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July 6, 2010

Audit on Bulk Oil Fees and Penalties
Shows DEC Could Have Collected $9 Million

The state Department of Environmental Conservation (DEC) could have potentially collected nearly $9 million in petroleum bulk storage registration fees and penalties from facilities with expired registrations and other violations, according to an audit released today by State Comptroller Thomas P. DiNapoli.

“These fees help protect our environment,” DiNapoli said. “They should be collected.  New York needs to make sure we’ll have the resources necessary to pay for any oil cleanups.”

Facilities with petroleum bulk storage tanks are required to register with the DEC every five years and pay a registration fee. The DEC is responsible for collecting the fees from more than 39,000 facilities in 57 counties. The registration fee, which is based on the total storage capacity of a facility’s tanks, ranges up to $500.

The fees are deposited into the State’s Oil Spill Fund, which pays for the cleanup of oil spills when the responsible party fails to do so. For the fiscal year ended March 31, 2009, DEC collected $2.4 million in registration fees.

DiNapoli’s auditors, however, determined DEC was not collecting all the registration fees from facilities with petroleum bulk storage tanks. Based on information from the DEC and the New York City Fire Department, as much as $3.4 million of registration fees may be due to the state for more than 5,530 facilities.

In addition, DiNapoli’s auditors found the DEC often did not assess penalties against facilities that failed to register. If the Department fined the 5,530 facilities without a registration and collected just a $1,000 penalty, the DEC could potentially generate $5.5 million for the state’s General Fund. The penalties can be as much as $37,500 per day.

Auditors recommended DEC:

  • Take action to collect all fees due the state;
  • Refer noncompliant facilities to the Attorney General’s office for enforcement; and
  • Consider using escalating penalties on facilities that are noncompliant for over a year.

Click here for a copy of the full audit, including DEC’s response.



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