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OSCM20 (Natural Gas Fund Memo)[1]

OSCM20 (Natural Gas Fund Memo)[1]

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Published by Jon Campbell

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Published by: Jon Campbell on Aug 09, 2011
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08/09/2011

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S
TATE OF NEW YORK 
 
OFFICE OF THE STATE COMPTROLLER
OSC #20
MEMORANDUMREAN ACTto amend the environmental conservation law, in relation to establishing the natural gas production contamination response and compensation program; and to amend the statefinance law, in relation to creating the New York natural gas production contaminationdamage recovery and remediation fund
 
PURPOSE: This bill will ensure a clean environment and healthy economy for the State by providing for the remediation of any contamination 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 suchcontamination and effect prompt cleanup and decontamination of such contamination,giving first priority to protecting against public health risks and minimizingenvironmental damage and by providing for strict liability for damage sustained withinthe State as a result of such contamination.SUMMARY OF PROVISIONS
:
Section 1

23 of the Environmental Conservation Law, adding new Sections 23-2901 through 23-2936

 Natural Gas Production Contamination Response andCompensation 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 termsdefined are administrator, claim, cleanup and decontamination,contamination, environment, fund, natural gas production, gas production,owner, operator and person;Section 23-2904 establishes that contamination of the environment bynatural gas production is prohibited;Section 23-2905 requires the Commissioner of EnvironmentalConservation to promulgate regulations governing the cleanup anddecontamination of any contamination resulting from natural gas production;
T
HOMAS
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OMPTROLLER 
110 S
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ORK 12236
 
 
 
Additionally, Section 23-2905 authorizes the Department of Environmental Conservation to draw on money in the New York NaturalGas Production Contamination Damage Recovery and Remediation Fundto pay for cleanup and decontamination costs incurred in any response tocontamination due to natural gas production after funds from surety bondsestablished for this purpose are fully expended;Section 23-2906 requires any person responsible for causingcontamination to immediately notify the Department of EnvironmentalConservation;Section 23-2907 requires any person causing prohibited contamination toimmediately undertake to contain such contamination;Section 23-2908 requires the Commissioner of EnvironmentalConservation to establish an emergency natural gas productioncontamination control network and an emergency natural gas productioncontamination relocation network;Section 23-2909 authorizes the Department of EnvironmentalConservation to enter and inspect any property for the purposes of inspecting sites, facilities for the purpose of inspection and to assist in thecleanup or decontamination of the contamination;Section 23-2910 requires the Department of Environmental Conservationto maintain a registry of all reports of contamination;Section 23-2914 requires the State Comptroller to appoint and supervisean administrator of the fund and establishes the powers and duties of suchadministrator;Section 23-2915 establishes that any person who has causedcontamination and the fund shall be strictly liable for all cleanup anddecontamination costs and all direct and indirect damages;Additionally, Paragraph (c) of Subdivision 3 of Section 23-2915establishes that owners and operators of natural gas production facilitiesengaging or seeking to engage in natural gas production shall provide a bond or other financial security in an amount sufficient to fully discharge

Cleanup and decontamination costs will be paid from this bond until it isexhausted;Section 23-2916 states the fund shall have a lien for the costs incurred bythe fund for the cleanup and decontamination of contamination 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 muststate;
 
 
Section 23-2918 requires a notice of environmental lien to be filed within6 years from the time a disbursement is made by the fund for cleanup anddecontamination 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 torecover cleanup and decontamination costs and damage costs;Section 23-2920 requires amounts received by the administrator to satisfyall or part of an environmental lien shall be deposited in the state treasuryand credited to the fund;Section 23-2921 relates to the timing and manner of claims against thefund;Section 23-2922 requires the administrator to attempt to promote andarrange a settlement between the claimant and the person responsible for the contamination;Section 23-2923 requires the administrator and the claimant to attempt toarrange a settlement of any claim against the fund when the source of thecontamination 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 validityor 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 theadministrator acquiring by subrogation all rights of the claimant torecovery of such costs or damages from the person responsible for thecontamination or other responsible party. The administrator shall thenseek 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 aspecific occurrence exceed the current balance of the fund, the immediateaward shall be paid on a prorated basis;Section 23-2927 allows any claims for costs of cleanup anddecontamination, 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 financialresponsibility;Section 23-2928 relates to the applicability of this Title;Section 23-2931 authorizes the Commissioner of EnvironmentalConservation and the State Comptroller to adopt, amend, repeal andenforce such rules and regulations as they deem necessary to accomplishthe purposes of this Title;

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