Statutory Regulation

47USC9608.pdf

Financial Responsibility for Water Pollution (Vessels)

Statutory Regulation

OMB: 1625-0046

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From the U.S. Code Online via GPO Access
[www.gpoaccess.gov]
[Laws in effect as of January 3, 2007]
[CITE: 42USC9608]
[Page 2226-2228]
CHAPTER 103--COMPREHENSIVE ENVIRONMENTAL RESPONSE, COMPENSATION, AND
LIABILITY
SUBCHAPTER I--HAZARDOUS SUBSTANCES RELEASES, LIABILITY, COMPENSATION

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 60105 of title 46 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

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(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
[[Page 2227]]
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

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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
title II of Pub. L. 89-272, Oct. 20, 1965, 79
generally by Pub. L. 94-580, Sec. 2, Oct. 21,
Subtitle C of the Solid Waste Disposal Act is
subchapter III (Sec. 6921 et seq.) of chapter

in subsec. (b)(1), is
Stat. 997, as amended
1976, 90 Stat. 2795.
classified generally to
82 of this title. For

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complete classification of
set out under section 6901
The Federal Bankruptcy
means a reference to Title

this Act to the Code, see Short Title note
of this title and Tables.
Code, referred to in subsec. (c)(2), probably
11, Bankruptcy.
Codification

In subsec. (a)(2), ``section 60105 of title 46'' substituted for
``section 4197 of the Revised Statutes of the United States'' on
authority of Pub. L. 109-304, Sec. 18(c), Oct. 6, 2006, 120 Stat. 1709,
which Act enacted section 60105 of Title 46, Shipping.
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
[[Page 2228]]
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.''

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