§ 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.