S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   8352
 
                        2021-2022 Regular Sessions
 
                           I N  A S S E M B L Y
 
                             October 20, 2021
                                ___________
 
 Introduced by M. of A. KELLES -- read once and referred to the Committee
   on Consumer Affairs and Protection
 
 AN ACT to amend the general business law, in relation to requiring fash-
   ion  retail  sellers  and  manufacturers to disclose environmental and
   social due diligence policies; and to amend the state finance law,  in
   relation to establishing a community benefit fund
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Short title. This act shall be known and may  be  cited  as
 the "Fashion sustainability and social accountability act".
   §  2. The general business law is amended by adding a new section 399-
 mm to read as follows:
   § 399-MM. FASHION SUSTAINABILITY AND SOCIAL ACCOUNTABILITY ACT.  1. AS
 USED IN THIS SECTION, THE FOLLOWING TERMS SHALL HAVE THE FOLLOWING MEAN-
 INGS:
   (A) "DOING BUSINESS IN THIS STATE" SHALL MEAN ACTIVELY ENGAGING IN ANY
 TRANSACTION FOR THE PURPOSE OF FINANCIAL OR PECUNIARY GAIN OR PROFIT.
   (B) "GROSS RECEIPTS" SHALL MEAN THE GROSS AMOUNTS REALIZED,  OTHERWISE
 KNOWN AS THE SUM OF MONEY AND THE FAIR MARKET VALUE OF OTHER PROPERTY OR
 SERVICES  RECEIVED, ON THE SALE OR EXCHANGE OF PROPERTY, THE PERFORMANCE
 OF SERVICES, OR THE USE OF PROPERTY OR CAPITAL, INCLUDING RENTS,  ROYAL-
 TIES,  INTEREST,  AND DIVIDENDS, IN A TRANSACTION THAT PRODUCES BUSINESS
 INCOME, IN WHICH THE INCOME, GAIN, OR LOSS IS RECOGNIZED,  OR  WOULD  BE
 RECOGNIZED  IF  THE  TRANSACTION  WERE  IN  THE UNITED STATES, UNDER THE
 INTERNAL REVENUE CODE, AS  APPLICABLE  FOR  PURPOSES  OF  THIS  SECTION.
 AMOUNTS  REALIZED  ON  THE  SALE  OR  EXCHANGE  OF PROPERTY SHALL NOT BE
 REDUCED BY THE COST OF GOODS SOLD OR THE BASIS OF PROPERTY  SOLD.  GROSS
 RECEIPTS,  EVEN  IF  BUSINESS  INCOME,  SHALL  NOT INCLUDE THE FOLLOWING
 ITEMS:

  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD11977-05-1
 A. 8352                             2
 
              

   (1) REPAYMENT, MATURITY, OR REDEMPTION OF THE  PRINCIPAL  OF  A  LOAN,
 BOND, MUTUAL FUND, CERTIFICATE OF DEPOSIT, OR SIMILAR MARKETABLE INSTRU-
 MENT;
   (2)  THE  PRINCIPAL  AMOUNT  RECEIVED  UNDER A REPURCHASE AGREEMENT OR
 OTHER TRANSACTION PROPERLY CHARACTERIZED AS A LOAN;
   (3) PROCEEDS FROM ISSUANCE OF THE TAXPAYER'S OWN STOCK OR FROM SALE OF
 TREASURY STOCK;
   (4) DAMAGES AND OTHER AMOUNTS RECEIVED AS THE RESULT OF LITIGATION;
   (5) PROPERTY ACQUIRED BY AN AGENT ON BEHALF OF ANOTHER;
   (6) TAX REFUNDS AND OTHER TAX BENEFIT RECOVERIES;
   (7) PENSION REVERSIONS;
   (8) CONTRIBUTIONS TO CAPITAL, EXCEPT FOR SALES OF SECURITIES BY  SECU-
 RITIES DEALERS;
   (9) INCOME FROM DISCHARGE OF INDEBTEDNESS;
   (10)  AMOUNTS REALIZED FROM EXCHANGES OF INVENTORY THAT ARE NOT RECOG-
 NIZED UNDER THE INTERNAL REVENUE CODE;
   (11) AMOUNTS RECEIVED FROM TRANSACTIONS IN INTANGIBLE ASSETS  HELD  IN
 CONNECTION  WITH  A TREASURY FUNCTION OF THE TAXPAYER'S UNITARY BUSINESS
 AND THE GROSS RECEIPTS AND OVERALL NET GAINS FROM THE MATURITY,  REDEMP-
 TION,  SALE,  EXCHANGE, OR OTHER DISPOSITION OF THOSE INTANGIBLE ASSETS;
 AND
   (12) AMOUNTS RECEIVED FROM HEDGING TRANSACTIONS  INVOLVING  INTANGIBLE
 ASSETS.  A  "HEDGING  TRANSACTION"  MEANS  A  TRANSACTION RELATED TO THE
 TAXPAYER'S TRADING FUNCTION INVOLVING FUTURES AND  OPTIONS  TRANSACTIONS
 FOR  THE  PURPOSE  OF  HEDGING PRICE RISK OF THE PRODUCTS OR COMMODITIES
 CONSUMED, PRODUCED, OR SOLD BY THE TAXPAYER.
   (C) "FASHION MANUFACTURER" SHALL MEAN A BUSINESS  ENTITY  WHICH  LISTS
 MANUFACTURING  AS  ITS  PRINCIPAL  BUSINESS ACTIVITY IN THE STATE OF NEW
 YORK, AS REPORTED ON THE ENTITY'S STATE BUSINESS TAX RETURN, AND  PRIMA-
 RILY MANUFACTURES ARTICLES OF WEARING APPAREL OR FOOTWEAR.
   (D)  "FASHION  RETAIL SELLER" SHALL MEAN A BUSINESS ENTITY WHICH LISTS
 RETAIL TRADE AS ITS PRINCIPAL BUSINESS ACTIVITY  IN  THE  STATE  OF  NEW
 YORK,  AS REPORTED ON THE ENTITY'S STATE BUSINESS TAX RETURN, AND PRIMA-
 RILY SELLS ARTICLES OF WEARING APPAREL OR FOOTWEAR.
   (E) "ARTICLE OF WEARING APPAREL" SHALL MEAN ANY COSTUME OR ARTICLE  OF
 CLOTHING WORN OR INTENDED TO BE WORN BY INDIVIDUALS.
   (F)  "FOOTWEAR" SHALL MEAN ANY COVERING WORN OR INTENDED TO BE WORN ON
 THE FOOT.
   (G) "DUE DILIGENCE" SHALL MEAN THE PROCESS COMPANIES SHOULD CARRY  OUT
 TO  IDENTIFY,  PREVENT, MITIGATE AND ACCOUNT FOR HOW THEY ADDRESS ACTUAL
 AND POTENTIAL ADVERSE IMPACTS IN  THEIR  OWN  OPERATIONS,  THEIR  SUPPLY
 CHAIN  AND OTHER BUSINESS RELATIONSHIPS, AS RECOMMENDED IN THE ORGANISA-
 TION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT GUIDELINES  FOR  MULTINA-
 TIONAL  ENTERPRISES,  THE  ORGANISATION  FOR  ECONOMIC  CO-OPERATION AND
 DEVELOPMENT DUE DILIGENCE GUIDANCE FOR RESPONSIBLE BUSINESS CONDUCT  AND
 UNITED NATIONS GUIDING PRINCIPLES FOR BUSINESS AND HUMAN RIGHTS.
   2. EVERY FASHION RETAIL SELLER AND FASHION MANUFACTURER DOING BUSINESS
 IN  THE STATE AND HAVING ANNUAL WORLDWIDE GROSS RECEIPTS THAT EXCEED ONE
 HUNDRED MILLION DOLLARS SHALL DISCLOSE, AS SET FORTH IN SUBDIVISION FOUR
 OF THIS SECTION, ITS ENVIRONMENTAL AND SOCIAL  DUE  DILIGENCE  POLICIES,
 PROCESSES  AND OUTCOMES, INCLUDING SIGNIFICANT REAL OR POTENTIAL ADVERSE
 ENVIRONMENTAL AND SOCIAL IMPACTS AND DISCLOSE TARGETS FOR PREVENTION AND
 IMPROVEMENT.
   3. THE DISCLOSURE DESCRIBED IN SUBDIVISION TWO OF THIS  SECTION  SHALL
 BE  POSTED  ON  THE  FASHION  RETAIL  SELLER'S OR FASHION MANUFACTURER'S
 WEBSITE WITH A CLEAR AND EASILY UNDERSTOOD LINK TO THE REQUIRED INFORMA-
 A. 8352                             3
 
 TION PLACED ON SUCH FASHION RETAIL SELLER'S  OR  FASHION  MANUFACTURER'S
 HOMEPAGE  WITHIN  TWELVE MONTHS OF THE ENACTMENT OF SUCH POLICIES, PROC-
 ESSES AND OUTCOMES, EXCEPT AS OTHERWISE PROVIDED. IN THE EVENT THE FASH-
 ION  RETAIL  SELLER  OR  FASHION  MANUFACTURER DOES NOT HAVE AN INTERNET
 WEBSITE, CONSUMERS SHALL BE PROVIDED A WRITTEN DISCLOSURE WITHIN  THIRTY
 DAYS OF RECEIVING A WRITTEN REQUEST FOR THE DISCLOSURE FROM A CONSUMER.
   4. THE DISCLOSURE REQUIRED PURSUANT TO SUBDIVISION TWO OF THIS SECTION
 SHALL INCLUDE, AT A MINIMUM:
   (A) SUPPLY CHAIN MAPPING AND DISCLOSURE, INCLUDING:
   (I)  TAKING  A  RISK-BASED  APPROACH,  USE  GOOD  FAITH EFFORTS TO MAP
 SUPPLIERS ACROSS ALL TIERS OF PRODUCTION, FROM  RAW  MATERIAL  TO  FINAL
 PRODUCTION. A MINIMUM OF FIFTY PERCENT OF SUPPLIERS BY VOLUME ACROSS ALL
 TIERS OF PRODUCTION SHALL BE MAPPED; AND
   (II)  USING  GOOD  FAITH  EFFORTS  TO MAP THE SUPPLIERS AND ASSOCIATED
 SUPPLY CHAINS RELEVANT TO THE PRIORITIZED RISK, AND OBTAIN AND  DISCLOSE
 THE NAMES OF PRIORITIZED SUPPLIERS.
   (B)  IMPACT AND DUE DILIGENCE DISCLOSURE, INCLUDING A SOCIAL AND ENVI-
 RONMENTAL SUSTAINABILITY REPORT, TO INCLUDE EXTERNALLY RELEVANT INFORMA-
 TION ON DUE DILIGENCE POLICIES, PROCESSES AND  ACTIVITIES  CONDUCTED  TO
 IDENTIFY,  PREVENT, MITIGATE, AND ACCOUNT FOR POTENTIAL ADVERSE IMPACTS,
 INCLUDING THE FINDINGS AND OUTCOMES OF  THOSE  ACTIVITIES.  SUCH  REPORT
 SHALL  INCLUDE,  IN  LINE  WITH THE UNITED NATIONS GUIDING PRINCIPLES ON
 BUSINESS AND HUMAN RIGHTS, THE INTERNATIONAL LABOR ORGANIZATION DECLARA-
 TION ON FUNDAMENTAL PRINCIPLES AND RIGHTS AT WORK, THE ORGANISATION  FOR
 ECONOMIC  CO-OPERATION  AND  DEVELOPMENT  GUIDELINES  FOR  MULTINATIONAL
 ENTERPRISES AND THE ORGANISATION FOR ECONOMIC CO-OPERATION AND  DEVELOP-
 MENT DUE DILIGENCE GUIDANCE FOR RESPONSIBLE BUSINESS CONDUCT:
   (I)  A  LINK  ON THE FASHION RETAIL SELLER'S OR FASHION MANUFACTURER'S
 WEBSITE TO RELEVANT POLICIES ON RESPONSIBLE BUSINESS CONDUCT;
   (II) INFORMATION ON  MEASURES  TAKEN  TO  EMBED  RESPONSIBLE  BUSINESS
 CONDUCT INTO POLICIES AND MANAGEMENT SYSTEMS;
   (III) THE FASHION RETAIL SELLER'S OR FASHION MANUFACTURER'S IDENTIFIED
 AREAS  OF  SIGNIFICANT  RISKS  IN THE CONTEXTS OF ITS OWN ACTIVITIES AND
 BUSINESS RELATIONSHIPS SUCH AS SUPPLY CHAINS;
   (IV) THE SIGNIFICANT ADVERSE IMPACTS ON RISKS IDENTIFIED,  PRIORITIZED
 AND ASSESSED IN THE CONTEXT OF ITS OWN ACTIVITIES AND BUSINESS RELATION-
 SHIPS SUCH AS SUPPLY CHAINS;
   (V) THE PRIORITIZATION CRITERIA;
   (VI)  THE  ACTIONS  TAKEN  TO PREVENT OR MITIGATE THOSE RISKS, SUCH AS
 CORRECTIVE ACTION PLANS, TO BE CITED WHERE  AVAILABLE,  INCLUDING  ESTI-
 MATED  TIMELINES,  TARGETS  AND  BENCHMARKS  FOR  IMPROVEMENT  AND THEIR
 OUTCOMES;
   (VII) MEASURES TO TRACK IMPLEMENTATION AND RESULTS; AND
   (VIII) THE FASHION RETAIL SELLER'S OR FASHION MANUFACTURER'S PROVISION
 OF OR CO-OPERATION IN ANY REMEDIATION.
   (C) IMPACT DISCLOSURE ON PRIORITIZED ADVERSE ENVIRONMENTAL AND  SOCIAL
 IMPACTS  WITHIN  EIGHTEEN  MONTHS AFTER ENACTMENT OF THE POLICIES, PROC-
 ESSES, AND OUTCOMES, INCLUDING:
   (I) A QUANTITATIVE BASELINE AND REDUCTION TARGETS ON ENERGY AND GREEN-
 HOUSE GAS EMISSIONS, WATER, CHEMICAL MANAGEMENT. GREENHOUSE GAS  REPORT-
 ING  SHALL  BE  INDEPENDENTLY  VERIFIED,  INCLUDE  ABSOLUTE  FIGURES AND
 CONFORM WITH  THE  GREENHOUSE  GAS  PROTOCOL  CORPORATE  ACCOUNTING  AND
 REPORTING STANDARD AND THE GREENHOUSE GAS PROTOCOL CORPORATE VALUE CHAIN
 SCOPE THREE STANDARD PROMULGATED BY THE WORLD RESOURCES INSTITUTE;
   (II)  ANNUAL VOLUME OF MATERIAL PRODUCED, INCLUDING BREAKDOWN BY MATE-
 RIAL TYPE WHICH SHALL BE INDEPENDENTLY VERIFIED;
 A. 8352                             4
 
   (III) HOW MUCH PRODUCTION HAS BEEN DISPLACED WITH  RECYCLED  MATERIALS
 AS COMPARED TO GROWTH TARGETS WHICH SHALL BE INDEPENDENTLY VERIFIED;
   (IV) THE MEDIAN WAGES OF WORKERS OF PRIORITIZED SUPPLIERS AND HOW THIS
 COMPARES WITH LOCAL MINIMUM WAGE AND LIVING WAGES; AND
   (V)  THE  COMPANY'S APPROACH FOR INCENTIVIZING SUPPLIER PERFORMANCE ON
 WORKERS' RIGHTS; STATE ANY KEY  PERFORMANCE  INDICATORS  OR  PERFORMANCE
 INCENTIVES  USED;  AND  DESCRIBE THE INCENTIVES USED TO REWARD SUPPLIERS
 AND ENCOURAGE GOOD PERFORMANCE. EXAMPLES MAY INCLUDE CONTRACT  RENEWALS,
 PRICE PREMIUMS AND THE OFFER OF LONGER-TERM CONTRACTS.
   (D)  WHAT  TARGETS,  FASHION  RETAIL SELLERS AND FASHION MANUFACTURERS
 HAVE FOR IMPACT REDUCTIONS, AND FOR TRACKING DUE  DILIGENCE  IMPLEMENTA-
 TION  AND  RESULTS,  INCLUDING  WHERE  POSSIBLE  ESTIMATED TIMELINES AND
 BENCHMARKS FOR IMPROVEMENT. CLIMATE  CHANGE  TARGETS  MUST  BE  ABSOLUTE
 TARGETS,  ALIGN  WITH  THE  APPAREL  AND  FOOTWEAR  SECTOR SCIENCE-BASED
 TARGETS GUIDANCE  PROMULGATED  BY  THE  WORLD  RESOURCES  INSTITUTE  AND
 INCLUDE  ALL  SCOPES  OF  PRODUCTION. FASHION RETAIL SELLERS AND FASHION
 MANUFACTURERS SHALL MEET TARGETS AND REPORT THEIR COMPLIANCE ON AN ANNU-
 AL BASIS.
   5. (A) THE REQUIREMENTS IMPOSED ON FASHION RETAIL SELLERS AND  FASHION
 MANUFACTURERS BY THIS SECTION MAY BE ENFORCED BY THE ATTORNEY GENERAL OR
 AN  ADMINISTRATOR  DESIGNATED  BY  THE  ATTORNEY  GENERAL BRINGING CIVIL
 PROCEEDINGS FOR AN INJUNCTION, MONETARY DAMAGES, OR CIVIL PERFORMANCE OF
 A STATUTORY DUTY.
   (I) THE ATTORNEY GENERAL, OR THE ATTORNEY GENERAL'S DESIGNATED  ADMIN-
 ISTRATOR  AS APPLICABLE, SHALL ANNUALLY PUBLISH AND MAKE PUBLICLY AVAIL-
 ABLE A REPORT REGARDING COMPLIANCE WITH THIS SECTION, LISTING THE  FASH-
 ION  RETAIL SELLERS AND FASHION MANUFACTURERS WHO ARE KNOWN TO BE OUT OF
 COMPLIANCE WITH THIS SECTION AND INCLUDING AN UP-TO-DATE REPORT  ON  THE
 ATTORNEY GENERAL'S MONITORING OF SUCH COMPLIANCE.
   (II)  FASHION RETAIL SELLERS AND FASHION MANUFACTURERS FOUND TO BE OUT
 OF COMPLIANCE WITH THIS SECTION  AFTER  THE  ATTORNEY  GENERAL,  OR  THE
 ATTORNEY  GENERAL'S DESIGNATED ADMINISTRATOR AS APPLICABLE, HAS PROVIDED
 NOTICE OF NON-COMPLIANCE, AND AFTER A THREE-MONTH PERIOD TO  MEET  OBLI-
 GATIONS UNDER THIS SECTION HAS LAPSED, MAY BE FINED UP TO TWO PERCENT OF
 ANNUAL  REVENUES  OF  FOUR  HUNDRED  FIFTY MILLION DOLLARS OR MORE. SUCH
 FINES SHALL BE DEPOSITED IN THE COMMUNITY BENEFIT  FUND  ESTABLISHED  BY
 SECTION NINETY-SEVEN-CCC OF THE STATE FINANCE LAW.
   (B) ANY CITIZEN MAY COMMENCE A CIVIL ACTION:
   (1)  AGAINST  ANY  PERSON  WHO IS ALLEGED TO HAVE VIOLATED OR TO BE IN
 VIOLATION OF THIS SECTION OR AN ORDER BY THE ATTORNEY  GENERAL,  OR  THE
 ATTORNEY  GENERAL'S DESIGNATED ADMINISTRATOR AS APPLICABLE, WITH RESPECT
 TO THE STANDARDS AND REQUIREMENTS SET FORTH IN THIS SECTION, INCLUDING:
   (I) NEW YORK STATE;
   (II) GOVERNMENTAL INSTRUMENTALITY OR AGENCY TO THE EXTENT PERMITTED BY
 THE ELEVENTH AMENDMENT TO THE UNITED STATES CONSTITUTION; AND
   (III) ANY BUSINESS.
   (2) TO COMPEL THE ATTORNEY GENERAL, OR THE ATTORNEY  GENERAL'S  DESIG-
 NATED ADMINISTRATOR AS APPLICABLE, TO INVESTIGATE AN ENTITY'S COMPLIANCE
 WITH  THIS SECTION, TO ENFORCE COMPLIANCE WITH THIS SECTION, OR TO APPLY
 THE PROHIBITIONS SET FORTH IN THIS SECTION  TO  ANY  BUSINESS  OPERATING
 WITHIN THIS STATE; AND
   (3) AGAINST THE ATTORNEY GENERAL, OR THE ATTORNEY GENERAL'S DESIGNATED
 ADMINISTRATOR  AS  APPLICABLE,  WHERE THERE IS AN ALLEGED FAILURE OF THE
 ATTORNEY GENERAL OR THE ATTORNEY GENERAL'S DESIGNATED  ADMINISTRATOR  TO
 PERFORM  ANY  ACT  OR DUTY UNDER THIS SECTION WHICH IS NOT DISCRETIONARY
 A. 8352                             5
 
 WITH THE ATTORNEY GENERAL, OR THE ATTORNEY GENERAL'S DESIGNATED ADMINIS-
 TRATOR AS APPLICABLE.
   §  3.  The state finance law is amended by adding a new section 97-ccc
 to read as follows:
   § 97-CCC. COMMUNITY BENEFIT FUND. 1. THERE IS  HEREBY  ESTABLISHED  IN
 THE  JOINT  CUSTODY OF THE COMPTROLLER, THE COMMISSIONER OF TAXATION AND
 FINANCE, AND THE COMMISSIONER OF ENVIRONMENTAL  CONSERVATION  A  SPECIAL
 FUND TO BE KNOWN AS THE COMMUNITY BENEFIT FUND.
   2. SUCH FUND SHALL CONSIST OF ALL MONEYS DEPOSITED PURSUANT TO SUBPAR-
 AGRAPH  (II)  OF  PARAGRAPH  (A)  OF  SUBDIVISION  FIVE OF SECTION THREE
 HUNDRED NINETY-NINE-MM OF THE GENERAL BUSINESS LAW.
   3. THE MONEYS IN THE FUND SHALL BE  EXPENDED  BY  THE  DEPARTMENT  FOR
 ENVIRONMENTAL  CONSERVATION  FOR THE PURPOSE OF IMPLEMENTING ONE OR MORE
 ENVIRONMENTAL BENEFIT PROJECTS  THAT  DIRECTLY  AND  VERIFIABLY  BENEFIT
 ENVIRONMENTAL JUSTICE COMMUNITIES.
   4.  ON  OR BEFORE THE FIRST DAY OF FEBRUARY EACH YEAR, THE COMPTROLLER
 SHALL CERTIFY TO THE TEMPORARY PRESIDENT OF THE SENATE, AND THE  SPEAKER
 OF  THE  ASSEMBLY,  THE  AMOUNT OF MONEY DEPOSITED BY SOURCE IN THE FUND
 DURING THE PRECEDING CALENDAR YEAR, AS WELL AS  ALL  DISBURSEMENTS  FROM
 THE FUND DURING THE PRECEDING CALENDAR YEAR.
   5.  MONEYS  SHALL BE PAYABLE FROM THE FUND ON THE AUDIT AND WARRANT OF
 THE COMPTROLLER ON VOUCHERS CERTIFIED AND APPROVED BY  THE  COMMISSIONER
 OF ENVIRONMENTAL CONSERVATION.
   § 4. This act shall take effect immediately.