Section 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
  insurance 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 insurance 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  insurance:
  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.