A04333 Summary:

BILL NOA04333C
 
SAME ASSAME AS S04746-B
 
SPONSORKelles
 
COSPNSREpstein, Simon, Hevesi, Gonzalez-Rojas, Forrest, Burgos, Weprin, Reyes, Fahy, Steck, Seawright, Mitaynes, Gallagher, Raga, Simone, Shrestha, Cunningham, Bores, Otis, Levenberg, Carroll, Thiele, Stern, Rosenthal L, Rajkumar, Kim, Gunther, Anderson, Glick, Lunsford, Barrett, Shimsky, Mamdani, Dinowitz, Santabarbara, Jacobson, Taylor, Clark, Paulin, Bichotte Hermelyn, Lavine, Slater, Eachus, De Los Santos, Ardila, Sillitti, Solages, Conrad, Cruz, Benedetto, Jackson, Pretlow, Tapia, Stirpe, Meeks, Lupardo, McMahon, Lee, Burdick, Colton, Alvarez, Davila, Bendett, Brown K, McGowan, Flood, Blumencranz
 
MLTSPNSR
 
Add §399-mm, Gen Bus L; add §97-ccc, St Fin L
 
Requires fashion sellers to be accountable to standardized environmental due diligence policies; establishes a fashion remediation fund.
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A04333 Actions:

BILL NOA04333C
 
02/14/2023referred to consumer affairs and protection
09/06/2023amend and recommit to consumer affairs and protection
09/06/2023print number 4333a
01/03/2024referred to consumer affairs and protection
05/06/2024amend (t) and recommit to consumer affairs and protection
05/06/2024print number 4333b
06/03/2024amend (t) and recommit to consumer affairs and protection
06/03/2024print number 4333c
06/05/2024reference changed to ways and means
06/06/2024reported referred to rules
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A04333 Committee Votes:

WAYS AND MEANS Chair:Weinstein DATE:06/06/2024AYE/NAY:20/15 Action: Favorable refer to committee Rules
WeinsteinAyeRaNay
GlickAyeFitzpatrickNay
PretlowAyeHawleyNay
ColtonAyeBlankenbushNay
CookAyeNorrisNay
AubryAyeBrabenecNay
BenedettoAyePalmesanoNay
WeprinAyeWalshNay
RamosAyeDeStefanoNay
BraunsteinNayManktelowNay
McDonaldNaySmullenNay
RozicNay
DinowitzAye
MagnarelliAye
ZebrowskiAye
BronsonAye
DilanNay
SeawrightAye
HyndmanAye
WalkerAye
Bichotte HermelAye
SimonAye
CruzAye
FahyAye

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A04333 Floor Votes:

There are no votes for this bill in this legislative session.
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A04333 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                         4333--C
 
                               2023-2024 Regular Sessions
 
                   IN ASSEMBLY
 
                                    February 14, 2023
                                       ___________
 
        Introduced  by  M. of A. KELLES, EPSTEIN, SIMON, HEVESI, GONZALEZ-ROJAS,
          FORREST, BURGOS, WEPRIN,  REYES,  FAHY,  STECK,  SEAWRIGHT,  MITAYNES,
          GALLAGHER, RAGA, SIMONE, SHRESTHA, CUNNINGHAM, BORES, OTIS, LEVENBERG,
          CARROLL,  THIELE,  STERN, L. ROSENTHAL, RAJKUMAR, KIM, GUNTHER, ANDER-
          SON, GLICK, LUNSFORD, BARRETT, SHIMSKY, MAMDANI,  DINOWITZ,  SANTABAR-
          BARA,  JACOBSON,  TAYLOR,  CLARK,  PAULIN,  BICHOTTE HERMELYN, LAVINE,
          SLATER, EACHUS,  DE LOS SANTOS,  ARDILA,  SILLITTI,  SOLAGES,  CONRAD,
          CRUZ,  BENEDETTO,  JACKSON,  PRETLOW,  TAPIA,  STIRPE, MEEKS, LUPARDO,
          McMAHON, LEE, BURDICK, COLTON,  ALVAREZ,  DAVILA,  McDONALD,  BENDETT,
          K. BROWN, MCGOWAN, FLOOD, BLUMENCRANZ -- read once and referred to the
          Committee  on Consumer Affairs and Protection -- committee discharged,
          bill amended, ordered reprinted as amended  and  recommitted  to  said
          committee  --  recommitted  to  the  Committee on Consumer Affairs and
          Protection in accordance with Assembly Rule 3,  sec.  2  --  committee
          discharged, bill amended, ordered reprinted as amended and recommitted
          to  said committee -- recommitted to the Committee on Consumer Affairs
          and Protection in accordance with Assembly Rule 3, sec. 2 -- committee
          discharged, bill amended, ordered reprinted as amended and recommitted
          to said committee
 
        AN ACT to amend the general business law, in relation to requiring fash-
          ion sellers to be accountable to environmental  standards  and  estab-
          lishing  the interstate fashion environment accountability act; and to
          amend the state finance law, in relation  to  establishing  a  fashion
          remediation fund
 
          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:
 
     1    Section 1. Short title. This act shall be known and may  be  cited  as
     2  the "fashion environmental accountability act".
     3    §  2. The general business law is amended by adding a new section 399-
     4  mm to read as follows:
     5    § 399-mm. Fashion environmental accountability act.   1.  Definitions.
     6  As  used  in  this section, the following terms shall have the following
     7  meanings:
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD03469-11-4

        A. 4333--C                          2
 
     1    (a) "Doing business in this state" shall mean actively engaging in any
     2  transaction for the purpose of financial or pecuniary gain or profit.
     3    (b)  "Gross receipts" shall mean the gross amounts realized, otherwise
     4  known as the sum of money and the fair market value of other property or
     5  services received, on the sale or exchange of property, the  performance
     6  of  services, or the use of property or capital, including rents, royal-
     7  ties, interest, and dividends, in a transaction that  produces  business
     8  income,  in  which  the income, gain, or loss is recognized, or would be
     9  recognized if the transaction were  in  the  United  States,  under  the
    10  Internal  Revenue  Code,  as  applicable  for  purposes of this section.
    11  Amounts realized on the sale  or  exchange  of  property  shall  not  be
    12  reduced  by  the cost of goods sold or the basis of property sold. Gross
    13  receipts, even if business  income,  shall  not  include  the  following
    14  items:
    15    (i)  repayment,  maturity,  or  redemption of the principal of a loan,
    16  bond, mutual fund, certificate of deposit, or similar marketable instru-
    17  ment;
    18    (ii) the principal amount received under  a  repurchase  agreement  or
    19  other transaction properly characterized as a loan;
    20    (iii)  proceeds from issuance of the taxpayer's own stock or from sale
    21  of treasury stock;
    22    (iv) damages and other amounts received as the result of litigation;
    23    (v) property acquired by an agent on behalf of another;
    24    (vi) tax refunds and other tax benefit recoveries;
    25    (vii) pension reversions;
    26    (viii) contributions to capital, except for  sales  of  securities  by
    27  securities dealers;
    28    (ix) income from discharge of indebtedness;
    29    (x)  amounts  realized from exchanges of inventory that are not recog-
    30  nized under the Internal Revenue Code;
    31    (xi) amounts received from transactions in intangible assets  held  in
    32  connection  with  a treasury function of the taxpayer's unitary business
    33  and the gross receipts and overall net gains from the maturity,  redemp-
    34  tion,  sale,  exchange, or other disposition of those intangible assets;
    35  and
    36    (xii) amounts received from hedging transactions involving  intangible
    37  assets.  A  "hedging  transaction"  means  a  transaction related to the
    38  taxpayer's trading function involving futures and  options  transactions
    39  for  the  purpose  of  hedging price risk of the products or commodities
    40  consumed, produced, or sold by the taxpayer.
    41    (c) "Fashion seller" shall mean a business entity which sells articles
    42  of wearing apparel, footwear, or fashion bags that together  exceed  one
    43  hundred  million dollars in annual gross receipts, but shall not include
    44  the sale of used wearing apparel, footwear, or fashion bags,  nor  shall
    45  it  include  multi-brand  retailers, except where the apparel, footwear,
    46  and fashion bag private labels of those companies  together  exceed  one
    47  hundred million dollars in global revenue.
    48    (d)  "Article of wearing apparel" shall mean any costume or article of
    49  clothing worn or intended to be worn by individuals.
    50    (e) "Footwear" shall mean any covering worn or intended to be worn  on
    51  the foot.
    52    (f)  "Fashion  bag"  shall  mean  flexible packaging made of textiles,
    53  leather or other animal products, woven material or other similar  mate-
    54  rials intended for repeated use.
    55    (g)  "Due  diligence"  shall  mean the comprehensive process companies
    56  shall carry out to identify, cease, prevent, mitigate, account for,  and

        A. 4333--C                          3
 
     1  remediate  actual  and  potential  adverse impacts to the environment in
     2  their own operations and in their supply chain, in compliance with, at a
     3  minimum, the standards outlined in  the  most  recent  Organisation  for
     4  Economic  Co-operation  and  Development  Guidelines  for  Multinational
     5  Enterprises, and the most recent Organisation for Economic  Co-operation
     6  and  Development Due Diligence Guidance for Responsible Supply Chains in
     7  the Garment and Footwear Sector.
     8    (h) "Due diligence report" shall mean the  document  prepared  by  the
     9  company  to  communicate  all relevant information concerning the exist-
    10  ence, implementation and outcomes of due diligence in  order  to  comply
    11  with  the  requirements of this section, and to comply with any rules or
    12  regulations established pursuant to this section.
    13    (i) "Risk-based approach" shall mean commensurate  to  the  likelihood
    14  and severity of the harm.  The fashion seller shall prioritize the order
    15  in  which  it takes action based on the likelihood and severity of harm.
    16  Severity of impacts shall be determined  according  to  their  scale  or
    17  gravity, scope, and irremediable character.
    18    (j)  "Supply chain tiers" shall mean a four tier system defined as the
    19  following:
    20    (i) "Tier one" shall mean suppliers who  produce  finished  goods  for
    21  fashion  sellers,  including  suppliers' subcontractors, who provide the
    22  following services, including but not limited to sewing  and  embroider-
    23  ing;
    24    (ii)  "Tier  two"  shall mean suppliers to tier one, including subcon-
    25  tractors, who provide the following services or goods, including but not
    26  limited to knitting, weaving, washing, dyeing, finishing,  printing  for
    27  finished  goods,  and  components  and materials for finished goods when
    28  they are stand-alone operations and not integrated with tier one. Compo-
    29  nents shall mean materials used to build a product,  including  but  not
    30  limited to buttons, zippers, rubber soles, down, and fusibles;
    31    (iii) "Tier three" shall mean suppliers to tier two suppliers, includ-
    32  ing  subcontractors,  who  process raw materials, such as ginning, spin-
    33  ning, and suppliers of chemicals; and
    34    (iv) "Tier four" shall mean companies, including subcontractors,  that
    35  provide raw materials to tier three.
    36    (k) "Independently verified" shall mean audited by a verification body
    37  accredited  by  the department of state as described in subdivision five
    38  of this section.
    39    (l) "Living wage" shall mean the remuneration received for a  standard
    40  workweek by a worker in a particular place sufficient to afford a decent
    41  standard  of  living  for  such  worker  and their family. Elements of a
    42  decent standard of  living  include  food,  water,  housing,  education,
    43  health care, transportation, clothing, and other essential needs includ-
    44  ing  provision  for  unexpected  events. Living wage shall be determined
    45  exclusive of overtime wages and by net wages including in-kind and  cash
    46  benefits, and deducting taxes and deductions.
    47    (m)  "Open  data  principles" shall mean data that can be freely used,
    48  reused and redistributed by anyone. Such data shall be findable or easi-
    49  ly discoverable on a website or within a database, accessible or  avail-
    50  able in a machine readable, convenient, modifiable form and published as
    51  a  whole,  complete  dataset,  interoperable  or  able  to be mixed with
    52  different datasets, and reusable or provided under an open license  that
    53  permits  reuse  and redistribution, including the intermixing with other
    54  datasets.

        A. 4333--C                          4
 
     1    (n) "Employee" shall mean all workers, whether full-time or part-time,
     2  permanent or fixed-term, directly contracted or hired indirectly through
     3  an agency or other intermediary.
     4    2. Due Diligence. (a) Every fashion seller shall effectively carry out
     5  environmental  due  diligence for the portions of their business related
     6  to wearing apparel, footwear or fashion bags, including wearing apparel,
     7  footwear or fashion bags  produced  as  a  private  label,  which  shall
     8  include:
     9    (i) supply chain mapping:
    10    (1) companies taking a risk-based approach and implementing good faith
    11  efforts   to  map  suppliers  across  tier  one  through  tier  four  of
    12  production.
    13    (2) disclosure of suppliers of the production supply chain  including:
    14  the name, parent company and product type at each site by country, filed
    15  by the following:
    16    (A)  Tier one suppliers shall be disclosed within twelve months of the
    17  effective date of this section, and shall contain a minimum of  seventy-
    18  five percent of suppliers by volume.
    19    (B)  Tier  two  suppliers  shall  be disclosed within two years of the
    20  effective date of this section, and shall contain a minimum of  seventy-
    21  five percent of suppliers by volume.
    22    (C)  Tier three suppliers shall be disclosed within three years of the
    23  effective date of this section and shall  contain  a  minimum  of  fifty
    24  percent of suppliers by volume or dollar value.
    25    (D)  Tier  four  suppliers shall be disclosed within four years of the
    26  effective date of this section and shall  contain  a  minimum  of  fifty
    27  percent of suppliers by volume or dollar value.
    28    (ii) in carrying out effective due diligence, fashion sellers shall be
    29  in compliance with the Organisation for Economic Co-operation and Devel-
    30  opment Guidelines for Multinational Enterprises and the Organisation for
    31  Economic Co-operation and Development Due Diligence Guidance for Respon-
    32  sible  Supply Chains in the Garment and Footwear Sector, requiring fash-
    33  ion sellers to, at a minimum:
    34    (1) embed responsible business conduct into the company's policies and
    35  management systems;
    36    (2) identify areas of significant risks in the  contexts  of  its  own
    37  activities and business and supply chain relationships;
    38    (3)  identify,  prioritize,  and  assess the significant potential and
    39  actual adverse impacts of those risks;
    40    (4) cease, prevent or mitigate those risks. This  shall  include,  but
    41  not be limited to:
    42    (A)  incentivizing  improved  supplier  performance  on  environmental
    43  impact by embedding responsible purchasing practices in its supply chain
    44  relationships and contracts,  including  but  not  limited  to  contract
    45  renewals,  longer  term  contracts, price premiums, providing reasonable
    46  assistance to suppliers so that they can meet  applicable  environmental
    47  standards  including  but  not  limited  to  meeting the carbon emission
    48  reduction targets set out in this act,  and  developing  pricing  models
    49  that account for the cost investments.
    50    (B) establishing quantitative baseline and reduction targets on green-
    51  house  gas  emissions.  Greenhouse  gas  emissions  inventory  shall  be
    52  reported annually, starting in two thousand twenty-six for emissions  in
    53  the  prior  fiscal  year; include absolute figures; and conform with the
    54  rules and regulations made by the department of  state  in  consultation
    55  with  the department of environmental conservation based on the account-
    56  ing and reporting requirements of the most recent Greenhouse Gas  Proto-

        A. 4333--C                          5
 
     1  col  Corporate  Accounting  and  Reporting Standard, Scope Two Guidance,
     2  and, starting in two thousand twenty-seven, the  most  recent  Corporate
     3  Value Chain Scope Three accounting and reporting standard promulgated by
     4  the  World  Resources  Institute  and  the  World  Business  Council for
     5  Sustainable Development. Greenhouse gas emissions inventory reported  in
     6  the  due diligence report required pursuant to subdivision three of this
     7  section shall be independently verified no  less  than  once  every  two
     8  years. Fashion sellers shall not be subject to an administrative penalty
     9  under  this  section  for  any  misstatements with regard to scope three
    10  emissions disclosures made with a reasonable basis and disclosed in good
    11  faith. Within four years of the effective date of this section,  primary
    12  data  shall  be  used  to capture the fashion seller's tier two and tier
    13  three inventory of its most significant suppliers contributing to green-
    14  house gas emissions. Significant suppliers shall mean suppliers  repres-
    15  enting  seventy-five  percent  of fabric by volume in tier two and fifty
    16  percent of fabric by volume  in  tier  three.  Greenhouse  gas  emission
    17  reduction  targets must be near-term and long-term, covering scopes one,
    18  two and three emissions, and align with the rules and  regulations  made
    19  by  the department of state in consultation with the department of envi-
    20  ronmental conservation based on, at  a  minimum,  Science  Based  Target
    21  initiative's  most  recent  target validation criteria as promulgated by
    22  World Resources Institute, CDP, United Nations Global  Compact  and  the
    23  World  Wildlife Fund.  Compliance with the rules and regulations made by
    24  the department of state shall not waive compliance requirements  related
    25  to  greenhouse gas emissions in any other provision of law.  For fashion
    26  sellers with global revenue  over  one  billion  dollars,  the  absolute
    27  contraction  approach  must  be used to calculate scope three emissions.
    28  Fashion sellers shall meet targets and report  their  compliance  on  an
    29  annual  basis  in  their  due  diligence report, as required pursuant to
    30  subdivision three of this section. If found to  be  out  of  compliance,
    31  fashion sellers shall have eighteen months to remedy their emissions and
    32  return  to  the necessary reduction pathway to deliver on their targets.
    33  In non-target years, non-compliance shall mean an increase  in  absolute
    34  emissions  in  three  consecutive  years,  for  companies over a billion
    35  dollars in revenue. In  target  years,  non-compliance  shall  mean  not
    36  reaching the target;
    37    (C)  being  in  compliance  with the rules and regulations made by the
    38  department of state in consultation with the department of environmental
    39  conservation based on, at a minimum, the  Zero  Discharge  of  Hazardous
    40  Chemicals  Program's  most recent wastewater guidelines, fashion sellers
    41  shall be required, for all significant tier two  dyeing,  finishing  and
    42  garment  washing  suppliers, to sample and report on wastewater chemical
    43  concentrations and water usage, within two years of the  effective  date
    44  of  this  section. Such reports shall be independently verified. Fashion
    45  sellers shall also provide corrective action plans for their  wastewater
    46  treatment  within  thirty  months of the effective date of this section.
    47  After three years of the effective date of this section, fashion sellers
    48  shall be considered out of compliance  if  their  significant  tier  two
    49  dyeing,  finishing and garment suppliers have not made adequate progress
    50  in  remediation  of  wastewater  pollution  concentrations.  Significant
    51  suppliers  shall  mean  suppliers  representing  seventy-five percent of
    52  fabric by volume.  Compliance with the rules and regulations made by the
    53  department of state shall not waive compliance requirements  related  to
    54  greenhouse gas emissions in any other provision of law;
    55    (D) utilizing responsible exit or disengagement strategies;

        A. 4333--C                          6
 
     1    (E)  consulting  and  engaging  with impacted and potentially impacted
     2  stakeholders and rights holders and their representatives;
     3    (5) track implementation and results;
     4    (6)  provide  for  or  co-operate  in  remediation  in the event of an
     5  adverse impact:
     6    (A) remedies shall seek to restore the  affected  person  or  persons,
     7  where  practicable,  to  the  situation  they would have been in had the
     8  adverse impact not occurred and shall enable remediation that is propor-
     9  tionate to the significance and scale of the adverse impact; and
    10    (B) remedies shall include, depending on the nature and extent of  the
    11  adverse  impact,  remediation, restitution or financial or non-financial
    12  compensation, including establishing compensation funds for  victims  or
    13  for future outreach and educational programs, punitive sanctions includ-
    14  ing the dismissals of staff responsible for wrongdoing, and establishing
    15  and  undertaking  measures  to prevent future adverse impacts, which may
    16  include, but are not limited to the development of  internal  protocols,
    17  practices and procedures to prevent future adverse impacts.
    18    (b)  The due diligence requirements pursuant to this subdivision shall
    19  not be conditional upon the company being effectively  involved  in  the
    20  subsidiary's  day-to-day operations or exercising a sufficient degree of
    21  control on companies within its supply chain.
    22    3. Reporting. Every fashion seller shall develop  and  submit  to  the
    23  department  of  state  annually, beginning within eighteen months of the
    24  effective date of this section, a due diligence report.
    25    (a) Such report, excluding the information required in clause  two  of
    26  subparagraph  (i)  of  paragraph (a) of subdivision two of this section,
    27  shall also be made publicly available on the fashion seller's website in
    28  a machine readable and reusable format, published in line with open data
    29  principles through a clear and easily discoverable link to the  required
    30  information.  In  the event the fashion seller does not have an internet
    31  website, the company shall provide a written disclosure  to  any  person
    32  who has requested information within thirty days of receiving a request.
    33  Such  report  shall  also  include the fashion seller's annual volume of
    34  material produced, including breakdown by material type.
    35    (b) Such report shall contain annual activities and financial spending
    36  to support supply chain due diligence.
    37    (c) The department of state shall identify and notify fashion  sellers
    38  that  have  failed  to file a due diligence report that they have thirty
    39  days to file such report before being placed on a  public  non-compliant
    40  list  and that they may be referred to the attorney general for investi-
    41  gation.
    42    (d) The department of state shall review the due diligence reports for
    43  completeness.
    44    (e) Fashion sellers shall have twelve months from the introduction  of
    45  any  updated guidance documents to integrate such guidance into the next
    46  annual due diligence report.
    47    (f) The department of state shall establish a standardized  due  dili-
    48  gence  report  format  model and publish such model due diligence report
    49  online for use by fashion sellers in compliance with this section.
    50    4. Regulations. (a) The department of  state  shall,  in  consultation
    51  with  the department of environmental conservation, promulgate all rules
    52  and regulations necessary to implement the provisions  of  this  section
    53  within six months from the effective date of this section.
    54    (b)  The  department  of state, in consultation with the department of
    55  environmental conservation, shall also develop  and  disseminate  educa-
    56  tional  materials to fashion sellers, including providing alerts on time

        A. 4333--C                          7
 
     1  sensitive issues, emerging issues, and high-risk country situations, and
     2  assisting fashion sellers in improving the quality of  their  due  dili-
     3  gence processes.
     4    (c)  The  department  of state shall develop regulations regarding the
     5  information required to be reported by fashion sellers in the due  dili-
     6  gence  report  in  item (B) of clause four of subparagraph (ii) of para-
     7  graph (a) of subdivision two of this section.  Such regulations shall be
     8  developed in consultation with the department of environmental conserva-
     9  tion and the most recent Greenhouse Gas Protocol. Such regulations shall
    10  develop methodologies to calculate data capture as laid out in item  (A)
    11  of clause four of subparagraph (ii) of  paragraph (a) of subdivision two
    12  of this section, prior to that requirement becoming effective.
    13    (d)  The  department  of state shall develop regulations regarding the
    14  information required to be reported by fashion sellers in the due  dili-
    15  gence  report  in  item (C) of clause four of subparagraph (ii) of para-
    16  graph (a) of subdivision two of this section. Such regulations shall  be
    17  developed in consultation with the department of environmental conserva-
    18  tion  and  the  Zero Discharge Hazardous Chemicals Program's most recent
    19  wastewater guidelines.
    20    (e) The department of state shall  develop  regulations  on  reporting
    21  requirements  that  minimize  duplication of effort and allows a fashion
    22  seller to submit a due diligence report to the department of state  that
    23  is  prepared to meet other national and international reporting require-
    24  ments, including any reports required by the federal government, as long
    25  as such reports satisfy all of the requirements of  subdivision  two  of
    26  this section.
    27    5.  Verification.  (a)  The department of state shall, in consultation
    28  with the department of environmental conservation, develop a process for
    29  accrediting  verification  bodies  authorized  to  provide  verification
    30  services  for the purposes of this section, including which requirements
    31  the entity is authorized to verify.
    32    (b) Such process shall at a minimum consider:
    33    (i) the demonstrated qualifications of verification  staff,  including
    34  their  education,  experience,  and professional licenses.  Verification
    35  bodies must employ and retain at least five total full-time  staff  with
    36  expertise in the requirements they seek to verify under this section;
    37    (ii)  any judicial proceedings, enforcement actions, or administrative
    38  actions filed against the body within the previous five years; and
    39    (iii) the policies and mechanisms in place  to  prevent  conflicts  of
    40  interest  and  to  identify  and  resolve potential conflict of interest
    41  situations if they arise. The department  shall  require  applicants  to
    42  submit the following information, at a minimum:
    43    (1)  identification of services provided by the verification body, the
    44  industries that the body serves, and the locations where those  services
    45  are provided;
    46    (2)  a  detailed  organizational  chart that includes the verification
    47  body, its management structure, and any related entities; and
    48    (3) the verification body's internal conflict of interest policy  that
    49  identifies  activities and limits to monetary or non-monetary gifts that
    50  apply to all employees and procedures to monitor conflicts of interest.
    51    (c) Verification bodies shall not be authorized to provide services to
    52  a company where a conflict of interest exists. A  conflict  of  interest
    53  shall include:
    54    (i) where the verification body and reporting entity share any manage-
    55  ment  staff  or  board  of  directors  membership,  or any of the senior

        A. 4333--C                          8
 
     1  management staff of the reporting  entity  have  been  employed  by  the
     2  verification body, or vice versa, within the previous five years;
     3    (ii)  any  employee  of  the  verification  body, or any employee of a
     4  related entity, or a subcontractor who is a member of  the  verification
     5  team  has  provided  the  reporting  entity with services related to the
     6  areas of verification, or any services designated by the  department  of
     7  state, within the previous five years;
     8    (iii)  any  staff member of the verification body provides any type of
     9  non-monetary incentive to a reporting entity to  secure  a  verification
    10  services contract; and
    11    (iv) any additional criteria provided by the department of state.
    12    (d) Verification bodies that have been accredited by the department of
    13  state  shall  notify the department within thirty days if they no longer
    14  meet the verification requirements set forth by this section.
    15    6. Monitoring and enforcement. (a) The requirements imposed on fashion
    16  sellers by this section shall be monitored, investigated,  and  enforced
    17  by  the  attorney general or an administrator designated by the attorney
    18  general to bring civil proceedings for an injunction, or fines for mone-
    19  tary damages as described in this section, or  civil  performance  of  a
    20  statutory  duty. Fashion sellers shall be deemed non-compliant with this
    21  section if they fail to conduct  effective  due  diligence  pursuant  to
    22  subdivision  two  of this section or fail to file a due diligence report
    23  pursuant to subdivision three of this section.
    24    (b) The department of state shall identify and notify fashion  sellers
    25  that  have  failed to file a complete due diligence report in accordance
    26  with the rules and regulations promulgated by the department of state in
    27  consultation with the department of environmental conservation.  If such
    28  fashion sellers fail to file a complete report, after a period of  three
    29  months,  the  department  of  state  shall  refer fashion sellers to the
    30  attorney general for enforcement for failure to file a complete report.
    31    (c) The department of  environmental  conservation  shall  review  and
    32  certify  effective  due  diligence  for environmental matters in the due
    33  diligence report and identify fashion sellers for referral to the attor-
    34  ney general for any failures.
    35    (d) The department of state shall compile and maintain a list of  non-
    36  compliant fashion sellers on the department's website. The department of
    37  state  shall refer to the attorney general for investigation any fashion
    38  seller who fails to file a due diligence  report  or  fails  to  conduct
    39  effective  due  diligence,  once any grace period lapses and the fashion
    40  seller remains in non-compliance.
    41    (e) Fashion sellers found to have  failed  to  conduct  effective  due
    42  diligence  pursuant to subdivision two of this section or failed to file
    43  a complete due diligence report pursuant to subdivision  three  of  this
    44  section,  after  the  attorney general, or the attorney general's desig-
    45  nated administrator, as applicable, has provided notice  of  non-compli-
    46  ance,  and  after  a  three-month  period to meet obligations under this
    47  section has lapsed, may be  assessed  a  civil  penalty  not  to  exceed
    48  fifteen  thousand  dollars  per  violation  per day. Such fines shall be
    49  deposited in the community benefit fund established by  section  ninety-
    50  seven-ccc of the state finance law.
    51    (f)  The attorney general, or the attorney general's designated admin-
    52  istrator shall use  a  risk-based  approach  in  enforcement  and  shall
    53  publish enforcement guidelines.
    54    (g)  Any person may report a violation of this section to the attorney
    55  general's office.

        A. 4333--C                          9
 
     1    § 3. The state finance law is amended by adding a new  section  97-ccc
     2  to read as follows:
     3    § 97-ccc. Fashion remediation fund.  1. There is hereby established in
     4  the  joint  custody of the comptroller, the commissioner of taxation and
     5  finance, the commissioner of environmental conservation, and the commis-
     6  sioner of labor a special fund to be known as  the  fashion  remediation
     7  fund.
     8    2.  Such  fund shall consist of all moneys deposited pursuant to para-
     9  graph (c) of subdivision six of section three hundred ninety-nine-mm  of
    10  the general business law.
    11    3. The moneys in the fund shall be expended by the comptroller for the
    12  purpose  of  implementing  one or more environmental benefit projects or
    13  environmental remediation projects that directly and verifiably  benefit
    14  the  workers  and communities directly impacted, to the extent practica-
    15  ble, at the location the injury has occurred.
    16    4. On or before the first day of February each year,  the  comptroller
    17  shall  certify to the temporary president of the senate, and the speaker
    18  of the assembly, the amount of money deposited by  source  in  the  fund
    19  during  the  preceding  calendar year, as well as all disbursements from
    20  the fund during the preceding calendar year.
    21    5. Moneys shall be payable from the fund on the audit and  warrant  of
    22  the  comptroller  on vouchers certified and approved by the commissioner
    23  of environmental conservation as applicable.
    24    § 4. The attorney general shall  certify  to  the  governor  that  the
    25  office  of  the  attorney  general  is  prepared  to  execute the duties
    26  assigned in subdivision 6 of section 399-mm of the general business  law
    27  within  one year following the effective date of this act. If, after the
    28  expiration of one year, the  attorney  general  requires  more  time  to
    29  certify  that  the office of the attorney general is prepared to execute
    30  such duties, the attorney general may, for good cause  shown,  apply  to
    31  the governor for an extension of time. The governor may grant or deny an
    32  extension of up to one year according to their discretion.
    33    §  5.  Severability. If any word, phrase, clause, sentence, paragraph,
    34  section, or part of this act shall be adjudged by any court of competent
    35  jurisdiction  to be invalid, such judgment shall not affect, impair,  or
    36  invalidate the remainder thereof, but shall be confined in its operation
    37  to the word, phrase, clause, sentence, paragraph, section, or part ther-
    38  eof  directly  involved in the controversy in which such  judgment shall
    39  have been rendered.
    40    § 6.  The department of state, in consultation with the department  of
    41  environmental  conservation,  shall  promulgate  rules  and  regulations
    42  necessary for the implementation of this act within one  hundred  eighty
    43  days of the effective date of this act.
    44    §  7.  This act shall take effect immediately; provided, however, that
    45  sections one through three of this act shall take effect one year  after
    46  they  shall  have become a law; provided further, however, that subdivi-
    47  sion 6 of section 399-mm of the general business law as added by section
    48  two of this act shall take effect one year after  the  attorney  general
    49  certifies that the office of the attorney general is prepared to execute
    50  the  duties  assigned  in  such  subdivision. The attorney general shall
    51  notify the legislative bill drafting commission upon the  occurrence  of
    52  such certification in order that the commission may maintain an accurate
    53  and  timely  effective data base of the official text of the laws of the
    54  state of New York in  furtherance  of  effectuating  the  provisions  of
    55  section  44  of the legislative law and section 70-b of the public offi-
    56  cers law.
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