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A04306 Summary:

BILL NOA04306
 
SAME ASSAME AS S00732
 
SPONSORPaulin
 
COSPNSRBurdick, Simon, Colton, Steck, Thiele, Fahy
 
MLTSPNSR
 
Amd §75-0113, En Con L; add Art 12-B §§289-g - 289-j, Tax L
 
Establishes a carbon dioxide emissions price for electric generation from carbon-based fuel; creates a carbon dioxide emissions fund.
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A04306 Actions:

BILL NOA04306
 
02/14/2023referred to environmental conservation
01/03/2024referred to environmental conservation
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A04306 Memo:

NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
submitted in accordance with Assembly Rule III, Sec 1(f)
 
BILL NUMBER: A4306
 
SPONSOR: Paulin
  TITLE OF BILL: 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   PURPOSE OR GENERAL IDEA OF BILL: To establish a carbon dioxide emissions price to be used in the feder- ally designated electric bulk system operator's proposed carbon pricing mechanism for the wholesale competitive markets and distribute the revenue to low-income individuals and communities and to support mass transit.   SUMMARY OF PROVISIONS: Section 1 provides legislative findings. Section 2 amends the environmental conservation law to provide that the social cost of carbon established for use by state agencies shall be taken into account in carbon pricing mechanism programs in New York State. Section 3 amends the tax law to add a new article 12-3. 289-g sets forth definitions. 289-h directs the department of environmental conservation (DEC)to determine and establish a carbon dioxide emissions price and 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 mechanism into the wholesale competitive markets, thereby conveying support by the State of New York for the bulk system operator to finalize the carbon pricing mechanism and submit it to the federal energy regulatory commission (FERC) for approval. 289-i establishes the carbon dioxide emissions fund and sets forth how the revenue in such fund shall be distributed, with sixty percent of such revenue distributed to low-income individuals and to support the transition to renewable energy and improve climate change adaptation in disadvantaged communities. The remaining forty percent will be used to support mass transit to reduce carbon emissions. 289-j authorizes the department of taxation, in coordination with DEC and the department of public service, to promulgate rules and regu- lations as necessary to implement this act. Section 4 provides the effective date.   JUSTIFICATION: With the passage of the Climate Leadership and Community Protection Act (CLCPA), New York has established nation-leading climate change goals, including the requirement that 100% of electricity consumed in the state will be derived from renewable resources by 2040. Under the CLCPA, the department of environmental conservation (DEC) will establish a social cost of carbon for use by state agencies. Alongside these state efforts, the New York Independent System Operator (NYISO), has intro- duced a first-in-the nation proposal to incorporate a carbon pricing mechanism into New York's wholesale competitive electricity markets. This bill would require the DEC's social cost of carbon to be considered in carbon pricing mechanism programs in New York, so that its use is not limited to state programs. This will help to align state and private sector efforts and encourage a holistic approach to meeting the state's ambitious climate goals. Importantly, this bill would require DEC to determine and establish a carbon dioxide emissions price to be used by the NYISO in its proposal to introduce a carbon pricing mechanism into the competitive wholesale electricity markets. NYISO's proposal must be approved by:the federal energy regulatory commission (FERC), and state support of the proposal is required to move forward with the FERC approval process. The bill explicitly states that transmitting this carbon dioxide emissions price to the NYISO for use in its carbon pricing mechanism will convey the necessary state support to allow NYISO to submit its proposal for approval by FERC. The bill establishes the carbon dioxide emissions fund to which revenues from the carbon pricing mechanism will be transferred and sets forth the way in which the fund shall be distributed. Sixty percent of the fund will be distributed to benefit low-income individuals and disadvantaged communities. Specifically, forty percent of revenue will be given directly to low-income residents in the form of tax credits. By provid- ing this money in the form of tax credits rather than a credit or offset on utility bills, low-income individuals who rent their home and do not directly pay a utility bill will still receive the money. Twenty percent of the fund will be used to support the transition to renewable energy and improve climate change adaptation in economically disadvantaged communities, including subsidies for renewable energy. Residents of economically disadvantaged communities are already exposed to higher levels of environmental hazards, and these same communities face a disproportionate impact from climate change. At the same time, government subsidy programs for renewable energy are expected to be phased out over the next several years as the state shifts to carbon pricing as the primary method to encourage renewable energy development. It is important that subsidies continue to be available to encourage the development of renewable energy in economically disadvantaged areas specifically. The remaining forty percent of the fund will be used to support mass transit to reduce carbon emissions. In a 2019 report, the Citizen's Budget Commission found that one-third of New York's total greenhouse gas emissions were from the transportation sector (https://cbcny.org/research/gettinggreener :-:text-In%20contrast9620to% 20a11%20other,from%2020.0%20to%2010.2=:20MM TCO2e). An investment in mass transit is critical if New York is to reach its greenhouse. gas emissions reduction goals. Without a reliable mass tran- sit alternative, more vehicles will be on the roads. Mass transit moves more people at once and heavy rail transit such as subways produce on average 76% lower greenhouse gas emissions per passenger mile than an average single-occupancy vehicle, according to the Federal Transit Administration. This legislation will allow the carbon pricing proposal to move forward in the state's wholesale competitive electricity markets, while ensuring that the money generated is directed to the residents and communities most impacted by climate change and used to further decrease greenhouse gas emissions.   PRIOR LEGISLATIVE HISTORY: A.1168, 2021 and 2022, referred to environmental conservation. / Same as S.4372, 2021 and 2022, referred to environmental conservation. A.11094, 2020, referred to environmental conservation.   FISCAL IMPLICATIONS: None   EFFECTIVE DATE: This act shall take effect immediately.
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A04306 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                          4306
 
                               2023-2024 Regular Sessions
 
                   IN ASSEMBLY
 
                                    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:
 
     1    Section 1. Legislative findings and declaration. The legislature here-
     2  by finds and declares that:
     3    1. As part of the 2020 state budget, the legislature passed the accel-
     4  erated renewable energy growth and  community  benefit  act  to  advance
     5  renewable  energy  siting  and establish tools for achieving the nation-
     6  leading climate change goals of the  climate  leadership  and  community
     7  protection act (CLCPA).
     8    2. a. The CLCPA passed by the legislature and signed by Governor Cuomo
     9  in 2019 codified into law the following requirements:
    10    i. 70% of electricity delivered in New York state must be derived from
    11  renewable resources by 2030;
    12    ii. 100% of the electricity consumed in New York state must be derived
    13  from zero-emissions resources by 2040;
    14    iii. 9,000 megawatts (MW) of offshore wind installed by 2035;
    15    iv. 6,000 MW of distributed solar energy resources installed by 2025;
    16    v. 3,000 MW of energy storage installed by 2030; and
    17    vi. Reducing building end-use energy consumption by 185 trillion Brit-
    18  ish thermal units by 2025.
    19    b.  The  CLCPA created a 22-member climate action council to establish
    20  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

     1    3. The CLCPA amended the environmental conservation law  by  adding  a
     2  new  section  75-0113  to  establish  a social cost of carbon for use by
     3  state agencies.
     4    4.  Entities  other  than  state agencies have been considering how to
     5  account for the value of carbon  dioxide  emissions  in  their  business
     6  plans and operations in light of the CLCPA and the accelerated renewable
     7  energy  growth and community benefit act. For example, the federally-de-
     8  signated electric bulk system operator in New York state has developed a
     9  proposal to introduce a carbon pricing mechanism  into  the  competitive
    10  wholesale  electricity  markets.  Encouraging  the  incorporation of the
    11  social cost of carbon established under the CLCPA into a carbon price by
    12  entities beyond state agencies would facilitate programs to  incorporate
    13  the  social  cost  of  carbon  in energy and other sectors of New York's
    14  economy that emit greenhouse gases.
    15    § 2. Subdivision 1 of section 75-0113 of the  environmental  conserva-
    16  tion  law,  as  added  by chapter 106 of the laws of 2019, is amended to
    17  read as follows:
    18    1. No later than one year after the effective date  of  this  article,
    19  the  department, in consultation with the New York state energy research
    20  and development authority, shall establish a social cost of  carbon  for
    21  use by state agencies, and shall be taken into account in carbon pricing
    22  mechanism  programs in New York state, expressed in terms of dollars per
    23  ton of carbon dioxide equivalent.
    24    § 3. The tax law is amended by adding a new article 12-B  to  read  as
    25  follows:
    26                                ARTICLE 12-B
    27  CARBON DIOXIDE EMISSIONS PRICE FOR ELECTRIC GENERATION FROM CARBON-BASED
    28                                    FUEL
    29  Section 289-g. Definitions.
    30           289-h. Determination  and establishment of carbon dioxide emis-
    31                    sions price.
    32           289-i. Carbon dioxide emissions fund.
    33           289-j. Regulations.
    34    § 289-g. Definitions. For the purposes of this article, the  following
    35  terms shall have the following meanings:
    36    1.  "Carbon-based  fuel"  means  coal, natural gas, renewable biomass,
    37  petroleum products, and any other product  that  emits  carbon  dioxide,
    38  methane,  nitrous  oxide,  or other greenhouse gases when combusted, and
    39  that is used for fuel for the purposes of producing electric energy.
    40    2. "Carbon-generated electricity" means electric energy produced using
    41  a carbon-based fuel.
    42    3. "Carbon dioxide equivalent" means a unit of  measure  denoting  the
    43  amount  of  emissions  from a greenhouse gas, expressed as the amount of
    44  carbon dioxide by weight that produces the same global warming impact.
    45    4. "Carbon dioxide emissions price" means a  price  that  incorporates
    46  the social cost of carbon established by the department of environmental
    47  conservation pursuant to subdivision one of section 75-0113 of the envi-
    48  ronmental  conservation  law  on  each ton of carbon dioxide equivalency
    49  emitted in the production of electric energy.
    50    § 289-h. Determination and establishment of carbon  dioxide  emissions
    51  price.   1. The department of environmental conservation shall determine
    52  and establish a carbon dioxide emissions price.  The department of envi-
    53  ronmental conservation may also obtain  information  necessary  for  the
    54  determination  of  the price from other state or federal agencies or the
    55  federally designated electric bulk system operator.

        A. 4306                             3
 
     1    2. Upon determining and  establishing  the  carbon  dioxide  emissions
     2  price,  the department of environmental conservation shall transmit such
     3  price to the federally designated electric bulk system operator  in  New
     4  York  state  for use in its proposal to introduce a carbon pricing mech-
     5  anism  into competitive wholesale electricity markets, thereby conveying
     6  support by the state of New York for the bulk system operator to  final-
     7  ize  the  carbon  pricing  mechanism and submit it to the federal energy
     8  regulatory commission for approval.  The  amount  of  charges  paid  for
     9  allowances  auctioned under the regional greenhouse gas initiative shall
    10  be deducted from the price determined pursuant to this section.
    11    3. The department of environmental conservation shall be authorized to
    12  develop any rule or regulation necessary to determine and establish  the
    13  carbon dioxide emissions price authorized under this article.
    14    4.  Notwithstanding  any  general  or special law to the contrary, the
    15  price authorized under this section shall not be paid by  any  generator
    16  of carbon-based electricity if such requirement is superseded by federal
    17  law or regulation.
    18    § 289-i. Carbon dioxide emissions fund.  1. The department, in coordi-
    19  nation  with  the department of environmental conservation, shall estab-
    20  lish the carbon dioxide emissions fund, and the department  of  environ-
    21  mental conservation's office of climate change shall serve as the fund's
    22  administrator. The department of environmental conservation shall depos-
    23  it  into  such fund all revenues transferred to it by load serving enti-
    24  ties, to the extent that such revenues are provided to such entities  by
    25  the federally designated electric bulk system operator in New York state
    26  in  accordance  with  the  implementation of section two hundred eighty-
    27  nine-h of this article. No such revenues  shall  fund  government  oper-
    28  ations  of  New York state, other than to pay for reasonable administra-
    29  tive costs as provided under subdivision two of this section.
    30    2. The office of climate change shall distribute sixty percent of  all
    31  carbon  dioxide  emissions  price revenues as follows: (a) forty percent
    32  shall be returned to very low to moderate income residents of the  state
    33  in  the  form  of  tax credits in order to offset the cost of the carbon
    34  dioxide emissions price.  The amount of such credit shall  be  based  on
    35  estimates and averages of expense and consumption trends for very low to
    36  moderate  income residents determined by the office of climate change in
    37  conjunction with the department of public  service  in  accordance  with
    38  regulations  pursuant to section two hundred eighty-nine-j of this arti-
    39  cle.  Such credit shall be progressively issued to very low to  moderate
    40  income  residents.  Such  income categories shall mean those with income
    41  below fifty percent for very low income residents, income between  fifty
    42  and  eighty percent for low income residents, and income between eighty-
    43  one and one hundred fifteen percent for moderate  income  residents,  of
    44  the  area  median  income as determined by the department of housing and
    45  urban development; and (b) twenty percent shall be used to  support  the
    46  transition  to renewable energy and improve climate change adaptation in
    47  disadvantaged communities as defined  in  subdivision  five  of  section
    48  75-0101 of the environmental conservation law, including but not limited
    49  to  payments and subsidies for renewable energy, energy conservation and
    50  efficiency measures, improvements in infrastructure, protection of  low-
    51  lying  areas  including  coastlines,  and emergency responses to extreme
    52  weather events.
    53    3. The office of climate change shall distribute the  remaining  forty
    54  percent  of  revenues  of  such  fund  to support mass transit to reduce
    55  carbon emissions.

        A. 4306                             4

     1    § 289-j. Regulations.    The  department,  in  coordination  with  the
     2  department  of  environmental  conservation and the department of public
     3  service, shall promulgate such rules and regulations as shall be  neces-
     4  sary to implement the provisions of this article.
     5    § 4. This act shall take effect immediately.
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