A BUDGET BILL submitted by the Governor in accordance with Article VII of the Constitution
AN ACT to amend the environmental conservation law, the civil practice law and rules, the general municipal law, the navigation law, the public authorities law, the public health law, the real property law and the state finance law, in relation to the remediation of inactive hazardous waste disposal sites and the cleanup and removal of petroleum discharges, and to repeal section 27-1316 of the environmental conservation law and section 1389-e of the public health law relating thereto; to amend chapter 83 of the laws of 1995 amending the state finance law and other laws relating to bonds, notes and revenue, in relation to making permanent certain provisions thereof; to amend the tax law, in relation to tax credits for brownfield redevelopment and for the development of remediated brownfields, and providing for the repeal of certain provisions of the state finance law upon certification provided by subdivision 15 of section 97-b of such law (A); to amend the environmental conservation law and the state finance law, in relation to requirements for environmental restoration projects (B); to amend the state finance law, the environmental conservation law and the tax law, in relation to the environmental protection fund, and repealing subdivision 7 of section 92-s of the state finance law relating to the application of certain state assistance payments (C); to amend the environmental conservation law, in relation to the revision of pesticides applicator certification fees (D); to amend the environmental conservation law and the state finance law, in relation to hunting and fishing licenses, and to repeal certain provisions of the environmental conservation law related thereto (E); to amend the environmental conservation law, in relation to surf clams and ocean quahogs (F); to amend the real property tax law, in relation to reimbursing localities for tax revenue losses (G); to amend the parks, recreation and historic preservation law and the vehicle and traffic law, in relation to snowmobile fees and trails (H); to amend the vehicle and traffic law, in relation to increasing the triennial fee for registration of a vessel (I); to amend chapter 2 of the laws of 1998, amending the public health law, the social services law and the insurance law relating to expanding the child health insurance plan, in relation to extending the provisions thereof; chapter 474 of the laws of 1996, amending the education law and other laws relating to rates for residential health care facilities, in relation to extending the effectiveness of such rates; the social services law, in relation to expanding Medicaid coverage; the public health law, in relation to rates of payment for residential health care facilities; chapter 483 of the laws of 1978, amending the public health law relating to rates of payment for residential health care facilities, in relation to making the provisions thereof permanent; chapter 904 of the laws of 1984, amending the public health law and the social services law relating to encouraging comprehensive health services, in relation to extending the provisions thereof (J); to amend the executive law, in relation to the program for elderly pharmaceutical insurance coverage (K); to amend the public health law, in relation to the establishment of a quality of care improvement fund account for the benefit of residential health care facilities (L); to amend chapter 170 of the laws of 1994 amending the executive law relating to creating naturally occurring retirement community supportive service program and providing for the repeal of such provisions upon expiration thereof, in relation to extending until December 31, 2003 the effectiveness of certain legislative findings and section 536-g of the executive law relating to the creation of such program (M); to amend the mental hygiene law, in relation to the reinvestment of funds into community-based programs for persons with serious mental illness, including children and adolescents with serious emotional disturbances, based upon inpatient bed closures and the re-location or closure of state-operated psychiatric centers; to provide community mental health support and workforce reinvestment by redirecting state savings to fund fee increases and cost of living adjustments for certain existing community-based mental health services; to establish certain state-operated services; to transition the resources for shared staff services to the local auspices; to provide for the repeal of certain provisions upon expiration thereof (N); and to amend the mental hygiene law, in relation to eliminating the Taconic Developmental Disabilities Services Office (O)
This bill contains various provisions needed to implement the Health, Mental Hygiene, and Environmental Conservation portion of the 2001-02 Executive Budget.
Purpose:
This bill will ensure the continued protection of public health and the environment through the reform and enhancement of the Inactive Hazardous Waste Disposal Site Program (State Superfund Program) and the Oil Spill Program; will assure the most efficient utilization of public and private funding sources for the investigation and remediation of sites under such programs and will ensure remediation efforts are completed as quickly as possible; will provide the statutory authority and funding to address sites contaminated with hazardous substances, not currently authorized under the existing State Superfund Program; and will clarify the authority for a Voluntary Cleanup Program within the Department of Environmental Conservation (DEC).
The bill also proposes programmatic adjustments in the areas of remedy selection, liability and citizen participation for each of the existing remedial programs. It includes financial incentives to encourage non-responsible parties or responsible parties whose liability results only from ownership or operation of the site subsequent to the discharge or disposal at the site to redevelop contaminated sites under the Voluntary Cleanup Program.
This bill also provides for the waiver of petroleum bulk storage (PBS) registration fees and the waiver of the special assessment fee for the recovery of any hazardous waste under specified circumstances where a site is being remediated under one of the DEC’s remedial programs.
This bill incorporates recommendations of the Superfund Working Group that was convened by Governor George E. Pataki in August 1998 and issued its report to Governor Pataki on June 2, 1999.
This bill also provides tax credits under the corporate franchise taxes and the personal income tax to developers of remediated brownfields.
Summary of Provisions:
Section 1. Environmental Conservation Law §17-1009(2) is amended to allow the DEC to waive the registration fee for a facility which is being remediated under one of the DEC’s remedial programs and at which the tanks are to be removed or otherwise permanently taken out of service.
§2. ECL §27-0923(3)(c) is amended to clarify instances where a party can avail itself of the exemption from the special assessment imposed pursuant to 27-0923 on the generation of any hazardous waste. The exemption is further clarified to expressly include the Voluntary Cleanup Program under the new Title 14 and the Brownfields Program under Title 5 of Article 56 of the ECL.
§3. Environmental Conservation Law §27-1301(1) is amended to expand the definition of “hazardous waste” to include all hazardous substances identified by DEC pursuant to ECL §37-0103, with the exception of certain natural or synthetic gasses, the residue of emissions from engine exhausts, source, byproduct or special nuclear material, and petroleum, consistent with Federal law.
ECL §27-1301(3) is amended to clarify DEC’s authority to include institutional and/or engineering controls as components of an inactive hazardous waste disposal site remedial program if the owner of the property provides reasonable access to the site and submits an annual statement, certifying that the controls are unchanged from the previous certification and that nothing has occurred that would constitute a violation of any of the controls. DEC must also maintain a database with relevant information on such controls and make the information on that database available for public inspection in each county.
ECL §27-1301(4) is amended to provide that certain parties, including: (1) lenders who do not participate in the management of a site and hold indicia of ownership primarily to protect a security interest in the site; (2) the State or a public corporation which acquires a site involuntarily in its capacity as a sovereign or in response to an emergency created by another person; (3) a fiduciary acting solely in its fiduciary capacity; and, (4) an industrial development agency acting as a conduit financier, shall be excluded from the definition of “person” for purposes of ECL Article 27, Title 13.
§4. ECL §27-1303(1), which requires municipalities to provide the DEC with a report identifying the suspected inactive hazardous waste disposal sites, is amended to explicitly require municipalities to provide such information to DEC annually. This amendment will codify and clarify existing practices. In addition, the amendments require municipalities to survey their jurisdictions after the first year of the effective date of this bill to determine the existence and location of suspected inactive hazardous waste disposal sites, including hazardous substance sites, and provide DEC such information annually thereafter.
§5. ECL §27-1305(4)(b) is amended to expressly allow DEC to defer listing a site on the Registry of Inactive Hazardous Waste Disposal Sites if the site is the subject of on-going good faith negotiations or an existing voluntary agreement for remediation under proposed Article 27, Title 14 (Voluntary Cleanup Program) and the person subject to the agreement is in compliance with its terms; the site shall be assessed or reassessed upon completion of the remediation.
§6. ECL §27-1305(5) is amended to require the Department to prepare an updated State inactive hazardous waste remedial plan on an annual basis, and also omits the reference to the State Superfund Management Board, whose term has expired, in the approval process of such State plan.
§7. ECL §27-1309(3), (4) and (5) are amended to allow the DEC to extend its access rights to an employee, agent, consultant or contractor of a responsible person acting at the direction of the Department.
§8. ECL §27-1313(1)(b) is amended to provide that the objective of an inactive hazardous waste disposal site remedial program shall be the protection of the public health and environment, with the minimum objective being to eliminate or mitigate all significant threats to the public health and environment presented by the contamination through proper application of scientific and engineering principles. A list of factors that must be considered by DEC in selecting a remedy is provided. These factors are currently required by DEC except for the following new addition: the current, intended, and reasonably anticipated future land uses for the property and its surroundings, if ascertainable. In addition, this section provides for a presumption that any soil contamination will be cleaned up to residential soil cleanup levels at Classification 1 and Classification 2 Registry sites that: (i) are not in active industrial or commercial use; (ii) are being remediated by a person responsible; and (iii) are adjacent to residential areas. This presumption may be overcome by a written finding of the DEC Commissioner after citizen participation.
§9. ECL §27-1313(3) is amended to authorize the DEC to offer technical assistance grants of up to $50,000 per site to a non-responsible municipality and/or a community group. These grants may be used by the recipients to obtain technical assistance in interpreting existing information with regard to the nature and extent of the contamination at the site and the development and implementation of a remedial program.
ECL §27-1313(4) is amended to provide a defense to liability under State law for: any person otherwise liable who can establish by a preponderance of the evidence that the significant threat attributable to hazardous waste disposal was caused by an act of God, an act of war, or an act or omission of a third party other than an agent or employee or a person in a contractual relationship, and that, at the time the site was acquired, appropriate inquiry into the previous ownership and uses of the site was undertaken; a governmental entity which acquired the site by escheat or other involuntary transfer or acquisition; or a person who acquired the site by inheritance or bequest and exercised due care with respect to the hazardous waste. These defenses are consistent with Federal law.
ECL §27-1313(8) is amended to allow the DEC to extend its access rights to an employee, agent, consultant or contractor of a responsible person and to clarify its current authority.
§10. ECL §27-1313 is amended by adding a new subdivision 10 to provide that if DEC conducts the remediation of a site after the owner and/or any person responsible for the disposal of hazardous wastes at such site have failed to do so, the State is entitled to recover, in any court of competent jurisdiction, all of its costs respecting such site plus a penalty in an amount no less than one and no more than three times all such costs (often referred to as treble damages). To obtain the penalty, the State must prove by a preponderance of the evidence that DEC expended reasonable efforts to obtain a voluntary commitment from such owner and/or any person responsible before conducting the remediation. In addition, an owner or person responsible at a multiple party site that voluntarily commits to conduct the remediation is entitled to seek contribution, in any court of competent jurisdiction of the excess paid by that person over and above such person’s equitable share of costs, from other persons responsible who failed to enter into a settlement agreement with the person conducting the remediation. Such owner or person responsible also may seek to recover three times such amount if one-third of any such award is paid into the Remedial Program Transfer Fund.
ECL §27-1313 is amended by adding a new subdivision 11 to provide that any person who is subject to an order to implement a department-approved inactive hazardous waste disposal site remedial program or who entered into a voluntary agreement with DEC may seek contribution from any other person responsible for costs incurred to implement the remedial program or voluntary agreement.
ECL §27-1313 is amended by adding a new subdivision 12 to provide that the State may seek to recover damages for injury to, destruction of, loss of, or loss of use of the State’s natural resources from the owner of an inactive hazardous waste disposal site or any person responsible for the disposal of hazardous wastes at such site. Damages recovered would be paid into the Remedial Program Transfer Fund. This cause of action is similar to the natural resource damages cause of action found in Federal law.
ECL §27-1313 is amended by adding a new subdivision 13 to clarify the DEC’s authority to exempt a person from the requirement to obtain any State or local permit or other authorization necessary to implement the remedial program.
§11. A new ECL §27-1314 is added to require DEC to provide a covenant not to sue to a party that remediates a site to DEC’s satisfaction under the terms of an order on consent. The covenant not to sue would apply to any liability or claim by the State for further remediation of hazardous waste at or from the site that was the subject of such order, would be binding upon the State, and would be subject to certain reservations and reopener. In addition, a party receiving a covenant not to sue would not be liable for claims for contribution regarding matters addressed in the order. A person responsible according to applicable principles of statutory or common law liability would not be released from liability for natural resource damages. The covenant not to sue would extend to the successors and assigns of such person but would not extend and could not be transferred to any person responsible for the remediation of hazardous waste at the site as of the date of the issuance of the order on consent.
§12. ECL §27-1315 is amended so that the definition of “hazardous waste” in existing regulations promulgated to carry out Article 27, Title 13 would be deemed revised to include the statutory definition.
§13. Existing ECL §27-1316, which directed DEC and the Department of Health (DOH) to conduct the Hazardous Substances Sites Study, is repealed since the study has already been completed. A new §27-1316 is added to require the Commissioner of Environmental Conservation to establish a technical advisory panel, which will provide advice on the development of, and recommend, soil cleanup levels that will provide for a multi-category approach to the remediation of soil contamination at inactive hazardous waste disposal sites, sites subject to a voluntary agreement for remediation, and cleanup and removal actions under article 12 of the Navigation Law. Cleanup levels for soil category 1 will be protective of the public health and environment and would allow the property to be used for any purpose without restriction and without reliance on institutional or engineering controls. Cleanup levels for soil category 2 will be protective of the public health and environment and allow for the property’s current, intended or reasonably anticipated residential, commercial or industrial use with consideration of institutional or engineering controls to reach these levels. Soil category 3 would consist of a process for determining cleanup levels that would be protective of the public health and environment, using site-specific data for the site’s current, intended, and reasonably anticipated residential, commercial or industrial use. The panel would be required to submit its recommendations within 18 months of its first meeting; all such recommendations would be subject to public comment. After the close of the public comment period, DEC and DOH would promulgate regulations setting forth the required cleanup levels, taking into consideration the recommendations of the technical advisory panel and any other information deemed relevant.
§14. A new ECL Article 27, Title 14, Voluntary Cleanup Program is added to codify the existing voluntary cleanup program and set forth the requirements for participation, voluntary agreements and work plans.
A new ECL §27-1400 is added to set forth the policy and findings of fact regarding the voluntary cleanup program. It also states that the remedial goal of the voluntary cleanup program shall be the same goal as set forth in the State Superfund Program, as amended herein, which is the protection of public health and the environment, with the minimum objective being to eliminate or mitigate all significant threats to public health and the environment presented by the hazardous waste and/or petroleum through proper application of scientific and engineering principles.
ECL § 27-1401 provides the definitions for certain terms used in the title.
A new ECL §27-1403 describes the application process for the Voluntary Cleanup Program, including a description of the types of information that will be required to determine eligibility for the program. DEC will determine if the affected site should be included in the Registry of Inactive Hazardous Waste Disposal Sites. If the DEC determines that the affected site should be listed as a classification 1 or 2 site, and if the affected person commits to enter into an agreement which requires the elimination or mitigation of all significant threats to the public health and environment, DEC will defer listing the site and continue to defer listing such site on the Registry as long as the affected person is negotiating an agreement in good faith and is in compliance with such agreement once it is in effect.
A new ECL §27-1405 sets forth procedures for determining the applicant’s eligibility for the Voluntary Cleanup Program. The application shall be rejected if the site is listed in the Registry as a classification 1 or 2 site and the applicant is an owner and or any person responsible for the disposal of hazardous waste at the site; if insufficient information is provided by the applicant; if the applicant is subject to a pending enforcement action; or if the site does not meet the definition of “affected site” under ECL §27-1401(2).
A new §27-1407 describes the provisions to be included in a voluntary agreement. The voluntary agreement must require the affected person to pay for State costs incurred overseeing and reviewing the voluntary agreement. A voluntary agreement may contain a provision that allows the affected person to offset against the State’s costs any technical assistance grant, as provided under new §27-1313, for a site that DEC has determined poses a significant threat to the public health and environment. The voluntary agreement must also include, but is not limited to, provisions concerning dispute resolution, State indemnification, voluntary agreement termination, State permit exemptions, and cost recovery as well as a provision requiring any work at the affected site to be conducted pursuant to one or more work plans which are approved by the DEC.
The minimal requirements for work plans are also set forth under this provision. A work plan for an investigation must provide for the investigation and characterization of the nature and extent of the contamination within the affected site’s boundaries. However, an affected person who is responsible for the disposal of hazardous waste or discharge of petroleum, must also investigate and characterize the nature and extent of off-site contamination unless such affected person’s responsibility results solely from ownership or operation of the affected site subsequent to the disposal or discharge. An affected person who is not responsible or an affected person who is liable solely as a result of ownership or operation of the affected site subsequent to the disposal or discharge at the site would be required to perform an exposure assessment for off-site contamination. Such work plan shall require the submission of a final report which describes the nature and extent of the contamination and states whether remediation is required to meet the remedial goal of the voluntary cleanup program. To the extent that the affected person certifies that no remediation is required, then the final report shall also demonstrate the same requirements as required under a final report for a work plan for remediation.
If it is determined that hazardous waste and/or petroleum migrating from the affected site poses a significant threat to the public health or environment, DEC will require the person responsible, except an affected person whose liability results solely from ownership or operation of the site subsequent to the disposal or discharge, to conduct off-site investigation and/or remediation. If the person responsible cannot be located or fails to take or takes but fails to complete such action, DEC may undertake the off-site investigation and/or remediation and seek recovery of costs from the person or persons responsible.
A proposed work plan for remediation must provide for the development and implementation of a remedial program for the contamination within the affected site’s boundaries. The cleanup objective for affected sites remediated under the Voluntary Cleanup Program will be the same as proposed for inactive hazardous waste disposal site remedial programs in §27-1313(1)(b). If the affected person subject to the voluntary agreement is a person responsible for the disposal of hazardous waste or discharge of petroleum, that affected person must also conduct any necessary off-site remediation, unless such liability results solely from ownership or operation of the site subsequent to the discharge or disposal. Such work plan must also include an analysis that the proposed remedy was assessed using the evaluation factors set forth in proposed amendments to §27-1313. The affected person subject to the voluntary agreement must submit a final remediation report for a work plan for remediation, other than one for an interim remedial measure, that, at a minimum, demonstrates that there is no contamination in concentrations exceeding remediation requirements; that the remediation was conducted in accordance with the voluntary agreement; that any land use restrictions are properly recorded; and that an operation and maintenance plan has been approved by DEC for any required engineering controls.
A work plan for an interim remedial measure shall contain such provisions as the DEC determines are necessary and shall provide for a final report to be submitted to the DEC.
The Commissioner must use best efforts to approve, modify or reject a proposed work plan within sixty days after receipt, except that the commissioner must use best efforts to approve, modify or reject a proposed work plan for remediation, other than one for an interim remedial measure, within sixty days after completion of the public comment period or the close of the public meeting, whichever is later, and after evaluating any comments received.
A new §27-1409 sets forth citizen participation and public notification procedures for the Voluntary Cleanup Program. Upon receipt of a request to participate in the program, the Department must publish a notification in the Environmental Notice Bulletin (ENB). Upon finalization of a work plan for investigation, and again upon completion of the investigation, the Department must notify individuals, groups and/or organizations that are interested or affected by the work plan and publish a notice in the ENB. Before finalization of a proposed work plan for remediation, other than one for an interim remedial measure, the Department must notify individuals, groups and/or organizations that are interested or affected by such work plan, and publish a notice in the ENB requesting comments on such proposed work plan and providing for a 45 day public comment period. A public meeting is also required for any affected site that constitutes a significant threat to the public health or environment.
A new ECL §27-1411 requires DEC to provide a covenant not to sue to an affected person that remediates an affected site to DEC’s satisfaction under the terms of a voluntary agreement. The covenant not to sue would apply to any liability or claim for further remediation of hazardous waste and/or petroleum at or from the affected site that was the subject of such voluntary agreement. It would be binding upon the State, and would be subject to certain reservations and reopeners. In addition, an affected person receiving a covenant not to sue would not be liable for claims for contribution regarding matters addressed in the voluntary agreement. An affected person responsible according to applicable principles of statutory or common law liability would not be released from liability for natural resource damages. The covenant not to sue would extend to the successors and assigns of such affected person but does not extend and cannot be transferred to any person responsible as of the effective date of the agreement.
A new §27-1413 authorizes DEC, upon application by an affected person subject to a voluntary agreement, to issue a “remediation certificate” upon a determination that the remedial goal of the program as well as the requirements of the work plan and Voluntary Cleanup Program statute have been achieved. The certificate would state that such affected person is eligible for certain tax credits. An affected person who is not a person responsible for the disposal of hazardous waste or the discharge of petroleum, or an affected person whose liability results solely from ownership or operation of the site subsequent to the disposal or discharge, is eligible for such certificate. If the soil has been remediated to soil category 1, when not specifically required by DEC, the remediation certificate would state that the affected person receiving the certificate is eligible to receive an additional two percent credit.
A new §27-1415 requires that the affected person pay the State’s costs to oversee implementation of the voluntary agreement. An affected person who is a person responsible (except a person whose liability results solely from ownership or operation of the site subsequent to the disposal or discharge) must also pay all costs incurred by the State up to the effective date of the voluntary agreement.
A new §27-1417 is added to state the requirements regarding change of use of an affected site after the issuance of a covenant not to sue under this title. This requirement mirrors the change of use requirements under Title 13 and Title 5 of Article 56 of the ECL. A new §17-1419 is added to provide the DEC with immunity, subject to limited exceptions, with respect to its activities conducted pursuant to this title. The immunity is similar to the immunity provision contained in Title 13 and Article 12 of the Navigation Law. A new §27-1421 is added to authorize the DEC to waive any State or local permit or authorization for activities conducted under the voluntary cleanup program. This authority is similar to that found under the State Superfund Program and the Brownfields Program. A new §27-1423 is added to authorize access to affected sites and records relative to the contamination at or mitigating from such affected sites for activities conducted under this title. The access provision is similar to that provided under Title 13.
§15. ECL §52-0101(8) is amended to refer to the new definition of “hazardous waste” in section 27-1301 rather than the definition in Title 9 of Article 27.
§16. ECL §52-0103(1) is amended to remove the authorization to spend up to $100,000 of 1986 Environmental Quality Bond Act funds for the Hazardous Substances Waste Disposal Sites study since the study has already been completed.
§17. ECL §71-2705 is amended to include the Voluntary Cleanup Program access provisions (§27-1423) under this section providing for civil and administrative sanctions for non-compliance of Titles 9, 11 and 13 of Article 27 of the ECL.
§18. ECL §71-2727(1) is amended to clarify that DEC’s authority to issue orders under this subdivision does not preclude DEC from settling any matter under Article 27 by stipulation, agreed settlement, consent order, default, or other informal method.
§19. ECL §§71-3601 - 71-3611 are added to provide the DEC with the authority to create an easement, covenant, restriction or other interest in property for the purpose of protecting the public health or safety or natural resources of the environment from pollution affecting the real property. The applicable definitions, common law rules which are not applicable, procedures for modifying or extinguishing an environmental easement, the scope of the title and the severability of the various sections are all set forth in the foregoing sections. This statutory language is patterned on present Article 49, Title 3 (Conservation Easements).
§20. The section heading of §213 of the Civil Practice Law and Rules (CPLR) is amended to refer to claims pursuant to ECL §27-1313 and to claims for natural resource damages.
§21. New subdivisions 9, 10 and 11 are added to §213 of the CPLR. Subdivision 9 establishes a six-year statute of limitations, triggered by the initiation of physical on-site construction of the remedial program, on State actions to recover costs and penalties under ECL §27-1313(10). Subdivision 10 establishes a six-year statute of limitations on actions for contribution under ECL §27-1313(11), triggered by the later of the date of any judgment regarding the costs that are the subject of the claim for contribution or the date of issuance of an order by DEC regarding the costs that are the subject of the claim or the date of issuance of an agreement by DEC regarding the costs or activities that caused the expenditure of the costs. Subdivision 11 establishes a six-year statute of limitations on actions under ECL §27-1313(12) to recover natural resource damages, triggered by the completion of remedial construction at the site.
§22. A new section 970-r is added to the General Municipal Law to authorize the Secretary of State, in consultation with the Commissioner of Environmental Conservation, to provide technical and financial assistance, using available monies, to municipalities and to not-for-profit corporations acting in cooperation with municipalities to conduct brownfield redevelopment area planning. The local cost share is 25 percent of the cost of such plans.
Funding can be used for: (1) preparation of a pre-planning study to develop information necessary for designating a brownfield redevelopment area (e.g., boundaries of the area, number and size of brownfield sites, current and anticipated uses, known environmental conditions and ownership of the sites); (2) preparation of brownfield redevelopment area plans (e.g., defining anticipated end uses of the site, identifying infrastructure needs); and (3) conducting site assessments to determine the nature and extent of contamination and to develop a proposed remediation strategy. Site assessments are subject to the review and approval of the Commissioner of Environmental Conservation.
Funding preference shall be given based on the benefit to human health, the benefit to the environment, the potential for economic benefit to the State including the creation of new jobs or a new public resource, and the strength of local support.
§23. A new §172-a is added to the Navigation Law to conform liability exclusions to those contained in proposed amendments to ECL § 27-1301(4). Accordingly, (1) lenders who do not participate in the management of the property and hold indicia of ownership primarily to protect a security interest in the property, (2) the State or a public corporation that acquires a property involuntarily in its capacity as a sovereign or in response to an emergency created by another person, (3) a fiduciary acting solely in its fiduciary capacity, and (4) an industrial development agency acting as a conduit financier, shall be excluded from the definition of “person” for purposes of Article 12 of the Navigation Law.
§24. and §25. Navigation Law §176 is amended to provide that the objective of a cleanup program for a spill site, other than one constituting an immediate response, shall be the protection of the public health and environment, with the minimum objective being to eliminate or mitigate all significant threats to the public health and environment presented by the spill through proper application of scientific and engineering principles. This cleanup objective is consistent with the cleanup objective for contaminated sites addressed under the State Superfund Program and the Voluntary Cleanup Program. This section also sets forth the factors that must be considered in selecting a remedy, which are the same as those set forth in ECL §27-1313(1)(b) as proposed in this bill. The cleanup objective for immediate response cleanups under the Oil Spill Program will be to effectuate prompt cleanup and removal of contamination to ensure restoration of the environment to pre-spill conditions.
The amendment will also provide enhanced citizen participation regarding cleanup and removal actions under the Navigation Law. For all cleanup and removal actions other than immediate response cleanups, the Department must notify individuals, groups and/or organizations that are interested or affected by the cleanup or removal action and publish a notice in the ENB upon initiation of an investigation, upon successful completion of an investigation, and upon submission of a proposed remedy, with a 45 day public comment period prior to the approval of a remedy.
§26. Navigation Law §176 is amended by adding a new subdivision 9 to provide the DEC with the authority to waive any State or local permit or authorization for activities conducted under this Article. This language is similar to the DEC’s authority under the Brownfields Program and the State Superfund Program.
§27. Navigation Law §181(1) is amended to provide that if DEC conducts a cleanup and removal of a petroleum discharge after the person responsible for the discharge has failed to do so, the State shall be entitled to recover, in any court of competent jurisdiction, all of its costs of cleanup and removal plus a penalty in an amount no less than one and no more than three times all such costs. To recover the penalty, the State must prove by a preponderance of the evidence that it expended reasonable efforts to obtain a voluntary commitment from the person responsible before conducting the cleanup and removal. In addition, an owner or person responsible that voluntarily commits to conduct the cleanup and removal may seek to recover the excess paid by that person over and above such person’s equitable share of costs from other persons that failed to enter into a settlement agreement with the person conducting the cleanup and removal as well as three times such amount if one-third of any such award is paid into the Remedial Program Transfer Fund.
Navigation Law §181(1) is further amended to provide a defense to liability under State law for any person otherwise liable who can establish by a preponderance of the evidence that the discharge was caused by an act of God, an act of war, or an act or omission of a third party, to parallel the defense established by proposed amendments to ECL §27-1313(4).
§28. A new subdivision 6 is added to Navigational Law §180 to direct the administrator of the New York Environmental Protection and Spill Compensation Fund to submit an independent audit of the Fund to the Governor and Legislature on an annual basis.
§29. Navigation Law §181(4) is amended to clarify that other than liability exemptions and limitations, and the innocent party defense added by this bill, an act or omission caused solely by war, sabotage or governmental negligence are the only defenses against liability that may be raised by an owner or operator of a major facility or vessel responsible for a discharge. A new subdivision 7 is added to establish that any party receiving a newly added liability exemption or limitation is deemed to have waived any claim the party may have against the New York Environmental Protection and Spill Compensation Fund.
§30. Navigation Law §183 is amended to require DEC to provide a covenant not to sue to a person that performs a cleanup and removal action to DEC’s satisfaction under the terms of an order on consent. The covenant not to sue would apply to any liability or claim for further cleanup or removal of petroleum relating to the discharge that was the subject of such order, would be binding upon the State, and would be subject to certain reservations and reopeners. In addition, a person receiving a covenant not to sue would not be liable for claims for contribution regarding matters addressed in the order on consent. A person responsible according to applicable principles of statutory or common law liability would not be released from liability for natural resource damages. The covenant not to sue would extend to the successors and assigns of such person but does not extend and cannot be transferred to any person responsible as of the effective date of the order.
§31. The definitions of “hazardous waste,” “inactive hazardous waste disposal site,” and “inactive hazardous waste disposal site remedial program” in §1281 of the Public Authorities Law are amended to conform such definitions to the ECL definitions.
§32. The definitions of “hazardous waste,” “inactive hazardous waste disposal site,” “inactive hazardous waste disposal site remedial program,” “person” and “waste” in Public Health Law §1389-a are amended to conform such definitions to existing and proposed ECL definitions.
§33. Public Health Law §1389-b(4) is amended to provide a defense to liability under State law for any person otherwise liable who can establish by a preponderance of the evidence that the significant threat attributable to hazardous waste disposal was caused by an act of God, an act of war, or an act or omission of a third party, parallel the defense established by proposed amendments to ECL §27-1313(4).
§34. Public Health Law §1389-e, which directed the State Department of Health to cooperate with DEC in conducting the Hazardous Substances Sites Study, is repealed because the study has been completed.
§35. Real Property Law §316-b is amended to require the recording officer of each county to record and index each declaration of restriction or any other declaration of covenants required by a voluntary agreement under proposed ECL Article 27, Title 14 or under any other provision of law.
§36. Subdivision 1 of §97-b of the State Finance Law is amended to add a “hazardous waste cleanup account” to the Hazardous Waste Remedial Fund.
Subdivision 2 of §97-b of the State Finance Law is amended to delete the provisions directing the deposit of waste end assessment revenue collected pursuant to ECL §27-0923, and fees and penalties collected pursuant to ECL §72-0201, into the industry fee transfer account of the Hazardous Waste Remedial Fund. A new provision is added authorizing the hazardous waste cleanup account to receive moneys transferred from the Remedial Program Transfer Fund.
Subdivision 3 of §97-b of the State Finance Law is amended to make money in the Hazardous Waste Remedial Fund available to all State agencies and departments rather than to DEC only, allowing all State agencies and departments involved in the remedial programs to access the Fund. The provision authorizing the use of funds to conduct the Hazardous Substance Waste Disposal Sites Study is deleted and two new provisions are added authorizing the use of the Fund for the costs associated with the Voluntary Cleanup Program and the Brownfield Redevelopment Area Program.
Subdivision 6 of §97-b of the State Finance Law is amended to require that any moneys recovered or reimbursed for funds expended from the hazardous waste cleanup account be deposited in the Remedial Program Transfer Fund.
Subdivision 12 of §97-b of the State Finance Law is amended to delete the requirement that the Comptroller notify the State Superfund Management Board when the Comptroller determines that the industry fee transfer account will lack sufficient funds to make debt service payments.
Subdivision 13 of §97-b of the State Finance Law, which describes the actions the State Superfund Management Board would take upon receiving the notification under subdivision 12, is deleted.
A new subdivision 15 is added to §97-b to establish procedures for the use of revenue currently deposited in the industry fee transfer account once the balance in that account has reached the amount necessary to fund 50 percent of the debt service of the 1986 EQBA. The proposed amendment would require the Comptroller to estimate the total debt service on the bonds and notes and the State fiscal year in which the sum of the special revenues received will exceed 50 percent of the estimated debt service when the 1986 EQBA bonds issued exceed 95 percent of the authorized bond act amount. The estimated State fiscal year must be certified to the Governor and the Legislature.
A new subdivision 16 is added to §97-b of the State Finance Law to provide that all moneys currently deposited in the industry fee transfer account shall be redirected to the Remedial Program Transfer Fund effective April first of the State fiscal year succeeding the State fiscal year certified in subdivision 15.
A new subdivision 17 is added to §97-b of the State Finance Law authorizing and directing the Comptroller, upon the request of the Director of the Budget, to transfer moneys from the Site Investigation and construction account to the hazardous waste cleanup account of the Hazardous Waste Remedial Fund.
§37. A new §97-xxx is added to the State Finance Law establishing the Remedial Program Transfer Fund consisting of revenue from registration fees, license fees, fine penalties and other moneys paid pursuant to certain provisions of the Environmental Conservation Law and the Navigation Law, funds previously deposited in the industry fee transfer account, cost recovery proceeds and various other sources of revenue.
Subdivision 3 of §97-xxx of the State Finance Law authorizes the Comptroller, upon the request of the Director of the Budget, for each State fiscal year to transfer from the General Fund to the Remedial Program Transfer Fund an amount equivalent to the projected amount of moneys to be deposited or transferred to the Remedial Program Transfer Fund by the revenue sources identified in subdivision 2 during that fiscal year.
Subdivision 4 of §97-xxx of the State Finance Law requires that the revenues in the Remedial Program Transfer Fund be kept separate and not commingled with other funds, that all deposits be secured by Federal or State government obligations if required by the Comptroller, and that all revenue, in the discretion of the Comptroller, be invested in authorized obligations.
Subdivision 5 of §97-xxx of the State Finance Law authorizes the Comptroller to transfer, upon the request of the Director of the Budget, money deposited in the Remedial Program Transfer Fund to the Environmental Protection and Spill Compensation Fund or to the hazardous waste cleanup account of the Hazardous Waste Remedial Fund.
§38. Navigation Law §179(2) is amended to authorize the New York Environmental Protection and Spill Compensation Fund to receive money transferred from the Remedial Program Transfer Fund pursuant to subdivision 5 of the proposed §97-xxx of the State Finance Law. A new subdivision 3 is added to §179 to redirect revenues that are currently deposited into the New York Environmental Protection and Spill Compensation Fund to the Remedial Program Transfer Fund beginning April 1, 2001.
§39. ECL §17-1009(2) is amended to increase petroleum bulk storage registration fees from a maximum of $250 to a maximum of $500 per facility. The fees, which are currently deposited in the New York Environmental Protection and Spill Compensation Fund, will be deposited in the Remedial Program Transfer Fund beginning April 1, 2001. The five-year fee for an owner with a combined storage capacity at a facility of 1,000 to 2,000 gallons is $100 per facility; greater than 2,000 but less than 5,000 gallons is $300 per facility; greater than 5,000 but less than 400,000 gallons is $500 per facility.
§40. Subdivision 3 of §362 of Chapter 83 of the Laws of 1995 is amended to remove the provision that repeals, as of April 1, 2004, DEC’s authority to use the New York Environmental Protection and Spill Compensation Fund to pay for the expenses of the Petroleum Bulk Storage Program.
§41. ECL §71-2725(1)(b) is amended to redirect revenue from fines and penalties collected pursuant to §71-2705, §71-2721, and §71-2723 from the General Fund to the Remedial Program Transfer Fund.
§42. ECL §72-0201(1)(b) is amended to redirect one-half of revenue from hazardous waste generator fees and hazardous waste transporter fees from the Hazardous Waste Remedial Fund to the Remedial Program Transfer Fund. A new paragraph (e) is added to ECL §72-0201(1) to direct all revenue from the hazardous waste generator surcharges to the Remedial Program Transfer Fund. ECL §72-0201(9) is amended to redirect one-half the revenue from penalties and interest related to hazardous waste generator or transporter fees and surcharges from the Hazardous Waste Remedial Fund to the Remedial Program Transfer Fund. Conforming amendments are made to ECL §72-0201(11).
§43. ECL §72-0202 is amended by adding a new subdivision (4) to provide a transitional billing procedure for hazardous waste generator surcharges. This provision is similar to existing ECL §72-0202, (1)-(2).
§44. A new ECL §72-0403 is added to impose hazardous waste generator surcharges. Generators of hazardous waste will be required to submit an annual fee to the Department based upon the amount of waste generated per year. These annual surcharges will range from $4,000 up to $360,000.
§45. ECL § 27-0923(4)(b) is amended to redirect revenue collected from waste end assessments from the industry fee transfer account of the Hazardous Waste Remedial Fund to the Remedial Program Transfer Fund.
§46. A new section 21 is added to the Tax Law to provide for a brownfield redevelopment tax credit, to be allowable against tax imposed under Tax Law Articles 9 (franchise taxes on transportation and transmission companies and agricultural cooperatives), 9-A (general business corporations), 22 (personal income tax), 32 (banking corporations) and 33 (insurance corporations). The credit would be subject to carryforward, and in the case of a new business a taxpayer may elect to treat 50 percent of the amount of any carryover as a refundable overpayment of tax.
Subdivision (a) of new Tax Law section 21 provides for the allowance and computation of the credit. The credit consists of the sum of up to two credit components:
1. Site preparation credit component: This credit is equal to the applicable percentage (10 percent in the case of credits claimed under Articles 9, 9-A, 32 and 33; 8 percent in the case of credits claimed under Article 22 of the Tax Law; and an additional 2 percent, respectively, if the taxpayer has remediated the soil on the site to soil category 1) of site preparation costs paid or incurred by the taxpayer with respect to a qualified site. A qualified site is a brownfield which has been cleaned up and with respect to which a remediation certificate has been issued by the Commissioner of Environmental Conservation. Site preparation costs do not include the costs of acquiring the land.
2. Tangible property credit component: This credit is equal to the applicable percentage (either 10 or 8 percent, and an additional 2 percent, as above) of the cost or other basis for Federal income tax purposes of tangible personal property and other tangible property, including buildings and structural components of buildings, principally used for commercial (including the commercial development of residential housing), industrial, recreational or environmental conservation purposes on a qualified site.
To be eligible for this credit, the taxpayer must have obtained a remediation certificate from the Commissioner of Environmental Conservation with respect to such site pursuant to the new ECL §27-1413.
Subdivision (b) of section 21 contains definitions of terms.
Subdivision (c) of section 21 provides that property which qualifies for the credit under this section and also for a credit under Tax Law section 210.12 (investment tax credit) or Tax Law section 210.12-B (Empire Zone investment tax credit), or both, (or the parallel sections under Article 22, 32 or 33) may be the basis for only one of such credits.
Subdivision (d) of section 21 provides the rules with respect to recapture of the credit where the qualified property is disposed of or ceases to be in qualified use.
Subdivision (e) of section 21 contains cross-references to the applicable credit provisions within each of the affected articles of the Tax Law.
§47 through §51, §56 and §57 add provisions to Articles 9, 9-A, 22, 32, and 33 of the Tax Law, respectively, to allow taxpayers under each of those articles to claim the credit provided for under section 21 of the Tax Law, and to provide for the proper administration thereof. Section 47 adds a new section 187-f to Article 9. Section 48 adds a new section 210.33 in Article 9-A. Sections 49 and 50 of the bill amend section 606(i) of the Tax Law, in Article 22, to render the credit under the personal income tax available to S corporation shareholders. Section 51 adds a new section 606(ff) to Article 22. Section 56 adds a new section 1456(q) to Article 32. Section 57 adds a new §1511(u) in Article 33.
§52. Section 683 of Article 22 of the Tax Law is amended to permit the Commissioner of Taxation and Finance to assess any tax liability that may arise if DEC modifies or revokes a remediation certificate. Such liability may be assessed within one year after a determination revoking or modifying such a certificate becomes final. In the event such liability is assessed, the taxpayer would have the right to offset against it any of the investment tax credits which would have been allowed for the investment had the taxpayer not elected to take the credit provided for by new section 21.
§53. Section 687 of Article 22 of the Tax Law is amended to permit a taxpayer to file a claim for credit or refund where it has been finally determined that DEC erroneously denied a remediation certificate. The taxpayer may file such a claim within (i) three years from the time the return was filed, (ii) two years from the time the tax was paid, or (iii) two years from the time the final determination that DEC’s denial was erroneous has been made and is no longer subject to judicial review, whichever period expires latest.
§54. Section 1083 of Article 27 of the Tax Law is amended to correspond to section 683 of Article 22 as amended by §52 above. Article 27 contains procedural provisions applicable to taxpayers under Article 9, 9-A, 32 and 33.
§55. Section 1087 of Article 27 of the Tax Law is amended to correspond to section 687 of Article 22 as amended by §53 above.
§58. A new section 25 is added to the Tax Law to describe two new credits to developers of remediated brownfields, denoted in the bill as “qualified sites”. A “qualified site” is defined as a site with respect to which a remediation certificate has been issued by the Commissioner of Environmental Conservation pursuant to section 27-1413 of the ECL and which is located in its entirety outside the boundaries of the Metropolitan Commuter Transportation District. The first new credit is available to developers of small qualified sites. The second is available to developers of large qualified sites.
A small qualified site is a qualified site, which on the effective date of the remediation certificate issued with respect to such site, consists of at least 10 but no more than 100 acres. A large qualified site is any qualified site which consists of more than 100 acres. A developer of a qualified site is a taxpayer under Article 9, 9-A, 22, 32 or 33 who either has been issued a remediation certificate with respect to a qualified site or has purchased all or any portion of a qualified site from a taxpayer who was issued a remediation certificate with respect to a qualified site, provided that, in the case of a small qualified site, that purchase occurs within five years of the effective date of the remediation certificate issued with respect to the small qualified site, and in the case of a large qualified site, that purchase occurs within ten years of the effective date of the remediation certificate issued with respect to the large qualified site. However, the taxpayer which is purchasing all or any portion of a qualified site and the taxpayer who was issued the remediation certificate may not be related persons, as that term is defined in section 465(b)(3)(C) of the Internal Revenue Code.
The credit available to a developer of a small qualified site which is taxable under Article 9, 9-A, 22, 32 or 33 is for eligible real property taxes imposed on the small qualified site. This credit is allowed for a benefit period of 14 years, commencing either in the taxable year next following the year in which the developer is issued a remediation certificate with respect to a qualified site or, in the case of a developer who has purchased all or any portion of a qualified site, in the taxable year in which such developer purchases the small qualified site. The amount of the credit is equal to the product of (1) a benefit period factor (essentially providing for a phase-out of the credit in years 11-14), (2) an employment number factor, and (3) the eligible real property taxes paid or incurred by the developer of the small qualified site during the taxable year.
The employment number is determined by the average number of full-time employees employed by the developer of the qualified site at the qualified site during the taxable year. If the average number of those employees is at least 25 but less than 50, the employment number factor is .25. If the average number of those employees is at least 50 but less than 75, the employment number factor is .50. If the average number of those employees is at least 75 but less than 100, the employment number factor is .75. If the average number of those employees is at least 100, the employment number factor is 1.0.
The second new credit is available to a developer of large qualified site taxable under Article 9, 9-A, 22, 32, or 33 of the Tax Law. This credit is for the eligible real property taxes imposed on the large qualified site and is available for a benefit period of 19 years, commencing on the same date as the benefit period for the credit for the small qualified sites. The amount of the credit is equal to the product of (1) a benefit period factor (essentially providing for a phase-out of the credit in years 16-19), (2) an employment number factor, and (3) the eligible real property taxes paid or incurred by the developer of the large qualified site during the taxable year. The employment number factor is the same for this credit as for the credit available to developers of small qualified sites.
Under section 15 of the Tax Law, “Qualified Empire Zone Enterprises” (QEZEs) are allowed a credit for real property taxes. If the qualified site is located in whole or in part in an Empire Zone and a taxpayer qualifies for both the QEZE real property tax credit and the remediated brownfields real property tax credit, with respect to the same real property, that taxpayer may claim only one of these credits. The taxpayer is required to elect one of the credits in the first year the taxpayer is allowed the credit under section 25. Once that election is made, it is binding on the taxpayer for all future years in the benefit period for the credit under section 15 or section 25, whichever is applicable, with respect to that property. A taxpayer which claimed the QEZE credit for real property taxes under section 15 with respect to real property which subsequently becomes a qualified site will not be precluded from claiming a credit under section 25.
§59 through §65 incorporate these two new credits into the provisions of Articles 9, 9-A, 22, 32 and 33. Under Article 9, the credits are allowed against the taxes imposed by sections 183, 184 and 185 of the Tax Law. The credits may not reduce the tax to less than the applicable minimum tax fixed by section 183 or 185. Any excess may be refunded without interest. Under Article 9-A, these two new credits may not reduce the tax to less than the alternative minimum taxable base or the fixed dollar minimum tax. However, any excess may be refunded, without interest. Under Article 22, these two new credits may reduce the tax to zero and any excess may be refunded, without interest. Under Articles 32 and 33, the two new credits may reduce the tax to the fixed dollar minimum tax of $250 and any excess may be refunded, without interest.
§66. This section provides that the bill will take effect immediately, provided that sections 36, 37, 38, 39, 41, 42, 43, 44 and 45 will take effect on April 1, 2001; sections 46, 47, 48, 51, 56 and 57 will apply to taxable years beginning on or after January 1, 2002, but only to site costs incurred and property placed in service on or after January 1, 2001; sections 58, 59, 60, 63, 64 and 65 will apply to taxable years beginning on or after January 1, 2003; sections 49 and 61 will take effect on the same date as section 3 of part E of chapter 63 of the law of 2000 takes effect, and provided, further, that sections 50 and 62 of this bill will take effect on the same date as the repeal of section 47 of part Y of chapter 63 of the laws of 2000. Further, Subdivisions 13 and 14 of section 97-b of the State Finance Law, as designated in section 36 of the bill, will be repealed effective April 1 of the State fiscal year following the certification provided for in subdivision 15.
Existing Law:
DEC administers two distinct remedial programs: the inactive hazardous waste disposal site remediation program authorized by ECL §27-1301 et seq., known as the State Superfund Program, and the Oil Spill Program authorized by Navigation Law §170 et seq. The Department of Health (DOH) also administers a counterpart inactive hazardous waste disposal site remediation program authorized by Public Health Law §1389-a et seq. The State Superfund Program is intended to address health and environmental threats attributable to contamination by hazardous waste, and is funded via the Hazardous Waste Remedial Fund created by State Finance Law (SFL) §97-b. The Oil Spill Program is intended to address health and environmental threats attributable to contamination by petroleum, and is funded via the Environmental Protection and Spill Compensation Fund created by Navigation Law §179. Both programs are administered by DEC’s Division of Environmental Remediation. The two programs sometimes overlap in practice because it is common to encounter a site at which there exist health and environmental threats resulting from both the disposal of hazardous waste and petroleum.
The Environmental Restoration Program authorized under the 1996 Clean Water/Clean Air Bond Act at ECL §56-0501 et seq. provides grants to municipalities to investigate and cleanup hazardous waste, hazardous substance and petroleum contamination.
DEC also administers a Voluntary Cleanup Program under the provisions of the ECL which authorizes such Program through the DEC’s general powers.
The Tax Law does not presently contain a credit comparable to the Brownfields Redevelopment Tax Credit.
The Tax Law presently contains no credits specifically available to developers of remediated brownfields. QEZEs are allowed a credit which is measured in part by eligible real property taxes, but which contains an employment increase factor (as opposed to an employment number factor). That credit is available for a total of 14 years, with a phase out in years 11 through 14.
Prior Legislative History:
A similar proposal was included in the Governor’s Executive Budget proposal in 2000. It was also submitted to the Legislature and introduced as S.8108 in the 2000 legislative session. Sections have been added to provide for additional tax credits for brownfield redevelopment.
Statement in Support:
New York has made significant progress in remediating contaminated sites. The State Superfund Program has reduced or eliminated the threat of contamination from hundreds of inactive hazardous waste disposal sites across New York State. The Oil Spill Program coordinates with a local and regional network and responds to thousands of petroleum spills annually. The Voluntary Cleanup Program enables parties to remediate contaminated sites with private funding and return these sites to productive use. The Clean Water/Clean Air Bond Act of 1996 provides funding to municipalities to investigate and remediate contaminated properties, and to return the properties to productive use. The reforms and enhancements included in this bill will serve to accelerate and strengthen the effectiveness of site remediations in New York State.
Hazardous Substance Sites
Currently, the State Superfund Program can only address sites contaminated by “hazardous waste” as defined in ECL §27-1301. DEC has recognized the need to address hazardous substance sites (that do not contain hazardous waste) that nonetheless pose a significant threat to the public health and environment, and has worked to clean up hazardous substance sites through other DEC programs or through the Federal Superfund Program. However, the number of hazardous substance sites requiring remediation, the cost of remediating these sites, and the lack of a dedicated funding source have precluded DEC from addressing many of the hazardous substance sites requiring remediation.
A March 1994 law directed DEC and the DOH to study the scope of hazardous substance sites that may pose a significant threat to the public health or environment and to estimate the cost to remediate such sites. DEC and DOH issued the “Hazardous Substance Waste Disposal Site Study Final Report” in June 1995. An addendum to the report, which updated the information contained in the original report, was completed in December 1998. The addendum concludes that between 118 and 161 hazardous substance sites in this State may pose a significant threat to the public health or environment. DEC has estimated that, if it received the authority to remediate hazardous substance sites, the State’s share of the remediation costs (that portion for which the State would not be able to obtain either Federal funding or funding from persons responsible for the contamination) would be $252 million to $326 million.
This bill provides DEC with the authority to address hazardous substance sites that pose a significant threat by expanding the definition of “hazardous waste” to include any hazardous substance presently defined in ECL Article 37.
Cleanup Process
This bill results in more uniform cleanups under all of New York’s remedial programs. Cleanups will be at least as protective of the public health and environment as the current programs and can be expected to remove more contamination from the environment overall.
To provide certainty, predictability and consistency among the State’s many cleanup programs, this legislation establishes one cleanup objective for the State Superfund Program, Voluntary Cleanup Program, and remediations which do not constitute an immediate response cleanup under the Oil Spill Program. The bill provides that the cleanup goal be protection of the public health and environment and, at a minimum, elimination or mitigation of all significant threats to the public health and environment. For immediate response actions at oil spill sites, the cleanup goal is restoration of the environment to pre-spill conditions.
The bill provides that the current, future or reasonable anticipated land uses of a site and surrounding properties will be one of nine criteria used when proposing, selecting or approving a cleanup plan. Consideration of land uses is consistent with EPA practices at Federal Superfund sites.
The bill also establishes a technical advisory panel to recommend soil cleanup levels and methodologies that would be protective of the public health and environment. The panel has 18 months to provide its recommendations to DEC and the DOH, which would then promulgate soil cleanup standards in three categories: Category 1 would allow a site’s use to be unrestricted; Category 2 would allow a site’s current, intended or reasonably anticipated use (e.g., industrial, commercial and residential) to occur; but such use would be restricted, and Category 3 would be a process to establish standards on a site-by-site basis using site-specific data that would assure standards are protective for the site’s current, intended or reasonably anticipated use.
Liability Reform
The current liability standards contained in the State Superfund Program and Oil Spill Program’s are based on the “polluter pays” principle, using a strict, joint and several liability scheme. However, these standards are widely perceived as unfair because in practice the potential exists that, even though many persons are factually responsible for the contamination of a site, only one person, even a factually innocent person, will bear the burden of paying for the cleanup. Each person responsible has a right to obtain contribution from other persons responsible but this right can be practically valueless when the other parties who should help bear the burden are unidentifiable or without assets. The result is that prospective purchasers, developers, lenders and others often avoid any involvement with sites that are or may be contaminated since these parties would acquire liability as an owner or operator of the site.
Although the modifications to the liability standards contained in this bill will maintain the “polluter pays” principle, they are designed to encourage the cleanup and reuse of contaminated property through private investment. The lender liability exemption will increase the lending community’s willingness to lend money at sites that are contaminated and at facilities that may have a high risk of future contamination. The liability limitation for fiduciaries (trustees, executors, administrators, conservators, etc.) will increase the participation of fiduciaries when an estate’s assets include a site that is contaminated or that has a high risk of future contamination. It will also remove real or perceived concerns regarding the purchase of contaminated properties by fiduciaries.
The municipal liability exemption will enable a municipality to acquire title in the event of tax delinquency or similar circumstances to a contaminated site in order to exercise control over its future in the public interest, without exposing its citizens to the financial burden of remediation. This would eliminate a significant barrier to the cleanup and redevelopment of contaminated sites. The liability protection for industrial development agencies (IDAs) acting as “conduit financiers” will enable IDAs to take title to property as an accommodation to developers, for the purpose of conferring certain tax benefits to the developer, without becoming liable as an owner or operator of the property. This would have the effect of increasing development opportunities at contaminated properties.
DEC currently provides limited releases from liability to volunteers who complete the remediation of a site under the current Voluntary Cleanup Program to DEC’s satisfaction. With few exceptions, persons responsible for the contamination under the State Superfund Program or the Oil Spill Program currently are not provided with liability releases from DEC upon the successful completion of the remedial objectives.
Currently, if a person seeks a release from liability once a site’s contamination is addressed, that person must separately negotiate such a release from the DEC, the Attorney General and, in the case of sites being addressed under the Oil Spill Program, the State Comptroller (who acts as the Oil Spill Fund Administrator). It would be more desirable if a person who remediated a site could receive one liability release binding upon the State of New York.
Under this bill, DEC would be authorized to provide a single, binding covenant not to sue to parties conducting cleanups under the State Superfund Program, the Oil Spill Program, and the Voluntary Cleanup Program. Responsible parties, other than those parties who are responsible as a result of ownership or operation of an affected site subsequent to the cessation of the disposal of hazardous waste or discharge of petroleum and are addressing such affected site’s contamination under Title 14, still would not receive a liability release for natural resource damages. The reservations would be structured to provide an incentive for parties conducting remediation to remediate a site to unrestricted use soil cleanup levels (soil category 1). The new authority provided to DEC in the bill to recover up to treble damages from recalcitrant persons responsible for the contamination will create an effective incentive for such persons to come forward and finance remedial programs, thereby expediting remediation projects and reducing the need for additional State resources. This new authority would target persons responsible that are either unwilling to enter into remedial negotiations with the State, or that are acting in bad faith in the negotiations process to delay having to spend money on site investigations or remedial activities. It could not be applied to persons responsible who are engaged in productive, ongoing negotiations with the State.
Voluntary Cleanup Program/Brownfields
Brownfields are abandoned, idled, or under-used properties where redevelopment is complicated by real or perceived environmental contamination. They typically are former industrial or commercial properties where operations may have resulted in environmental contamination. Brownfields often pose not only environmental, but legal and financial burdens on communities. Left vacant, contaminated sites can diminish the property value of surrounding property and threaten the economic viability of adjoining properties.
In an effort to spur the cleanup and redevelopment of brownfields, New York State has implemented the Clean Water/Clean Air Bond Act Brownfields Program and the Voluntary Cleanup Program. Each of these programs have been highly successful; however, modifications to the programs would further enable additional private sector investment in the cleanup and redevelopment of contaminated sites.
The impediments to brownfield redevelopment are complex. Some of these may be addressed administratively, and are being addressed through the current DEC Voluntary Cleanup Program. However, aspects of the barriers to brownfield redevelopment require statutory amendment. The existing liability scheme, which holds all owners of contaminated property liable for cleanup costs, regardless of when or how the property was acquired relative to the contamination, contributes to the reluctance of developers to purchase even minimally contaminated sites. So, too, does the potential cost of cleanup, which may not be known at the time of purchase. In addition, lenders are often reluctant to extend credit for the purchase and cleanup of brownfield sites, fearing future liability or diminution of the value of the property held as collateral should the site prove to require more extensive and costly cleanup than initially thought. Consequently, financing such a purchase may be more difficult than financing a purchase of a greenfield site.
The voluntary agreement, tax credits and liability protection concepts contained in this bill address major barriers associated with redevelopment of brownfield sites. The Voluntary Cleanup Program eliminates the exposure to future open-ended cleanup costs and provides financial incentives for remediating and reusing these sites. These measures would make brownfield sites competitive with greenfield sites. The program should encourage persons not previously involved with brownfield sites to consider them for the location of new commercial, industrial, residential or public uses. It will provide assurances to financial institutions willing to lend the capital needed for redevelopment projects. The Program will also assure that the community benefits in many meaningful respects from reuse of such sites, consistent with appropriate public health and environmental protections and with community needs, both during implementation of the remedy and redevelopment activities and in the future. Moreover, it will allow program participants to recover their costs from the site’s responsible parties. Finally, it will provide notice in the chain of title so that any potential purchaser, lender, or member of the community will know what uses have been approved for the reclaimed site.
This bill is designed to remove much of the short- and long-term risk inherent in reusing a brownfield site and to encourage more private sector involvement and funding. Provisions in this bill provide an important tool in redeveloping and reclaiming our economically disadvantaged urban areas, promoting job development, impeding the sprawl of development outward into our valuable open space areas, and reducing the economic pressure of infrastructure construction on local governments.
Brownfield Redevelopment Area Program
Urban areas that are experiencing a transition from once active industry to new uses often have sizeable areas of contiguous brownfields in those former industrial areas. An area-wide strategy to accommodate the environmental and redevelopment needs of the community in those areas could be more efficient than addressing each site as a separate initiative. Area-wide brownfield redevelopment programs will lead to appropriate redevelopment and reuse of brownfields as expeditiously as possible once the sites are remediated. The Secretary of State would be responsible for the brownfield redevelopment area program employing the successful model created by the Local Waterfront Revitalization Program.
This bill will provide tax incentives to business entities and individuals to remediate and develop a brownfield site by providing a tax credit for site preparation costs and tangible property placed on a brownfield site. In addition, once a site has been remediated, the bill provides a tax credit that is equal to all or part of the amount of the real property tax imposed on that site. The potential for the development of the site will be further enhanced by virtue of the fact that a purchaser of a site from the person or entity that remediated the brownfield site will also be eligible for a like tax credit relating to the real property tax imposed on the site.
This bill amends the program and funding requirements for Environmental Restoration or “brownfield” projects authorized by the 1996 Clean Water/ Clean Air Bond Act, to enhance participation by municipalities and facilitate the investigation and remediation of hazardous substance sites. This is accomplished by providing municipalities with greater financial incentives and increased flexibility to undertake projects.
Effective April 1, 2001, this bill amends the Environmental Conservation Law (ECL) and the State Finance Law (SFL) to :
In addition, this bill adds new provisions to the ECL granting the State immunity with respect to certain activities to authorize the Department to require access to properties that contain hazardous substances for the purpose of inspection or cleanup; to require that any person furnish information regarding current and past hazardous substance activities to the Department, and makes other technical adjustments.
The Environmental Restoration ( Brownfields) Program is authorized under Title 5 of the 1996 Clean Water/ Clean Air Bond Act (Article 56 of the ECL). Current law provides that:
The 1996 Clean Water/Clean Air Bond Act authorized $200 million to assist municipalities in addressing contaminated sites and returning them to productive use. To date, approximately $20 million in Bond Act funding has been approved for more than 100 projects to investigate or remediate brownfield sites. Experience with the program has shown that the cost, uncertainty, and concerns about incurring additional liability associated with these projects impede greater utilization of Bond Act funding. This bill addresses these concerns by providing significant incentives for municipalities to undertake remediation of these sites as follows:
This bill increases the reimbursement for eligible project costs from 75 percent to 90 percent, and allow the use of other State or Federal assistance for the required 10 percent local match, thereby greatly increasing the total resources available to municipalities for these projects and reducing the costs borne by municipalities.
Uncertainty about the extent and cost of remediation that could be required at a particular site, coupled with concerns about incurring legal liability as the title holder, currently impedes municipalities from taking title to contaminated sites and undertaking remediation through the Brownfields Program. This bill removes the requirement that a municipality have title to a property to be eligible for funding to investigate a brownfield site. It allows municipalities to conduct preliminary investigations on potential sites and make informed judgements about the potential costs and risks associated with potential brownfield projects.
Current and potential brownfields projects often involve contamination which has migrated “off-site” into a nearby parcel to which the municipality does not hold title. This “off-site” contamination can be many times greater than the contamination present on the property remediated under the program, and, if left unaddressed, could present health and safety concerns. This bill allows municipalities to receive up to 100 percent State assistance from the Bond Act for costs incurred to remediate “off-site” contamination. This will help ensure that the full scope of contamination is addressed, and that the financial burden for the clean-up will not be unfairly placed upon the municipalities.
This bill further maximizes incentives for a municipality to undertake brownfields projects. It allows a municipality to recoup its costs from the proceeds of the disposition of the property prior to the State receiving funds for its assistance for the project. Additionally, the bill removes the requirement that any profit be shared equally with the State and allows the municipality to retain any profits after its costs and the State’s assistance payments have been covered.
This bill amends the Environmental Protection Act of 1993 to increase the annual deposit of Real Estate Transfer Tax revenues into the Environmental Protection Fund (EPF), expand revenues associated with State lands to be deposited into the fund, expand the purposes for which the EPF can be used, and make the funding eligibility requirements for certain municipal landfill closure projects under the EPF consistent with the funding eligibility requirements of the 1996 Clean Water/Clean Air Bond Act.
Effective April 1, 2001, this bill amends the Environmental Conservation Law, the State Finance Law and the Tax Law to:
The Environmental Protection Act of 1993 established the EPF, a dedicated fund comprised of revenues from: (1) proceeds from the sale/lease of certain State lands; (2) annual service charges on conservation license plates; (3) proceeds from the settlement of a lawsuit brought by the State for an oil spill on Long Island; (4) interest earnings; and (5) a portion of the State’s revenues from the Real Estate Transfer Tax (RETT). Current law requires the deposit of $112 million in RETT revenues annually to the EPF; the law also provides for the deposit of revenues from the sale of oil and gas leases on State lands to be deposited in the General Fund.
Under current law, subject to appropriations, the EPF may be used for the following purposes: (1) non-hazardous municipal landfill closure projects; (2) municipal waste reduction and recycling; (3) secondary materials marketing grants; (4) local solid waste management planning grants; (5) municipal park, recreation and historic preservation projects; (6) waterfront revitalization plans and projects; (7) coastal rehabilitation projects; (8) open space protection projects; (9) the Long Island Pine Barrens Commission, the Albany Pine Bush Preserve Commission and the Long Island South Shore Estuary Reserve; (10) biodiversity stewardship and research; (11) county agricultural and farmland protection plans and projects; (12) non-point source water pollution control and abatement projects; and (13) the Pesticide Database Registry.
The use of the EPF for the Hudson River Park project is limited to recreational purposes and EPF funds may not be directed to a public authority, public benefit corporation or not-for-profit corporation, including the Hudson River Park Trust, for the purpose of developing the Park.
The EPF is currently authorized to reimburse up to 75 percent of the total costs for eligible landfill closure projects in municipalities with populations of fewer than 3,500. However, the Clean Water/Clean Air Bond Act provides reimbursement for up to 90 percent for this same type of project.
This bill increases the annual deposit of RETT revenues by $20 million -- from $112 million to $132 million -- and dedicates revenues from oil and gas production revenues to the EPF to provide increased funding for important environment projects. Specifically, the recommended increase in revenues will permit the annual EPF appropriation to increase from $125 million to $150 million to recognize, in part, that certain categories of 1996 Clean Water/ Clean Air Bond Act funding have or will soon be depleted (e.g., the original $150 million in Bond Act Open Space funding will have been fully appropriated in the 2001-02 Budget.) These increased revenues will allow the State to continue to fund from the EPF such critical environmental activities as land acquisition and farmland preservation, as well as other priority projects.
Permanent authorization of funding from the EPF for State Parks and Lands Infrastructure and Stewardship projects will clarify the State’s commitment to the proper care and management of its lands and parks. These investments will enhance the public’s enjoyment and access to New York’s unparalleled environmental and recreational assets.
This bill expands the programs eligible for funding from the EPF to include assessment of natural resource damages in the Hudson River, Hudson River Estuary Management Plan projects, county Soil and Water Conservation District activities, the Hudson River Park, and Historic Barns projects. Since many of these programs have been supported in annual, enacted appropriation bills, their inclusion in permanent law is entirely appropriate.
This bill eliminates existing inconsistencies between landfill closure grants made from the EPF and the 1996 Clean Water/Clean Air Bond Act. Specifically, the bill increases the reimbursement rate, from 75 percent to 90 percent, for EPF landfill closure grants made to communities with populations of fewer than 3,500, consistent with grants made from the Bond Act.
This bill increases the fees payable by certified pesticide applicators and businesses to support enhancements to the Department of Environmental Conservation’s (DEC) Pesticide Program.
Effective April 1, 2001 the Environmental Conservation Law is amended to:
Commercial permit fees, commercial and private applicator fees and fees for pesticide applicator certification examinations have not been increased since 1983. The annual business registration fee has not been increased since 1977.
The pesticide program fees charged in New York State are substantially lower than similar fees in surrounding states. For example, in New Jersey the commercial applicator fee is $75 annually, but in New York State the current fee is $15 for three years. Increasing New York State’s fees will make them more comparable to those in surrounding states.
In the past 15 years responsibilities for the Pesticide Program have increased dramatically as follows:
The increased fees will provide for: improved oversight and enforcement to address the problem of illegal applicators; expanded in-house laboratory services to support enhanced pesticide monitoring and response to specific problems such as the West Nile virus; an enhanced product registration program to shorten review times for products with new active ingredients and allow all users -- and particularly farmers -- to benefit from the use of new chemicals and biopesticides which are much more environmentally friendly; an expansion of the Integrated Pest Management Program, including non-toxic alternatives to mosquito control; and fee changes made by this bill makes the Department’s pesticide program more consistent with the United States Environmental Protection Agency recommendations for nationwide uniformity in certification cycles.
This bill authorizes the Commissioner of the Department of Environmental Conservation (DEC) to set fees for sport hunting and fishing licenses to ensure the solvency of the Conservation Fund and to enable the Department of Environmental Conservation to continue its fish and wildlife programs at the current levels. Additionally, this bill alters the terms and conditions of sporting licenses in response to public feedback, and establishes a special voluntary habitat stamp for habitat management and improved public access to wildlife activities.
Effective October 1, 2001, this bill amends the Environmental Conservation Law (ECL) to:
In addition, this bill amends State Finance Law to provide that the revenue from the sale of voluntary habitat stamps shall be deposited in a special habitat account within the Conservation Fund to be used for fish and wildlife habitat management and the improvement of public access for hunting, fishing and trapping activities.
Environmental Conservation Law provides for resident and non-resident hunting, trapping and fishing licenses, describes the privileges of each license and sets the fees for each license and amounts that may be retained by issuing officers. Current ECL also defines the general powers of DEC regarding license issuance and provides procedures for legally tagging harvested big game animals.
Resident license fees were last increased by Chapter 450 of the Laws of 1991, and non-resident license fees were last increased by Chapter 57 of the Laws of 1993.
Revenues from the sale of sport hunting and fishing licenses are deposited in the Conservation Fund to support the Department’s fish and wildlife programs. The Fund receives revenues of approximately $33.7 million annually which are projected to decline. At the same time, fish and wildlife program costs have exceeded annual revenues due to inflation and personal service cost increases. Current projections show that the Fund will have a cash deficit of approximately $2.5 million by the end of 2001-02, growing to $8.7 million by the end of 2002-03, and $15.5 million in 2003-04. Alternatives to a fee increase would include program cuts or additional General Fund support.
Residents have not had an increase in license fees since 1991 and nonresident license fees have not increased since 1993. However, costs of providing a fish and wildlife program have increased annually. New York State hunting and fishing license fees are lower than neighboring states, and this proposed increase, makes these fees more comparable to neighboring states.
Consistent with the Conservation Fund Advisory Board’s statutory responsibility to oversee the expenditures of the Fund, this bill enhances the capacity of the Board to annually recommend appropriate fees for hunting, fishing, and trapping licenses, permits and stamps. Authorizing the Commissioner of DEC to adopt fee increases via regulation, based upon the Board’s recommendation will ensure the timely adoption of appropriate revenue increases to be used to support the State’s high quality fish and wildlife programs. Furthermore, current law ensures adequate public input into the fee increase process contemplated by the Board and the Commissioner.
This bill provides additional and dedicated funding from the sale of voluntary habitat stamps to acquire, manage and protect important fish and wildlife habitats and provide additional public access to wildlife areas for the enjoyment of fish and wildlife recreational activities.
This bill increases opportunities for residents and junior licensees by enhancing privileges associated with the new super sportsman license, junior game and archery licenses.
This bill amends the Environmental Conservation Law to make permanent the Department of Environmental Conservation’s (DEC’s) authority to collect fees on surf clams and ocean quahogs harvested from certified waters in the State to enable DEC to continue to effectively manage this resource. Revenues from the fees will continue to be deposited to the surf clam/ocean quahog account of the Conservation Fund.
Section 13-0309 of the Environmental Conservation Law currently authorizes DEC to collect per bushel fees on surf clams (15 cents) and quahogs (10 cents) taken from New York State waters and directs that the fees be deposited in the surf clam/ocean quahog account of the Conservation Fund. The State Finance Law requires that these deposits be available to DEC for research and stock assessments of surf clams and ocean quahogs. The existing authorization to collect the fees expires on January 1, 2002.
The currently authorized surcharges for surf clams and ocean quahogs were enacted in 1994 (Chapter 512) and extended in 1996, 1998, and 2000.
By making permanent DEC’s authority to collect fees on surf clams and ocean quahogs, this bill ensures continued annual revenues of approximately $45,000. These revenues are necessary to support ongoing efforts by DEC to conduct stock assessments and research for the long term benefit of these fisheries and the industry they support, and obtain data necessary for the management of these important resources.
This bill amends the Real Property Tax Law to establish a program to provide State payments to local governments that experience property tax revenue losses as a result of State forest management tax relief programs.
Effective immediately, this bill establishes a new section 480-b of the Real Property Tax Law (RPTL) to authorize the State Board of the Office of Real Property Services to reimburse local governments for a loss of greater than 1 percent of their property tax revenues as a result of property tax exemptions provided under sections 480 and 480-a of the RPTL. RPTL sections 480 and 480-a establish tax exempt programs for owners of land which is being devoted to forest crop production.
Although forest tax exemptions benefit both the forest landowner and the general public, they can be a fiscal burden on the local governments in which the exempted lands are located. This bill addresses that issue by providing State assistance payments to those local governments which experience a greater than 1 percent reduction in their tax base due to the forest tax exemptions under Sections 480 and 480-a of the RPTL.
The bill amends Section 21.07 of the Parks, Recreation and Historic Preservation Law and Section 2222 of the Vehicle and Traffic Law to increase the snowmobile trail development and maintenance fee. Specifically, the trail development and maintenance fees are increased by $10 for both residents ($10 to $20) and non-residents ($20 to $30). These fees are dedicated to the Snowmobile Trail Development and Maintenance Fund. The registration fee applicable to all snowmobile registrations remains at $5.00.
This bill also increases the State staffing authorization (from 2 to 3 persons) to provide adequate oversight of the Snowmobile Trail Program.
Currently, section 21.07 of the Parks, Recreation and Historic Preservation Law (PRHPL) imposes a $10.00 resident and $20.00 non-resident fee on every snowmobile registered in the State. These fees are for the express purpose of providing a program of State assistance to municipalities for developing and maintaining snowmobile trails as provided in Section 27.17 of the PRHPL.
Section 2222 of the Vehicle and Traffic Law provides for the Commissioner of Motor Vehicles to collect the Snowmobile Trail fee when a snowmobile is registered. Section 2231 of the Vehicle and Traffic Law provides for the deposit of snowmobile trail fees along with one-half of certain fines for violations of snowmobile statutes to be deposited in the Snowmobile Trail Development and Maintenance Fund. These receipts are distributed through counties and other local governments to snowmobile clubs for services of maintaining a public system of trails, and for law enforcement expenses. A registration fee of $5.00 is also collected and deposited into the General Fund.
Section 92-n of the State Finance Law provides for the establishment of the Snowmobile Trail Development and Maintenance Fund from the money collected through section 21.07 of the PRHPL and section 2222 of the Vehicle and Traffic Law.
The snowmobile trail system in New York State has been expanded and improved through a cooperative effort of the State Office of Parks, Recreation and Historic Preservation, other State agencies, counties, municipalities, State and local snowmobile associations and clubs, and landowners. These entities work together to develop, groom and maintain a statewide system of safe, interconnected trails and conduct safety training and awareness programs. Today, over 58 counties and cities, towns and villages receive a total of about $1.1 million annually in grants from the State under this program.
The amount of local assistance aid provided under the Snowmobile Trail Development Program has not, however, kept pace with the rapid growth in popularity of snowmobiling. New York is the fourth largest among states in snowmobile registrations with approximately 126,000 sleds, and third largest in trail mileage with 8,700 miles open to the public; and the demand for additional snowmobiling recreational capacity is increasing. Accordingly, the fees collected are no longer sufficient to fully reimburse local expenses or meet the demand for new trail development. Absent a fee increase, the current reimbursement rate of 87.7 percent of allowable expenditures will decrease and would be further exacerbated if additional localities choose to join the program.
An increase in fee revenues will enable OPRHP to increase the amount reimbursed per trail mile while still allowing room for increased participation in the program. Accordingly, the already substantial snowmobile trail system in the State would be guaranteed high quality maintenance and grooming, and interested parties would also have the incentive and wherewithal to expand it.
The increased non-resident fee compares favorably to New Hampshire’s $47 fee for non-residents, Maine’s $60, and Vermont’s $58.
This bill increases boat registration fees paid by boat owners in New York State to make additional funds available to counties for Navigation Law enforcement activities in State Fiscal Year 2002-03 and thereafter, and to provide a net benefit to the State Financial Plan, commencing in 2001-02.
Effective 120 days from enactment, this bill amends the Vehicle and Traffic Law to double registration fees from $9 to $18 for boats under 16 feet; $18 to $36 for boats from 16 feet up to 26 feet; and $30 to $60 for boats 26 feet or over. These fees have not been increased since 1985. The 3 year payment cycle will remain unchanged.
Article 4-A of the Navigation Law requires that 75 percent of boat registration monies collected by the State be used in the following year to reimburse counties for up to 75 percent of eligible expenses for local Navigation Law enforcement programs (up to a $400,000 cap per county). The Office of Parks, Recreation and Historic Preservation allocates these local assistance monies to the participating counties based upon a ratio of the total available funds to the total eligible expenses submitted by the counties.
A fee increase directly benefits counties with Navigation Law enforcement programs. At present, the existing fees do not generate enough revenue to fully reimburse 75 percent of each county’s eligible expenses. For example, in calendar year 2000, each participating county was reimbursed for only 57 percent of its eligible costs. In recent years, several counties have decreased their Navigation Law enforcement efforts or dropped out of the program, largely because of the low reimbursement rate.
An increase in boat registration fees would double the pool of money available for local assistance, enabling participating counties to be reimbursed up to the full 75 percent of the eligible costs. A higher reimbursement rate is likely to encourage counties to maintain and enhance their boating safety programs and may also induce other counties that dropped out of boating safety programs to re-instate their programs.
New York State’s boat registration fees are low relative to fees charged by other states. For example, in New York the annual cost to register a boat under 16 feet is $3 (based on triennial fee of $9) whereas, registration for a similar sized boat is $22.50 in Connecticut, $15 in Rhode Island and Massachusetts, $5 in Vermont, and $6 in New Jersey.
An increase in the amount of local assistance funding for the Navigation Law enforcement program makes the State eligible for additional Federal matching grants. Federal funds are used for State-run boating safety programs and to buy boats and other equipment for use in both State and local law enforcement programs.
This bill continues the restructuring of the State’s Medicaid program through initiatives which will reduce costs, enhance revenue and maintain and expand access to health care services.
The major provisions of this bill are as follows:
Sections 211 through 222-a of Chapter 474 of the Laws of 1996 established additional disproportionate share payments for HHC and certain other public hospitals.
Title 1-A of Article 25 of the Public Health Law authorizes a Child Health Insurance program to provide subsidized health insurance coverage to low-income children under age 19 who are ineligible for Medicaid and lack insurance coverage. Chapter 2 of the Laws of 1998 expanded eligibility for the program to up to 250 percent of the Federal Poverty Level and enhanced the benefit package.
Sections 366, 364-i and 368-a of the Social Services Law currently authorize Medicaid eligibility for certain low-income children under age 19; 12 months continuous coverage of such children; a contingent Medicaid expansion for children up to 133 percent of the Federal Poverty Level, including presumptive eligibility; and mandate reimbursement for Medicaid provided to children under the income expansions be made with State and Federal funds.
Sections 365 and 366 of the Social Services Law, as amended by Chapter 639 of the Laws of 1996, establish eligibility for Medicaid and responsibility for payment of Medicaid by the State and localities. Section 368-a of the Social Services Law divides the responsibility for payment of Medicaid costs between the State, localities and the Federal government.
Article 28 of the Public Health Law contains the various components of the Medicaid nursing home reimbursement rate.
Chapter 577 of the laws of 1998, which amended section three of chapter 483 of the laws of 1978, requires reimbursement for capital costs for nursing homes to be made on an historical basis.
Chapter 41 of the laws of 1992 made co-payments for prescription drugs applicable to certain populations.
Chapter 904 of the laws of 1984, as amended by Chapter 153 of the Laws of 1999, established PHSPs and the authority to provide six month guaranteed eligibility.
New York’s Medicaid program continues to be recognized as the best and most comprehensive in the nation. This bill proposes initiatives that enhance Federal revenues and expand Medicaid coverage to certain populations while producing $282 million in State share savings in SFY 2001-02.
Continuation of the CHP eligibility and benefit expansions is critically important to New York’s commitment to provide quality care for New York’s children.
Continuation of additional disproportionate share payments for HHC hospitals funded through a local share contribution maximizes Federal financial participation for losses incurred for care provided to the indigent and uninsured.
Authorizing Medicaid payments for certain medical services provided to State inmates maximizes Federal financial participation. This authorization also affords local governments the opportunity to seek Federal reimbursement for inmates in county and city operated facilities.
Expanding Medicaid eligibility to include working disabled individuals and women diagnosed with cervical and/or breast cancer provides health care coverage for these vulnerable populations.
Authorizing proportionate share hospital Medicaid payments for non-State operated public facilities will maximize Federal financial participation and bring New York payments closer to approved Federal maximum reimbursement levels.
Ensuring that important health care programs are adequately funded will preserve and enhance the quality and continuity of care to New York residents.
Permanently eliminating 2001-02 nursing home inflationary increases will require facilities to operate more efficiently.
Eliminating the return on equity for proprietary nursing home providers targets the segment of the industry that experiences the largest profits which has enabled them to consistently withdraw substantial equity. Therefore, the original intent on paying a return on equity -- to encourage providers to keep equity in their facilities to ensure financial stability -- has failed.
Removing the higher cost Medicare and other payor data from the case mix component of the Medicaid nursing home rate calculation is justifiable given recent changes in Federal Medicare reimbursement policy which provides facilities with full coverage for the cost of serving Medicare patients.
Requiring managed care recipients to make a co-payment on prescription drugs will provide an incentive for managed care recipients to utilize less costly generic drugs when available.
Prohibiting Medicaid capital reimbursement for any new residential health care facility bed is prudent given current declining occupancy rates. This proposal does not, however, preclude facilities from building new beds.
Failure to extend PHSPs would jeopardize the mandatory managed care program by limiting the availability of managed care plans for recipients. Guaranteeing recipients at least 6 months of Medicaid coverage from the date of Medicaid eligibility provides both the recipient and the managed care plan with stability.
Permanently extending the nursing home capital reimbursement methodology based upon historical costs ensures that Medicaid reimburses costs for a facility only once regardless of changes in ownership, and precludes windfall profits by nursing home owners upon the sale of a facility by limiting real property appreciation.
This bill makes the Elderly Pharmaceutical Insurance Coverage (EPIC) Program more cost effective by standardizing the Program’s business practices with those of Medicaid and the AIDS Drug Assistance Program, which are also managed by the Department of Health (DOH), and private insurers. It also makes technical amendments to implement these standard business practices more smoothly.
Effective April 1, 2001, this bill:
Chapter 913 of the Laws of 1986 created the EPIC Program which provides assistance to income qualified non-Medicaid eligible seniors in their purchase of prescribed medications and establishes dispensing limits, and a fair hearing process for individuals and participating provider pharmacies.
Executive Law section 547-j delineates EPIC pharmacy reimbursement and manufacturer rebates; Executive Law section 547-b (3)(c) defines EPIC as the payer of last resort.
The EPIC Program pays disproportionately higher prices for drugs than other DOH drug programs. This bill ensures that all DOH programs pay the same prices for the same drugs.
Under current law, individuals with “better health insurance” are not permitted to enroll in EPIC. Increasingly, Medicare managed care plans are providing better coverage but only up to a predetermined dollar amount, typically several hundred dollars a year. Some plans even divide this amount into a quarterly limit. This situation requires seniors to withdraw from EPIC annually or quarterly when their managed care benefits are available and reapply when they are exhausted. Seniors find this confusing and difficult to manage. This provision, combined with improved coordination of benefits, will ensure that seniors get their prescription drugs when they need them.
State law requires that the EPIC program be the payer of last resort; however, voluntary cooperation on the part of private insurers in this regard has been limited. As a result, EPIC has been paying for claims that are rightfully the responsibility of other insurers. Requiring insurers to match membership tapes with EPIC will identify seniors with dual coverage and allow appropriate coordination of benefits.
The provision authorizing the Commissioner, upon the recommendation of the EPIC panel, to make exceptions to the rebate requirement for certain drugs deemed by the EPIC panel to be essential for the health of EPIC participants, will address the rare case where there is a drug available to treat a condition but a senior is unable to procure it through EPIC because there is no rebate agreement in place.
This bill establishes a “quality of care improvement account” to receive all penalty and fine revenues collected by the Department of Health (DOH) and the Federal Department of Health and Human Services from residential health care facilities (RHCFs). Such revenues are to be used for the protection of the health or property of residents of those facilities found to be deficient.
This bill adds a new subdivision 10 to section 2803 of the Public Health Law (PHL) to establish a quality of care improvement account within the Miscellaneous Special Revenue Fund. The account will be funded from fines collected pursuant to Section 12 of the PHL; all penalties and fines received from violations of Federal requirements for participation in the Medicaid program and fines imposed pursuant to Section 2803-d of the PHL.
Monies available through this account will be applied to the protection of the health and property of residents of residential health care facilities that are found to be deficient, including, but not limited to, payment for the cost of relocation of the residents to other facilities and maintenance of operation of a facility pending correction of the deficiencies or closure.
The Omnibus Budget Reconciliation Act of 1987 (OBRA '87) and subsequent Federal regulations which took effect July 1, 1995 permit any civil monetary penalties collected by the Federal government to be returned to the State and deposited in a special account to be used for quality improvement activities to protect the health, safety and property of nursing home residents.
Section 12 of the PHL grants the Commissioner of Health authority to seek legal action against any person who violates, disobeys or disregards any term or provision of the PHL; or of any lawful notice, order or regulation for which a civil penalty is not otherwise expressly prescribed by law. Each violation of the above provisions is subject to a civil penalty of up to $2,000.
Section 2803-d of the PHL provides for the fines against individuals providing care in a residential health care facility found to be guilty of physical abuse, maltreatment or neglect.
This bill enables the State to access the Federal Medicaid share of fines collected by the Federal Department of Health and Human Services for violations of the requirements for participation in the Medicaid program that occur in residential health care facilities. It also directs fines imposed on residential health care facilities provided for under the PHL into the quality of care improvement account.
Failure to establish a quality of care improvement account will result in fines being held at the Federal level instead of being redirected back to New York State. This bill allows the State to access a portion of the Federal fines and apply them along with State dollars toward the improvement of resident care and quality of life in nursing facilities.
This bill extends the State Office for the Aging’s Naturally Occurring Retirement Community Supportive Service (NORCS) Program. Subdivision 51 of section 564 of Chapter 170 of the Laws of 1994, as amended by Chapter 191 of the Laws of 1999, is amended to extend the expiration date of December 31, 2001 by two-years, to December 31, 2003.
This is the third consecutive extension of this program. The expiration date previously has been extended for two year periods.
The term “Naturally Occurring Retirement Community” describes a phenomenon experienced by certain housing complexes, cooperatives and apartment buildings in which a significant amount of the resident population “age in place”, changing the demographic characteristic of the residence.
The NORCS program, recognizes this phenomenon and provides a comprehensive array of on-site supportive services within these residences, thereby allowing their elderly residents to continue to remain independent. It is estimated that this program serves 20,000 clients in 14 locations statewide. This program is supported with a $1.5 million State appropriation which is matched dollar for dollar by private contributions from the retirement communities themselves.
This bill creates the Community Mental Health Support and Workforce Reinvestment Program to strengthen the existing system of county and voluntary operated services. It institutes a multi-year plan to fund a fee increase and a three year cost-of-living adjustment for certain community-based mental health programs, through savings associated with adult inpatient bed closures, the re-location of four children’s psychiatric centers and one forensic psychiatric center, and the closure of two adult psychiatric centers. In addition, this bill establishes a mechanism for the development of new State-operated residence beds and authorizes the transition of resources for State shared-staff services to local assistance funding.
This bill, effective October 1, 2001 with certain exceptions, is summarized as follows:
Sections 1 and 4 of this bill amend the Mental Hygiene Law (MHL) to reestablish and make permanent the definitions for certain mentally ill populations and the membership for community service boards required in the local planning process.
Sections 2 and 3 amend the MHL to provide for the closure of the Richard H. Hutchings Psychiatric Center (January 1, 2003), and the Middletown Psychiatric Center (January 1, 2004) and to provide that the one year prior notice provisions of the law shall be deemed satisfied for these two adult facility closures.
Section 5 adds a new section 41.56 of the MHL to establish the Community Mental Health Support and Workforce Reinvestment Program and define how such Reinvestment funds will be available to provide fee increases and cost-of-living adjustments for certain community-based mental health services. This section also clarifies that cost-of-living adjustments shall not be applied to fees increased under this section, nor any other reimbursement which the Commissioner of Mental Health determines is subject to cost based reimbursement, is adjusted for inflation, or otherwise receives a comparable adjustment.
Section 6 prescribes a formula for determining the amount available to fund the Community Mental Health Support and Workforce Reinvestment Program during the State Fiscal Years 2001-02 through 2003-04 based on the annual State-operations appropriation reductions for the savings directly attributed to adult inpatient bed closures and facility re-locations and closures. This section also:
Section 7 provides for additional State aid to counties and not-for-profit providers through the transition of moneys that had previously been appropriated in the OMH budget for State employees (known as State shared staff) assigned temporarily to work for non State-operated community programs, and further provides for the transition of funding as State positions become vacant.
Section 8 provides for an October 1, 2001 effective date with certain exceptions and specific effective dates for the closure of two psychiatric centers and the re-location of five psychiatric centers. In addition, this section provides for the sunset of provisions relating to Community Mental Health Support and Workforce Reinvestment Program beginning in March 31, 2004.
The Community Mental Health Reinvestment Act (Chapter 723 of the Laws of 1993) established a mechanism whereby State appropriation reductions attributable to savings associated with closure of non-geriatric inpatient beds and psychiatric centers were directed to local governments for the expansion of community mental health services. This Act was extended by Chapter 358 of the Laws of 1998 until the funding mechanism expires on September 30, 2001.
The new Community Mental Health Support and Workforce Reinvestment Program, established by this bill provides a mechanism to strengthen the existing community mental health system by providing fee increases and cost-of-living adjustments. New York State has an extensive system of State aided mental health services. In recent years, there have been several initiatives to reorganize and expand the capacity of community mental health services including Community Mental Health Reinvestment, the New York / New York Housing Agreements, the Assisted Outpatient Treatment Program and the Enhanced Community Services Program.
In the past two years alone, there have been significant investments to expand the system including: new single point of entry and accountability systems in all counties throughout the State; Assisted Outpatient Treatment systems for the hard-to-serve population; resources nearly doubling adult case management to provide over 25,000 slots; and a significant increase in children’s mental health services including additional community residences, Home and Community Based Services waiver slots, family based treatment, and family support services. In addition, there are 4,700 new community beds in various stages of development to bring the total number of community beds to over 28,000 -- an increase of almost 50 percent in the number of beds operating since 1995.
As the community mental health system has undergone significant expansion in recent years, the prevailing priority now is to strengthen the current array of services by providing a multi-year commitment for cost-of-living adjustments.
This bill designates State savings from adult inpatient bed closures and facility re-locations and closures to further strengthen this comprehensive network of community mental health services. In view of this identifiable funding source, for the first time, there would be a commitment to support a multi-year cost-of-living adjustment for certain community mental health providers. This identifiable funding source would not only improve recruitment and retention of staff, but because it is a multi-year commitment, this would also enable providers to make better long-range planning decisions.
This bill designates naturally occurring State savings from the closure of unneeded adult inpatient beds to implement the outpatient fee increase and multi-year cost-of-living adjustment. Despite the moratorium on inpatient bed closures for 2000-01 to ensure immediate access to inpatient care, the State adult census has continued to decrease due to improved medication, treatments and increased opportunities to place long-term patients. The State savings would only accrue from the closure of unneeded adult inpatient beds, and adequate bed capacity will remain in place to ensure access to inpatient treatment when appropriate.
The bill also designates State savings attributed to facility re-locations and closures for these purposes. There is no longer a need to operate 17 adult psychiatric centers across the State to provide space for intermediate and long-term inpatients. In addition, the closure of the Hutchings and Middletown Psychiatric Centers over the next three years on a phased basis will result in savings through combining staff functions and other economies of scale. Moreover, savings will be achieved by re-locating four free-standing children’s facilities and one forensic facility onto vacant space at nearby psychiatric center campuses, and sharing administrative and support functions.
The closure or re-location of the seven facilities avoids over $110 million in net capital costs for extensive capital improvements which would otherwise be needed were these facilities to remain in the current physical space. In addition, the children’s re-locations will provide an opportunity to more effectively provide the same high quality of clinical care that the children are currently receiving, in better, new and more therapeutic physical environments. Moreover, the adult and children’s populations will remain physically separate, with each having separate and secure entrances and exits, as well as separate treatment, program, educational and recreational space.
The transition of resources for State shared staff (psychiatric center staff assigned to local agencies) to local auspices, would improve the use and accountability of these resources by local governments.
This bill amends Section 13.17 of the Mental Hygiene Law (MHL) to eliminate the Taconic Developmental Disabilities Services Office (DDSO), reducing the total number of DDSO’s from 13 to 12. This action improves service delivery and oversight by the Office of Mental Retardation and Developmental Disabilities (OMRDD).
In 1990, the Legislature acknowledged OMRDD’s policy of deinstitutionalization by stating that it “recognizes the goal of the Office of Mental Retardation and Developmental Disabilities to consolidate, whenever possible, the provision of services within a catchment [service] area”. In 1995, Section 13.17 of the MHL was amended to eliminate six of OMRDD’s nineteen DDSOs, to consolidate and streamline OMRDD’s district office structure.
In 2000, MHL section 13.17 was amended to add the new Valley Ridge Center for Intensive Treatment, which is not a traditional DDSO but rather a specialized treatment facility with a statewide catchment area.
This bill continues administrative streamlining of OMRDD, which will have consolidated nineteen DDSOs into twelve by 2001-02. This latest action will produce improved efficiencies within the OMRDD service system while maintaining high standards of service delivery and oversight.
Enactment of this bill is necessary to implement the 2001-2002 Executive Budget specifically:
The State Superfund is financed by the Environmental Quality Bond Act of 1986. Of the $1.1 billion authorized by that Bond Act, only $186 million remains unobligated. Under current projections for additional obligations through March 31, 2001, including two unusually large landfill remediation projects in New York City estimated to cost over $180 million, the Bond Act will be completely exhausted, with no available resources to commit to other potential Superfund sites.
To address the future funding needs of the State Superfund Program, the bill provides for an estimated $138 million in annual revenue from existing and new revenue sources to support the State’s remedial programs. On average, approximately $69 million is from special revenues and another $69 million is from the General Fund. Of the $69 million from special revenues, $19.4 million is from new fees proposed in the bill. In addition to the $138 million to support the remedial programs, the bill also provides tax credits for remediation and redevelopment of brownfields, and for real property taxes paid on qualified sites. Taxpayers can begin to incur costs for site remediation and for property placed in service on the site on or after January 1, 2001. The tax credit provisions are estimated to reduce revenues by $12 million in State fiscal year 2002-03 and by $70 million annually, on average through State fiscal year 2005-06. This reduction in revenues has been reflected in the Financial Plan and, as a result, enactment of this bill is necessary to implement the 2001-02 Executive Budget.
Enactment of this bill is necessary to provide State assistance to municipalities for remediation projects.
This bill provides appropriations for State parks and lands infrastructure and stewardship projects, the Hudson River Park, Historic Barns, the Hudson River Estuary, and other important environmental efforts.
Increasing the fees will provide $2.4 million in additional revenue for the environmental regulatory account. This will provide for the transfer of 20 positions totaling almost $1.1 million from the General Fund and $1.3 million for other priority initiatives such as integrated pest management (including non-toxic alternatives to mosquito control), improved enforcement against illegal applicators, and new pesticide notification requirements.
Enactment of this bill is necessary to ensure adequate funding for activities supported by the Conservation Fund. Absent a fee increase, a reduction in program expenditures would be necessary to avoid a cash deficit in early 2001-02. Alternatively, a General Fund deficiency of up to $7.3 million would be required in 2001-02 to avoid a cash deficit and provide an adequate opening balance for 2002-03 operations.
This bill includes fee revenues of $45,000 to support DEC’s shellfish program.
This bill includes $3.3 million in the General Fund to support the State assistance payments.
Enactment of this bill is necessary because the current level of fund revenue derived from snowmobile trail development and maintenance fees is insufficient to keep pace with local trail maintenance costs eligible for reimbursement by the State. The additional revenue will be directed to the Snowmobile Trail Development and Maintenance Fund. Estimating 126,000 sleds being registered, $2.6 million in revenues would be generated, a $1.2 million increase over current levels. Funds available to reimburse local efforts would approximate $1.9 million, and the remaining $0.7 million would be available for State administration and snowmobile trail maintenance and development on State-owned lands.
Enactment of this bill is necessary because the Financial Plan assumes receipt of $700,000 from increased boating registration fees. The Department of Motor Vehicles currently collects $2.7 million annually in boat registration fees. Of this amount, 75 percent or $2.0 million is used to reimburse counties for eligible costs of their local Navigation Law enforcement programs in the year following the revenue collection. The balance of $700,000 is deposited in the General Fund.
This legislation will increase boat registration fees beginning in 2001-02 with collections totaling $3.4 million which will grow to $5.4 million when fully annualized. The 2001-02 payment to localities would be $2 million, or 75 percent of the 2000-01 revenues. The balance of $1.4 million would go to the General Fund, an increase of $700,000 from 2000-01.
In turn, the amount of funding available to reimburse counties based upon their projected eligible Navigation Law enforcement costs and current reimbursement caps, would increase from the current level of $2.0 million to $2.5 million in 2002-03 and to $3.0 million in 2003-04.
Similarly, since the 2002-03 payment to the localities would be $2.5 million, and boating registration fees would total $5.4 million, the Financial Plan would benefit by a total of $2.9 million in 2002-03, an increase of $2.2 million from the current $700,000 level.
Enactment of this bill is necessary to achieve $282 million in State share Medicaid savings. The local share savings is $69 million in SFY 2001-02.
This bill is necessary to achieve cost avoidance of $36 million and $4.5 million in additional rebate revenues.
Enactment of this bill is necessary to provide not be clear authority to spend $2 million appropriated in the Budget for the purposes outlined in Federal law. This bill will make Federal funds available for nursing home care improvement.
The 2001-02 Executive Budget provides an appropriation for the NORCS Program.
It is expected that this bill will result in a total of $64.1 million in additional funding for fee increases and cost-of-living adjustments once fully annualized. The projected State savings are associated with the anticipated closure of 625 adult inpatient beds ($41.6 million), and the re-location of five facilities and the closure of two facilities ($22.5 million). The projected State savings will support the cost of a multi-year 2.5 percent cost-of-living adjustment once fully implemented. However, because the portion attributed to the facility re-locations and closures will not be immediately available, this bill will also permit an interim additional amount limited to specific percentages of the State appropriation reductions to fund the fee increase and the maximum of a 2.5 percent cost-of-living adjustment in each of the next three years.
The mechanics of the formula will continue to reflect the principles of Reinvestment by linking funds to actual State appropriation reductions. In the event that such State savings do not materialize as projected, the cost-of-living adjustment would be less than 2.5 percent in any given fiscal year.
| 2001-2002 | 2002-2003 | 2003-2004 | Full Annual | |
|---|---|---|---|---|
| Projected Savings | 6.0 | 21.6 | 49.6 | 64.1 |
| Maximum Additional Amount | 8.9 | 14.9 | 6.4 | 0 |
| Total | 14.9 | 36.5 | 56.0 | 64.1 |
This bill also authorizes the development and operation of up to 144 new State-operated residence beds that would require $7.7 million in funding once fully operational.
Lastly, this bill provides for the conversion of over $12 million in General Fund State Operations resources (associated with 215 positions providing shared staff services) to transition to the counties as State aid. It is expected that a minimum of $3 million will be converted in the first year associated with vacant positions.
This bill assumes savings of $361,000 in 2001-02 and fully annualized savings of $722,000 beginning in 2002-03 as a result of this streamlining action.
This bill takes effect April 1, 2001, except:
The bill will take effect according to the provisions of §66 described under Summary of Provisions, supra.
This bill takes effect October 1, 2001.
This bill is effective immediately.
This bill is effective immediately.
Takes effect 120 days after its enactment.
Section 1 of this bill related to the Child Health Insurance program will take effect March 31, 2001. Sections 6 and 7 related to the Medicaid Buy-In program will take effect on January 1, 2002, or as soon thereafter as practicable. Section 11 related to the breast and cervical cancer eligibility proposal shall take effect October 1, 2001. Sections 4 and 5 related to Federal financial participation for inmates in State or locally operated correctional facilities shall take effect retroactively to January 1, 1997. All other sections of the bill shall take effect April 1, 2001.
The portions of the bill affecting pharmacy reimbursement and manufacturers’ rebates are effective April 1, 2001. The provisions allowing seniors with other drug coverage to remain in EPIC become effective 120 days following enactment, and the provision requiring insurers to coordinate membership lists is effective retroactively to January 1999.
This bill takes effect immediately.
This bill takes effect immediately.
This bill takes effect October 1, 2001 with certain exceptions and specific effective dates for the re-location of five psychiatric centers and the closure of the two psychiatric centers. In addition, the provisions relating to Community Mental Health Support and Workforce Reinvestment would begin to sunset on March 31, 2004.