Add Art 23 Title 29 §§23-2901 - 23-2936, amd §23-1903, En Con L; add §92-kk, St Fin L
Establishes the natural gas production contamination response and compensation program; creates the New York natural gas production contamination damage recovery and remediation fund.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A7282
SPONSOR: Englebright TITLE OF BILL:
An act to amend the environmental conservation law, in relation to
establishing the natural gas production contamination response and
compensation program; and to amend the state finance law, in relation to
creating the New York natural gas production contamination damage recov-
ery and remediation fund
PURPOSE:
The intent of this bill is to ensure a clean environment and healthy
economy for the State by providing for the remediation of any contam-
ination associated with natural gas production which may result in
damage to lands, waters or natural resources of the state by authorizing
the Department of Environmental Conservation to respond quickly to such
contamination and effect prompt cleanup and decontamination of such
contamination, giving first priority to protecting against public health
risks and minimizing environmental damage and by providing for strict
liability for damage sustained within the State as a result of such
contamination.
SUMMARY OF PROVISIONS:
Section 1 establishes a new "Title 29" within Article 23 of the Environ-
mental Conservation Law, adding new Sections 23-2901 through 232936,
collectively known as the "Natural Gas Production Contamination Response
and Compensation Program":
*Section 23-2901 contains legislative intent;
*Section 23-2902 contains the purpose of this Title;
*Section 23-2903 defines those terms applicable to Title 29. The terms
defined are administrator, claim, cleanup and decontamination, contam-
ination, environment, fund, natural gas production, gas production,
owner, operator and person;
*Section 23-2904 establishes that contamination of the environment by
natural gas production is prohibited;
*Section 23-2905 requires the Commissioner of Environmental Conservation
to promulgate regulations governing the cleanup and decontamination of
any contamination resulting from natural gas production;
*Additionally, Section 23-2905 authorizes the Department of Environ-
mental Conservation to draw on money in the New York Natural Gas
Production Contamination Damage Recovery and Remediation Fund to pay for
cleanup and decontamination costs incurred in any response to contam-
ination due to natural gas production after funds from bonds established
for this purpose are fully expended; *Section 23-2906 requires any
person responsible for causing contamination to immediately notify the
Department of Environmental Conservation;
*Section 23-2907 requires any person causing prohibited contamination to
immediately undertake to contain such contamination;
*Section 23-2908 requires the Commissioner of Environmental Conservation
to establish an emergency natural gas production contamination control
network and an emergency natural gas production contamination relocation
network;
*Section 23-2909 authorizes the Department of Environmental Conservation
to enter and inspect any property for the purposes of inspecting sites,
facilities for the purpose of inspection and to assist in the cleanup or
decontamination of the contamination;
*Section 23-2910 requires the Department of Environmental Conservation
to maintain a registry of all reports of contamination;
*Section 23-2914 requires the State Comptroller to appoint and supervise
an administrator of the fund and establishes the powers and duties of
such administrator;
*Section 23-2915 establishes that any person who has caused contam-
ination and the fund shall be strictly liable for all cleanup and decon-
tamination costs and all direct and indirect damages;
*Additionally, Paragraph (c) of Subdivision 3 of Section 23-2915 estab-
lishes that owners and operators of natural gas production facilities
engaging or seeking to engage in natural gas production shall provide a
bond or other financial security in an amount sufficient to fully
discharge such owner's and operator's cleanup and decontamination
responsibilities. Cleanup and decontamination costs will be paid from
this bond until it is exhausted;
*Section 23-2916 states the fund shall have a lien for the costs
incurred by the fund for the cleanup and decontamination of contam-
ination and for the payment of claims for direct and indirect damages as
a result of contamination upon certain real property located within the
State;
*Section 23-2917 establishes what a notice of environmental lien must
state;
*Section 23-2918 requires a notice of environmental lien to be filed
within 6 years from the time a disbursement is made by the fund for
cleanup and decontamination costs and damage costs incurred;
*Section 23-2919 establishes that nothing in this Article or in Article
3 of the Lien Law shall affect the right of the fund to bring certain
actions to recover cleanup and decontamination costs and damage costs;
*Section 23-2920 requires amounts received by the administrator to
satisfy all or part of an environmental lien shall be deposited in the
state treasury and credited to the fund;
*Section 23-2921 relates to the timing and manner of claims against the
fund;
*Section 23-2922 requires the administrator to attempt to promote and
arrange a settlement between the claimant and the person responsible for
the contamination;
*Section 23-2923 requires the administrator and the claimant to attempt
to arrange a settlement of any claim against the fund when the source of
the contamination is unknown or cannot be determined;
*Section 23-2924 requires the administrator to grant a hearing when
persons alleged to be responsible for the contamination contest the
validity or amount of certain claims or settlement proposals;
*Section 23-2925 establishes that payment of any cleanup costs or
damages by the fund arising from a single incident shall be conditioned
upon the administrator acquiring by subrogation all rights of the claim-
ant to recovery of such costs or damages from the person responsible for
the contamination or other responsible party. The administrator shall
then seek satisfaction from the person responsible for the contamination
or other responsible party;
*Section 23-2926 establishes that in the event that the total awards for
a specific occurrence exceed the current balance of the fund, the imme-
diate award shall be paid on a prorated basis;
*Section 23-2927 allows any claims for costs of cleanup and decontam-
ination, civil penalties or damages by the state and any claim for
damages by any injured person, to be brought directly against the bond,
the insurer or any other person providing evidence of financial respon-
sibility;
*Section 23-2928 relates to the applicability of this Title;
*Section 23-2931 authorizes the Commissioner of Environmental Conserva-
tion and the State Comptroller to adopt, amend, repeal and enforce such
rules and regulations as they deem necessary to accomplish the purposes
of this Title;
*Section 23-2932 establishes penalties for any person who knowingly
gives or causes to be given false information as a part of, or in
response to, any claim made pursuant to this Title or who otherwise
violates any of the provisions of this Title or any rule promulgated
thereunder; *Section 23-2933 states that nothing in this Title shall be
deemed to preclude the pursuit of any other civil or injunctive remedy
by any person;
*Section 23-2934 states that this title shall be liberally construed for
the general health, safety and welfare of the people of this State;
*Section 23-2935 requires the Commissioner of Environmental Conservation
and the administrator to make an annual report to the Legislature and
the Governor describing the quantity and degree of contamination caused
by natural gas production, the costs and damages paid by and recovered
by the fund, and the economic and environmental impact on the state as a
result of the administration of this -Title; *Section 23-2936 relates to
the effect of future Federal legislation on this Title.
Section 2 of this bill amends Section 23-1903 of the Environmental
Conservation Law to add a new Subdivision 3 that authorizes the Commis-
sioner of Environmental Conservation to establish a surcharge on the
permit fees on gas wells that will be credited to the fund. The
surcharge shall be established to provide sufficient funds to meet the
obligations of the fund.
Section 3 of the bill amends the State Finance Law to create a new §
92-t establishing the New York Natural Gas Production Contamination
Damage Recovery and Remediation Fund.
Section 4 of the bill contains a severability clause.
Section 5 of the bill sets an effective date of the one hundred twenti-
eth day after it shall have become a law.
PRIOR LEGISLATIVE HISTORY:.
A.7942 of 2019-2020
A.2972 of 2017-2018
A.5895 of 2015-2016
S.4028 and A.3634 of 2013-2014
S.6542 and A.8572 of 2011- 2012
JUSTIFICATION:
New York's lands and waters constitute a unique and delicately balanced
resource. The protection and preservation of these lands and waters
promotes the health, safety and welfare of the people of this State. The
State is the trustee, for the benefit of its citizens, of all natural
resources within its jurisdiction. Contamination from incidents or
accidents that result from natural gas production pose a threat to the
economy and environment of this State. This bill would provide strict
liability for damage sustained within this state as a result of contam-
ination caused by natural gas production, require prompt cleanup and
decontamination of any affected real or personal property and establish
a fund for the payment of remediation costs of contamination and timely
and adequate compensation to any persons damaged by such contamination.
The Natural Gas Production Contamination Response and Compensation
Program established in this bill is modeled after the New York State
Environmental Protection and Spill Compensation Fund ("Oil Spill Fund"),
which draws on the expertise and collaborative efforts of the Office of
the State Comptroller ("OSC"), the Department of Environmental Conserva-
tion ("DEC"), and the Office of the Attorney General ("OAG"). The new
program would ensure the timely clean up of dangerous contamination
caused by any element of the natural gas production process, and provide
for efficient resolution to related damage claims and recovery of costs
from liable parties. It would also create for the first time a registry
of all gas drilling related incidents in New York State.
This program is modeled closely after the successful structure of the
Oil Spill Fund, which uses the expertise of three State agencies (OSC,
OAG and DEC). With the Oil Spill Fund, OSC ensures that the accounting
is scrupulous and the Fund is used for appropriate expenses, the legal
expertise of the OAG ensures that responsible parties pay and money is
recouped whenever possible, and DEC's environmental expertise ensures
timely and adequate site remediation.
The New York Natural Gas Production Contamination Damage Recovery and
Remediation Fund ("Natural Gas Damage Recovery Fund") would also be
structured similarly to the Oil Spill Fund currently administered by OSC
and would establish absolute liability for damages caused by natural gas
production. In the event of a report or evidence of contamination or
damages, DEC would investigate, identify responsible parties and deter-
mine an appropriate course of action.
OSC would manage the Natural Gas Damage Recovery Fund, which would pay
for any remediation undertaken by DEC of contamination where either a
responsible party could not be identified or parties refused or were
unable to clean up the contamination.
OAG would determine who is legally responsible for the contamination
and, if necessary, commence civil damage-recovery litigation against
responsible parties. Any recovered funds would be returned to the
Natural Gas Damage Recovery Fund to pay for the cleanup of future
contamination.
By using The Oil Spill Fund as a model, the Natural Gas Production
Contamination Response and Compensation Program and the Natural Gas
Damage Recovery Fund established in this bill shall make sure that
dangerous contamination is remediated quickly and that New York resi-
dents do not have to face costly and prolonged delays in resolving
damage claims for losses related to accidents.
The Comptroller urges approval of this legislation.
BUDGET IMPLICATIONS:
There are mechanisms to fund this Act included in this bill. Therefore,
the budget implications should be minimal.
EFFECTIVE DATE:
The 120th day after this act shall have become a law.
