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Francis Root Oil Co. - Interim Decision and Order, January 3, 1994

Interim Decision and Order, January 3, 1994

STATE OF NEW YORK : DEPARTMENT OF ENVIRONMENTAL CONSERVATION

In the Matter
of
Alleged Violations of Environmental Conservation Law ("ECL")
Article 23 and Title 6 of the Official Compilation of Codes, Rules and Regulations of
the State of New York ("6 NYCRR") Part 551 by

FRANCIS ROOT OIL CO.

Respondent

INTERIM DECISION

AND

ORDER

DEC File No.

D9-A113-93-08

WHEREAS:

  1. This proceeding was brought by a Motion for Summary Order pursuant to 6 NYCRR 622.10 before Administrative Law Judge ("ALJ") Robert P. O'Connor.
  2. The attached Summary Report and Rulings prepared by ALJ O'Connor are adopted as my Interim Decision in this matter.
  3. As stated in the Summary Report and Rulings, there are no facts in dispute relating to Respondent's liability on the charges of failure to file an amended Organizational Report for a change in mailing address and of failure to fully complete the required items of information on the Annual Well Report forms submitted for the reporting years 1990, 1991 and 1992. Respondent violated ECL 23-0305.8(f) and 6 NYCRR 551.1 and 551.2 in its failure to carry out these actions.
  4. There are triable issues of fact relating to the timeliness of Respondent's submission of the Annual Well Reports for 1990, 1991 and 1992. Accordingly, the record of this proceeding should be further developed with respect to Respondeant's liability on the charge of failure to timely submit the Annual Well Reports for 1990, 1991 and 1992.
  5. There are also triable issues of fact relating to the considerations which affect penalties and relief which should be granted in this matter.
  6. The existence of a triable issue of fact relating to penalties and relief does not bar the granting of a Summary Order when issues concerning relief are still outstanding [6 NYCRR 622.10(e)].

NOW, THEREFORE, having considered this matter, it is ORDERED that:

  1. Respondent is found to have violated ECL 23-0305.8(f) and 6 NYCRR 551.1 and 551.2 for failure to file an amended Organizational Report for a change in mailing address and for failure to fully complete the required items of information on the Annual Well Report forms submitted for the reporting years 1990, 1991 and 1992. Summary judgement is granted on these two charges.
  2. This proceeding is remanded to ALJ O'Connor to conduct an administrative enforcement hearing on the allegations that Respondent violated ECL 23-0305.8(f) and 6 NYCRR 551.2(b) for failure to timely submit Annual Well Reports for reporting years 1990, 1991 and 1992; and on the appropriate civil penalty and/or other relief to be assessed Respondent for all violations found.

NEW YORK STATE DEPARTMENT OF
ENVIRONMENTAL CONSERVATION
THOMAS C. JORLING, COMMISSIONER

/s/

Dated: Albany, New York
January 3, 1994

To: Francis Root Oil Co.
1441 White Hill Road
Bolivar, New York 14715

Francis R. Root and
Beverly J. Root, co-owners
Francis Root Oil Co.
1441 White Hill Road
Bolivar, New York 14715

G. William Gunner, Esq.
Embser & Woltag
164 North Main Street
Wellsville, New York 14895-1152

Carl G. Dworkin, Esq.
Division of Environmental Enforcement
Room 609
New York State Department of
Environmental Conservation
50 Wolf Road
Albany, New York 12233-5500

Gregory H. Sovas
Director, Division of Mineral Resources
Room 202
New York State Department of
Environmental Conservation
50 Wolf Road
Albany, New York 12233-6500

STATE OF NEW YORK : DEPARTMENT OF ENVIRONMENTAL CONSERVATION

In the Matter
of
Alleged Violations of Environmental Conservation Law ("ECL")
Article 23 and Title 6 of the Official Compilation of Codes, Rules and Regulations of
the State of New York ("6 NYCRR") Part 551 by

SUMMARY REPORT AND RULINGS

OF THE ADMINISTRATIVE LAW JUDGE

DEC File No.

D9-A113-93-08

FRANCIS ROOT OIL CO.

Respondent

PROCEEDINGS

On August 27, 1993, the New York State Department of Environmental Conservation (the "Department" or "DEC"), Division of Environmental Enforcement, 50 Wolf Road, Albany, New York 12233-5500, personally served a Notice of Motion for Summary Order and Notice of Hearing upon Francis R. Root, Co-Owner, Francis Root Oil Co. ("Respondent"), 1441 White Hill Road, Bolivar, New York 14715. The Motion was answerable not later than September 16, 1993.

The Department Staff's Notices were filed with the Department's Office of Hearings on August 30, 1993. The same date, Administrative Law Judge ("ALJ") Robert P. O'Connor was assigned to preside over this matter.

To support its Motion, the Department Staff included an affidavit, dated August 25, 1993, by Richard A. Arieda, Mineral Resources Specialist III in the Bureau of Oil and Gas Regulation of the Division of Mineral Resources in the Department's Central Office in Albany, New York. Included with Mr. Arieda's affidavit are labeled Exhibits "A" through "I" providing supporting documentation for the Staff's allegations. The Department Staff is represented in this matter by Carl G. Dworkin, Esq., Principal Administrative Litigator, Division of Environmental Enforcement, in the Department's Central Office in Albany, New York.

The Respondent filed an Answer with the Department on September 10, 1993. Such Answer was received in the Department's Office of Hearings on September 13, 1993.

Respondent's answering papers consist solely of a four page response by Respondent's attorneys, Embser & Woltag, 164 North Main Street, Wellsville, New York 14895-1152 (G. William Gunner, Esq., of Counsel). The attorney's affirmation concludes that Respondent complied with the filing requirements for Organizational Reports and Annual Well Reports. The bases for these conclusions are: Respondent's original Organizational Report, a copy of which is appended to the Department Staff's Motion papers as Exhibit "A" and Respondent's June 4, 1993 letter to the Department, a copy of which is appended to the Staff's papers as Exhibit "H". Attached to the four page answer is a one paragraph affidavit, dated September 3, 1993, by Francis R. Root, as an owner of Francis Root Oil Co., averring the truthfulness of the information in the answer, based upon his personal knowledge and an examination of the Respondent's books and records.

Position of the Department Staff

The Department Staff maintains that Environmental Conservation Law ("ECL") 23-0305.8(f) requires every person who, among other activities, produces and/or purchases oil or gas in New York State to keep and maintain complete and accurate records of the quantities thereof and to file with the Department reports concerning production and purchases. The Staff also notes the specific requirements for reporting organizational information and production and purchase information to the Department are found in Title 6 of the Official Compilation of Codes, Rules and Regulations of the State of New York ("6 NYCRR") 551.1 and 551.2, respectively.

The Staff further states the Respondent is the registered owner of some 39 unplugged wells in Allegany (County). The Staff alleges that Respondent failed to comply with regulations which require the filing of an Organizational Report on an annual basis.

The Staff also claims Respondent was notified of the requirement that it had to file Annual Well Reports for the reporting years 1990, 1991 and 1992 on repeated occasions during the years 1991, 1992 and 1993, respectively. The Department Staff states it received Annual Well Reports from Respondent for these three reporting years on June 8, 1993. The Department Staff alleges that these three reports were not filed on a timely basis and that Respondent did not completely fill out the required reporting information when the Annual Report Forms for 1990, 1991 and 1992 were finally submitted.

Purchasers of crude oil are also required to file reports with the Department on an annual basis. The Department received reports from firms who purchased crude oil from Respondent during the reporting years 1990, 1991 and 1992. The Department Staff noted that purchase report information from these crude oil purchasers in some instances did not match the information reported on the annual well reports submitted by the Respondent.

The Department Staff seeks the issuance of a Summary Order which finds no hearing is necessary to determine that Respondent violated ECL 23-0305.8(f) and 6 NYCRR 551.1 and 551.2, because no facts are in dispute; which finds that Respondent did, in fact, violate ECL 23-0305.8(f) and 6 NYCRR 551.1 and 551.2; which finds the relief sought may be granted as a matter of law; which imposes upon Respondent a civil penalty in the amount of fifteen thousand dollars ($15,000); and which grants such other and further relief as the Commissioner may deem to be appropriate and just.

Position of Respondent

In its Answer, Respondent claims that, in all respects, it complied with the requirements of the ECL and regulations in 6 NYCRR Part 551. Particularly, Respondent claims it filed an Organizational Report with the Department and that the information in the report has not changed since it was so filed. Respondent also claims it filed Annual Well Reports with the Department for the years in question, i.e. - 1990, 1991 and 1992, except that the 1992 report was two days late. Respondent contends a hearing is necessary to determine the allegations of the Notice of Motion.

Respondent demands judgment dismissing the Department's Complaint and Notice of Motion, awarding to Respondent counsel fees and expenses pursuant to Article 86 of the Civil Practice Law and Rules, together with the costs and disbursements of the instant action and such other and further relief as to the Court may seem just and equitable.

INTRODUCTION

In the instant case, there are three components to the Department Staff's charges: (1) The Staff has alleged that Respondent failed to update its Organizational Report on an annual basis; (2) The Staff has alleged that Respondent failed to completely fill out the required information on the Annual Well Report forms which it submitted for reporting years 1990, 1991 and 1992; and (3) The Staff has alleged that Respondent failed to submit the Annual Well Reports for reporting years 1990, 1991 and 1992 on a timely basis.

Pursuant to 6 NYCRR 622.10(c), "The motion for summary order shall be granted if, upon all the papers and proof submitted, the cause of action or defense shall be established sufficiently to warrant the granting of summary judgment under the CPLR in favor of any party."

As detailed in the following sections of this Report, Respondent has not provided any evidence which could defeat the Staff's Motion regarding the first two causes of action. There are no facts in dispute, and there is no justification to convene a hearing on any issue of fact relating to the first two charges. Therefore, it is appropriate to partially grant the Motion for Summary Order and to prepare a summary report with Findings of Fact, Conclusions and Recommendations regarding these causes of action.

Section 622.10(d) states, "The motion shall be denied if any party shall show facts sufficient to require a hearing of any issue of fact." Under such circumstances, the hearing officer (ALJ) shall "ascertain what facts are not in dispute or are uncontrovertible" and shall "make an order specifying such facts, and they shall be deemed established for all purposes in the action. Upon such denial and order, the moving and answering papers shall be deemed the complaint and answer, respectively," and a hearing regarding the disputed facts shall proceed in accordance with 6 NYCRR Part 622.

With respect to the charge related to the timeliness of Respondent's filing of the Annual Well Reports in question, I find that disputed issues of fact do exist between the proof which the Staff submitted with its motion papers and the affidavit provided by Respondent in opposition to the Staff's Motion.

In the instant case, then, it is appropriate to deny that portion of the Staff's Motion relating to this charge and to order that a hearing be convened to adjudicate the disputed issues of fact, i.e. - only those facts related to the timely/untimely filing of Respondent's Annual Well Reports for reporting years 1990, 1991 and 1992.

FINDINGS OF FACT

(NOTE: Disputed Facts are marked with an asterisk ("*") and will be the subject of an administrative enforcement hearing. The remaining Facts are not in dispute or are uncontrovertible and are therefore established for all purposes in the hearing.)

1. The Department's regulations in 6 NYCRR 551.1(a) require that each person who is a principal in an activity which produces oil and gas in the state must file an organizational report with the Department. The report must be on the form which the Department prescribes.

2. The Department's regulations in 6 NYCRR 551.1(b) require that any person who must file an organizational report must also file a new organizational report within 30 calendar days of the occurrence of the change of any fact stated on their most recent organizational report. Additionally, 6 NYCRR 551.1(c) provides that "Any corporation listed on the New York or American Stock Exchange must update its organizational report annually no later than March 31st."

3. On February 23, 1979, Respondent Francis Root Oil Co. filed an Organizational Report with the Department. The Organizational Report was signed by Beverly J. Root, as co-owner, and listed Francis R. Root and Beverly J. Root as the principal officers or partners. The report listed the company as an individual organization and noted that all correspondence should be sent to Francis R. Root, R.D.#1, Bolivar, New York 14715. There is no indication in the record of this matter that the Respondent company is listed on either the New York or American Stock Exchange.

4. Respondent's co-owner, Beverly J. Root, in a June 4, 1993 letter to the Department Staff, acknowledged that Respondent's Bolivar, New York mailing address had changed in 1987 to 1441 White Hill Road vice R.D.#1. Ms. Root indicated the address change had been submitted on the Annual Well Report for 1987. She did not mention any submission of a new or amended Organizational Report to reflect the address change information. The only Organizational Report for the Respondent in the Department's files is the report submitted in 1979 by Respondent. Ms. Root acknowledged in the June 4, 1993 letter that she still received mail addressed to the R.D.#1 address, because "its a good thing the postal service know us."

5. Respondent is the registered owner of oil wells in New York State. The Department's records show 39 unplugged wells in Allegany County, New York as being registered to the Respondent.

6. ECL 23-0305.8(f) provides that every person who, among other activities, produces, sells or purchases oil and gas in the State shall keep and maintain complete and accurate records of the quantities thereof and shall file with the Department reports concerning such production, sales or purchases on a form provided or approved by the Department.

7. The Department's regulations in 6 NYCRR 551.2(a) require that, among others, producers, sellers and purchasers of oil and gas produced in New York State must keep and maintain complete and accurate records of the amounts thereof. Additionally, 6 NYCRR 551.2(b) requires that each person who first produces, sells or purchases oil and gas produced in the State must file with the Department on a form the Department prescribes a statement of the oil and gas produced, sold or purchased. This information must be compiled on a calendar year basis and must be filed no later than March 31st next following the close of the calendar year, unless the Department requires otherwise.

8. As part of a bulk mailing using "mail merge" capabilities, the Department sent letters notifying and then reminding Respondent of the annual reporting requirements for reporting year 1990 on January 3, 1991, March 25, 1991 and May 14, 1991, respectively.

*9. The Department did not receive Respondent's Annual Well Report for 1990 for any of its 39 wells until June 8, 1993.

10. As part of a bulk mailing using "mail merge" capabilities, the Department sent letters notifying and then reminding Respondent of the annual reporting requirements for reporting year 1991 on January 2, 1992, March 10, 1992 and May 21, 1992, respectively.

*11. The Department did not receive Respondent's Annual Well Report for 1991 for any of its 39 wells until June 8, 1993.

12. As part of a bulk mailing using "mail merge" capabilities, the Department sent letters notifying and then reminding Respondent of the annual reporting requirements for reporting year 1992 on January 4, 1993 and May 17, 1993, respectively.

*13. The Department did not receive Respondent's Annual Well Report for 1992 for any of its 39 wells until June 8, 1993.

14. On June 4, 1993, Respondent received a May 26, 1993 Cease and Desist Directive from the Department which advised Respondent of its failure to submit the required Annual Well Reports for production years 1990, 1991 and 1992. The U.S. Postal Service Domestic Return Receipt which accompanied the Cease and Desist Directive mailed to Respondent at its R.D.#1, Bolivar, New York address is signed "B.J. Root," date of delivery "6-4-93." The Directive also advised Respondent of the penalty provisions in the ECL for failure to comply with the statutory and regulatory mineral resources/oil and gas production reporting requirements. The Directive further directed Respondent to accurately complete and file its Annual Well Reports for the years 1990, 1991 and 1992.

15. Respondent submitted a letter and alleged copies of its own copies of Annual Well Reports for 1990, 1991 and 1992. Respondent's letter, bearing the above-noted date of June 4, 1993, is stamped as having been received in the Department's Bureau of Oil and Gas Regulation on June 7, 1993, while the Annual Well Report copies for 1990, 1991 and 1992 are stamped as having been received in the same Bureau on June 8, 1993.

*16. Respondent's June 4, 1993 letter states, "I have submitted these reports timley (sic), except for 1992 which I admit were 2 days late filling out and probably 3 days later accounting for the mail arriving in Albany, N.Y."

17. The Department's Annual Well Report form seeks certain specific information regarding each unplugged well for the reporting year. Detailed instructions for correctly filling out the Annual Well Report form are printed on the back of the form. For oil wells, the form requires, among other items of information, entries for: "well data" -- well name and number and API well identification number; "production/injection data" -- well type, months operation, oil buyer's tank number, production or injection of water and oil in barrels and of gas in multiples of one thousand cubic feet ("mcf"); and "tax assessment data" -- tax map and parcel number. The form also requires entries for "disposition of oil" -- purchaser, buyers tank number and barrels sold.

18. Respondent's Annual Well Reports for 1990, 1991 and 1992 list Quaker State Corporation and/or Witco Corporation, Kendall/Amalie Division as the purchasers of Respondent's oil well production for these three reporting years. The Annual Crude Oil Purchase Reports submitted to the Department by Quaker State Corporation and Witco Corporation, Kendall/Amalie Division list the quantities of crude oil which each of these corporations purchased from Respondent in reporting years 1990, 1991 and 1992.

19. Respondent's four page Annual Well Report for 1990, bearing the date March 17, 1991, lists 25 wells. The quantities of oil, reported by oil buyer's tank number, which Respondent reported as having produced and sold to Quaker State during 1990 do not match the quantities of oil which Quaker State reported, by its tank numbers, as having purchased from Respondent in 1990. In the instance of several wells, Respondent did not include the API Well Identification Number on the report. Respondent did not list the production of each individual well, but lumped groups of wells together with an aggregate production in number of barrels of oil. Respondent did not report the quantity of water and/or gas produced in any of the wells. Respondent did not include tax assessment data in the way of tax map and parcel number for any of the reported wells.

20. Respondent's five page Annual Well Report for 1991, bearing the date February 22, 1992, lists 36 wells. The quantities of oil, reported by oil buyer's tank number, which Respondent reported as having produced and sold to Quaker State during 1991 do not match the quantities of oil which Quaker State reported, by its tank numbers, as having purchased from Respondent in 1991. Respondent reported having produced and sold oil to Witco Corporation in 1991, but no evidence was presented by the Department Staff that Witco had purchased oil from Respondent in 1991. In the instance of several wells, Respondent did not include the API Well Identification Number on the report. Respondent did not list the production of each individual well, but lumped groups of wells together with an aggregate production in number of barrels of oil. Respondent did not report the quantity of water and/or gas produced in any of the wells. Respondent did not include tax assessment data in the way of tax map and parcel number for any of the reported wells.

21. Respondent's six page Annual Well Report for 1992, bearing the date April 2, 1993, lists 36 wells. In this instance, the quantities of oil, reported by oil buyer's tank number, which Respondent reported as having produced and sold to Witco during 1992 do exactly match the quantities of oil which Witco reported, by its tank numbers, as having purchased from Respondent in 1992. However, Quaker State reported also having purchased oil from Respondent in 1992, but Respondent did not report having produced and sold oil to Quaker State in 1992. In the instance of several wells, Respondent did not include the API Well Identification Number on the report. Respondent did not list the production of each individual well, but lumped groups of wells together with an aggregate production in number of barrels of oil. Respondent did not report the quantity of water and/or gas produced in any of the wells. Respondent did not include tax assessment data in the way of tax map and parcel number for any of the reported wells.

22. The New York State Real Property Tax Law, Section 595(1), requires that oil and gas producers in the State must "report annual production" and that "a true and accurate copy of the production report for the production year required to be filed with the department of environmental conservation must be provided" to the appropriate assessor. Section 595(5)(a) of this Law requires that by "April first of each year or as soon thereafter as possible," the Department of Environmental Conservation shall "provide to each county director of real property tax services a copy of each production report received by the department relating to production in that county in the applicable production year".

23. The Department of Environmental Conservation does not administer the Real Property Tax Law. However, to assure compliance with the above noted provisions of the Real Property Tax Law, the Department's Annual Well Report, DEC Form No. 85-15-4, in both versions 12/88 and 10/91, provides instructions to the well owner to file the original of the Annual Well Report with the Department and one copy each with the local tax assessor and with the County Coordinator of Real Property Taxes. The form instructions state that the Department will forward copies of the Annual Well Report to the State Division of Equalization and Assessment and to the State Public Service Commission.

24. On July 15, 1993, Robert M. Wilkins, Director of Real Property Tax Services for Allegany County, New York, notified the Department Staff by notarized letter that his office did not have any "oil and gas reports" from the Francis Root Oil Company for the years 1990, 1991 and 1992 for either the Town of Alma or any of the other towns in Allegany County.

CONCLUSIONS

1. Respondent's original Organizational Report was filed with the Department in 1979. Respondent's mailing address was listed then as R.D.#1, Bolivar, New York 14715. When Respondent's mailing address changed in 1987 to 1441 White Hill Road vice R.D.#1, Respondent was obligated to file a new Organizational Report with the Department. By not filing a new or amended Organizational Report with the Department to reflect a change in mailing address, Respondent was in violation of 6 NYCRR 551.1(b). This, however, cannot be considered a serious violation, particularly since Respondent has stated that the address change was submitted on the 1987 Annual Well Report. Moreover, Respondent has indicated it received mail from the Department, even though the Department Staff did not use Respondent's new mailing address after 1987.

2. Since Respondent company is not listed on the New York or American Stock Exchanges, there is no requirement in the ECL or 6 NYCRR Part 551 for Respondent to file an updated Organizational Report on an annual basis. Therefore, Respondent did not violate the ECL or 6 NYCRR by not filing an annual Organizational Report.

3. Following the Department Staff's June 4, 1993 service on the Respondent of a Cease and Desist Order, Respondent filed with the Department what Respondent terms copies of its copies of the 1990, 1991 and 1992 Annual Well Reports. These reports, when received by the Department on June 8, 1993, were defective and incomplete, lacking required information, such as the API Well Identification Number for various wells, the specific oil and water/gas production for each well reported, and tax assessment information for all of the wells listed. The back of the Department's Annual Well Report form, DEC Form No. 85-15-4, provides clear instructions about the required information and on how the reporting entity is to complete the form. Respondent failed to heed these instructions.

4. In several instances, the quantities of oil Respondent reported to have produced and sold to Quaker State and/or Witco during the three reporting years do not coincide with the quantities of oil which Quaker State and/or Witco reported as having purchased from Respondent. However, without any additional information having been provided by the Department Staff, there is no basis for knowing which is correct -- the quantities of oil reported as produced by Respondent or the quantities of oil reported as purchased by Quaker State and Witco, respectively. Therefore, this element of the Department Staff's proof cannot be properly evaluated.

5. In view of the evidence presented by the Department Staff, none of which has been rebutted by Respondent, I conclude that Respondent violated the provisions of ECL 23-0305.8(f) and 6 NYCRR 551.2(b) for failure to correctly fill out with complete information the Annual Well Reports for reporting years 1990, 1991 and 1992.

6. Evidence produced by the Department Staff in its attachments to the affidavit of Richard Arieda is sufficient to establish that the Staff repeatedly notified and reminded Respondent of its obligation to submit Annual Well Reports for the reporting years 1990, 1991 and 1992 on a timely basis. Such notifications were made by way of numerous letters from the Department's Division of Mineral Resources Staff to Respondent between the dates of January 3, 1991 and May 17, 1993, as detailed in Findings of Fact Nos. 8, 10 and 12, above.

7. The regulatory deadline for Annual Well Reports to be filed with the Department is March 31st next following the close of the calendar year for which the report is being made. Respondent's Annual Well Report forms for reporting years 1990, 1991 and 1992 were due to be filed not later than March 31st in 1991, 1992 and 1993, respectively. Respondent's Annual Well Reports for 1990, 1991 and 1992, respectively, bear the dates March 17, 1991, February 22, 1992 and April 2, 1993. Based only on a review of the forms bearing these dates, one might reasonably conclude that Respondent timely filed the requisite Annual Well Reports for 1990, 1991 and 1992, with the 1992 report being dated an inconsequential two days after the filing deadline. However, all three reports are date stamped as having been received by the Department on June 8, 1993.

8. Additionally, in order to comply with the filing instructions on the back of the Annual Well Report form, Respondent was required to file a copy of its 1990, 1991 and 1992 Annual Well Reports with the Allegany County Coordinator of Real Property Taxes. The Director of Real Property Tax Services for Allegany County, as of July 15, 1993, had not received any copies of Respondent's Annual Well Reports for 1990, 1991 and 1992. Thus, Respondent has not complied with the filing instructions for Annual Well Reports.

9. There are no provisions in the ECL or in 6 NYCRR for assessing any penalties against an oil producer who fails to file copies of the Annual Well Report with the local tax assessor and the County Coordinator of Real Property Taxes. Therefore, Respondent's failure to provide these copies to local government entities cannot be considered a violation of the ECL or 6 NYCRR. However, failure of Respondent to provide copies of the 1990, 1991 and 1992 Annual Well Reports to the Allegany County Director of Real Property Tax Services may also be indicative of a failure of Respondent to properly file these same reports with the Department Staff.

10. Respondent has stated that it mailed the Annual Well Reports to the Department on a timely basis, although it has not presented any documentation to support this claim. It is noted that Respondent did not submit any evidence on its own behalf, but relied solely on the documents which the Staff had appended to its motion papers. Although the weight of the evidence, as submitted by the Staff, seems to be in the Staff's favor, Respondent has raised a disputed issue of fact regarding the timely submission of its 1990, 1991 and 1992 Annual Well Reports.

Respondent should have the opportunity to cross-examine Staff witnesses regarding these disputed facts.

11. Therefore, regarding the timeliness of Respondent's 1990, 1991 and 1992 Annual Well Reports, on the basis of the evidence submitted to date, I cannot conclude that Respondent violated the provisions of ECL 23-00305.8(f) and 6 NYCRR 551.2(b). The disputed issue of fact regarding the timeliness of these submissions must be resolved at a hearing.

DISCUSSION

The Department's Motion, pursuant to Title 6 of the Official Compilation of Codes, Rules and Regulations of the State of New York ("6 NYCRR") 622.10, set forth the Department Staff's "material facts and other available evidence" regarding the Department Staff's allegations that the Respondent is in violation of Environmental Conservation Law ("ECL") Article 23 and 6 NYCRR 551.1 and 551.2. Such allegations are based upon the Department's records which indicate Respondent's failure to completely fill out and timely file with the Department the required Annual Well Reports for reporting years 1990, 1991 and 1992 and by its failure to file an updated Organizational Report.

Respondent has provided nothing to counter the Department Staff's charges that it did not file an amended Organizational Report to update its address or that it did not provide all the information required to complete the Annual Well Reports which it submitted for 1990, 1991 and 1992. Therefore, the Staff's Motion for Summary Order is partially granted, only with respect to these two charges.

ECL 71-1307 provides for the assessment of a civil penalty in the amount of $5,000 for violation of any provision of ECL Article 23, plus an additional $1,000 for each day during which such violation continues.

In the instant case, Respondent committed a minor violation of 6 NYCRR 551.1 by failure to update its Organizational Report when a change of mailing address occurred. Under the circumstances presented here, it would be inappropriate to assess a penalty for Respondent's failure to amend its Organizational Report. Respondent should, however, be required to file an amended Organizational Report with the Department.

Respondent also violated the provisions of ECL Article 23 and its implementing regulations in 6 NYCRR Part 551 by failure to provide complete information in its Annual Well Reports for reporting years 1990, 1991 and 1992. While some important information required on the Annual Well Report forms was omitted by Respondent on its 1990, 1991 and 1992 reports, the information of primary concern to the Department, i.e. - crude oil production information, was filed with the Department. It may be appropriate, however, to assess Respondent a civil penalty for failure to completely fill out the 1990, 1991 and 1992 Annual Well Reports. Part of any assessed penalty should be suspended on the condition that Respondent resubmit fully completed forms to the Department.

Respondent should, therefore, be provided the opportunity to file amended reports which include all the required information in accordance with the instructions on the back of the Annual Well Report form. If Respondent still fails to provide the required information within the period allotted, the remainder of the assessed penalty should become due and payable.

With regard to the charge of untimely filing the reports, this portion of the Staff's Motion is denied. Until the disputed issues of fact are examined at a hearing Respondent cannot be found to have violated either the ECL or 6 NYCRR for this cause of action, and it is premature to discuss penalties or relief of any other sort, except as noted in the previous three paragraphs. Therefore, any final determination on these matters must await the outcome of the hearing.

RECOMMENDATIONS

1. Pursuant to 6 NYCRR 622.10(c) and 622.13, this Report and Rulings are submitted to the Commissioner of Environmental Conservation for an interim determination. I recommend the Commissioner make a determination that Respondent violated ECL 23-0305.8(f) and 6 NYCRR 551.1 and 551.2 for failure to amend its Organizational Report upon a change of mailing address and for failure to completely fill in all the required information on its Annual Well Reports for 1990, 1991 and 1992. The Department Staff's Motion for Summary Order is partially granted for these two causes of action.

2. I recommend that no penalty be assessed for Respondent's failure to submit an amended Organizational Report, although Respondent should be ordered to file such an amended report.

3. I further recommend that for failure to completely fill out the required information on its Annual Well Reports for 1990, 1991 and 1992, any civil penalty ultimately assessed should have a payable portion and a suspended portion, pending resubmission of the completely and correctly filled out forms for these three years.

4. That portion of the Staff's Motion for Summary Order related to the timeliness of Respondent's submission of its Annual Well Reports for 1990, 1991 and 1992 is denied. I lastly recommend that this matter be remanded to me to conduct an administrative enforcement hearing on the disputed issues of fact regarding timeliness of the report submission and, as appropriate, to determine the amount of any civil penalty which should be imposed upon Respondent.

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