Protecting Our Environment: A Comptroller’s Unique Role

Dear Colleagues, 

The New York Environmental Protection and Spill Compensation Fund is a special revenue account administered by the New York State Comptroller. The Fund helps to maintain clean soil, groundwater, and surface water by helping to ensure an immediate response and a thorough cleanup of petroleum spills in New York State.

The Fund’s authority comes from New York Navigation Law Article 12, enacted in 1977. The Fund became operational a year later. New York State’s legislation reflected the tenor of the times, when numerous state and federal laws were enacted to protect our environment from industrial pollution. That era included devastating environmental incidents like the Santa Barbara, California spill and the pollution of the New York Harbor when 480,000 gallons of crude oil spilled into the sea.  

In New York State a spill or “discharge” is legally defined as the unauthorized discharge of petroleum, oil or petroleum of any kind including fuel oil, oil sludge, oil mixed with other wastes and crude oils, or gasoline.

The Comptroller’s office works jointly with the State Department of Environmental Conservation (DEC) and the Office of the Attorney General (OAG). The Fund pays for remediation conducted under the oversight of DEC. The Fund also compensates third parties who file damage claims for financial losses related to spill impacts. The Fund is financed through storage tank registration fees and license fees imposed on barrels of petroleum imported into New York State and stored at major oil storage facilities at ports like Albany and New York City. Fees paid into the Fund range between 9.5 to 13.75 cents per barrel on imported petroleum depending on transport, as well as costs and penalties recovered from responsible parties.

As evidenced during the past several decades, oil spills are not limited to large tankers, gas stations or industrial businesses; many spills reported to DEC are from small businesses, homes, or motor vehicle accidents.

Spills must be reported to the DEC within two hours of discovery.  If an owner is unwilling or unable to pay for the cleanup, DEC has a list of on-call contractors, vetted by the State, who can respond to the site as soon as possible. The contractor bills DEC, and the Fund pays the invoice. This process provides maximum protection to the environment by helping to ensure speedy cleanup by trained personnel. 

Each year there are approximately 15,000 spills in New York State. The Fund pays to clean up between 300 to 400 of them; ninety-five percent of the time the spill is cleaned up by the responsible party. However, if payment is not made, cost recovery is initiated through a demand letter sent from the OAG to the responsible party demanding reimbursement for cleanup and any associated penalties.

Presently there are more than 2,000 open cost recovery cases in our state -- from individuals to large firms. Some parties in these cases have no assets with which to reimburse the Fund. Others may have available resources but employ their right to due process under the law to defend themselves. Some cases take years to reach a settlement.

To date, the Fund has recovered approximately $301 million from responsible parties. During the past decade, the Fund has paid for the remediation of more than four thousand sites and recovered nearly $90 million.

Oil spill remediation paid by the Fund has additional benefits to the State.  For example, the Town of Hyde Park in Dutchess County converted land polluted by a gas station into a green space for residents. In the Village of Yorkville in Oneida County, cleanup of a business lot resulted in a new convenience store being built. On Long Island, numerous contaminated sites have been transformed into parkland and business plazas.

New York’s Oil Spill Fund is a unique program that utilizes the respective strengths of three different State agencies to protect residents and the environment from the hazards of petroleum spills, and to recover associated cleanup costs whenever possible from the party responsible for the spill. This collaborative model maximizes the effectiveness and cost efficiency of the program to the benefit of all the State’s residents.

Thomas P. DiNapoli
Comptroller
New York State