S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   4306
 
                        2023-2024 Regular Sessions
 
                           I N  A S S E M B L Y
 
                             February 14, 2023
                                ___________
 
 Introduced  by  M.  of A. PAULIN, BURDICK, SIMON, COLTON, STECK, THIELE,
   FAHY -- 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.
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD02860-01-3
 A. 4306                             2

              

   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.
   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.
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   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-
 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.
 A. 4306                             4

   § 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.