Anyone that conducts activities on their property involving the management and disposal of hazardous soils and wastewater could be subject to substantial hazardous waste “generator” fees levied by the New York State Department of Environmental Conservation (the “NYSDEC”) in connection with the Hazardous Waste Regulatory Fee Program and the Hazardous Waste Special Assessment Tax. This fee and tax are not well known and could impact property owners that remove contaminated soil or wastewater from their property during normal construction activities, or that remediate historical petroleum spills on their property.
Hazardous Waste Regulatory Fee Program
The Hazardous Waste Regulatory Fee Program was established in 1983 under Article 72 of the Environmental Conservation Law (“ECL”) and requires all “generators” to submit an annual hazardous waste fee to NYSDEC. A “generator” is defined under the statute as “any person, by site, whose act or process produced hazardous waste or whose act first causes a hazardous waste to become subject to regulation.” Thus, persons conducting remedial activities at their properties requiring the management or disposal of hazardous soils, materials or wastewater may be subject to the prescribed regulatory fees, unless the remediation qualifies for one of the exemptions specified under the statute. Fees are assessed based on the tonnage of hazardous waste generated per year. The program fees have been amended several times since their inception, most recently in 2010, and can be quite substantial.
The statute currently provides that, for the period beginning January 1, 2010, all persons generating 15 tons or more per year of hazardous waste are required to pay a fee in the amount of $130 per ton of hazardous waste generated, up to $300,000. For those generating between 4,000 tons and 10,000 tons, the fee is up to $400,000; for those generating more than 10,000 tons, the fee is up to $800,000. An additional fee, ranging from $3,000 to 6000 will also be assessed against generators of hazardous wastewater. A separate set of fees apply to treatment, storage and disposal facilities.
In determining the annual program fees for generators, NYSDEC will typically rely on hazardous waste manifests and annual reports required to be filed by generators under the ECL. Failure to pay the fee by the due date noted on the invoice can result in penalty and interest charges. Any person that believes a fee has been inappropriately assessed has the right to challenge it by submitting forms supplied by NYSDEC within 30 days of the invoice date.
Some hazardous wastes are exempt from the fee, including, but not limited to, waste resulting from services that are provided under: (i) an agreement with NYSDEC, or an order of NYSDEC, the federal government or a court related to a hazardous materials cleanup; (ii) an agreement with NYSDEC for the cleanup and removal of a petroleum spill under the Navigation Law; (iii) a NYSDEC Brownfield site cleanup agreement; (iv) an order of a court, NYSDEC, Department of Health or the USEPA related to an inactive hazardous waste disposal site under the New York state or the federal Superfund statutes; (v) a permit or order requiring corrective action pursuant to the federal Resource Conservation and Recovery Act or its New York State counterpart, the Industrial Hazardous Waste Management System; or (vi) a NYSDEC environmental restoration project state assistance contract. These exemptions are quite specific and it is likely that most property owners that remove contaminated soil from their property in connection with construction-related activities could be subject to the Hazardous Waste Program fees.
Hazardous Waste Special Assessment Tax
Generators of hazardous waste are also required to file quarterly tax returns with the New York State Department of Taxation and Finance under Article 27 of the ECL, accompanied by payment of a hazardous waste special assessment. The amount of the assessment is based upon the tonnage of hazardous waste generated and the method of disposal, and can range from $27.00 per ton for disposal in a landfill to $2.00 per ton for on-site incineration, as specified by the statute. Separate fees are assessed against treatment, storage and disposal facilities. Failure to file a return and pay the required assessment will result in the issuance of additional penalties and interest upon the unpaid amount. Persons who believe that they have been improperly assessed can request a conciliation conference with the Department of Taxation and Finance
Exemptions from payment of the hazardous waste special assessment tax are more limited than under the Hazardous Waste Fee Program. The exemptions include, but are not limited to, the retrieval or creation of hazardous waste disposed of under an order of or an agreement with NYSDEC under the State Superfund statute, the NYS Brownfield Cleanup Program, or an environmental restoration project. Further, the statue provides that there will be no special assessment imposed on the resource recovery, i.e. recycling, of any hazardous waste, which includes any method used to separate, process, modify, convert, treat or otherwise prepare hazardous waste so that the component materials or substances thereof may be beneficially used or reused, exclusive of usable energy. Because the exemptions for the Hazardous Waste Special Assessment Tax are more limited than under the Hazardous Waste Fee Program, more property owners will find themselves subject to the tax, even if they were not subject to the Hazardous Waste Program fees, including persons remediating historical petroleum spills on their property.