount re- quired under subparagraph (B) or (C), as ap- plicable. (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 lo- cated seaward of the seaward boundary of a State; or (ii) $10,000,000 for an offshore facility lo- cated landward of the seaward boundary of a State. (C) Greater amount If the President determines that an amount of financial responsibility for a re- sponsible party greater than the amount re- quired 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 finan- cial responsibility required shall be for an amount determined by the President not ex- ceeding $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 respon- sibility need be established only to meet the amount applicable to the facility having the greatest financial responsibility require- ment under this subsection. (E) Definition For the purpose of this paragraph, the sea- ward boundary of a State shall be deter- mined 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 sec- tion 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, evi- dence of financial responsibility need be estab- lished only to meet the maximum liability ap- plicable 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 com- bination, of the following methods which the Secretary (in the case of a vessel) or the Presi- dent (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 re- sponsibility. Any bond filed shall be issued by a bonding company authorized to do business in the United States. In promulgating require- ments 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 responsi- bility 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 dam- ages to which the claim pertains. In defending against such a claim, the guarantor may in- voke— (A) all rights and defenses which would be available to the responsible party under this Act; (B) any defense authorized under sub- section (e); and (C) the defense that the incident was caused by the willful misconduct of the re- sponsible party. The guarantor may not invoke any other de- fense that might be available in proceedings brought by the responsible party against the guarantor. (2) Further requirement A claim may be asserted pursuant to para- graph (1) directly against a guarantor pro- viding evidence of financial responsibility Page 894 TITLE 33—NAVIGATION AND NAVIGABLE WATERS § 2716 under subsection (c)(1) with respect to an off- shore facility only if— (A) the responsible party for whom evi- dence of financial responsibility has been provided has denied or failed to pay a claim under this Act on the basis of being insol- vent, as defined under section 101(32) of title 11, and applying generally accepted account- ing principles; (B) the responsible party for whom evi- dence 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 para- graph (2) in a manner that will allow for the orderly and expeditious presentation and reso- lution 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 dam- ages or removal costs which exceed, in the ag- gregate, the amount of financial responsibility which that guarantor has provided for a respon- sible party pursuant to this section. The total li- ability 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 responsi- bility, which has been issued pursuant to any provision of law repealed or superseded by this Act, and which is in effect on the date imme- diately preceding the effective date of this Act, is deemed and shall be construed to be a regula- tion issued pursuant to this section. Such a reg- ulation shall remain in full force and effect un- less and until superseded by a new regulation issued under this section. (i) Unified certificate The Secretary may issue a single unified cer- tificate of financial responsibility for purposes of this Act and any other law. (Pub. L. 101–380, title I, § 1016, Aug. 18, 1990, 104 Stat. 502; Pub. L. 104–55, § 2(d)(2), Nov. 20, 1995, 109 Stat. 547; Pub. L. 104–324, title XI, § 1125(a), Oct. 19, 1996, 110 Stat. 3981; Pub. L. 111–281, title VII, § 712, Oct. 15, 2010, 124 Stat. 2988.) Editorial Notes 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, known as the Oil Pollution Act of 1990, which is classified prin- cipally 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 ap- plicable 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. CODIFICATION In subsec. (b)(1), ‘‘section 60105 of title 46’’ substituted for ‘‘section 4197 of the Revised Statutes of the United States’’ on authority of Pub. L. 109–304, § 18(c), Oct. 6, 2006, 120 Stat. 1709, which Act enacted section 60105 of Title 46, Shipping. AMENDMENTS 2010—Subsec. (a)(3). Pub. L. 111–281 added par. (3). 1996—Subsec. (c)(1). Pub. L. 104–324, § 1125(a)(1), reen- acted heading without change and amended text gen- erally. Prior to amendment, text read as follows: ‘‘Ex- cept as provided in paragraph (2), each responsible party with respect to an offshore facility shall estab- lish 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 sub- section, evidence of financial responsibility need be es- tablished only to meet the maximum liability applica- ble to the facility having the greatest maximum liabil- ity.’’ Subsec. (f). Pub. L. 104–324, § 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 re- moval 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 avail- able to the responsible party under this Act, (2) any de- fense authorized under subsection (e), and (3) the de- fense that the incident was caused by the willful mis- conduct 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, § 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 inci- dent on any guarantor for damages or removal costs which exceed, in the aggregate, the amount of financial responsibility required under this Act which that guar- antor has provided for a responsible party.’’ 1995—Subsec. (a). Pub. L. 104–55 substituted ‘‘the re- sponsible 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 sub- jected under section 2704(a)(2) or (d) of this title’’. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 1996 AMENDMENT Pub. L. 104–324, title XI, § 1125(b), Oct. 19, 1996, 110 Stat. 3983, provided that: ‘‘The amendment made by subsection (a)(2) [amending this section] shall not apply to any final rule issued before the date of enact- ment of this section [Oct. 19, 1996].’’ Executive Documents 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. Page 895 TITLE 33—NAVIGATION AND NAVIGABLE WATERS § 2717 § 2716a. Financial responsibility civil penalties (a) Administrative Any person who, after notice and an oppor- tunity for a hearing, is found to have failed to comply with the requirements of section 2716 of this title or the regulations issued under that section, or with a denial or detention order issued under subsection (b)(2) of that section, shall be liable to the United States for a civil penalty, not to exceed $25,000 per day of viola- tion. The amount of the civil penalty shall be assessed by the President by written notice. In determining the amount of the penalty, the President shall take into account the nature, circumstances, extent, and gravity of the viola- tion, the degree of culpability, any history of prior violation, ability to pay, and such other matters as justice may require. The President may compromise, modify, or remit, with or without conditions, any civil penalty which is subject to imposition or which had been imposed under this paragraph. If any person fails to pay an assessed civil penalty after it has become final, the President may refer the matter to the Attorney General for collection. (b) Judicial In addition to, or in lieu of, assessing a pen- alty under subsection (a), the President may re- quest the Attorney General to secure such relief as necessary to compel compliance with section 2716 of this title, including a judicial order ter- minating operations. The district courts of the United States shall have jurisdiction to grant any relief as the public interest and the equities of the case may require. (Pub. L. 101–380, title IV, § 4303, Aug. 18, 1990, 104 Stat. 539; Pub. L. 115–232, div. C, title XXXV, § 3547(d), Aug. 13, 2018, 132 Stat. 2328.) Editorial Notes CODIFICATION Section was not enacted as part of title I of Pub. L. 101–380 which comprises this subchapter. AMENDMENTS 2018—Subsec. (a). Pub. L. 115–232, § 3547(d)(1), sub- stituted ‘‘subsection (b)(2)’’ for ‘‘subsection (c)(2)’’. Subsec. (b). Pub. L. 115–232, § 3547(d)(2), substituted ‘‘section 2716’’ for ‘‘this section 2716’’. Executive Documents DELEGATION OF FUNCTIONS Specific functions of President under this section del- egated to Secretary of Department in which Coast Guard is operating and Secretary of the Interior by sec- tion 5(b) of Ex. Ord. No. 12777, Oct. 18, 1991, 56 F.R. 54765, as amended, set out as a note under section 1321 of this title. § 2717. Litigation, jurisdiction, and venue (a) Review of regulations Review of any regulation promulgated under this Act may be had upon application by any in- terested person only in the Circuit Court of Ap- peals of the United States for the District of Co- lumbia. Any such application shall be made within 90 days from the date of promulgation of such regulations. Any matter with respect to which review could have been obtained under this subsection shall not be subject to judicial review in any civil or criminal proceeding for enforcement or to obtain damages or recovery of response costs. (b) Jurisdiction Except as provided in subsections (a) and (c), the United States district courts shall have ex- clusive original jurisdiction over all controver- sies arising under this Act, without regard to the citizenship of the parties or the amount in controversy. Venue shall lie in any district in which the discharge or injury or damages oc- curred, or in which the defendant resides, may be found, has its principal office, or has ap- pointed an agent for service of process. For the purposes of this section, the Fund shall reside in the District of Columbia. (c) State court jurisdiction A State trial court of competent jurisdiction over claims for removal costs or damages, as de- fined under this Act, may consider claims under this Act or State law and any final judgment of such court (when no longer subject to ordinary forms of review) shall be recognized, valid, and enforceable for all purposes of this Act. (d) Assessment and collection of tax The provisions of subsections (a), (b), and (c) shall not apply to any controversy or other mat- ter resulting from the assessment or collection of any tax, or to the review of any regulation promulgated under title 26. (e) Savings provision Nothing in this subchapter shall apply to any cause of action or right of recovery arising from any incident which occurred prior to August 18, 1990. Such claims shall be adjudicated pursuant to the law applicable on the date of the incident. (f) Period of limitations (1) Damages Except as provided in paragraphs (3) and (4), an action for damages under this Act shall be barred unless the action is brought within 3 years after— (A) the date on which the loss and the con- nection of the loss with the discharge in question are reasonably discoverable with the exercise of due care, or (B) in the case of natural resource dam- ages under section 2702(b)(2)(A) of this title, the date of completion of the natural re- sources damage assessment under section 2706(c) of this title. (2) Removal costs An action for recovery of removal costs re- ferred to in section 2702(b)(1) of this title must be commenced within 3 years after completion of the removal action. In any such action de- scribed in this subsection, the court shall enter a declaratory judgment on liability for removal costs or damages that will be binding on any subsequent action or actions to recover further removal costs or damages. Except as otherwise provided in this paragraph, an ac- tion may be commenced under this subchapter for recovery of removal costs at any time after such costs have been incurred.