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February 21, 2009

DiNapoli Proposes Legislation to Strengthen Oil Spill Fund Collections

State Comptroller Thomas P. DiNapoli today announced he has proposed legislation to improve collection of monies owed to the New York Environmental Protection and Spill Compensation Fund (the Fund). The Fund pays for oil spill clean ups when spillers cannot be identified or refuse to conduct the clean up. The Fund then turns the case over to the Attorney General’s office to commence an enforcement action to recover the monies expended for clean up. Once the court case has been decided in favor of the state, the Attorney General can pursue collection of the monies owed.

“There are 15,000 oil spills in New York State every year,” DiNapoli said. “Almost all of them are cleaned up and paid for by those responsible for the spill. But in roughly 3 percent of the spills, the Oil Spill Fund pays for clean up. Then comes the hard part: getting the money back. Spillers fight payment, drag out court cases, or simply have no assets to collect against.

“The law on collection and enforcement needs to be tougher. The legislation I’m proposing will give us some additional tools to enforce judgments and get the clean up money back. Right now, spillers could still have a state contract and be receiving payments from the state. The state shouldn’t be paying spillers that owe the Fund money for clean ups.”

DiNapoli said the State Department of Environmental Conservation, the Attorney General and the Comptroller’s office work very closely together to pursue those responsible to compensate for spill clean up. Earlier this month, the New York State Appellate Division, Second Department, affirmed a jury verdict assessing penalties of $6 million against Sunoco, Inc. (R&M), $250,000 against LVF Realty Co., Inc., and $75,000 against Sun Super Services Centers, Inc. in an oil spill case.

DiNapoli’s proposal would strengthen Oil Spill Fund liens against spillers’ property, and require that the Comptroller’s office be notified when the Attorney General’s office files a judgment against a spiller (which occurs after final judgment has been rendered by the court).

In addition, DiNapoli said his office is exploring options to require funds be held in escrow when an environmental lien is placed against a spiller’s property. DiNapoli noted that while there are no legal grounds to seize assets under an environmental lien, placing funds in escrow would provide an additional layer of taxpayer protection without violating a spiller’s right to due process.

Click here for a copy of the legislation.



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