This bill would allow tax districts to recover damages from persons whose negligent or intentional conduct resulted in a violation of the Environmental Conservation Law (ECL) or Public Health Law (PHL), and where such violations were wholly or partially the basis for the reduced valuation of real property.
The intent of this bill is to assure that persons whose violations of the Environmental Conservation Law or Public Health Law cause actual environmental damage will not benefit financially from such actions through lower real property tax assessments.
The Business Council opposes A.997, however, because its impact would extend well beyond its intended purpose, and raises a number of legal and practical concerns.
The following analysis illustrates the potential impact of this bills, and raises significant concerns about its potential implementation.
- Under New York State court decisions (City of Amsterdam v. Board of Assessment, Katz Buffalo Realty v. Anderson), assessors cannot be required to testify in court as to how they arrived at an assessed value. Given this case law, it would be difficult if not impossible for a defendant to disprove that a reevaluation was based on ECL or PHL violations. This places the burden of defense on a party who would be legally barred from discovering the reason for an assessment change.
- Damage claims could not brought under this bill in response to actions that occurred before the state's hazardous waste or hazardous material management laws were enacted, since in most cases those releases did not represent a violation of law. However, persons who take ownership of such sites with "historic" contamination could still be subject to damage claims under this bill, even though they did not cause the environmental harm. For example, enforcement cases have been brought for Clean Water Act violations against releases to surface water from "historic" contamination sites, and such cases have been brought against property owners who purchased the property after the contamination occurred. This illustrates one example of how A.997, as presently drafted, could result in lawsuits against persons who did not cause environmental contamination that results in property devaluation.
- An assessor may devalue a parcel due to its proximity to an regulated "environmental facility" (e.g., a manufacturing plant or a solid waste incinerator.) The assessor could then seek damages under this bill in response to any environmental violation at such facility, claiming that such devaluations were at least partially to blame for the reduced property value. Again, considering case law, it would be difficult if not impossible for facilities to defend against such claims. Further, under this type of scenario, it is unclear whether A.997 would apply an apportioned or a "joint and several" liability standard in awarding damages relative to environmental violations.
- Likewise, the valuation of an active manufacturing site could be reduced due to the demolition of structures on the site. (In at least one instances, a Business Council member demolished a structure in order to conduct state mandated soil and groundwater remediation under the former building.) Under this bill, the tax district could retaliate by seeking damages claiming that any devaluation is partially attributable to existing environmental contamination on the site. Again, the defendant could not call the assessor to testify as the reasons for the devaluation.
- It is unclear whether a tax district could seek damages in instances where the DEC has taken no enforcement action in response to an alleged violation, or in instances where the DEC has determined that no violation occurred. For example, under federal citizen suit provisions, a defendant can go to the courts to enforce against alleged environmental violations even after the EPA or DEC determines that no violation exists. The Business Council is concerned that, under A.997, the courts could supersede the DEC's authority to assess the legal and technical interpretation of the ECL.
- Under the state's Environmental Conservation Law, most unpermitted environmental releases are considered a violation. This includes leaks from chemical or petroleum bulk storage tanks, and air or wastewater discharges that exceed permit limits. While most releases are not considered by the DEC as the result of negligence, this bill would place such determinations in the hands of tax districts and the courts.
Based on these concerns, The Business Council respectfully opposes adoption of A.997.