S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   1168
 
                        2021-2022 Regular Sessions
 
                           I N  A S S E M B L Y
 
                              January 7, 2021
                                ___________
 
 Introduced  by M. of A. PAULIN, BURDICK -- read once and referred to the
   Committee on Environmental Conservation
 
 AN ACT to amend the environmental conservation law and the tax  law,  in
   relation to establishing a carbon dioxide emissions price for electric
   generation  from carbon-based fuel and creating a carbon dioxide emis-
   sions fund

   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Legislative findings and declaration. The legislature here-
 by finds and declares that:
   1. As part of the 2020 state budget, the legislature passed the accel-
 erated  renewable  energy  growth  and  community benefit act to advance
 renewable energy siting and establish tools for  achieving  the  nation-
 leading  climate  change  goals  of the climate leadership and community
 protection act (CLCPA).
   2. a. The CLCPA passed by the legislature and signed by Governor Cuomo
 in 2019 codified into law the following requirements:
   i. 70% of electricity delivered in New York state must be derived from
 renewable resources by 2030;
   ii. 100% of the electricity consumed in New York state must be derived
 from zero-emissions resources by 2040;
   iii. 9,000 megawatts (MW) of offshore wind installed by 2035;
   iv. 6,000 MW of distributed solar energy resources installed by 2025;
   v. 3,000 MW of energy storage installed by 2030; and
   vi. Reducing building end-use energy consumption by 185 trillion Brit-
 ish thermal units by 2025.
   b. The CLCPA created a 22-member climate action council  to  establish
 an implementation plan for how the state will achieve these goals.
   3.  The  CLCPA  amended the environmental conservation law by adding a
 new section 75-0113 to establish a social cost  of  carbon  for  use  by
 state agencies.
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD02148-01-1

 A. 1168                             2
 
   4.  Entities  other  than  state agencies have been considering how to
 account for the value of carbon  dioxide  emissions  in  their  business
 plans and operations in light of the CLCPA and the accelerated renewable
 energy  growth and community benefit act. For example, the federally-de-
 signated electric bulk system operator in New York state has developed a
 proposal  to  introduce  a carbon pricing mechanism into the competitive
 wholesale electricity markets.  Encouraging  the  incorporation  of  the
 social cost of carbon established under the CLCPA into a carbon price by
 entities  beyond state agencies would facilitate programs to incorporate
 the social cost of carbon in energy and  other  sectors  of  New  York's
 economy that emit greenhouse gases.
   §  2.  Subdivision 1 of section 75-0113 of the environmental conserva-
 tion law, as added by chapter 106 of the laws of  2019,  is  amended  to
 read as follows:
   1.  No  later  than one year after the effective date of this article,
 the department, in consultation with the New York state energy  research
 and  development  authority, shall establish a social cost of carbon for
 use by state agencies, AND SHALL BE TAKEN INTO ACCOUNT IN CARBON PRICING
 MECHANISM PROGRAMS IN NEW YORK STATE, expressed in terms of dollars  per
 ton of carbon dioxide equivalent.
   §  3.  The  tax law is amended by adding a new article 12-B to read as
 follows:
                               ARTICLE 12-B
 CARBON DIOXIDE EMISSIONS PRICE FOR ELECTRIC GENERATION FROM CARBON-BASED
                                   FUEL
 SECTION 289-G. DEFINITIONS.
          289-H. DETERMINATION AND ESTABLISHMENT OF CARBON DIOXIDE  EMIS-
                   SIONS PRICE.
          289-I. CARBON DIOXIDE EMISSIONS FUND.
          289-J. REGULATIONS.
   §  289-G. DEFINITIONS. FOR THE PURPOSES OF THIS ARTICLE, THE FOLLOWING
 TERMS SHALL HAVE THE FOLLOWING MEANINGS:
   1. "CARBON-BASED FUEL" MEANS COAL,  NATURAL  GAS,  RENEWABLE  BIOMASS,
 PETROLEUM  PRODUCTS,  AND  ANY  OTHER PRODUCT THAT EMITS CARBON DIOXIDE,
 METHANE, NITROUS OXIDE, OR OTHER GREENHOUSE GASES  WHEN  COMBUSTED,  AND
 THAT IS USED FOR FUEL FOR THE PURPOSES OF PRODUCING ELECTRIC ENERGY.
   2. "CARBON-GENERATED ELECTRICITY" MEANS ELECTRIC ENERGY PRODUCED USING
 A CARBON-BASED FUEL.
   3.  "CARBON  DIOXIDE  EQUIVALENT" MEANS A UNIT OF MEASURE DENOTING THE
 AMOUNT OF EMISSIONS FROM A GREENHOUSE GAS, EXPRESSED AS  THE  AMOUNT  OF
 CARBON DIOXIDE BY WEIGHT THAT PRODUCES THE SAME GLOBAL WARMING IMPACT.
   4.  "CARBON  DIOXIDE  EMISSIONS PRICE" MEANS A PRICE THAT INCORPORATES
 THE SOCIAL COST OF CARBON ESTABLISHED BY THE DEPARTMENT OF ENVIRONMENTAL
 CONSERVATION PURSUANT TO SUBDIVISION ONE OF SECTION 75-0113 OF THE ENVI-
 RONMENTAL CONSERVATION LAW ON EACH TON  OF  CARBON  DIOXIDE  EQUIVALENCY
 EMITTED IN THE PRODUCTION OF ELECTRIC ENERGY.
   §  289-H.  DETERMINATION AND ESTABLISHMENT OF CARBON DIOXIDE EMISSIONS
 PRICE.  1. THE DEPARTMENT OF ENVIRONMENTAL CONSERVATION SHALL  DETERMINE
 AND ESTABLISH A CARBON DIOXIDE EMISSIONS PRICE.  THE DEPARTMENT OF ENVI-
 RONMENTAL  CONSERVATION  MAY  ALSO  OBTAIN INFORMATION NECESSARY FOR THE
 DETERMINATION OF THE PRICE FROM OTHER STATE OR FEDERAL AGENCIES  OR  THE
 FEDERALLY DESIGNATED ELECTRIC BULK SYSTEM OPERATOR.
   2.  UPON  DETERMINING  AND  ESTABLISHING  THE CARBON DIOXIDE EMISSIONS
 PRICE, THE DEPARTMENT OF ENVIRONMENTAL CONSERVATION SHALL TRANSMIT  SUCH
 PRICE  TO  THE FEDERALLY DESIGNATED ELECTRIC BULK SYSTEM OPERATOR IN NEW
 YORK STATE FOR USE IN ITS PROPOSAL TO INTRODUCE A CARBON  PRICING  MECH-

 A. 1168                             3
 
 ANISM  INTO COMPETITIVE WHOLESALE ELECTRICITY MARKETS, THEREBY CONVEYING
 SUPPORT BY THE STATE OF NEW YORK FOR THE BULK SYSTEM OPERATOR TO  FINAL-
 IZE  THE  CARBON  PRICING  MECHANISM AND SUBMIT IT TO THE FEDERAL ENERGY
 REGULATORY  COMMISSION  FOR  APPROVAL.  THE  AMOUNT  OF CHARGES PAID FOR
 ALLOWANCES AUCTIONED UNDER THE REGIONAL GREENHOUSE GAS INITIATIVE  SHALL
 BE DEDUCTED FROM THE PRICE DETERMINED PURSUANT TO THIS SECTION.
   3. THE DEPARTMENT OF ENVIRONMENTAL CONSERVATION SHALL BE AUTHORIZED TO
 DEVELOP  ANY RULE OR REGULATION NECESSARY TO DETERMINE AND ESTABLISH THE
 CARBON DIOXIDE EMISSIONS PRICE AUTHORIZED UNDER THIS ARTICLE.
   4. NOTWITHSTANDING ANY GENERAL OR SPECIAL LAW  TO  THE  CONTRARY,  THE
 PRICE  AUTHORIZED  UNDER THIS SECTION SHALL NOT BE PAID BY ANY GENERATOR
 OF CARBON-BASED ELECTRICITY IF SUCH REQUIREMENT IS SUPERSEDED BY FEDERAL
 LAW OR REGULATION.
   § 289-I. CARBON DIOXIDE EMISSIONS FUND.  1. THE DEPARTMENT, IN COORDI-
 NATION WITH THE DEPARTMENT OF ENVIRONMENTAL CONSERVATION,  SHALL  ESTAB-
 LISH  THE  CARBON DIOXIDE EMISSIONS FUND, AND THE DEPARTMENT OF ENVIRON-
 MENTAL CONSERVATION'S OFFICE OF CLIMATE CHANGE SHALL SERVE AS THE FUND'S
 ADMINISTRATOR. THE DEPARTMENT OF ENVIRONMENTAL CONSERVATION SHALL DEPOS-
 IT INTO SUCH FUND ALL REVENUES TRANSFERRED TO IT BY LOAD  SERVING  ENTI-
 TIES,  TO THE EXTENT THAT SUCH REVENUES ARE PROVIDED TO SUCH ENTITIES BY
 THE FEDERALLY DESIGNATED ELECTRIC BULK SYSTEM OPERATOR IN NEW YORK STATE
 IN ACCORDANCE WITH THE IMPLEMENTATION OF  SECTION  TWO  HUNDRED  EIGHTY-
 NINE-H  OF  THIS  ARTICLE.  NO SUCH REVENUES SHALL FUND GOVERNMENT OPER-
 ATIONS OF NEW YORK STATE, OTHER THAN TO PAY FOR  REASONABLE  ADMINISTRA-
 TIVE COSTS AS PROVIDED UNDER SUBDIVISION TWO OF THIS SECTION.
   2.  THE OFFICE OF CLIMATE CHANGE SHALL DISTRIBUTE SIXTY PERCENT OF ALL
 CARBON DIOXIDE EMISSIONS PRICE REVENUES AS FOLLOWS:  (A)  FORTY  PERCENT
 SHALL  BE RETURNED TO VERY LOW TO MODERATE INCOME RESIDENTS OF THE STATE
 IN THE FORM OF TAX CREDITS IN ORDER TO OFFSET THE  COST  OF  THE  CARBON
 DIOXIDE  EMISSIONS  PRICE.   THE AMOUNT OF SUCH CREDIT SHALL BE BASED ON
 ESTIMATES AND AVERAGES OF EXPENSE AND CONSUMPTION TRENDS FOR VERY LOW TO
 MODERATE INCOME RESIDENTS DETERMINED BY THE OFFICE OF CLIMATE CHANGE  IN
 CONJUNCTION  WITH  THE  DEPARTMENT  OF PUBLIC SERVICE IN ACCORDANCE WITH
 REGULATIONS PURSUANT TO SECTION TWO HUNDRED EIGHTY-NINE-J OF THIS  ARTI-
 CLE.   SUCH CREDIT SHALL BE PROGRESSIVELY ISSUED TO VERY LOW TO MODERATE
 INCOME RESIDENTS. SUCH INCOME CATEGORIES SHALL MEAN  THOSE  WITH  INCOME
 BELOW  FIFTY PERCENT FOR VERY LOW INCOME RESIDENTS, INCOME BETWEEN FIFTY
 AND EIGHTY PERCENT FOR LOW INCOME RESIDENTS, AND INCOME BETWEEN  EIGHTY-
 ONE  AND  ONE  HUNDRED FIFTEEN PERCENT FOR MODERATE INCOME RESIDENTS, OF
 THE AREA MEDIAN INCOME AS DETERMINED BY THE DEPARTMENT  OF  HOUSING  AND
 URBAN  DEVELOPMENT;  AND (B) TWENTY PERCENT SHALL BE USED TO SUPPORT THE
 TRANSITION TO RENEWABLE ENERGY AND IMPROVE CLIMATE CHANGE ADAPTATION  IN
 DISADVANTAGED  COMMUNITIES  AS  DEFINED  IN  SUBDIVISION FIVE OF SECTION
 75-0101 OF THE ENVIRONMENTAL CONSERVATION LAW, INCLUDING BUT NOT LIMITED
 TO PAYMENTS AND SUBSIDIES FOR RENEWABLE ENERGY, ENERGY CONSERVATION  AND
 EFFICIENCY  MEASURES, IMPROVEMENTS IN INFRASTRUCTURE, PROTECTION OF LOW-
 LYING AREAS INCLUDING COASTLINES, AND  EMERGENCY  RESPONSES  TO  EXTREME
 WEATHER EVENTS.
   3.  THE  OFFICE OF CLIMATE CHANGE SHALL DISTRIBUTE THE REMAINING FORTY
 PERCENT OF REVENUES OF SUCH FUND  TO  SUPPORT  MASS  TRANSIT  TO  REDUCE
 CARBON EMISSIONS.
   §  289-J.  REGULATIONS.    THE  DEPARTMENT,  IN  COORDINATION WITH THE
 DEPARTMENT OF ENVIRONMENTAL CONSERVATION AND THE  DEPARTMENT  OF  PUBLIC
 SERVICE,  SHALL PROMULGATE SUCH RULES AND REGULATIONS AS SHALL BE NECES-
 SARY TO IMPLEMENT THE PROVISIONS OF THIS ARTICLE.
   § 4. This act shall take effect immediately.