S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   7321
 
                        2023-2024 Regular Sessions
 
                           I N  A S S E M B L Y
 
                               May 17, 2023
                                ___________
 
 Introduced by M. of A. ARDILA -- read once and referred to the Committee
   on Ways and Means
 
 AN  ACT  to  amend  the  tax  law,  in relation to establishing a tax on
   carbon-based  fuels  to  mitigate  greenhouse  gas  emissions  causing
   anthropogenic climate change
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. The tax law is amended by adding a new article 12-B to read
 as follows:
                               ARTICLE 12-B
                         TAX ON CARBON-BASED FUELS
 SECTION 289-G. DEFINITIONS.
         289-H. ADMINISTRATION OF EMISSIONS CHARGES.
         289-I. CARBON DIOXIDE EMISSIONS TAX.
         289-J. CARBON DIOXIDE EMISSIONS FUND.
         289-K. 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 CONTAINS CARBON AND EMITS
 CARBON DIOXIDE, METHANE, NITROUS OXIDE, OR OTHER GREENHOUSE  GASES  WHEN
 COMBUSTED, THAT ARE USED FOR FUEL, HEATING, COOLING, OR INDUSTRIAL PROC-
 ESSES, WHICH PROCESSES SHALL INCLUDE ELECTRICITY GENERATION.
   2. "CARBON-GENERATED ELECTRICITY" MEANS ELECTRIC ENERGY PRODUCED USING
 A  CARBON-BASED  FUEL  THAT  IS  GENERATED OR TRANSMITTED BY AN ELECTRIC
 POWER FACILITY.
   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 TAX" MEANS A TAX IMPOSED ON EACH  TON  OF
 CARBON DIOXIDE EQUIVALENCY.

  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD06497-01-3
              

 A. 7321                             2
 
   5.  "FUEL  DISTRIBUTOR"  MEANS ANY PERSON, FIRM, ASSOCIATION OR CORPO-
 RATION, THAT IMPORTS OR CAUSES TO BE IMPORTED INTO THE STATE,  FOR  USE,
 DISTRIBUTION, STORAGE OR SALE WITHIN THE STATE, ANY CARBON-BASED FUEL AS
 DEFINED  IN  SUBDIVISION ONE OF THIS SECTION; AND ALSO ANY PERSON, FIRM,
 ASSOCIATION  OR  CORPORATION  THAT  PRODUCES,  REFINES,  MANUFACTURES OR
 COMPOUNDS CARBON-BASED FUEL WITHIN THE STATE.
   6. "FUND" MEANS THE CARBON DIOXIDE EMISSIONS FUND ESTABLISHED BY  THIS
 ARTICLE.
   7.  "MOTOR VEHICLE FUEL" MEANS FUEL FOR THE OPERATION OF A MOTOR VEHI-
 CLE.
   8. "UTILITY" MEANS ANY SUCH GAS CORPORATION, ELECTRIC CORPORATION, GAS
 AND ELECTRIC CORPORATION, STEAM CORPORATION, MUNICIPALITY, OR ANY ENTITY
 THAT, IN ANY MANNER,  SELLS  OR  FACILITATES  THE  SALE,  FURNISHING  OR
 PROVISION  OF  GAS  OR  ELECTRONIC  COMMODITY  TO RESIDENTIAL CUSTOMERS;
 PROVIDED, HOWEVER, THAT THE TERM SHALL NOT INCLUDE ANY MUNICIPALITY THAT
 IS EXEMPT FROM REGULATION BY THE PUBLIC SERVICE COMMISSION  PURSUANT  TO
 PARAGRAPH  G  OF  SUBDIVISION  FIVE  OF SECTION ONE THOUSAND FIVE OF THE
 PUBLIC AUTHORITIES LAW.
   § 289-H. ADMINISTRATION OF EMISSIONS CHARGES. THE DEPARTMENT OF  ENVI-
 RONMENTAL  CONSERVATION SHALL ADMINISTER THE SCHEDULES OF CARBON DIOXIDE
 EMISSIONS CHARGES AND THE CARBON DIOXIDE  EMISSIONS  FUND,  BOTH  ESTAB-
 LISHED  PURSUANT TO THIS ARTICLE. SUCH TAX SHALL BE IMPOSED ON EACH FUEL
 DISTRIBUTOR AND UTILITY AT A RATE AND SCHEDULE TO BE DETERMINED  BY  THE
 DEPARTMENT  OF ENVIRONMENTAL CONSERVATION IN ACCORDANCE WITH SECTION TWO
 HUNDRED EIGHTY-NINE-I OF THIS ARTICLE FOR A CARBON-BASED  FUEL  THAT  IS
 EITHER:
   1. SOLD BY A FUEL DISTRIBUTOR TO CONSUMERS IN THIS STATE IN THE PREVI-
 OUS CALENDAR YEAR; OR
   2.  USED TO PRODUCE CARBON-GENERATED ELECTRICITY THAT IS SUPPLIED BY A
 UTILITY TO CONSUMERS IN THIS STATE IN THE PREVIOUS CALENDAR YEAR.
   § 289-I. CARBON DIOXIDE EMISSIONS  TAX.  1.  THE  DEPARTMENT  AND  THE
 DEPARTMENT  OF ENVIRONMENTAL CONSERVATION SHALL ESTABLISH A CARBON DIOX-
 IDE EMISSIONS TAX ON THE DISTRIBUTION  OR  SALE  OF  CARBON-BASED  FUELS
 WHICH  SHALL BE NO LESS THAN THIRTY-FIVE DOLLARS PER TON OF CARBON DIOX-
 IDE EQUIVALENCY AND SHALL INCREASE BY FIFTEEN DOLLARS PER TON OF  CARBON
 DIOXIDE  EQUIVALENCY  ANNUALLY  TO  A MAXIMUM OF ONE HUNDRED EIGHTY-FIVE
 DOLLARS PER TON OF CARBON DIOXIDE EQUIVALENCY.
   2. IN THE FOURTH YEAR OF IMPLEMENTATION,  AND  BIANNUALLY  THEREAFTER,
 THE  DEPARTMENT OF ENVIRONMENTAL CONSERVATION SHALL PUBLISH A REPORT FOR
 THE LEGISLATURE AND SHALL POST THE REPORT ON AN INTERNET WEBSITE  ACCES-
 SIBLE TO THE PUBLIC. SUCH REPORT SHALL CONSIDER WHETHER ANY INCREASES OR
 DECREASES  IN  THE  CARBON  DIOXIDE  EMISSIONS TAX AS AUTHORIZED BY THIS
 SECTION ARE RECOMMENDED TO ACCOUNT FOR INFLATION, AND TO ENSURE PROGRESS
 TOWARDS REACHING EMISSIONS LEVELS TO MITIGATE CLIMATE CHANGE IN FURTHER-
 ANCE OF ESTABLISHED STATE POLICY.
   3. THE DEPARTMENT SHALL DETERMINE TOTAL TAXABLE EMISSIONS ANNUALLY FOR
 EACH DISTRIBUTOR OR UTILITY USING THE CARBON DIOXIDE EQUIVALENT FOR EACH
 CARBON-BASED FUEL BASED ON INFORMATION THAT  SHALL  BE  PROVIDED  IN  AN
 ANNUAL  REPORT TO THE DEPARTMENT BY THE DISTRIBUTOR OR UTILITY ABOUT THE
 AMOUNT OF CARBON-BASED FUEL  OR  CARBON-GENERATED  ELECTRICITY  SOLD  TO
 CONSUMERS  WITHIN  THE  STATE  DURING  THE PRECEDING CALENDAR YEAR. SUCH
 ANNUAL REPORT SHALL ALSO INCLUDE ANY INFORMATION REQUIRED BY THE DEPART-
 MENT BY RULE OR REGULATION.
   4. THE DEPARTMENT AND THE  DEPARTMENT  OF  ENVIRONMENTAL  CONSERVATION
 SHALL  BE  AUTHORIZED  TO  DEVELOP  ANY  RULE OR REGULATION NECESSARY TO
 A. 7321                             3
 
 COLLECT AND ADMINISTER THE CARBON DIOXIDE EMISSIONS TAX AUTHORIZED UNDER
 THIS ARTICLE.
   5. NOTWITHSTANDING ANY GENERAL OR SPECIAL LAW TO THE CONTRARY, THE TAX
 AUTHORIZED  UNDER  THIS SECTION SHALL NOT BE IMPOSED ON ANY CARBON-BASED
 FUEL OR SOURCE OF CARBON-BASED ELECTRICITY IF SUCH IMPOSITION IS  SUPER-
 SEDED BY FEDERAL LAW OR REGULATION.
   §  289-J. CARBON DIOXIDE EMISSIONS FUND. 1. THE DEPARTMENT OF ENVIRON-
 MENTAL CONSERVATION SHALL ESTABLISH THE CARBON DIOXIDE  EMISSIONS  FUND,
 AND  THE DEPARTMENT'S OFFICE OF CLIMATE CHANGE SHALL SERVE AS THE FUND'S
 ADMINISTRATOR. THE DEPARTMENT OF ENVIRONMENTAL CONSERVATION SHALL DEPOS-
 IT ALL PROCEEDS COLLECTED IN ACCORDANCE WITH SECTION TWO HUNDRED  EIGHT-
 Y-NINE-I  OF  THIS  ARTICLE  INTO  THE FUND. NO SUCH PROCEEDS SHALL FUND
 GOVERNMENT OPERATIONS OF THE STATE, OTHER THAN  TO  PAY  FOR  REASONABLE
 ADMINISTRATIVE COSTS AS PROVIDED UNDER SUBDIVISION TWO OF THIS SECTION.
   2.  THE  OFFICE  OF  CLIMATE  CHANGE SHALL RETURN SIXTY PERCENT OF ALL
 CARBON DIOXIDE EMISSIONS CHARGE PROCEEDS TO VERY LOW TO MODERATE  INCOME
 RESIDENTS OF THE STATE IN THE FORM OF TAX CREDITS IN ORDER TO OFFSET THE
 REGRESSIVE NATURE OF SUCH FEES. 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  IN  ACCORDANCE  WITH  SECTION  TWO
 HUNDRED EIGHTY-NINE-K OF THIS ARTICLE. SUCH CREDIT SHALL BE PROGRESSIVE-
 LY  ISSUED TO VERY LOW TO MODERATE INCOME RESIDENTS. SUCH INCOME CATEGO-
 RIES 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.
   3. THE OFFICE OF CLIMATE CHANGE SHALL DISTRIBUTE EVENLY THE  REMAINING
 FORTY  PERCENT  OF PROCEEDS OF SUCH FUND IN ORDER TO SUPPORT THE TRANSI-
 TION TO ONE HUNDRED PERCENT CLEAN ENERGY IN THE STATE, TO  SUPPORT  MASS
 TRANSIT  TO REDUCE CARBON EMISSIONS, AND TO IMPROVE CLIMATE CHANGE ADAP-
 TATION. SUCH FUNDS SHALL INCLUDE BUT NOT  BE  LIMITED  TO  PAYMENTS  AND
 SUBSIDIES FOR RENEWABLE ENERGY, ENERGY CONSERVATION AND EFFICIENCY MEAS-
 URES,  IMPROVEMENTS  IN  INFRASTRUCTURE,  IMPROVEMENTS  IN  MASS TRANSIT
 CAPACITY, AGRICULTURAL  ADAPTATION  MEASURES,  PROTECTION  OF  LOW-LYING
 AREAS  INCLUDING  COASTLINES, AND EMERGENCY RESPONSES TO EXTREME WEATHER
 EVENTS.
   § 289-K. REGULATIONS. 1. THE DEPARTMENT  AND  DEPARTMENT  OF  ENVIRON-
 MENTAL CONSERVATION SHALL PROMULGATE SUCH RULES AND REGULATIONS AS SHALL
 BE NECESSARY TO IMPLEMENT THE PROVISIONS OF THIS ARTICLE.
   2.  THE  DEPARTMENT  AND  THE DEPARTMENT OF ENVIRONMENTAL CONSERVATION
 SHALL UNDERTAKE ALL REASONABLE EFFORTS  TO  COLLECT  CHARGES  AUTHORIZED
 PURSUANT  TO  THIS  ARTICLE  AT  THE FIRST POINT OF DISTRIBUTION OR SALE
 WITHIN THE STATE.
   § 2. This act shall take effect on the ninetieth day  after  it  shall
 have become a law. Effective immediately, the addition, amendment and/or
 repeal  of  any  rule  or regulation necessary for the implementation of
 this act on its effective date are authorized to be made  and  completed
 on or before such effective date.