What is the easiest way to violate New York's oil storage rules when you purchase a building that has petroleum storage tanks?
Based to a recent chain of New York Department of Environmental Protection (DEC) enforcement cases, it appears that failure to register your newly acquired oil tanks with the DEC is one of the targeted violations - you risk being held liable for tens of thousands of dollars in civil penalties as a result. That's a lot of money, but how do you know if you should be worried?
DEC's Petroleum Bulk Storage (PBS) program applies to facilities that store more than 1,100 gallons of oil in either aboveground or underground storage tanks. If you have one or more underground tanks that hold more than 110 gallons, then you also need to register the tank(s) with the DEC. As the property owner, you are also responsible for making sure the tanks maintain in good condition (e.g., no leaks), in accordance with DEC regulations.
In the last few months, DEC has been heavily enforcing its PBS regulations and creating havoc for unsuspecting property owners. Below are a few examples of recent decisions by the DEC that have a common thread - failing to register a PBS within 30 days of obtaining ownership of a property:
· In August, the owner of four Bronx buildings was ordered to pay $30,000 in penalties for failing to register aboveground storage tanks. The owner purchased the buildings in December 2013, but didn't submit a registration application until October 2016. DEC found that the application was incomplete, and the owner never completed the application; the owner didn't even show up to the hearing.
· In September, a property owner in the Bronx was fined $83,750 for numerous violations stemming from an oil spill on the facility. The owner also failed to submit a remedial action work plan that they had previously agreed to and failed to register a waste oil tank within 30 days of the transfer of ownership of the facility.
· DEC imposed a $37,000 penalty on an apartment building owner in the Bronx for failing to comply with PBS requirements with respect to an aboveground heating oil tank. DEC found that the owner failed to register the facility within 30 days of the transfer of ownership in 2006 and also found that the respondent had failed to comply with other PBS requirements (e.g., displaying a PBS certificate at the facility, equipping the tank with secondary containment, marking the tank with the registration identification number and other information, color coding the fill port, maintaining the tank vault, and conducting and maintaining records of monthly inspections). The administrative law judge recommended reducing the fine, but DEC found that the fine was appropriate because of the high number of violations and the length of time the owner was not in compliance. DEC also found the owner was not cooperative and the facility was located near sensitive areas.
· Two property owners were ordered to pay $10,000 for failing to register or renew the registration for their PBS facilities. One property owner in midtown Manhattan had not renewed the registration when it expired in August 2008, while the owner of a Bronx property acquired the property in June 2012 and failed to register a tank. DEC's decision to impose a $10,000 fine for each property was based on previous decisions that established $10,000 as the appropriate penalty for failing to register a facility for more than 5 years, and $7,500 for a failing to register for between 2-5 years. DEC imposed the higher fine on the Bronx property even though date of acquisition was less than five years before the filing of DEC's complaint, because the owner was apparently on notice of the requested penalty amount and had still failed to register the facility more than 5 years after the registration was due.
What does all of this mean? Well, if you decide to purchase a building or a facility that has bulk oil storage, you need to determine whether you have to register any tanks. If you do, make sure to register any tanks with the DEC within 30 days of closing or otherwise risk substantial penalties. Even if you have owned your property for years without registering a tank or your registration needs to be renewed, submit your registration papers to the DEC as soon as possible because the DEC considers length of time that you are out of compliance as an aggravating factor.
Call the attorneys of Periconi, LLC at (212) 213-5500 if you own or recently purchased a facility with an oil tank and want to make sure you are adequately registered with the DEC, or if you have general questions about DEC's Petroleum Bulk Storage program.