BILL NUMBER: S8282

SPONSOR: GAUGHRAN
 
TITLE OF BILL:

An act to amend the public health law, in relation to cost recovery by
municipalities and other recipients from responsible parties and ensures
that responsible parties do not benefit from state assistance payments
or grants made by the environmental facilities corporation to munici-
palities and recipients

 
PURPOSE OR GENERAL IDEA OF BILL:

To encourage cost recovery from responsible parties and ensure that
those parties do not benefit from state assistance payments/grants made
by the Environmental Facilities Corporation and unnecessarily burdening
taxpayers.  The New York state Environmental Facilities Corporation
(EFC) is authorized to provide state assistance payments/grants for
eligible municipal water supply projects designed to comply with federal
and state drinking water goals and standards. For example, the EFC
recently announced several million dollars in state assistance
payments/grants to address the emerging contaminants 1,4-dioxane, PFOS
              

and/or PFOA.

Federal and state drinking water goals and standards are often exceeded
due to the acts of polluters or other responsible parties.  Munici-
palities that receive a state assistance payment/grant are not currently
required to reimburse the EFC for the state assistance payment/grant.
When a municipality seeks damages from a party legally responsible for
causing contamination of public water supplies and/or damages to water
supply facilities, any state assistance payment/grant made to the muni-
cipality may be considered a collateral source of payment pursuant to
civil practice law and rules section 4545 and other laws, and the amount
of any award recoverable from a responsible party may be reduced by the
amount of such state assistance payment/grant. Thus, it is the responsi-
ble party that ultimately benefits from the state assistance
payment/grant to the municipality at the cost of the taxpayers of the
state of New York.

 
SUMMARY OF SPECIFIC PROVISIONS:

Section 1 amends the public health law by adding a new section 1167-a
that provides for the reimbursement of state assistance payments/grants
made to a municipality for an eligible project to remove contaminants,
such as 1,4-dioxane, PFOS and/or PFOA, when the municipality takes legal
action to recover costs of removing the contaminants from its water
supplies caused by responsible parties and it receives a payment from a
responsible party for such contamination.

- The amount of the reimbursement to the EFC shall be the portion of the
payment that is in excess of (1) the total cost of the eligible project
and (2) the expenses incurred pursuing recovery of such costs from
responsible parties.

- This Section also provides that, notwithstanding any other provision
of law, evidence of any grant or state assistance payment from the EFC
to any municipality or other recipient shall not be admissible in any
action brought by such municipality or recipient and that the court

shall not reduce the amount of any award against a responsible party in
whole or in part because of such state assistance payment/grant.

Section 2 is the effective date (immediately).

 
JUSTIFICATION:

Parts m and r of chapter 57 of the laws of 2017 amended the public
health law by adding sections 1112 and 1113 requiring the Commissioner
of the Department of Health to promulgate regulations regarding emerging
contaminants after recommendations from a new drinking water advisory
council. These new drinking water regulations have resulted in new and
significant costs for public water suppliers, their customers and the
state. Public water suppliers can mitigate these costs through liti-
gation against parties who are responsible for the contamination of
sources of water supply.

The state has also provided and announced significant state assistance
payments/grants through the EFC to municipalities and recipients to help
pay the costs for eligible projects that provide treatment, so that such
treatment can be installed before funds from litigation are available to
municipalities and recipients.

This bill is intended to prevent responsible parties from benefitting
from such state assistance payments/grants by prohibiting them from
being considered collateral sources and reducing awards that may be
granted to municipalities and recipients in such litigation.

 
LEGISLATIVE HISTORY:

New bill.

 
FISCAL IMPLICATIONS:

None.

 
EFFECTIVE DATE:
Immediately.