S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   2579
 
                        2023-2024 Regular Sessions
 
                             I N  S E N A T E
 
                             January 23, 2023
                                ___________
 
 Introduced  by  Sens.  PARKER, BAILEY, BRESLIN, HARCKHAM, HOYLMAN-SIGAL,
   KAVANAGH, KRUEGER, LIU, MYRIE, SANDERS,  SEPULVEDA,  SERRANO  --  read
   twice  and  ordered  printed,  and when printed to be committed to the
   Committee on Budget and Revenue
 
 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.

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

 S. 2579                             2
 
   4.  "CARBON  DIOXIDE EMISSIONS TAX" MEANS A TAX IMPOSED ON EACH TON OF
 CARBON DIOXIDE EQUIVALENCY.
   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.
 S. 2579                             3
 
   4.  THE  DEPARTMENT  AND  THE DEPARTMENT OF ENVIRONMENTAL CONSERVATION
 SHALL BE AUTHORIZED TO DEVELOP  ANY  RULE  OR  REGULATION  NECESSARY  TO
 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.