2023 New York Laws › NAV - Navigation › Article 12 - Oil Spill Prevention, Control, and Compensation › Part 3 - New York Environmental Protection and Spill Compensation Fund; Liability; Third Party Compensation › 181 - Liability.

§ 181. Liability.  1. Any person who has discharged petroleum shall be
strictly liable, without regard to fault, for all  cleanup  and  removal
costs  and all direct and indirect damages, no matter by whom sustained,
as defined in this section. In addition to cleanup and removal costs and
damages, any such person who is notified of such release and who did not
undertake relocation of persons residing in the area of the discharge in
accordance with paragraph  (c)  of  subdivision  seven  of  section  one
hundred  seventy-six of this article, shall be liable to the fund for an
amount equal to two times the actual and necessary expense  incurred  by
the   fund   for   such  relocation  pursuant  to  section  one  hundred
seventy-seven-a of this article.
2. The fund shall be strictly liable, without regard to fault, for all
cleanup and removal costs and all direct and indirect damages, no matter
by whom sustained, including, but not limited to:
(a) The cost  of  restoring,  repairing,  or  replacing  any  real  or
personal  property  damaged or destroyed by a discharge, any income lost
from the time such property is damaged to  the  time  such  property  is
restored,  repaired or replaced, any reduction in value of such property
caused by such discharge by comparison with its value prior thereto;
(b) The cost of restoration and replacement, where  possible,  of  any
natural resource damaged or destroyed by a discharge;
(c)  Loss of income or impairment of earning capacity due to damage to
real or personal property,  including  natural  resources  destroyed  or
damaged  by  a  discharge; provided that such loss or impairment exceeds
ten percent of the amount which claimant derives, based upon  income  or
business  records, exclusive of other sources of income, from activities
related to the particular real or personal property or natural resources
damaged or destroyed by such discharge during the week,  month  or  year
for which the claim is filed;
(d) Loss of tax revenue by the state or local governments for a period
of  one  year  due  to  damage  to real or personal property proximately
resulting from a discharge;
(e) Interest on loans obtained or  other  obligations  incurred  by  a
claimant  for  the  purpose  of  ameliorating  the  adverse effects of a
discharge pending the payment of a claim in full  as  provided  by  this
article.
3.  (a)  The owner or operator of a major facility or vessel which has
discharged petroleum shall be strictly liable, without regard to  fault,
subject  to the defenses enumerated in subdivision four of this section,
for all cleanup and removal costs and all direct  and  indirect  damages
paid  by the fund. However, the cleanup and removal costs and direct and
indirect damages which may be recovered by the fund with respect to each
incident shall not exceed:
(i) for a tank vessel, the greater of:
(1) one thousand two hundred dollars per gross ton; or
(2) (A) in the case of a vessel  greater  than  three  thousand  gross
tons, ten million dollars; or
(B)  in the case of a vessel or three thousand gross tons or less, two
million dollars;
(ii) for any other vessel subject to the liability limits set forth in
the Federal Oil Pollution Act of 1990 (33  U.S.C.  2701  et  seq.),  six
hundred  dollars  per  gross  ton  or  five  hundred  thousand  dollars,
whichever is greater;
(iii) for any other vessel not subject to  the  liability  limits  set
forth in the Federal Oil Pollution Act of 1990 (33 U.S.C. 2701 et seq.),
three hundred dollars per gross ton for each vessel;
(iv) for a major facility that is defined as an "onshore facility" and
covered  by  the  liability  limits  established  under  the Federal Oil

Pollution Act of 1990 (33 U.S.C. 2701  et  seq.),  three  hundred  fifty
million  dollars.  This  liability  limit  shall  not  be  considered to
increase the liability above the federal limit of  three  hundred  fifty
million dollars per incident.
(v)  for  a  major  facility  not covered in subparagraph (iv) of this
paragraph, fifty million dollars.
(b) The liability limits established in subparagraphs (i) and (ii)  of
paragraph  (a)  of  this subdivision shall not be considered to increase
liability above the federal  limits  for  tank  vessels  or  vessels  as
defined  in  the  Federal  Oil  Pollution Act of 1990 (33 U.S.C. 2701 et
seq.).
(c) (i) The department shall establish,  by  regulation,  a  limit  of
liability  under  this  subdivision  of  less  than  three hundred fifty
million dollars but not less  than  eight  million  dollars,  for  major
facilities  defined  as  "onshore  facilities"  under  the  Federal  Oil
Pollution Act of 1990 (33 U.S.C. 2701  et  seq.),  taking  into  account
facility    size,    storage    capacity,   throughput,   proximity   to
environmentally sensitive areas, type of petroleum  handled,  and  other
factors relevant to risks posed by the class or category of facility.
(ii)  The  department  shall  establish,  by  regulation,  a  limit of
liability under this subdivision of fifty million dollars  or  less  for
major  facilities  other  than  vessels that are not defined as "onshore
facilities" under the Federal Oil Pollution Act of 1990 (33 U.S.C.  2701
et   seq.),   taking  into  account  facility  size,  storage  capacity,
throughput,  proximity  to  environmentally  sensitive  areas,  type  of
petroleum  handled,  and  other  factors  relevant to risks posed by the
class or category of facility.
(d) The provisions of paragraph (a)  of  this  subdivision  shall  not
apply  and  the owner or operator shall be liable for the full amount of
cleanup and removal costs and damages  if  it  can  be  shown  that  the
discharge  was the result of (i) gross negligence or willful misconduct,
within the knowledge and privity of the owner,  operator  or  person  in
charge,  or  (ii)  a  gross  or  willful violation of applicable safety,
construction or operating standards or  regulations.  In  addition,  the
provisions  of  paragraph (a) of this subdivision shall not apply if the
owner or operator fails or refuses:
(1) to report  the  discharge  as  required  by  section  one  hundred
seventy-five  of  this  article  and  the owner or operator knows or had
reason to know of the discharge; or
(2) to provide all reasonable cooperation and assistance requested  by
the  federal on-scene coordinator or the commissioner or his designee in
connection with cleanup and removal activities.
(e) (i) The owner or operator of a vessel shall establish and maintain
with the department evidence of financial responsibility  sufficient  to
meet  the  amount  of liability established pursuant to paragraph (a) of
this subdivision. The owner or operator of any vessel which demonstrates
financial responsibility pursuant to the requirements of the Federal Oil
Pollution Act of 1990 (33 U.S.C. 2701 et seq.), shall be deemed to  have
demonstrated financial responsibility in accordance with this paragraph.
(ii)  The  commissioner  in  consultation  with  the superintendent of
financial services may promulgate regulations  requiring  the  owner  or
operator  of  a  major  facility  other  than  a vessel to establish and
maintain evidence of financial responsibility in an amount not to exceed
twenty-five dollars, per incident, for each barrel  of  total  petroleum
storage  capacity  at  the facility, subject to a maximum of one million
dollars per incident per facility in an  aggregate  not  to  exceed  two
million  dollars  per  facility per year; provided, however, that if the
owner or operator establishes to the satisfaction  of  the  commissioner

that  a  lesser amount will be sufficient to protect the environment and
public  health,  safety  and  welfare,  the  commissioner  shall  accept
evidence   of   financial  responsibility  in  such  lesser  amount.  In
determining  the  sufficiency  of the amount of financial responsibility
required under this section, the commissioner and the superintendent  of
financial  services shall take into consideration facility size, storage
capacity, throughput, proximity to environmentally sensitive areas, type
of petroleum handled, and other factors relevant to the risks  posed  by
the  class  or  category  of  facility,  as well as the availability and
affordability  of  pollution  liability   insurance.   Any   regulations
promulgated  pursuant  to  this subparagraph shall not take effect until
forty-eight months after the effective date of this section.
(iii) Financial responsibility under this paragraph may be established
by any one or a combination of the following methods acceptable  to  the
commissioner  in  consultation  with  the  superintendent  of  financial
services: evidence of insurance,  surety  bonds,  guarantee,  letter  of
credit,  qualification as a self-insurer, or other evidence of financial
responsibility, including certifications which qualify under the Federal
Oil Pollution Act of 1990 (33 U.S.C. 2701 et seq.).
(iv) The  liability  of  a  third-party  insurer  providing  proof  of
financial responsibility on behalf of a person required to establish and
maintain  evidence  of  financial  responsibility  under this section is
limited to the type of risk assumed and the amount of coverage specified
in the proof of financial responsibility furnished to  and  approved  by
the  department. For the purposes of this section, the term "third-party
insurer"  means  a  third-party  insurer,  surety,   guarantor,   person
furnishing  a letter of credit, or other group or person providing proof
of financial responsibility on behalf of another  person;  it  does  not
include  the  person required to establish and maintain evidence of such
financial responsibility.
4. (a) The only defenses that may be raised by  a  person  responsible
for  a  discharge  of petroleum are: an act or omission caused solely by
(i) war, sabotage, or governmental negligence or (ii) an act or omission
of a third  party  other  than  an  employee  or  agent  of  the  person
responsible, or a third party whose act or omission occurs in connection
with  a  contractual  relationship  with  the person responsible, if the
person responsible establishes by a preponderance of the  evidence  that
the  person  responsible  (a)  exercised  due  care  with respect to the
petroleum concerned, taking into consideration  the  characteristics  of
petroleum  and in light of all relevant facts and circumstances; and (b)
took precautions against the acts or omissions of any such  third  party
and  the  consequences  of those acts or omissions. These defenses shall
not apply to a person responsible who refuses or fails to (a) report the
discharge, or (b) provide all reasonable cooperation and  assistance  in
cleanup  and  removal activities undertaken on behalf of the fund by the
department. In any case where  a  person  responsible  for  a  discharge
establishes  by a preponderance of the evidence that a discharge and the
resulting cleanup and removal costs were caused  solely  by  an  act  or
omission  of  one  or  more  third parties as described above, the third
party or parties shall be treated as the person or  persons  responsible
for the purposes of determining liability under this article.
(b) Nothing set forth in this subdivision shall be construed to hold a
lender  liable to the state as a person responsible for the discharge of
petroleum at a site in the event: (i) such lender, without participating
in the management of such site, holds indicia of ownership primarily  to
protect  the lender's security interest in the site, or (ii) such lender
did  not  participate  in  the  management  of  such  site  prior  to  a
foreclosure, and such lender:
(1) forecloses on such site; and
(2)  after  foreclosure,  sells,  re-leases  (in  the  case of a lease
finance  transaction),  or  liquidates  such  site,  maintains  business
activities, winds up operations, or takes any other measure to preserve,
protect  or prepare such site for sale or disposition; provided however,
that such lender shall take actions to sell, re-lease (in the case of  a
lease  finance  transaction), or otherwise divest itself of such site at
the earliest practicable, commercially reasonable time, on  commercially
reasonable  terms,  taking  into account market conditions and legal and
regulatory requirements.
(c) This exemption shall not apply to any lender that has  (i)  caused
or  contributed  to the discharge of petroleum from or at the site, (ii)
purchased, sold, refined, transported, or discharged petroleum  from  or
at   such   site,  or  (iii)  caused  the  purchase,  sale,  refinement,
transportation, or discharge of petroleum from or at such site.
The terms "participating in management," "foreclosure,"  "lender"  and
"security  interest"  shall  have  the  same  meaning as those terms are
defined in paragraph (c) of subdivision one of section  27-1323  of  the
environmental conservation law.
5.  Any  claim  by  any  injured  person  for the costs of cleanup and
removal and direct and indirect damages based on  the  strict  liability
imposed  by  this section may be brought directly against the person who
has discharged the petroleum, provided, however, that  damages  recover-
able  by  any  injured person in such a direct claim based on the strict
liability imposed by this  section  shall  be  limited  to  the  damages
authorized by this section.
6.  Notwithstanding  any  other provision of this section, a volunteer
firefighter, volunteer fire company, volunteer fire district,  volunteer
fire  protection  district,  or  volunteer  fire department shall not be
strictly liable for discharged petroleum  when  such  discharge  results
from  such volunteer firefighter, volunteer fire company, volunteer fire
district,  volunteer  fire  protection  district,  or   volunteer   fire
department  performing  his, her, or their firefighting duties and there
is not a showing of willful or gross negligence. This subdivision  shall
not  be construed to provide an exemption from liability for a discharge
of petroleum on or from real or  personal  property  owned,  leased,  or
operated  by  any  such volunteer fire company, volunteer fire district,
volunteer fire protection district, or volunteer fire department.