BILL NO A08572
SAME AS SAME AS S06543
SPONSOR Sweeney (MS)
COSPNSR Silver, Farrell, Lupardo, Glick, Kavanagh, Zebrowski, Cymbrowitz,
Latimer, Jaffee, Titone, Schimel, Abinanti, Colton, Castelli,
Gottfried, Lentol, Brennan, Englebright, Galef, Dinowitz, Millman,
Magnarelli, Markey, Paulin, Cusick, Reilly, Benedetto, Rosenthal,
Maisel, Bronson, Roberts, Castro, Rivera P, Quart
MLTSPNSR Braunstein, Cahill, Hooper, Losquadro, McEneny, Murray, Nolan,
Add Art 23 Title 29 Part 1 SS23-2901 - 23-2903, Part 2 SS23-2904 - 23-2910,
Part 3 SS23-2914 - 23-2928, Part 4 SS23-2931 - 23-2936, amd S23-1903, En Con L;
add S92-t, St Fin L
Establishes the natural gas production contamination response and compensation
program and creates the New York natural gas production contamination damage
recovery and remediation fund.
STATE OF NEW YORK
2011-2012 Regular Sessions
September 13, 2011
Introduced by M. of A. SWEENEY, SILVER, FARRELL, LUPARDO, GLICK,
KAVANAGH, ZEBROWSKI, CYMBROWITZ, LATIMER, JAFFEE, TITONE, SCHIMEL,
ABINANTI, COLTON, CASTELLI, GOTTFRIED, LENTOL, BRENNAN, ENGLEBRIGHT,
GALEF, DINOWITZ, MILLMAN, MAGNARELLI, MARKEY, PAULIN, CUSICK, REILLY,
BENEDETTO, ROSENTHAL, MAISEL, BRONSON, ROBERTS -- Multi-Sponsored by
-- M. of A. CAHILL, LOSQUADRO, McENENY, MURRAY, NOLAN, RUSSELL -- (at
request of the State Comptroller) -- read once and referred to the
Committee on Environmental Conservation
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
recovery and remediation fund
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Article 23 of the environmental conservation law is amended
2 by adding a new title 29 to read as follows:
3 TITLE 29
4 NATURAL GAS PRODUCTION CONTAMINATION RESPONSE
5 AND COMPENSATION PROGRAM
6 Part 1. General Provisions.
7 2. Natural gas production contamination cleanup and decontam-
9 3. Liability; third party compensation.
10 4. Miscellaneous.
11 PART 1
12 GENERAL PROVISIONS
13 Section 23-2901. Legislative intent.
14 23-2902. Purposes.
15 23-2903. Definitions.
16 § 23-2901. Legislative intent.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
 is old law to be omitted.
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1 The legislature finds and declares that New York's lands and waters
2 constitute a unique and delicately balanced resource; that the
3 protection and preservation of these lands and waters promotes the
4 health, safety and welfare of the people of this state; that the state
5 is the trustee, for the benefit of its citizens, of all natural
6 resources within its jurisdiction; and that contamination from incidents
7 or accidents that result from natural gas production pose a threat to
8 the economy and environment of this state. The legislature intends by
9 the passage of this title to exercise the powers of this state to
10 provide strict liability for damage sustained within this state as a
11 result of contamination caused by natural gas production, require prompt
12 cleanup and decontamination of any affected real or personal property,
13 and establish a fund for the payment of remediation costs of contam-
14 ination and timely and adequate compensation to any persons damaged by
15 such contamination.
16 § 23-2902. Purposes.
17 It is the purpose of this title to ensure a clean environment and
18 healthy economy for the state by providing for the remediation of any
19 contamination associated with natural gas production which may result in
20 damage to lands, waters or natural resources of the state by authorizing
21 the department of environmental conservation to respond quickly to such
22 contamination and effect prompt cleanup and decontamination of such
23 contamination, giving first priority to protecting public health and
24 minimizing environmental damage, and by providing for strict liability
25 for damage sustained within the state as a result of such contamination.
26 § 23-2903. Definitions.
27 For the purposes of this title, unless the context clearly indicates
28 otherwise, the following terms shall have the following meanings:
29 1. "Administrator" means the chief executive, within the department of
30 audit and control, of the New York natural gas production contamination
31 damage recovery and remediation fund established in section ninety-two-t
32 of the state finance law;
33 2. "Claim" means, for purposes of part three of this title, any claim
34 of the fund or any claim by an injured person who is not responsible for
35 the contamination seeking compensation for cleanup and decontamination
36 costs incurred or damages sustained as a result of contamination that
37 results from natural gas production;
38 3. "Cleanup and decontamination" means activities undertaken to perma-
39 nently eliminate, remove, abate, control or monitor health and/or envi-
40 ronmental hazards or potential hazards in connection with natural gas
42 4. "Cleanup and decontamination costs" means all costs associated with
43 the cleanup and decontamination of contamination including relocation
44 costs pursuant to section 23-2907 of this title incurred by the state or
45 its political subdivisions or their agents or any person with approval
46 of the department;
47 5. "Contamination" means any damage to any property or the environ-
48 ment, including, but not limited to, a public or private water supply,
49 any threat to public health, or any hazardous condition that prevents
50 the use of property or that requires relocation of people or property to
51 prevent harm resulting from natural gas production, or the release of
52 any substance used in or associated with processes related to natural
53 gas production, including, but not limited to, the development of
54 natural gas wells; activities associated with drilling, stimulating,
55 completing, or operating a natural gas well; activities associated with
56 the construction or operation of facilities for the collection and/or
A. 8572 3
1 processing of natural gas or for the transmission of natural gas from
2 gas wells to consumers of natural gas; and the transportation of materi-
3 als associated with a natural gas well site or natural gas production;
4 6. "Environment" means any water including, but not limited to, a
5 stream, pond, lake, river, water course, aquifer, wetland or reservoir,
6 any land including, but not limited to, a land surface or subsurface,
7 air, fish, wildlife, biota and all other natural resources;
8 7. "Fund" means the New York natural gas production contamination
9 damage recovery and remediation fund established by section ninety-two-t
10 of the state finance law;
11 8. "Natural gas production" or "gas production" means all activities
12 associated with the exploration and production of natural gas, includ-
13 ing, but not limited to, (a) development of natural gas wells; (b)
14 activities associated with drilling, stimulating, completing, or operat-
15 ing a natural gas well; (c) activities associated with the construction
16 or operation of facilities for the collection and transmission of
17 natural gas from gas wells to consumers of natural gas; and (d) the
18 transportation of materials associated with a natural gas well site or
19 natural gas production whether or not such gas is re-injected into the
20 subsurface of the earth, from a geological formation and the transporta-
21 tion of such natural gas to another location;
22 9. "Owner" or "operator" means with respect to natural gas production
23 any person owning or operating by lease, contract or other form of
24 agreement any natural gas production sites, facilities, equipment, or
25 development rights; with respect to abandoned or derelict sites, facili-
26 ties, equipment, or development rights, the person who owned or operated
27 such sites, facilities, equipment or development rights immediately
28 prior to such abandonment, or the owner, or operator at the time of
30 10. "Person" means public or private corporations, companies, associ-
31 ations, societies, firms, partnerships, joint stock companies, individ-
32 uals, the United States, the state of New York and any of its political
33 subdivisions or agents.
34 PART 2
35 NATURAL GAS PRODUCTION CONTAMINATION
36 CLEANUP AND DECONTAMINATION
37 Section 23-2904. Contamination caused by natural gas production; prohi-
39 23-2905. Cleanup and decontamination of contamination caused by
40 natural gas production.
41 23-2906. Notification by persons responsible for contamination.
42 23-2907. Cleanup and decontamination of prohibited contam-
44 23-2908. Emergency natural gas production contamination control
45 network and emergency natural gas production contam-
46 ination relocation network.
47 23-2909. Right to enter and inspect.
48 23-2910. Registry of reports of contamination.
49 § 23-2904. Contamination caused by natural gas production; prohibition.
50 Contamination of the environment caused by natural gas production is
52 § 23-2905. Cleanup and decontamination of contamination caused by
53 natural gas production.
54 1. The commissioner shall promulgate regulations governing the cleanup
55 and decontamination of any contamination resulting from natural gas
A. 8572 4
1 2. No person shall supervise, aid or participate in any cleanup or
2 decontamination method which is inconsistent with any rule or regulation
3 promulgated pursuant to this section.
4 § 23-2906. Notification by persons responsible for contamination.
5 Any person responsible for causing contamination shall immediately
6 notify the department pursuant to rules and regulations established by
7 the department, but in no case later than two hours after the contam-
8 ination. Failure to so notify shall make such person liable pursuant to
9 the penalty provisions of section 23-2932 of this title.
10 § 23-2907. Cleanup and decontamination of prohibited contaminations.
11 1. Any person causing contamination prohibited by section 23-2904 of
12 this part shall immediately undertake to contain such contamination.
13 Notwithstanding the above requirement, the department, pursuant to regu-
14 lations promulgated for such purpose, may undertake the decontamination
15 of such contamination and may retain agents and contractors who shall
16 operate under the direction of such department for such purpose.
17 2. (a) Upon the occurrence of contamination resulting from natural gas
18 production, pursuant to regulations promulgated for such purpose, the
19 department shall respond promptly and proceed to cleanup and remove the
20 contamination in accordance with environmental priorities or may, at its
21 discretion, direct the person responsible for such contamination to
22 promptly cleanup and remove the contamination. The department shall be
23 responsible for cleanup and decontamination or, as the case may be, for
24 retaining agents and contractors who shall operate under the direction
25 of that department for such purposes. Implementation of cleanup and
26 decontamination procedures of each contamination shall be conducted in
27 accordance with environmental priorities and procedures established by
28 the department.
29 (b) Section eight of the court of claims act or any other provision of
30 law to the contrary notwithstanding, the state shall be immune from
31 liability and action with respect to any act or omission done in the
32 discharge of the department's responsibility pursuant to this title;
33 provided, however, that this subdivision shall not limit any liability
34 which may otherwise exist for unlawful, willful or malicious acts or
35 omissions on the part of the state, state agencies, or their officers,
36 employees or agents or for contamination in violation of section 23-2904
37 of this part.
38 3. Any unexplained contamination caused by natural gas production
39 within state jurisdiction or contamination caused by natural gas
40 production occurring beyond state jurisdiction that for any reason pene-
41 trates within state jurisdiction shall be removed by or under the direc-
42 tion of the department. Except for those expenses incurred by the party
43 causing such contamination, any expenses incurred in the decontamination
44 of contamination shall be paid promptly from the New York natural gas
45 production contamination damage recovery and remediation fund pursuant
46 to section ninety-two-t of the state finance law and any reimbursements
47 due such fund shall be collected in accordance with the provisions of
48 such section.
49 4. Cleanup and decontamination of contamination and actions to mini-
50 mize damage from such contamination shall be, to the greatest extent
51 possible, permanent remedies to the contamination, in accordance with
52 applicable federal and state environmental laws, rules and regulations.
53 5. The department, in consultation with the state comptroller and the
54 attorney general, shall develop a standard contract form to be used when
55 contracting services for the cleanup and decontamination of a contam-
A. 8572 5
1 6. Whenever the department acts to remove contamination or contracts
2 to secure prospective decontamination services, the department is
3 authorized to draw upon the money available in the fund, paid out on the
4 audit and warrant of the comptroller. Such moneys shall be used to pay
5 promptly for all cleanup and decontamination costs incurred by the
6 department. Whenever the department acts to remove contamination or
7 contracts to secure prospective decontamination services to address
8 contamination that is associated with an owner or operator, it shall
9 first draw on the bond or other financial security required by paragraph
10 (c) of subdivision three of section 23-2915 of this title paid out on
11 the audit and warrant of the comptroller. If such bond or financial
12 security is insufficient to fully discharge cleanup and decontamination
13 costs, the department is authorized to draw on money available in the
14 fund, paid out on the audit and warrant of the state comptroller.
15 7. (a) Nothing in this section is intended to preclude cleanup and
16 decontamination by any person threatened by such contamination, who, as
17 soon as is reasonably possible, coordinates and obtains approval for
18 such actions with ongoing state or federal operations and appropriate
19 state and federal authorities. Notwithstanding any other provision of
20 law to the contrary, the liability of any contractor for such person,
21 where such person obtains approval from appropriate state and federal
22 authorities for such cleanup and decontamination, and the liability of
23 any person providing services related to the cleanup or decontamination
24 of contamination, under contract with the department, for any injury to
25 a person or property caused by or related to such services shall be
26 limited to acts or omissions of the person during the course of perform-
27 ing such services which are shown to have been the result of negligence,
28 gross negligence or reckless, wanton or intentional misconduct. Notwith-
29 standing any other provisions of law, when (i) a verdict or decision in
30 an action or claim for injury to a person or property caused by or
31 related to such services is determined in favor of a claimant in an
32 action involving a person performing such services and any other person
33 or persons jointly liable, and (ii) the liability of the person perform-
34 ing such services is found to be fifty percent or less of the total
35 liability assigned to all persons liable, and (iii) the liability of the
36 person performing such services is not based on a finding of reckless
37 disregard for the safety of others, or intentional misconduct, then the
38 liability of the person performing such services to the claimant for
39 loss relating to injury to property and for non-economic loss relating
40 to injury to a person shall not exceed the equitable share of the person
41 performing such services determined in accordance with the relative
42 culpability of each person causing or contributing to the total liabil-
43 ity for such losses; provided, however, that the culpable conduct of any
44 person not a party to the action shall not be considered in determining
45 any equitable share herein if the claimant proves that with due dili-
46 gence the claimant was unable to obtain jurisdiction over such person in
47 said action. As used in this section, the term "non-economic loss"
48 includes, but is not limited to, pain and suffering, mental anguish,
49 loss of consortium or other damages for non-economic loss. However,
50 nothing in this subdivision shall be deemed to alter, modify or abrogate
51 the liability of any person performing such services for breach of any
52 express warranty, limited or otherwise, or an express or implied warran-
53 ty under the uniform commercial code, or to an employee of such person
54 pursuant to the workers' compensation law, or to relieve from any
55 liability any person who is responsible for contamination in violation
56 of section 23-2904 of this part.
A. 8572 6
1 (b) No action taken by any person to contain or remove contamination
2 shall be construed as an admission of liability for such contamination.
3 No person who gratuitously renders assistance in containing or removing
4 contamination shall be liable for any civil damages to third parties
5 resulting solely from acts or omissions of such person in rendering such
6 assistance except for acts or omissions of gross negligence or willful
7 misconduct. In the course of cleanup and decontamination, no person
8 shall discharge any detergent or other substance into the waters of this
9 state without prior authorization of the commissioner.
10 (c) A person may, without admission of responsibility for a contam-
11 ination and with the consent of the commissioner, commence clean up and
12 decontamination of the contamination and upon the recommendation of the
13 commissioner of health and with the consent of the fund undertake the
14 relocation of persons affected by contamination. Upon determination by
15 the fund that the person is not responsible for the contamination, the
16 person shall be reimbursed by the fund for the actual and necessary
17 expenses incurred.
18 8. Notwithstanding any other provision of law to the contrary, includ-
19 ing but not limited to section 15-108 of the general obligations law,
20 every person providing cleanup, decontamination of contamination or
21 relocation of persons pursuant to this section shall be entitled to
22 contribution from any other responsible party.
23 § 23-2908. Emergency natural gas production contamination control
24 network and emergency natural gas production contamination
25 relocation network.
26 The commissioner shall, by regulation, establish an emergency natural
27 gas production contamination control network and an emergency natural
28 gas production contamination relocation network.
29 § 23-2909. Right to enter and inspect.
30 The department is hereby authorized to enter and inspect any property
31 or premises for the purpose of inspecting sites, facilities, or equip-
32 ment and investigating either actual or suspected sources of contam-
33 ination or violation of this title or any rule or regulation promulgated
34 pursuant to this title. The department is further authorized to enter on
35 property or premises in order to assist in the cleanup or decontam-
36 ination of the contamination. Any information relating to secret proc-
37 esses or methods of manufacture shall be kept confidential.
38 § 23-2910. Registry of reports of contamination.
39 1. The department shall maintain and post on a publicly available
40 internet website a registry of all reports of contamination pursuant to
41 section 23-2906 of this part. Reports shall be added to the registry on
42 an ongoing basis as soon as possible after the date on which they are
43 reported, but no later than thirty days after such date. Such registry
44 shall include, but not be limited to, the following items:
45 (a) a general description of the site consisting of:
46 (i) the name, if any, of the site and the address of the site, includ-
47 ing the town and county;
48 (ii) the contamination at the site, including, but not limited to, a
49 description of the natural gas production activity resulting in contam-
50 ination, the date on which this activity occurred and all inspections,
51 tests and other measures employed in assessing the contamination;
52 (iii) the owner or operator of the natural gas production activity at
53 the time of contamination; and
54 (iv) the name of the current owner of the site;
55 (b) an assessment by the department of harm to the environment result-
56 ing from contamination at the site;
A. 8572 7
1 (c) an assessment prepared by the department of health of public
2 health problems at the site resulting from contamination at the site;
4 (d) a description of cleanup and contamination activities undertaken
5 at the site.
6 2. Periodically, but no less than annually, the department shall
7 update the registry to reflect the status of cleanup and decontamination
9 3. When a permanent remedy of contamination has been achieved, the
10 department may, at the request of the site owner, remove the name of the
11 site owner and the site address information except for the town and
12 county of the site from the registry. All other items shall remain as
13 permanent records on the registry.
14 PART 3
15 LIABILITY; THIRD PARTY COMPENSATION
16 Section 23-2914. Administrator of the New York natural gas production
17 damage recovery and remediation fund.
18 23-2915. Liability.
19 23-2916. Environmental lien.
20 23-2917. Environmental lien notice; contents.
21 23-2918. Filing of notice of environmental lien; filing of
23 23-2919. Enforcement of environmental lien.
24 23-2920. Amounts received to satisfy lien.
25 23-2921. Claims against the fund.
26 23-2922. Settlements.
27 23-2923. Settlements when source of contamination is unknown.
28 23-2924. Hearings for persons on claims filed with the adminis-
30 23-2925. Subrogation of rights.
31 23-2926. Awards exceeding current balance.
32 23-2927. Claims against insurers.
33 23-2928. Application of title.
34 § 23-2914. Administrator of the New York natural gas production damage
35 recovery and remediation fund.
36 The state comptroller shall appoint and supervise an administrator of
37 the New York natural gas production damage recovery and remediation fund
38 for the purposes of this part referred to as "the fund". The administra-
39 tor shall be the chief executive of the fund and shall have the follow-
40 ing powers and duties:
41 1. To represent the state in meetings with the alleged person respon-
42 sible for a contamination and claimants concerning liability for the
43 contamination and amount of the claims;
44 2. To determine if hearings are needed to settle particular claims
45 filed by injured persons;
46 3. To convene hearings;
47 4. To certify the amount of claims and names of claimants to the state
48 comptroller; and
49 5. To disburse moneys from the fund for cleanup and decontamination
50 costs pursuant to a certification of claims by the commissioner.
51 § 23-2915. Liability.
52 1. Any person who has caused contamination shall be strictly liable,
53 without regard to fault, for all cleanup and decontamination costs and
54 all direct and indirect damages, no matter by whom sustained, as defined
55 in this section. In addition to cleanup and decontamination costs and
56 damages, any such person who is notified of such contamination and who
A. 8572 8
1 did not undertake relocation of persons residing in the area of the
2 contamination in accordance with paragraph (c) of subdivision seven of
3 section 23-2907 of this title, shall be liable to the fund for an amount
4 equal to two times the actual and necessary expense incurred by the fund
5 for such relocation pursuant to regulations authorized by section
6 23-2908 of this title.
7 2. The fund shall be strictly liable, without regard to fault, for all
8 cleanup and decontamination costs and all direct and indirect damages,
9 no matter by whom sustained, including, but not limited to:
10 (a) Cleanup and decontamination costs including, but not limited to
11 the cost of restoring, repairing, or replacing any real or personal
12 property damaged or destroyed by contamination, any income lost from the
13 time such property is damaged to the time such property is restored,
14 repaired or replaced, any reduction in value of such property caused by
15 such contamination by comparison with its value prior thereto;
16 (b) The cost of restoration and replacement, where possible, of any
17 natural resource damaged or destroyed by contamination;
18 (c) Loss of income or impairment of earning capacity due to damage to
19 real or personal property, including natural resources destroyed or
20 damaged by contamination; provided that such loss or impairment exceeds
21 ten percent of the amount which claimant derives, based upon income or
22 business records, exclusive of other sources of income, from activities
23 related to the particular real or personal property or natural resources
24 damaged or destroyed by such contamination during the week, month or
25 year for which the claim is filed;
26 (d) Loss of tax revenue by the state or local governments for a period
27 of one year due to damage to real or personal property proximately
28 resulting from contamination; and
29 (e) Interest on loans obtained or other obligations incurred by a
30 claimant for the purpose of ameliorating the adverse effects of a
31 contamination pending the payment of a claim in full as provided by this
33 3. (a) The owner or operator which has caused contamination shall be
34 strictly liable for the full amount of cleanup and decontamination costs
35 and damages, without regard to fault, subject to the defenses enumerated
36 in subdivision four of this section, for all cleanup and decontamination
37 costs and all direct and indirect damages paid by the fund.
38 (b) (i) The commissioner in consultation with the superintendent of
39 financial services shall promulgate regulations requiring the owner or
40 operator of a drilling site to establish and maintain evidence of finan-
41 cial responsibility.
42 (ii) Financial responsibility under this paragraph may be established
43 by any one or a combination of the following methods acceptable to the
44 commissioner in consultation with the superintendent of financial
45 services: evidence of insurance, surety bonds, guarantee, letter of
46 credit, qualification as a self-insurer, or other evidence of financial
48 (iii) The liability of a third-party insurer providing proof of finan-
49 cial responsibility on behalf of a person required to establish and
50 maintain evidence of financial responsibility under this section is
51 limited to the type of risk assumed and the amount of coverage specified
52 in the proof of financial responsibility furnished to and approved by
53 the department. For the purposes of this section, the term "third-party
54 insurer" means a third-party insurer, surety, guarantor, person furnish-
55 ing a letter of credit, or other group or person providing proof of
56 financial responsibility on behalf of another person; it does not
A. 8572 9
1 include the person required to establish and maintain evidence of such
2 financial responsibility.
3 (c) Any owner or operator engaging in or seeking to engage in natural
4 gas production shall provide a bond or other financial security accepta-
5 ble to the department in an amount established by rule or regulation in
6 consultation with the administrator of the fund conditioned on perform-
7 ance of such owner's or operator's cleanup and decontamination responsi-
8 bilities in the event of contamination as defined in this section. The
9 bond shall be in an amount sufficient to fully discharge such owner's or
10 operator's cleanup and decontamination responsibilities. The failure of
11 any owner or operator to prevent prohibited contamination shall be
12 deemed a breach of the responsibilities of this title and entitle the
13 department to claim the proceeds of the bond or other financial security
14 authorized by this paragraph. In the event the department acts or
15 remove contamination or contracts to secure prospective decontamination
16 services pursuant to subdivision six of section 23-2907 of this title to
17 address contamination that is associated with an owner or operator, the
18 department shall draw on the bond or other financial security authorized
19 by this paragraph to pay promptly for cleanup and decontamination costs
20 incurred by such department.
21 4. (a) The only defenses that may be raised by a person responsible
22 for causing contamination are: (i) an act or omission caused solely by
23 war, sabotage, or governmental negligence or (ii) an act or omission of
24 a third party other than an employee or agent of the person responsible,
25 or a third party whose act or omission occurs in connection with a
26 contractual relationship with the person responsible, if the person
27 responsible establishes by a preponderance of the evidence that the
28 person responsible exercised due care with respect to the natural gas
29 concerned, taking into consideration the characteristics of natural gas
30 and in light of all relevant facts and circumstances; and
31 (b) took precautions against the acts or omissions of any such third
32 party and the consequences of those acts or omissions. These defenses
33 shall not apply to a person responsible who refuses or fails to (i)
34 report the contamination, or (ii) provide all reasonable cooperation and
35 assistance in cleanup and decontamination activities undertaken on
36 behalf of the fund by the department. In any case where a person respon-
37 sible for contamination establishes by a preponderance of the evidence
38 that the contamination and the resulting cleanup and decontamination
39 costs were caused solely by an act or omission of one or more third
40 parties as described in this paragraph, the third party or parties shall
41 be treated as the person or persons responsible for the purposes of
42 determining liability under this title.
43 (c) Nothing set forth in this subdivision shall be construed to hold a
44 lender liable to the state as a person responsible for the contamination
45 caused by natural gas production at a site in the event: (i) such lend-
46 er, without participating in the management of such site, holds indicia
47 of ownership primarily to protect the lender's security interest in the
48 site, or (ii) such lender did not participate in the management of such
49 site prior to a foreclosure, and such lender:
50 (1) forecloses on such site; and
51 (2) after foreclosure, sells, re-leases (in the case of a lease
52 finance transaction), or liquidates such site, maintains business activ-
53 ities, winds up operations, or takes any other measure to preserve,
54 protect or prepare such site for sale or disposition; provided however,
55 that such lender shall take actions to sell, re-lease (in the case of a
56 lease finance transaction), or otherwise divest itself of such site at
A. 8572 10
1 the earliest practicable, commercially reasonable time, on commercially
2 reasonable terms, taking into account market conditions and legal and
3 regulatory requirements.
4 (d) This exemption shall not apply to any lender that has caused or
5 contributed to the contamination caused by natural gas production from
6 or at the site.
7 The terms "participating in management," "foreclosure," "lender" and
8 "security interest" shall have the same meaning as those terms are
9 defined in paragraph (c) of subdivision one of section 27-1323 of this
11 5. Any claim by any injured person for the costs of cleanup and decon-
12 tamination and direct and indirect damages based on the strict liability
13 imposed by this section may be brought directly against the person who
14 has caused contamination, provided, however, that damages recoverable by
15 any injured person in such a direct claim based on the strict liability
16 imposed by this section shall be limited to the damages authorized by
17 this section.
18 § 23-2916. Environmental lien.
19 1. The fund shall have a lien for the costs incurred by the fund for
20 the cleanup and decontamination of contamination and for the payment of
21 claims for direct and indirect damages as a result of contamination upon
22 real property located within the state:
23 (a) owned by a person liable to the fund for such costs under section
24 23-2915 of this part at the time a notice of environmental lien is
25 filed; and
26 (b) upon which the contamination occurred.
27 2. An environmental lien shall attach when:
28 (a) cleanup and decontamination costs and damage costs are incurred by
29 the fund;
30 (b) the person referred to in subdivision one of this section fails to
31 pay such costs within ninety days after a written demand therefor by the
32 administrator is mailed by certified or registered mail, return receipt
33 requested; and
34 (c) a notice of environmental lien is filed as provided in section
35 23-2918 of this part; provided, however, that a copy of the notice of
36 environmental lien is served upon the owner of the real property subject
37 to the environmental lien within thirty days of such filing in accord-
38 ance with the provisions of section eleven of the lien law.
39 3. An environmental lien shall continue against the real property
41 (a) the claim or judgment against the person referred to in subdivi-
42 sion one of this section for cleanup and decontamination costs and
43 damage costs is satisfied or becomes unenforceable;
44 (b) the lien is released by the administrator pursuant to this subdi-
46 (c) the lien is discharged by payment of moneys into court; or
47 (d) the lien is otherwise vacated by court order.
48 Upon the occurrence of any of the foregoing, except where the lien is
49 vacated by court order, the administrator shall execute the release of
50 an environmental lien and file the release as provided in section
51 23-2918 of this part. The administrator may release an environmental
52 lien where:
53 (i) a legally enforceable agreement satisfactory to the administrator
54 has been executed relating to cleanup and decontamination costs and
55 damage costs or reimbursing the fund for cleanup and decontamination
56 costs and damage costs; or
A. 8572 11
1 (ii) the attachment or enforcement of the environmental lien is deter-
2 mined by the administrator not to be in the public interest.
3 4. An environmental lien is subject to the rights of any other person,
4 including an owner, purchaser, holder of a mortgage or security inter-
5 est, or judgment lien creditor, whose interest is perfected before a
6 lien notice has been filed as provided in section 23-2918 of this part.
7 § 23-2917. Environmental lien notice; contents.
8 A notice of environmental lien must state:
9 1. That the lienor is the New York natural gas production contam-
10 ination damage recovery and remediation fund;
11 2. The name of the record owner of the real property on which the
12 environmental lien has attached;
13 3. The real property subject to the lien, with a description thereof
14 sufficient for identification;
15 4. That the real property described in the notice is the property upon
16 which contamination occurred and that cleanup and decontamination costs
17 and damage costs have been incurred by the lienor as a result of such
19 5. That the owner is potentially liable for cleanup and decontam-
20 ination costs and damage costs pursuant to section 23-2915 of this part;
22 6. That an environmental lien has attached to the described real prop-
24 § 23-2918. Filing of notice of environmental lien; filing of release.
25 1. A notice of environmental lien shall be filed within six years from
26 the time a disbursement is made by the fund for cleanup and decontam-
27 ination costs and damage costs incurred by the fund in the clerk's
28 office of the county where the property is situated. If such property is
29 situated in two or more counties, the notice of environmental lien shall
30 be filed in the office of the clerk of each of such counties. The notice
31 of lien shall be indexed by the county clerk in accordance with the
32 provisions of section ten of the lien law.
33 2. A release of an environmental lien shall be filed in the clerk's
34 office of each county where the notice of environmental lien was filed
35 and shall be indexed in the manner prescribed for indexing environmental
37 § 23-2919. Enforcement of environmental lien.
38 An environmental lien may be enforced against the property specified
39 in the notice of environmental lien, and an environmental lien may be
40 vacated or released, as prescribed in article three of the lien law;
41 provided, however, that nothing in this article or in article three of
42 the lien law shall affect the right of the fund to bring an action to
43 recover cleanup and decontamination costs and damage costs under section
44 23-2915, 23-2926, 23-2927 or 23-2928 of this part.
45 § 23-2920. Amounts received to satisfy lien.
46 Amounts received by the administrator to satisfy all or part of an
47 environmental lien shall be deposited in the state treasury and credited
48 to the natural gas production damage recovery and remediation fund.
49 § 23-2921. Claims against the fund.
50 Claims shall be filed with the administrator not later than three
51 years after the date of discovery of damage nor later than ten years
52 after the date of the incident which caused the damage. The administra-
53 tor shall prescribe appropriate forms and procedures for such claims,
54 which shall include a provision requiring the claimant to make a sworn
55 verification of the claim to the best of his knowledge. Any person who
56 knowingly gives or causes to be given any false information as a part of
A. 8572 12
1 any such claim shall, in addition to any other penalties herein or else-
2 where prescribed, be guilty of a misdemeanor punishable by a fine of up
3 to one thousand dollars or up to one year imprisonment. Upon receipt of
4 any claim, the administrator shall as soon as practicable inform all
5 affected parties of the claim.
6 § 23-2922. Settlements.
7 The administrator shall attempt to promote and arrange a settlement
8 between the claimant and the person responsible for the contamination.
9 If the source of the contamination can be determined and liability is
10 conceded, the claimant and the alleged person responsible for the
11 contamination may agree to a settlement which shall be final and binding
12 upon the parties and which will waive all recourse against the fund.
13 § 23-2923. Settlements when source of contamination is unknown.
14 If the source of the contamination is unknown or cannot be determined,
15 the claimant and the administrator shall attempt to arrange a settlement
16 of any claim against the fund. The administrator is authorized to enter
17 and certify payment of such settlement subject to such proof and proce-
18 dures contained in regulations promulgated by the administrator.
19 § 23-2924. Hearings for persons on claims filed with the administrator.
20 1. The administrator shall grant a hearing when persons alleged to be
21 responsible for the contamination contest the validity or amount of
22 damage claims or claims for cleanup and decontamination costs presented
23 by injured persons to the fund for payment or when injured persons who
24 have filed a claim against the fund contest the validity or amount of
25 the settlement proposed by the administrator.
26 2. One hearing may be granted to hear and determine all claims arising
27 from or related to a common contamination.
28 3. The burden of proof with respect to the validity or amount of
29 damage claims or claims for cleanup and decontamination costs shall be
30 upon the persons contesting such claims or the claimants contesting the
31 settlement proposed by the administrator.
32 4. At least twenty days notice of such hearing shall be given by the
33 administrator to the claimants and, if known, the alleged person respon-
34 sible for the contamination.
35 5. Upon the return day of such notice the person so notified shall
36 file with the administrator a statement setting forth the position of
37 the person so notified. Pertinent and relevant testimony of witnesses
38 shall be received in support of or opposition to such statement. The
39 claimants or alleged persons responsible for the contamination may
40 appear in person or by attorney, present witnesses, submit evidence and
41 be given full opportunity to be heard.
42 6. The administrator shall have the power to order testimony under
43 oath and may subpoena attendance and testimony of witnesses and the
44 production of such documentary materials pertinent to the issues
45 presented at the hearing. Each person appearing at the hearing may be
46 represented by counsel.
47 7. Within sixty calendar days from the close of such hearing and after
48 due consideration of the written and oral statements and testimony and
49 arguments filed pursuant to this section, or on default in appearance on
50 said return day, the administrator shall make his final determination on
51 the validity or amount of the damage claims or claims for cleanup and
52 decontamination costs filed by the injured persons. The administrator
53 shall notify the claimant and, if known, the alleged person responsible
54 for the contamination thereof in writing by registered mail.
55 8. Determinations made by the administrator after such hearing shall
56 be final and conclusive. Any action for judicial review shall be filed
A. 8572 13
1 pursuant to the provisions of article seventy-eight of the civil prac-
2 tice law and rules.
3 9. Upon a determination by the administrator that provides for an
4 award to the claimants, the administrator shall certify the amount of
5 the award and the name of the claimant to the state comptroller, who
6 shall pay the award from the fund. In any case in which a person respon-
7 sible for the contamination seeks judicial review, reasonable attorney's
8 fees and costs shall be awarded to the claimant if the determination of
9 the administrator is affirmed.
10 § 23-2925. Subrogation of rights.
11 Payment of any cleanup costs or damages by the fund arising from a
12 single incident shall be conditioned upon the administrator acquiring by
13 subrogation all rights of the claimant to recovery of such costs or
14 damages from the person responsible for the contamination or other
15 responsible party. The administrator shall then seek satisfaction from
16 the person responsible for the contamination or other responsible party
17 in the supreme court if the person responsible for the contamination or
18 other responsible party does not reimburse the fund. In any such suit,
19 except as provided by section 23-2915 of this part, the administrator
20 need prove only that an unlawful contamination occurred which was the
21 responsibility of the person responsible for the contamination or other
22 responsible party. The administrator is hereby authorized and empowered
23 to compromise and settle the amount sought for costs and damages from
24 the person responsible for the contamination or other responsible party
25 and any penalty arising under this title.
26 § 23-2926. Awards exceeding current balance.
27 In the event that the total awards for a specific occurrence exceed
28 the current balance of the fund, the immediate award shall be paid on a
29 prorated basis, and all claimants paid on a prorated basis shall be paid
30 as determined by the administrator, a pro rata share of all moneys
31 received by the fund until the total amount of the proven damages is
32 paid to the claimant or claimants. The administrator may also provide
33 through regulation to fix the priority for the payment of claims based
34 on extreme hardship.
35 § 23-2927. Claims against insurers.
36 Any claims for costs of cleanup and decontamination, civil penalties
37 or damages by the state and any claim for damages by any injured person,
38 may be brought directly against the bond, the insurer, or any other
39 person providing evidence of financial responsibility.
40 § 23-2928. Application of title.
41 For purposes of cleanup and decontamination of any public or private
42 ground water supply system contaminated by any contamination occurring
43 either before or after the effective date of this title, all relevant
44 provisions of this title shall apply.
45 PART 4
47 Section 23-2931. Joint rules and regulations.
48 23-2932. Enforcement of title; penalties.
49 23-2933. Availability of additional remedies.
50 23-2934. Construction.
51 23-2935. Reports.
52 23-2936. Effect of federal legislation.
53 § 23-2931. Joint rules and regulations.
54 The commissioner and the state comptroller are authorized to adopt,
55 amend, repeal, and enforce such rules and regulations pursuant to the
A. 8572 14
1 state administrative procedure act, as they may deem necessary to accom-
2 plish the purposes of this title.
3 § 23-2932. Enforcement of title; penalties.
4 Any person who knowingly gives or causes to be given any false infor-
5 mation as a part of, or in response to, any claim made pursuant to this
6 title for cleanup and decontamination costs, direct or indirect damages
7 resulting from contamination, or who otherwise violates any of the
8 provisions of this title or any rule promulgated thereunder or who fails
9 to comply with any duty created by this title shall be liable to a
10 penalty of not more than twenty-five thousand dollars for each offense
11 in a court of competent jurisdiction. If the violation is of a continu-
12 ing nature each day during which it continues shall constitute an addi-
13 tional, separate and distinct offense.
14 § 23-2933. Availability of additional remedies.
15 Nothing in this title shall be deemed to preclude the pursuit of any
16 other civil or injunctive remedy by any person. The remedies provided in
17 this title are in addition to those provided by existing statutory or
18 common law, but no person who receives compensation for damages or
19 cleanup and decontamination costs pursuant to any other state or federal
20 law shall be permitted to receive compensation for the same damages or
21 cleanup and decontamination costs under this title.
22 § 23-2934. Construction.
23 This title, being necessary for the general health, safety and welfare
24 of the people of this state, shall be liberally construed to affect its
26 § 23-2935. Reports.
27 The commissioner and the administrator shall make an annual report to
28 the legislature and the governor which shall describe the quantity and
29 degree of contamination caused by natural gas production, the costs and
30 damages paid by and recovered for the fund, and the economic and envi-
31 ronmental impact on the state as a result of the administration of this
33 § 23-2936. Effect of federal legislation.
34 If the United States congress enacts legislation providing compen-
35 sation in the event of contamination caused by natural gas production,
36 the commissioner shall determine to what degree such legislation
37 provides the needed protection for our citizens, businesses and environ-
38 ment and shall make the appropriate recommendations to the legislature
39 for amendments to this title.
40 § 2. Section 23-1903 of the environmental conservation law is amended
41 by adding a new subdivision 3 to read as follows:
42 3. The commissioner is hereby authorized to establish a surcharge
43 pursuant to regulation on the permit fees on gas wells, authorized by
44 subdivision one of this section, to be credited to the New York natural
45 gas production contamination damage recovery and remediation fund estab-
46 lished in section ninety-two-t of the state finance law. The surcharge
47 shall be established to provide sufficient funds to meet the obligations
48 of the fund.
49 § 3. The state finance law is amended by adding a new section 92-t to
50 read as follows:
51 § 92-t. New York natural gas production contamination damage recovery
52 and remediation fund. 1. There is hereby established in the joint
53 custody of the state comptroller and the commissioner of taxation and
54 finance a special fund to be known as the "the New York natural gas
55 production contamination damage recovery and remediation fund".
A. 8572 15
1 2. The fund shall consist of revenues collected by the department of
2 environmental conservation pursuant to subdivision 3 of section 23-1903,
3 section 23-2915, section 23-2920, and section 23-2932 of the environ-
4 mental conservation law and all other moneys appropriated, credited or
5 transferred thereto from any other fund or source pursuant to law.
6 3. Moneys in the fund shall be kept separate and not commingled with
7 any other moneys in the custody of the commissioner of taxation and
8 finance and the state comptroller.
9 4. Moneys of the fund, following appropriation by the legislature, may
10 be expended for the following purposes:
11 (a) damages as defined in section 23-2915 of the environmental conser-
12 vation law;
13 (b) research on the prevention and the effects of contamination from
14 natural gas production on the environment and on the development of
15 improved cleanup and decontamination operations; provided, however, that
16 the cost of such research shall not exceed the amount of interest which
17 is credited to this fund;
18 (c) general administration of the fund, equipment and personnel costs
19 of the department of environmental conservation, the state comptroller
20 and any other state agency related to the enforcement of title twenty-
21 nine of article twenty-three of the environmental conservation law;
22 (d) research and demonstration programs concerning the causes and
23 abatement of contamination from natural gas production; provided, howev-
24 er, that the cost of such research and demonstration programs shall not
25 exceed the amount of interest which is credited to this fund.
26 5. The comptroller may invest and reinvest any moneys in such fund in
27 obligations in which the comptroller is authorized to invest pursuant to
28 the provisions of section ninety-eight-a of the state finance law. Any
29 income or interest derived from such investment shall be included in the
31 6. Moneys, shall be payable from the fund on the audit and warrant of
32 the comptroller on vouchers approved and certified by the comptroller
33 and the commissioner of environmental conservation.
34 7. The administrator of the fund, as established in section 23-2914 of
35 the environmental conservation law, shall recover to the fund moneys
36 disbursed for the following purposes:
37 a. costs incurred by the fund in the cleanup and decontamination of
38 contamination when the person responsible for causing a contamination
39 has failed to promptly clean up and remove the contamination to the
40 satisfaction of the department of environmental conservation;
41 b. costs incurred by the fund in the payment of claims for direct and
42 indirect damages, as defined in section 23-2915 of the environmental
43 conservation law; and
44 c. all penalties assessed pursuant to title twenty-nine of article
45 twenty-three of the environmental conservation law.
46 § 4. Severability. If any clause, sentence, paragraph, section or part
47 of this act shall be adjudged by any court of competent jurisdiction to
48 be invalid, the judgment shall not affect, impair, or invalidate the
49 remainder thereof, but shall be confined in its operation to the clause,
50 sentence, paragraph, section or part thereof directly involved in the
51 controversy in which the judgment shall have been rendered.
52 § 5. This act shall take effect on the one hundred twentieth day after
53 it shall have become a law; provided, however, that effective immediate-
54 ly, the addition, amendment and/or repeal of any rule or regulation
55 necessary for the implementation of this act on its effective date is
56 authorized to be made and completed on or before such date.