42 USC Sec. 9608 Financial Responsibility

Sec. 9608. Financial responsibility

(a) Establishment and maintenance by owner or operator of vessel;

amount; failure to obtain certification of compliance

(1) The owner or operator of each vessel (except a nonself-propelled

barge that does not carry hazardous substances as cargo) over three

hundred gross tons that uses any port or place in the United States or

the navigable waters or any offshore facility, shall establish and

maintain, in accordance with regulations promulgated by the President,

evidence of financial responsibility of $300 per gross ton (or for a

vessel carrying hazardous substances as cargo, or $5,000,000, whichever

is greater) to cover the liability prescribed under paragraph (1) of

section 9607(a) of this title. Financial responsibility may be

established by any one, or any combination, of the following: insurance,

guarantee, surety bond, or qualification as a self-insurer. Any bond

filed shall be issued by a bonding company authorized to do business in

the United States. In cases where an owner or operator owns, operates,

or charters more than one vessel subject to this subsection, evidence of

financial responsibility need be established only to meet the maximum

liability applicable to the largest of such vessels.

(2) 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 subsection that does not have certification furnished by

the President that the financial responsibility provisions of paragraph

(1) of this subsection have been complied with.

(3) The Secretary of Transportation, in accordance with regulations

issued by him, shall (A) deny entry to any port or place in the United

States or navigable waters to, and (B) detain at the port or place in

the United States from which it is about to depart for any other port or

place in the United States, any vessel subject to this subsection that,

upon request, does not produce certification furnished by the President

that the financial responsibility provisions of paragraph (1) of this

subsection have been complied with.

(4) In addition to the financial responsibility provisions of

paragraph (1) of this subsection, the President shall require additional

evidence of financial responsibility for incineration vessels in such

amounts, and to cover such liabilities recognized by law, as the

President deems appropriate, taking into account the potential risks

posed by incineration and transport for incineration, and any other

factors deemed relevant.

(b) Establishment and maintenance by owner or operator of production,

etc., facilities; amount; adjustment; consolidated form of

responsibility; coverage of motor carriers

(1) Beginning not earlier than five years after December 11, 1980,

the President shall promulgate requirements (for facilities in addition

to those under subtitle C of the Solid Waste Disposal Act [42 U.S.C.

6921 et seq.] and other Federal law) that classes of facilities

establish and maintain evidence of financial responsibility consistent

with the degree and duration of risk associated with the production,

transportation, treatment, storage, or disposal of hazardous substances.

Not later than three years after December 11, 1980, the President shall

identify those classes for which requirements will be first developed

and publish notice of such identification in the Federal Register.

Priority in the development of such requirements shall be accorded to

those classes of facilities, owners, and operators which the President

determines present the highest level of risk of injury.

(2) The level of financial responsibility shall be initially

established, and, when necessary, adjusted to protect against the level

of risk which the President in his discretion believes is appropriate

based on the payment experience of the Fund, commercial insurers, courts

settlements and judgments, and voluntary claims satisfaction. To the

maximum extent practicable, the President shall cooperate with and seek

the advice of the commercial insurance industry in developing financial

responsibility requirements. Financial responsibility may be established

by any one, or any combination, of the following: insurance, guarantee,

surety bond, letter of credit, or qualification as a self-insurer. In

promulgating requirements under this section, the President is

authorized to specify policy or other contractual terms, conditions, or

defenses which are necessary, or which are unacceptable, in establishing

such evidence of financial responsibility in order to effectuate the

purposes of this chapter.

(3) Regulations promulgated under this subsection shall

incrementally impose financial responsibility requirements as quickly as

can reasonably be achieved but in no event more than 4 years after the

date of promulgation. Where possible, the level of financial

responsibility which the President believes appropriate as a final

requirement shall be achieved through incremental, annual increases in

the requirements.

(4) Where a facility is owned or operated by more than one person,

evidence of financial responsibility covering the facility may be

established and maintained by one of the owners or operators, or, in

consolidated form, by or on behalf of two or more owners or operators.

When evidence of financial responsibility is established in a

consolidated form, the proportional share of each participant shall be

shown. The evidence shall be accompanied by a statement authorizing the

applicant to act for and in behalf of each participant in submitting and

maintaining the evidence of financial responsibility.

(5) The requirements for evidence of financial responsibility for

motor carriers covered by this chapter shall be determined under section

31139 of title 49.

(c) Direct action

(1) Releases from vessels

In the case of a release or threatened release from a vessel,

any claim authorized by section 9607 or 9611 of this title may be

asserted directly against any guarantor providing evidence of

financial responsibility for such vessel under subsection (a) of

this section. In defending such a claim, the guarantor may invoke

all rights and defenses which would be available to the owner or

operator under this subchapter. The guarantor may also invoke the

defense that the incident was caused by the willful misconduct of

the owner or operator, but the guarantor may not invoke any other

defense that the guarantor might have been entitled to invoke in a

proceeding brought by the owner or operator against him.

(2) Releases from facilities

In the case of a release or threatened release from a facility,

any claim authorized by section 9607 or 9611 of this title may be

asserted directly against any guarantor providing evidence of

financial responsibility for such facility under subsection (b) of

this section, if the person liable under section 9607 of this title

is in bankruptcy, reorganization, or arrangement pursuant to the

Federal Bankruptcy Code, or if, with reasonable diligence,

jurisdiction in the Federal courts cannot be obtained over a person

liable under section 9607 of this title who is likely to be solvent

at the time of judgment. In the case of any action pursuant to this

paragraph, the guarantor shall be entitled to invoke all rights and

defenses which would have been available to the person liable under

section 9607 of this title if any action had been brought against

such person by the claimant and all rights and defenses which would

have been available to the guarantor if an action had been brought

against the guarantor by such person.

(d) Limitation of guarantor liability

(1) Total liability

The total liability of any guarantor in a direct action suit

brought under this section shall be limited to the aggregate amount

of the monetary limits of the policy of insurance, guarantee, surety

bond, letter of credit, or similar instrument obtained from the

guarantor by the person subject to liability under section 9607 of

this title for the purpose of satisfying the requirement for

evidence of financial responsibility.

(2) Other liability

Nothing in this subsection shall be construed to limit any other

State or Federal statutory, contractual, or common law liability of

a guarantor, including, but not limited to, the liability of such

guarantor for bad faith either in negotiating or in failing to

negotiate the settlement of any claim. Nothing in this subsection

shall be construed, interpreted, or applied to diminish the

liability of any person under section 9607 of this title or other

applicable law.

(Pub. L. 96-510, title I, Sec. 108, Dec. 11, 1980, 94 Stat. 2785; Pub.

L. 99-499, title I, Secs. 108, 127(c), Oct. 17, 1986, 100 Stat. 1631,

1692.)

References in Text

The Solid Waste Disposal Act, referred to in subsec. (b)(1), is

title II of Pub. L. 89-272, Oct. 20, 1965, 79 Stat. 997, as amended

generally by Pub. L. 94-580, Sec. 2, Oct. 21, 1976, 90 Stat. 2795.

Subtitle C of the Solid Waste Disposal Act is classified generally to

subchapter III (Sec. 6921 et seq.) of chapter 82 of this title. For

complete classification of this Act to the Code, see Short Title note

set out under section 6901 of this title and Tables.

The Federal Bankruptcy Code, referred to in subsec. (c)(2), probably

means a reference to Title 11, Bankruptcy.

Codification

In subsec. (b)(5), ``section 31139 of title 49'' substituted for

``section 30 of the Motor Carrier Act of 1980, Public Law 96-296'' on

authority of Pub. L. 103-272, Sec. 6(b), July 5, 1994, 108 Stat. 1378,

the first section of which enacted subtitles II, III, and V to X of

Title 49, Transportation.

Amendments

1986--Subsec. (a)(1). Pub. L. 99-499, Sec. 127(c)(1), inserted ``to

cover the liability prescribed under paragraph (1) of section 9607(a) of

this title'' after ``whichever is greater)''.

Subsec. (a)(4). Pub. L. 99-499, Sec. 127(c)(2), added par. (4).

Subsec. (b)(2). Pub. L. 99-499, Sec. 108(a), inserted provisions

relating to evidence of financial responsibility and authority of the

President regarding establishment of that evidence.

Subsec. (b)(3). Pub. L. 99-499, Sec. 108(b), substituted ``as

quickly as can reasonably be achieved but in no event more than 4

years'' for ``over a period of not less than three and no more than six

years''.

Subsec. (c). Pub. L. 99-499, Sec. 108(c), amended subsec. (c)

generally. Prior to amendment, subsec. (c) read as follows: ``Any claim

authorized by section 9607 or 9611 of this title may be asserted

directly against any guarantor providing evidence of financial

responsibility as required under this section. In defending such a

claim, the guarantor may invoke all rights and defenses which would be

available to the owner or operator under this subchapter. The guarantor

may also invoke the defense that the incident was caused by the willful

misconduct of the owner or operator, but such guarantor may not invoke

any other defense that such guarantor might have been entitled to invoke

in a proceeding brought by the owner or operator against him.''

Subsec. (d). Pub. L. 99-499, Sec. 108(c), amended subsec. (d)

generally. Prior to amendment, subsec. (d) read as follows: ``Any

guarantor acting in good faith against which claims under this chapter

are asserted as a guarantor shall be liable under section 9607 of this

title or section 9612(c) of this title only up to the monetary limits of

the policy of insurance or indemnity contract such guarantor has

undertaken or of the guaranty of other evidence of financial

responsibility furnished under this section, and only to the extent that

liability is not excluded by restrictive endorsement: Provided, That

this subsection shall not alter the liability of any person under

section 9607 of this title.''

Section Referred to in Other Sections

This section is referred to in section 9609 of this title.