BRISPORT, CLEARE, FAHY, FERNANDEZ, GIANARIS, GONZALEZ, GOUNARDES, HARCKHAM, HINCHEY, JACKSON,
KAVANAGH, KRUEGER, LIU, MAY, MYRIE, RIVERA, RYAN C, RYAN S, SALAZAR, SEPULVEDA, SERRANO, SKOUFIS,
WEBB
MLTSPNSR
Add §399-mm, Gen Bus L; add §97-ccc, St Fin L
Requires fashion sellers to carry out environmental due diligence for the portions of their business related to wearing apparel, footwear or fashion bags, including wearing apparel, footwear or fashion bags produced as a private label; establishes a fashion remediation fund.
STATE OF NEW YORK
________________________________________________________________________
4558--B
2025-2026 Regular Sessions
IN SENATE
February 7, 2025
___________
Introduced by Sens. HOYLMAN-SIGAL, BRISPORT, CLEARE, FAHY, FERNANDEZ,
GIANARIS, GONZALEZ, GOUNARDES, HARCKHAM, HINCHEY, JACKSON, KAVANAGH,
KRUEGER, LIU, MAY, MYRIE, RIVERA, C. RYAN, S. RYAN, SALAZAR, SEPULVE-
DA, SERRANO, SKOUFIS, WEBB -- read twice and ordered printed, and when
printed to be committed to the Committee on Consumer Protection --
committee discharged, bill amended, ordered reprinted as amended and
recommitted to said committee -- 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:
8 (a) "Doing business in this state" shall mean actively engaging in any
9 transaction for the purpose of financial or pecuniary gain or profit.
10 (b) "Gross receipts" shall mean the gross amounts realized, otherwise
11 known as the sum of money and the fair market value of other property or
12 services received, on the sale or exchange of property, the performance
13 of services, or the use of property or capital, including rents, royal-
14 ties, interest, and dividends, in a transaction that produces business
15 income, in which the income, gain, or loss is recognized, or would be
16 recognized if the transaction were in the United States, under the
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD01707-08-5
S. 4558--B 2
1 Internal Revenue Code, as applicable for purposes of this section.
2 Amounts realized on the sale or exchange of property shall not be
3 reduced by the cost of goods sold or the basis of property sold. Gross
4 receipts, even if business income, shall not include the following
5 items:
6 (i) repayment, maturity, or redemption of the principal of a loan,
7 bond, mutual fund, certificate of deposit, or similar marketable instru-
8 ment;
9 (ii) the principal amount received under a repurchase agreement or
10 other transaction properly characterized as a loan;
11 (iii) proceeds from issuance of the taxpayer's own stock or from sale
12 of treasury stock;
13 (iv) damages and other amounts received as the result of litigation;
14 (v) property acquired by an agent on behalf of another;
15 (vi) tax refunds and other tax benefit recoveries;
16 (vii) pension reversions;
17 (viii) contributions to capital, except for sales of securities by
18 securities dealers;
19 (ix) income from discharge of indebtedness;
20 (x) amounts realized from exchanges of inventory that are not recog-
21 nized under the Internal Revenue Code;
22 (xi) amounts received from transactions in intangible assets held in
23 connection with a treasury function of the taxpayer's unitary business
24 and the gross receipts and overall net gains from the maturity, redemp-
25 tion, sale, exchange, or other disposition of those intangible assets;
26 and
27 (xii) amounts received from hedging transactions involving intangible
28 assets. A "hedging transaction" means a transaction related to the
29 taxpayer's trading function involving futures and options transactions
30 for the purpose of hedging price risk of the products or commodities
31 consumed, produced, or sold by the taxpayer.
32 (c) "Fashion seller" shall mean a business entity which sells articles
33 of wearing apparel, footwear, or fashion bags that together exceed one
34 hundred million dollars in annual gross receipts, but shall not include
35 the sale of used wearing apparel, footwear, or fashion bags, nor shall
36 it include multi-brand retailers, except where:
37 (i) the apparel, footwear, and fashion bag private labels of those
38 companies together exceed one hundred million dollars in global revenue;
39 or
40 (ii) the business primarily operates as an online platform or market-
41 place facilitating the sale of third-party goods in the categories of
42 apparel, footwear, or fashion bags, and at least fifty percent of the
43 platform's total sales volume comes from these categories, even if the
44 platform itself does not own the brands.
45 (d) "Article of wearing apparel" shall mean any costume or article of
46 clothing worn or intended to be worn by individuals.
47 (e) "Footwear" shall mean any covering worn or intended to be worn on
48 the foot.
49 (f) "Fashion bag" shall mean flexible packaging made of textiles,
50 leather or other animal products, woven material or other similar mate-
51 rials intended for repeated use.
52 (g) "Due diligence" shall mean the comprehensive process companies
53 shall carry out to identify, cease, prevent, mitigate, account for, and
54 remediate actual and potential adverse impacts to the environment in
55 their own operations and in their supply chain, in compliance with, at a
56 minimum, the standards outlined in the most recent Organisation for
S. 4558--B 3
1 Economic Co-operation and Development Guidelines for Multinational
2 Enterprises, and the most recent Organisation for Economic Co-operation
3 and Development Due Diligence Guidance for Responsible Supply Chains in
4 the Garment and Footwear Sector.
5 (h) "Due diligence report" shall mean the document prepared by the
6 company to communicate all relevant information concerning the exist-
7 ence, implementation and outcomes of due diligence in order to comply
8 with the requirements of this section, and to comply with any rules or
9 regulations established pursuant to this section.
10 (i) "Risk-based approach" shall mean commensurate to the likelihood
11 and severity of the harm. The fashion seller shall prioritize the order
12 in which it takes action based on the likelihood and severity of harm.
13 Severity of impacts shall be determined according to their scale or
14 gravity, scope, and irremediable character.
15 (j) "Supply chain tiers" shall mean a four tier system defined as the
16 following:
17 (i) "Tier one" shall mean suppliers who produce finished goods for
18 fashion sellers, including suppliers' subcontractors, who provide the
19 following services, including but not limited to sewing and embroider-
20 ing;
21 (ii) "Tier two" shall mean suppliers to tier one, including subcon-
22 tractors, who provide the following services or goods, including but not
23 limited to knitting, weaving, washing, dyeing, finishing, printing for
24 finished goods, and components and materials for finished goods when
25 they are stand-alone operations and not integrated with tier one. Compo-
26 nents shall mean materials used to build a product, including but not
27 limited to buttons, zippers, rubber soles, down, and fusibles;
28 (iii) "Tier three" shall mean suppliers to tier two suppliers, includ-
29 ing subcontractors, who process raw materials, such as spinning; and
30 (iv) "Tier four" shall mean companies, including subcontractors, that
31 provide raw materials to tier three.
32 (k) "Independently verified" shall mean audited by a verification body
33 accredited by the department of state as described in subdivision five
34 of this section.
35 (l) "Open data principles" shall mean data that can be freely used,
36 reused and redistributed by anyone. Such data shall be findable or easi-
37 ly discoverable on a website or within a database, accessible or avail-
38 able in a machine readable, convenient, modifiable form and published as
39 a whole, complete dataset, interoperable or able to be mixed with
40 different datasets, and reusable or provided under an open license that
41 permits reuse and redistribution, including the intermixing with other
42 datasets.
43 (m) "Employee" shall mean all workers, whether full-time or part-time,
44 permanent or fixed-term, directly contracted or hired indirectly through
45 an agency or other intermediary.
46 2. Due diligence. (a) Every fashion seller shall effectively carry out
47 environmental due diligence for the portions of their business related
48 to wearing apparel, footwear or fashion bags, including wearing apparel,
49 footwear or fashion bags produced as a private label, which shall
50 include:
51 (i) supply chain mapping:
52 (1) companies taking a risk-based approach and implementing good faith
53 efforts to map suppliers across tier one through tier four of
54 production.
55 (2) disclosure of suppliers of the production supply chain including:
56 the name, parent company and product type, filed by the following:
S. 4558--B 4
1 (A) Tier one suppliers shall be disclosed within twelve months of the
2 effective date of this section, and shall contain a minimum of eighty-
3 five percent of suppliers by volume.
4 (B) Tier two suppliers shall be disclosed within two years of the
5 effective date of this section, and shall contain a minimum of seventy-
6 five percent of suppliers by volume.
7 (C) Tier three suppliers shall be disclosed within four years of the
8 effective date of this section and shall contain a minimum of fifty
9 percent of suppliers by volume or dollar value.
10 (D) Tier four suppliers shall be disclosed within six years of the
11 effective date of this section and shall contain a minimum of fifty
12 percent of suppliers by volume or dollar value.
13 (ii) in carrying out effective due diligence, fashion sellers shall be
14 in compliance with the Organisation for Economic Co-operation and Devel-
15 opment Guidelines for Multinational Enterprises and the Organisation for
16 Economic Co-operation and Development Due Diligence Guidance for Respon-
17 sible Supply Chains in the Garment and Footwear Sector, requiring fash-
18 ion sellers to, at a minimum:
19 (1) embed responsible business conduct into the company's policies and
20 management systems;
21 (2) identify areas of significant risks in the contexts of its own
22 activities and business and supply chain relationships;
23 (3) identify, prioritize, and assess the significant potential and
24 actual adverse impacts of those risks;
25 (4) cease, prevent or mitigate those risks. This shall include, but
26 not be limited to:
27 (A) incentivizing improved supplier performance on environmental
28 impact by embedding responsible purchasing practices in its supply chain
29 relationships and contracts, including but not limited to contract
30 renewals, longer term contracts, price premiums, providing reasonable
31 assistance to suppliers so that they can meet applicable environmental
32 standards including but not limited to meeting the carbon emission
33 reduction targets set out in this act, and developing pricing models
34 that account for the cost investments.
35 (B) establishing quantitative baseline and reduction targets on green-
36 house gas emissions. Greenhouse gas emissions inventory shall be
37 reported annually, starting in two thousand twenty-seven for emissions
38 in the prior fiscal year; include absolute figures; and conform with the
39 rules and regulations made by the department of state in consultation
40 with the department of environmental conservation based on the account-
41 ing and reporting requirements of the most recent Greenhouse Gas Proto-
42 col Corporate Accounting and Reporting Standard, Scope Two Guidance,
43 and, starting in two thousand twenty-eight, the most recent Corporate
44 Value Chain Scope Three accounting and reporting standard promulgated by
45 the World Resources Institute and the World Business Council for
46 Sustainable Development. Greenhouse gas emissions inventory reported in
47 the due diligence report required pursuant to subdivision three of this
48 section shall be independently verified no less than once every two
49 years. Fashion sellers shall not be subject to an administrative penalty
50 under this section for any misstatements with regard to scope three
51 emissions disclosures made with a reasonable basis and disclosed in good
52 faith. Greenhouse gas emission reduction targets must be near-term and
53 long-term, covering scopes one, two and three emissions, and align with
54 the rules and regulations made by the department of state in consulta-
55 tion with the department of environmental conservation based on, at a
56 minimum, Science Based Target initiative's most recent target validation
S. 4558--B 5
1 criteria as promulgated by World Resources Institute, CDP, United
2 Nations Global Compact and the World Wildlife Fund. Compliance with the
3 rules and regulations made by the department of state shall not waive
4 compliance requirements related to greenhouse gas emissions in any other
5 provision of law. For fashion sellers with global revenue over one
6 billion dollars, the absolute contraction approach must be used to
7 calculate scope three emissions. Fashion sellers shall meet targets and
8 report their compliance on an annual basis in their due diligence
9 report, as required pursuant to subdivision three of this section. If
10 found to be out of compliance, fashion sellers shall have eighteen
11 months to remedy their emissions and return to the necessary reduction
12 pathway to deliver on their targets. In non-target years, non-compliance
13 shall mean an increase in absolute emissions in five consecutive years,
14 for companies over a billion dollars in revenue. In target years, non-
15 compliance shall mean not reaching the target;
16 (C) in accordance with internationally recognized methodologies for
17 chemical management and wastewater testing, requiring fashion sellers
18 within two years of the effective date of this section, for all signif-
19 icant tier two dyeing, finishing, printing and garment washing suppli-
20 ers, to: sample and report on wastewater chemical concentrations and
21 water usage; report on chemical inventory; and provide evidence that the
22 supplier is in compliance with local chemical management laws. For
23 significant suppliers that use indirect wastewater management, fashion
24 sellers shall report the chemical concentrations of the wastewater
25 treatment facilities report on the percentage of significant suppliers
26 that have chemical remediation plans in place and what the fashion sell-
27 er is doing to remediate. Reports required pursuant to this item shall
28 be independently verified. Three years after the effective date of this
29 section, fashion sellers shall be considered out of compliance if their
30 significant tier two dyeing, finishing, printing and garment suppliers
31 have not made adequate progress in remediation of wastewater pollution
32 concentrations and chemical management. For the purposes of this item,
33 "significant suppliers" shall mean suppliers representing seventy-five
34 percent of fabric by volume;
35 (D) utilizing responsible exit or disengagement strategies;
36 (E) consulting and engaging with impacted and potentially impacted
37 stakeholders and rights holders and their representatives;
38 (5) track implementation and results;
39 (6) provide for or co-operate in remediation in the event of an
40 adverse impact:
41 (A) remedies shall seek to restore the affected locations, places or
42 person or persons, where practicable, to the situation they would have
43 been in had the adverse impact not occurred and shall enable remediation
44 that is proportionate to the significance and scale of the adverse
45 impact; and
46 (B) remedies shall include, depending on the nature and extent of the
47 adverse impact, remediation, restitution or financial or non-financial
48 compensation, including establishing compensation funds for victims or
49 for future outreach and educational programs, punitive sanctions includ-
50 ing the dismissals of staff responsible for wrongdoing, and establishing
51 and undertaking measures to prevent future adverse impacts, which may
52 include, but are not limited to the development of internal protocols,
53 practices and procedures to prevent future adverse impacts.
54 (b) The due diligence requirements pursuant to this subdivision shall
55 not be conditional upon the company being effectively involved in the
S. 4558--B 6
1 subsidiary's day-to-day operations or exercising a sufficient degree of
2 control on companies within its supply chain.
3 3. Reporting. Every fashion seller shall develop and submit to the
4 department of state annually, beginning within eighteen months of the
5 effective date of this section, a due diligence report.
6 (a) Such report, excluding the information required in clause two of
7 subparagraph (i) of paragraph (a) of subdivision two of this section,
8 shall also be made publicly available on the fashion seller's website in
9 a machine readable and reusable format, published in line with open data
10 principles through a clear and easily discoverable link to the required
11 information. In the event the fashion seller does not have an internet
12 website, the company shall provide a written disclosure to any person
13 who has requested information within thirty days of receiving a request.
14 Such report shall also include the fashion seller's annual volume of
15 material produced, including breakdown by material type.
16 (b) Such report shall contain annual activities and financial spending
17 to support supply chain due diligence.
18 (c) The department of state shall identify and notify fashion sellers
19 that have failed to file a due diligence report that they have thirty
20 days to file such report before being placed on a public non-compliant
21 list and that they may be referred to the attorney general for investi-
22 gation.
23 (d) The department of state shall review the due diligence reports for
24 completeness.
25 (e) Fashion sellers shall have twelve months from the introduction of
26 any updated guidance documents to integrate such guidance into the next
27 annual due diligence report.
28 (f) The department of state shall establish a standardized due dili-
29 gence report format model and publish such model due diligence report
30 online for use by fashion sellers in compliance with this section.
31 4. Regulations. (a) The department of state shall, in consultation
32 with the department of environmental conservation, promulgate all rules
33 and regulations necessary to implement the provisions of this section
34 within six months from the effective date of this section.
35 (b) The department of state, in consultation with the department of
36 environmental conservation, shall also develop and disseminate educa-
37 tional materials to fashion sellers, including providing alerts on time
38 sensitive issues, emerging issues, and high-risk country situations, and
39 assisting fashion sellers in improving the quality of their due dili-
40 gence processes.
41 (c) The department of state shall develop regulations regarding the
42 information required to be reported by fashion sellers in the due dili-
43 gence report in item (C) of clause four of subparagraph (ii) of para-
44 graph (a) of subdivision two of this section. Such regulations shall be
45 developed in consultation with the department of environmental conserva-
46 tion.
47 (d) The department of state shall develop regulations on reporting
48 requirements that minimize duplication of effort and allows a fashion
49 seller to submit a due diligence report to the department of state that
50 is prepared to meet other national and international reporting require-
51 ments, including any reports required by the federal government, as long
52 as such reports satisfy all of the requirements of subdivision two of
53 this section.
54 5. Verification. (a) The department of state shall, in consultation
55 with the department of environmental conservation, develop a process for
56 accrediting verification bodies authorized to provide verification
S. 4558--B 7
1 services for the purposes of this section, including which requirements
2 the entity is authorized to verify.
3 (b) Such process shall at a minimum consider:
4 (i) the demonstrated qualifications of verification staff, including
5 their education, experience, and professional licenses. Verification
6 bodies must employ and retain at least five total full-time staff with
7 expertise in the requirements they seek to verify under this section;
8 (ii) any judicial proceedings, enforcement actions, or administrative
9 actions filed against the body within the previous five years; and
10 (iii) the policies and mechanisms in place to prevent conflicts of
11 interest and to identify and resolve potential conflict of interest
12 situations if they arise. The department shall require applicants to
13 submit the following information, at a minimum:
14 (1) identification of services provided by the verification body, the
15 industries that the body serves, and the locations where those services
16 are provided;
17 (2) a detailed organizational chart that includes the verification
18 body, its management structure, and any related entities; and
19 (3) the verification body's internal conflict of interest policy that
20 identifies activities and limits to monetary or non-monetary gifts that
21 apply to all employees and procedures to monitor conflicts of interest.
22 (c) Verification bodies shall not be authorized to provide services to
23 a company where a conflict of interest exists. A conflict of interest
24 shall include:
25 (i) where the verification body and reporting entity share any manage-
26 ment staff or board of directors membership, or any of the senior
27 management staff of the reporting entity have been employed by the
28 verification body, or vice versa, within the previous five years;
29 (ii) any employee of the verification body, or any employee of a
30 related entity, or a subcontractor who is a member of the verification
31 team has provided the reporting entity with services related to the
32 areas of verification, or any services designated by the department of
33 state, within the previous five years;
34 (iii) any staff member of the verification body provides any type of
35 non-monetary incentive to a reporting entity to secure a verification
36 services contract; and
37 (iv) any additional criteria provided by the department of state.
38 (d) Verification bodies that have been accredited by the department of
39 state shall notify the department within thirty days if they no longer
40 meet the verification requirements set forth by this section.
41 6. Monitoring and enforcement. (a) The requirements imposed on fashion
42 sellers by this section shall be monitored, investigated, and enforced
43 by the attorney general or an administrator designated by the attorney
44 general to bring civil proceedings for an injunction, or fines for mone-
45 tary damages as described in this section, or civil performance of a
46 statutory duty. Fashion sellers shall be deemed non-compliant with this
47 section if they fail to conduct effective due diligence pursuant to
48 subdivision two of this section or fail to file a due diligence report
49 pursuant to subdivision three of this section.
50 (b) The department of state shall identify and notify fashion sellers
51 that have failed to file a complete due diligence report in accordance
52 with the rules and regulations promulgated by the department of state in
53 consultation with the department of environmental conservation. If such
54 fashion sellers fail to file a complete report, after a period of three
55 months, the department of state shall refer fashion sellers to the
56 attorney general for enforcement for failure to file a complete report.
S. 4558--B 8
1 (c) The department of environmental conservation shall review and
2 certify effective due diligence for environmental matters in the due
3 diligence report and identify fashion sellers for referral to the attor-
4 ney general for any failures.
5 (d) The department of state shall compile and maintain a list of non-
6 compliant fashion sellers on the department's website. The department of
7 state shall refer to the attorney general for investigation any fashion
8 seller who fails to file a due diligence report or fails to conduct
9 effective due diligence, once any grace period lapses and the fashion
10 seller remains in non-compliance.
11 (e) Fashion sellers found to have failed to conduct effective due
12 diligence pursuant to subdivision two of this section or failed to file
13 a complete due diligence report pursuant to subdivision three of this
14 section, after the attorney general, or the attorney general's desig-
15 nated administrator, as applicable, has provided notice of non-compli-
16 ance, and after a three-month period to meet obligations under this
17 section has lapsed, may be assessed a civil penalty not to exceed
18 fifteen thousand dollars per violation per day. Such fines shall be
19 deposited in the community benefit fund established by section ninety-
20 seven-ccc of the state finance law.
21 (f) The attorney general, or the attorney general's designated admin-
22 istrator shall use a risk-based approach in enforcement and shall
23 publish enforcement guidelines.
24 (g) Any person may report a violation of this section to the attorney
25 general's office.
26 § 3. The state finance law is amended by adding a new section 97-ccc
27 to read as follows:
28 § 97-ccc. Fashion remediation fund. 1. There is hereby established in
29 the joint custody of the comptroller, the commissioner of taxation and
30 finance, and the commissioner of environmental conservation a special
31 fund to be known as the fashion remediation fund.
32 2. Such fund shall consist of all moneys deposited pursuant to para-
33 graph (e) of subdivision six of section three hundred ninety-nine-mm of
34 the general business law.
35 3. The moneys in the fund shall be expended by the comptroller for the
36 purpose of implementing one or more environmental benefit projects or
37 environmental remediation projects that directly and verifiably benefit
38 the workers and communities directly impacted, to the extent practica-
39 ble, at the location the injury has occurred.
40 4. On or before the first day of February each year, the comptroller
41 shall certify to the temporary president of the senate, and the speaker
42 of the assembly, the amount of money deposited by source in the fund
43 during the preceding calendar year, as well as all disbursements from
44 the fund during the preceding calendar year.
45 5. Moneys shall be payable from the fund on the audit and warrant of
46 the comptroller on vouchers certified and approved by the commissioner
47 of environmental conservation as applicable.
48 § 4. The attorney general shall certify to the governor that the
49 office of the attorney general is prepared to execute the duties
50 assigned in subdivision 6 of section 399-mm of the general business law
51 within one year following the effective date of this act. If, after the
52 expiration of one year, the attorney general requires more time to
53 certify that the office of the attorney general is prepared to execute
54 such duties, the attorney general may, for good cause shown, apply to
55 the governor for an extension of time. The governor may grant or deny an
56 extension of up to one year according to their discretion.
S. 4558--B 9
1 § 5. Severability. If any word, phrase, clause, sentence, paragraph,
2 section, or part of this act shall be adjudged by any court of competent
3 jurisdiction to be invalid, such judgment shall not affect, impair, or
4 invalidate the remainder thereof, but shall be confined in its operation
5 to the word, phrase, clause, sentence, paragraph, section, or part ther-
6 eof directly involved in the controversy in which such judgment shall
7 have been rendered.
8 § 6. The department of state, in consultation with the department of
9 environmental conservation, shall promulgate rules and regulations
10 necessary for the implementation of this act within one hundred eighty
11 days of the effective date of this act.
12 § 7. This act shall take effect immediately; provided, however, that
13 sections one through three of this act shall take effect one year after
14 they shall have become a law; provided further, however, that subdivi-
15 sion 6 of section 399-mm of the general business law as added by section
16 two of this act shall take effect one year after the attorney general
17 certifies that the office of the attorney general is prepared to execute
18 the duties assigned in such subdivision. The attorney general shall
19 notify the legislative bill drafting commission upon the occurrence of
20 such certification in order that the commission may maintain an accurate
21 and timely effective data base of the official text of the laws of the
22 state of New York in furtherance of effectuating the provisions of
23 section 44 of the legislative law and section 70-b of the public offi-
24 cers law.
