CHAPTER 127

FORMERLY

SENATE BILL NO. 300

AS AMENDED BY

SENATE AMENDMENT NOS. 1 AND 2 AND

HOUSE AMENDMENT NO. 1

AN ACT TO AMEND TITLE 7 OF THE DELAWARE CODE TO CONFER UPON THE DEPARTMENT OF NATURAL RESOURCES AND ENVIRONMENTAL CONTROL THE POWER TO DEAL WITH THE HAZARDS AND THREATS OF DANGER AND DAMAGE POSED BY SPILLS OF OIL AND PETROLEUM PRODUCTS UPON THE WATERS AND WITHIN THE BOUNDARIES OF THIS STATE; TO REQUIRE THE PROMPT CONTAINMENT AND REMOVAL OF POLLUTION OCCASIONED THEREBY; TO PROVIDE PROCEDURES WHEREBY PERSONS SUFFERING DAMAGES FROM SUCH OCCURRENCES MAY BE PROMPTLY MADE WHOLE; TO GUARANTEE THAT ALL PERSONS USING THE WATERS OF THE STATE FOR THE TRANSPORTATION OR TRANSFER OF OIL, PETROLEUM PRODUCTS AND THEIR BY-PRODUCTS MEET MINIMUM REQUIREMENTS OF FINANCIAL RESPONSIBILITY; TO PROVIDE PENALTIES FOR VIOLATING PROVISIONS THEREOF; TO PROVIDE FOR SERVICE OF PROCESS UPON NON-RESIDENT OWNERS OR OPERATORS; AND PROVIDING AN APPROPRIATION TO CARRY OUT THE PROVISIONS OF THIS ACT.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE:

Section 1. Amend Title 7 of the Delaware Code by adding thereto a new chapter, designated as Chapter 62, which new Chapter shall read as follows:

"CHAPTER62. OIL POLLUTION LIABILITY

§6201. Findings and purpose

The Legislature finds and declares that the highest and and best uses of the seacoast of the State are as a source of public and private recreation and solace from the pressures of an industrialized society and as a source of public use and private commerce in fishing, crabbing and gathering

other marine life used and useful in food production and other commercial activities.

The Legislature further finds and declares that the preservation of these uses is a matter of the highest urgency and priority and that such uses can only be served effectively by maintaining the coastal waters, estuaries, tidal flats, beaches and public lands adjoining the seacoast in as close to a pristine condition as possible, taking into account multiple use accommodations necessary to provide the broadest possible promotion of public and private interest with the least possible conflicts in such

diverse uses.

The Legislature further finds and declares that the transfer of oil, petroleum products and their by-products between vessels and vessels and onshore facilities and vessels within the jurisdiction of the State and State waters is a hazardous undertaking; that the spills, discharges and escape of oil, petroleum products and their by-products occurring as a result of procedures involved in the transfer and storage of such products pose threats of great danger and damage to the marine, estuarine and adjacent terrestrial environment of the State; to owners and users of shorefront property; to public and private recreation; to citizens of the State and other interests deriving livelihood from marine related activities; and to the beauty of the Delaware coast; that such hazards have frequently occurred in the past, are occurring now and present future threats of potentially catastrophic proportions, all of which are expressly declared to be inimical to the paramount interests of the State as herein set forth and that such State interests outweigh any restrictions or burdens imposed by the Legislature upon those engaged in transferring oil, petroleum products and their by-products and related activities.

The Legislature intends by the enactment of this legislation to exercise the police power of the State through the Department of Natural Resources and Environmental Control by conferring upon said Department the exclusive_nower to deal

with the hazards and threats of danger and damage posed by such transfers and related activities; to require the prompt containment and removal of pollution occasioned thereby;

to provide procedures whereby persons suffering damage from such occurrences may be promptly made whole; and to guarantee that all persons using the waters of the State for the transportation or transfer of oil, petroleum products and their by-products meet minimum requirements of financial responsibility.

The Legislature further finds and declares that the preservation of the public uses referred to herein is of grave public interest and concern to the State in promoting its general welfare, preventing disease, promoting health and providing for the public safety, and that the State's interest in such preservation outweighs any burdens of absolute liability imposed by the Legislature upon those engaged in transferring oil, petroleum products and their by-products and related activities.

§6202. Definitions

ascribed to them in this Chapter unless the context clearly indicates otherwise:

(a) 'Claim' shall mean a demand in writing for damages.

(b) 'Claimant' shall mean anyone who asserts a claim.

(c) 'Cleanup costs' shall mean costs of reasonable measures taken, after an incident has occurred, to prevent, minimize, or mitigate further oil pollution from that incident.

(d) 'Discharge' shall mean any emission, intentional

or unintentional, and shall include spilling, leaking, pumping, pouring, emptying, or dumping.

(e) 'Facility' shall mean a structure or group of structures (other than a vessel or vessels) including trucks, pipelines, bulk storage tanks, and tank cars, used for the purpose of transporting, producing, processing, storing, transferring, or handling oil.

(f) 'Guarantor' shall mean the person, other than the owner or operator, who provides evidence of financial responsibility for an owner or operator.

(g) 'Incident' shall mean any occurrence or series of occurrences, involving one or more vessels, facilities, or any combination thereof, which causes, or poses any threat of oil pollution in or upon the waters and lands of the State of Delaware.

(h) 'Oil' shall mean petroleum, including crude oil or any fraction or residue therefrom.

(i) 'Oil pollution' shall mean any discharge of oil that results in a film on, emulsion in, or sludge beneath the waters of the State of Delaware or its shoreline.

(j) 'Operator' shall mean -

(1) in the case of a vessel, a charterer by demise or any other person, who is responsible for the operation, manning, victualing, and supplying of the vessel,

Or

(2) in the case of a facility, any person responsible for the operation of the facility by agreement with the owner.

(k) 'Owner' shall mean any person holding title to, or, in the absence of title, any other indicia of ownership

In

of a vessel or facility, but does not include a person having only a security interest in, or security title to, a vessel or facility, under a contract of conditional sale, an equipment trust, a chattel or corporate mortgage, a lease which

is the functional equivalent of an extension of credit, or any similar instrument.

(1) 'Person' shall mean an individual, firm, corporation, association, or partnership.

(m) 'Person in charge' shall mean the individual immediately responsible for the operation of a vessel or facility.

(n) 'Refinery' shall mean a terminal which receives crude oil for the purpose of refinement.

(o) 'Secretary' shall mean the Secretary of the Departnent of Natural Resources and Environmental Control.

(q) 'Terminal' shall mean a facility, located within the boundaries of the State of Delaware which receives oil in bulk directly from any vessel, offshore production facility, offshore port facility or onshore pipeline.

'Vessel' shall mean every description of watercraft or other artifical contrivance used, or capable of being used, as a means of water transportation.

(s) 'Waters of the State of Delaware' shall mean those waters within the boundaries of the State as defined in §201, Title 29 of the Delaware Code, including those waters of the territorial sea which are in direct contact with the coast of Delaware and extending from the line of ordinary

low water seaward for a distance of three geographical miles.

§6203. Pollution of waters and lands of the State prohibited

The discharge of oil which causes an incident is prohibited.

§6204. Removal of illegal discharge

Any person determined by the Secretary to be responsible for causing an incident shall immediately undertake to remove such oil pollution to the Secretary's satisfaction.

If the person responsible fails immediately to undertake to remove the oil pollution to the Secretary's satisfaction, the Secretary may undertake the removal of such oil pollution

and may retain agents and contractors for such purpose who shall operate under the direction of the Secretary. The Secretary may authorize a third person, affected by such oil pollution to expend funds to remove said oil pollution at the expense of the person responsible for same. All monies expended by the Secretary under this section and recovered under §6205 of this Chapter are hereby appropria-

ted to the Department of Natural Resources and Environmental Control to carry out the purposes of this Chapter.

§6205. Injunction to prohibit violations; action to recover moneys expended for removal; action for penalties

If any person violates any of the provisions of this Chapter or any rule or regulation promulgated thereunder, the Secretary, through the Attorney General, may institute a civil action in the Court of Chancery for appropriate relief including injunctive relief to prohibit and prevent such violation or violations. The Secretary, through the Attorney General, may also bring an action in the Superior Court against any person in violation of this Chapter to recover any moneys expended by him or any moneys expended by third persons which the Secretary so authorized. The Superior Court shall have jurisdiction over all actions for penalties under this Chapter.

§6206. Service of process on owners or operators of vessels or facilities who are non-residents or corporations not incorporated in Delaware

(a) Any non-resident who, either in person or through others, owns or operates a vessel or facility in or upon the lands or waters of this State or any non-resident who, either in person or through others, owns or operates a vessel or facility outside the State, which while located outside the State causes an incident in or upon the lands or waters of the State shall be deemed thereby to have submitted himself to the jurisdiction of the courts of this State and to have appointed and constituted the Secretary of State of this State or his designee as his agent for the acceptance of legal process in any action under this Chapter. The force, validity and effect of service of process under this subsection as well as the procedure for effectuating said service shall be governed in all respects by the provisions of §3112, Title 10 of the Delaware Code.

(b) Any corporation, not incorporated in this State, which itself or through others owns or operates a vessel or facility in or upon the lands or waters of this State or any such corporation which itself or through others owns or operates a vessel or facility outside the State which, while outside the State, causes an incident in or upon the lands

or waters of this State, shall be deemed thereby to have sufficient contacts with this State to have submitted itself to the jurisdiction of the courts of this State. The force, validity and effect of service of process under this subsection as well as the procedure for effectuating said service shall be governed in all respects by the provisions of §3111, Title 10 of the Delaware Code.

§6207. Damages and claimants

(a) In addition to all necessary costs of investigation and prosecution, claims for damages for economic loss, arising out of or directly resulting from oil pollution, may be asserted for:

(1) cleanup costs;

(2) injury to, or destruction of, real or personal property;

(3) loss of use of real or personal property;

(4) injury to, or destruction of, natural resources;

(5) loss of use of natural resources;

(6) loss of profits or impairment of earning capacity due to injury or destruction of real or personal property or natural resources; and

(7) loss of tax revenue for a period of one year due to injury to real or personal property.

(b) A claim authorized by subsection (a) may be asserted:

(1) under any items, by the Attorney General on behalf of the State, its citizens or subdivisions; however, the right of any claimant or claimants to proceed in their own behalf shall not be impaired;

(2) under paragraph (1) of subsection (a), by any claimant;

(3) under paragraphs (2), (3) and (5) of subsection (a), by any claimant, if the property involved is owned or leased, or the natural resource involved is utilized, by the claimant;

(4) under paragraph (4) of subsection (a), by the Governor, as trustee for natural resources over which the State of Delaware has sovereign rights;

(5) under paragraph (6) of subsection (a), by any claimant, if the claimant dereives at least fifteen percentum (15%) of his income from activities which utilize the property or natural resources;

(6) under paragraph (7) of subsection (a), by the State or political subdivision thereof.

§6208. Liability

(a) Subject to provisions of subsections (b) and (c) of this section, the owner and operator of a vessel or of a facility, which is the source of, or poses a threat of, oil pollution, shall be jointly, severally, and strictly liable for all damages for which a claim may be asserted under §6207 of this Chapter.

(b) Except when the incident is caused by gross negligence or willful misconduct within the privity or knowledge of the owner or operator, or when the incident is caused by a gross or willful violation by the owner or operator of applicable safety, construction, or operating standards or regulations of the State of Delaware, or when the owner or operator fails or refuses to provide a certificate of financial responsibility as required by subsection

(d) of this section, the total liability under subsection (a) shall not exceed:

(1) in the case of a vessel other than a ship, one hundred fifty dollars ($150.00) per gross ton;

(2) in the case of a ship, three hundred dollars ($300.00) per gross ton or two hundred fifty thousand dollars ($250,000.00), whichever is greater, up to a maximum of thirty million dollars ($30,000,000.00); or

(3) in the case of a facility, fifty million dollars ($50,000,000.00) or such lesser limit as is established under subsection (e) of this section.

(c) There shall be no liability under subsection (a):

(1) to the extent that the incident is caused by an act of war, hostilities, civil war, or insurrection, or by a natural phenomenon of an unforeseen, exceptional, inevitable, and irresistible character;

(2) as to a particular claimant, where the incident or the economic loss is caused by the gross negligence or willful misconduct of that claimant.

(d) A certificate of financial responsibility, duly issued or approved by the Secretary, shall be an absolute condition precedent to any limitation of liability under this section.

(e) The Secretary shall issue regulations establishing limits of liability, up to fifty million dollars ($50,000,000.00), for various classes of facilities. These regulations shall take into account the size, type, location, oil storage and handling capacity, and other matters relating to the likelihood of incidents as to those classes. Such limits shall, to the extent practicable, be comparable to those limits established under paragraph (2), subsection (b) of this section, taking into account the relative potential threat of oil pollution. In no case shall it exceed the limits imposed by the federal government.

(f) The Secretary shall, from time to time, report to the General Assembly on the desirability of adjusting the monetary limitation of liability specified in subsection (b).

(g) In addition to the damages for which claims may be asserted under §6207, and without regard to the limitation of liability provided in §6208, the owner, operator, or guarantor shall be liable to the claimant for such interest as may be awarded in the discretion of the Court as well as court costs and attorneys' fees.

(h) Nothing in this Chapter shall bar a cause of action that an owner or operator, subject to liability under subsection (a) of this section, or a guarantor has or would have, by reason of subrogation or otherwise, against any person or governmental entity other than the State of Delaware and its agencies or subdivisions.

§6209. Financial responsibility

(a) The owner or operator of any vessel (except a non-self-propelled barge that does not carry oil as fuel or cargo) over 300 gross tons, which uses the waters of the State of Delaware shall establish and maintain, in accordance with regulations promulgated by the Secretary, evidence of financial responsibility sufficient to satisfy the maximum amount of liability applicable to that vessel under the provisions of subsection (b), §6208 of this Chapter. Financial responsibility may be established by any one or any combination of the following methods: evidence of 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 State of Delaware. In cases where an owner or operator owns, operates, or charters more than one vessel subject to this subsection, evidence

of financial responsibility must be established to meet the maximum liability applicable to the largest of such vessels.

(b) The owner or operator of a facility shall establish and maintain, in accordance with regulations promulgated by the Secretary, evidence of financial responsibility sufficient to satisfy the maximum amount of liability applicable to that facility under the provisions of 6208 (b) of this Chapter.

(c) The master or operator of any vessel subject to the provisions of this Chapter shall have in his possession at all times certification that the financial responsibility provisions of this section have been complied with. Pilots holding a license issued by the State of Delaware shall demand that such certification of financial responsibility be produced before providing any pilot service to said vessel.

(d) The owner or operator of any vessel or facility subject to this Chapter who, upon request, does not produce certification furnished by the Secretary that the financial responsibility provisions of this section have been complied with, shall be punished by a fine of not less than five thousand dollars ($5,000.00) nor more than fifteen thousand dollars ($15,000.00) for each such violation.

(e) Any claim authorized by 6207 of this Chapter may be asserted directly against any guarantor providing evidence of financial responsibility as required under this section. In defending such claim, the guarantor shall be entitled to invoke all rights and defenses which would be available to the owner or operator under this Title. He shall also be entitled to invoke the defense that the incident was caused by the willful misconduct of the owner or operator, but shall not be entitled to invoke any other defense which he might have been entitled to invoke in proceedings brought by the owner or operator against him.

6210. Notification, designation, and advertisement

(a) The person in charge of a vessel or facility, which is subject to the provisions of this Chapter, as soon as he has knowledge of an incident in which the vessel or facility is involved, shall immediately notify the Secretary of the incident.

(b)(1) When the Secretary receives information, pursuant to subsection (a) of this section or otherwise, of an incident which involves oil pollution, the Secretary shall, where possible, designate the source or sources of the oil pollution and shall immediately notify the owner and operator of such source, and the guarantor, of that designation as well as the Attorney General of the State of Delaware.

(2) When a source designated under paragraph (1) of this subsection is a vessel or a facility, and the owner, operator, or guarantor fails to inform the Secretary, within five days after receiving notification of the designation, of his denial of such designation, such owner, operator, or guarantor, in accordance with regulations promulgated by the Secretary, shall advertise the designation and the

procedures by which claims may be presented to him. If advertisement is not otherwise made in accordance with this paragraph, the Secretary shall, at the expense of the owner, operator, or guarantor involved, advertise the designation and the procedures by which claims may be presented to that owner, operator, or guarantor.

(c) Advertisement under subsection (b) of this section shall commence no later than fifteen (15) days from the date of the designation made thereunder to continue for a period of no less than thirty (30) days.

§6211. Claims settlement or actions in Superior Court

(a) Except as provided in subsection (b) of this section, all claims shall be presented to the owner, operator, or guarantor.

(b) In the case of a claim presented in accordance with subsection (a), and in which:

(1) the person to whom the claim is presented denies all liability for the claim, for any reason; or

(2) the claim is not settled by any person by payment to the claimant within sixty days of the date upon which (i) the claim was presented, or (ii) advertising was commenced pursuant to §6210 (b) (2), whichever is later, the claimant may elect to commence an action in Superior Court against the owner, operator, or guarantor.

(c) (1) In any action brought against an owner, operator, or guarantor, both the plaintiff and defendant shall serve a copy of the complaint and all subsequent pleadings therein upon the Attorney General and Secretary at the same

time those pleadings are served upon the opposing parties.

(2) The Attorney General may intervene in the action as a matter of right.

(3) In any action to which the Secretary is a party, if the owner, operator, or guarantor admits liability under this Chapter, the Secretary upon his motion shall be dismissed therefrom.

(d) No claim may be presented, nor may an action be commenced for damages recoverable under this Chapter, unless that claim is presented to, or that action is commenced against, the owner, operator, or guarantor, as to their respective liabilities, within three years from the date of discovery of the economic loss for which a claim may be asserted under subsection (a) of §6207, or within six years of the date of the incident which resulted in that loss, whichever is earlier.

§6212. Adjudication by the Secretary

In lieu of any action under subsections (a) or (b) of 56211 of this Chapter, the claimant may elect to submit his claim to the Secretary for adjudication, that election to be irrevocable and exclusive.

§6213. Appeal to Board

Any person whose interest is substantially affected by the adjudication of the Secretary under 56212 may appeal to the Environmental Appeals Board within twenty (20) days after the Secretary has announced his decision. The Board may affirm, modify, or reverse the decision of the Secretary. If the decision of the Secretary is overruled or modified by the Board, then the Board shall state reasons for its decision. No decision of the Board shall be valid unless signed by a minimum of five members.

§6214. Appeal from Board's decision

(a) Any person or persons, jointly or severally, aggrieved by any decision of the Board, may appeal to the Superior Court in and for the county in which the incident in question wholly or principally occurred by filing a petition, duly verified, setting forth the grounds of the appeal. Any such appeal shall be perfected within thirty (30) days of the receipt of the written decision of the Board.

(b) The Court may affirm, reverse or modify the Board's decision. The Board's findings of fact shall not be set aside unless the Court determines that the record contains no substantial evidence that would reasonably support the findings. If the Court finds that additional evidence should be taken, the Court may remand the case to the Board for completion of the record.

§6215. Subrogation

Any person or governmental entity who shall pay compensation to any claimant for an economic loss, compensable under 58207 (a) of this Chapter, shall" be subrogated to all rights, claims and causes of action which that claimant

has under this Chapter.

§6216. Rules and regulations

The Secretary may, after public hearing in accordance with 56006 of this Title, adopt, amend, modify or repeal rules or regulations to effectuate the polices and purposes of this Chapter."

Section 2. The sum of sixty thousand dollars ($60,000.00) is hereby appropriated to the Department of Natural Resources and Environmental Control to initiate the progrm contained in the provisions of this Act.

Section 3. The funds appropriated to implement the provisions of this Act shall be used for that purpose only. This is a supplemental appropriation for the fiscal year 1977 and any funds appropriated but unexpended as of June 30, 1978, shall thereupon revert to the General Fund of the State Treasury.

Section 4. If any provision of this Act or the application of any provision of this Act to any person or circumstance is held invalid, the application of such provision to other persons or circumstances and the remainder of this Act shall not be affected thereby, and toward that end are declared to be severable.

Approved July 11, 1977.