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Legislative Memo

Darren Suarez
Director of Government Affairs
T 518.465.7511
www.bcnys.org

BILL:

S.2640 (Lanza) / A.972 (Cusick)

Support

SUBJECT:

License Fees for Petroleum Products Shipped Through New York

 

DATE:

February 13, 2017

 

The Business Council of New York State supports this legislation which relates to per barrel licenses fees on petroleum shipped through the state for use outside the state. This legislation amends the petroleum licensing fees as modified by part X of chapter 58 of the laws of 2015.

When the petroleum licensing fees were increased in 2015, the dramatic fee increases placed petroleum storage facilities that store and then transfer the stored petroleum product out of state, at a significant competitive disadvantage.  Specifically, in the Port of New York and New Jersey the fee makes New York facilities uncompetitive. Previously, shippers of petroleum through New York pay less into the New York State Oil Spill if the product is not sold in New York.

The facilities that are covered by the proposed change do not historically draw resources from the New York State Oil Spill Fund. All of these facilities are Major Oil Storage Facilities (MOSF), which are facilities that store a total of 400,000 gallons or more of petroleum in aboveground and underground storage tanks. Facilities must be licensed by the DEC and managed in compliance with applicable regulations for the storage and handling of petroleum. A considerable number of MOSFs store products other than oil.

Additionally MOSFs have a strong safety record, with few, relatively minor releases over the past ten years, the majority of which are prevented from escaping to the environment by secondary containment measures. To put this into context, the Department of Environmental Conservation receives approximately 14,000 non-MOSF spill notifications per year. In 2013, there were 17 MOSF spills with only four affecting the environment – all were considered minor and cleaned up by the responsible party. Small spills will continue to be a challenge, but the required secondary containment mechanisms at MOSFs generally ensure that spills do not reach the surrounding environment.

For these reasons, we believe it makes sense for the state to restore the oil spill fund licensing fees to pre-2015 levels for certain storage facilities and restoring the credit for barrels of product transferred through a facility in New York and then exported out of state for certain storage facilities.

Therefore, The Business Council supports approval of S.2640 / A.972.