New York State Assembly

 
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AB7389 Summary:

AB7389 Actions:

AB7389 Committee Votes:

Committee:ENVIRONMENTAL CONSERVATION   Chair:Englebright      
DATE:03/22/2022AYE/NAY:23/7  Action: Favorable refer to committee Ways and Means        
Englebright
Aye
Smullen
Nay
Glick
Aye
Miller
Nay
Colton
Aye
Tague
Nay
Cymbrowitz
Aye
Manktelow
Nay
O'Donnell
Aye
Brown
Aye
Gunther
Aye
Durso
Nay
Thiele
Aye
Lemondes
Nay
Abinanti
Aye
Simpson
Nay
Fahy
Aye
Otis
Aye
Williams
Aye
Barrett
Aye
Carroll
Aye
Burke
Aye
Griffin
Aye
Epstein
Aye
McMahon
Aye
Burdick
Aye
Lunsford
Aye
Kelles
Aye
Gonzalez-Rojas
Aye
Septimo
Aye

Committee:RULES   Chair:Gottfried      
DATE:04/25/2022AYE/NAY:21/8  Action: Favorable         
Heastie
Excused
Barclay
Nay
Gottfried
Aye
Hawley
Nay
Nolan
Excused
Giglio
Nay
Weinstein
Aye
Blankenbush
Nay
Pretlow
Aye
Norris
Nay
Cook
Aye
Montesano
Nay
Glick
Aye
Ra
Nay
Aubry
Aye
Brabenec
Nay
Englebright
Aye
Dinowitz
Aye
Colton
Aye
Magnarelli
Aye
Paulin
Aye
Peoples-Stokes
Aye
Benedetto
Aye
Lavine
Aye
Lupardo
Aye
Zebrowski
Aye
Thiele
Aye
Braunstein
Aye
Dickens
Aye
Davila
Aye
Hyndman
Aye

Committee:WAYS AND MEANS   Chair:Weinstein      
DATE:04/25/2022AYE/NAY:20/15  Action: Favorable refer to committee Rules        
Weinstein
Aye
Ra
Nay
Glick
Aye
Fitzpatrick
Nay
Fahy
Aye
Hawley
Nay
Pretlow
Aye
Montesano
Nay
Colton
Aye
Blankenbush
Nay
Cook
Aye
Norris
Nay
Cahill
Aye
Brabenec
Nay
Aubry
Aye
Palmesano
Nay
Cusick
Aye
Byrne
Nay
Benedetto
Aye
Ashby
Nay
Weprin
Nay
Ramos
Aye
Braunstein
Aye
McDonald
Aye
Rozic
Nay
Dinowitz
Aye
Joyner
Nay
Magnarelli
Aye
Zebrowski
Aye
Bronson
Nay
Otis
Aye
Seawright
Aye
Hyndman
Nay
Walker
Aye
Bichotte Hermel
Aye

AB7389 Floor Votes:

AB7389 Memo:

NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
 submitted in accordance with Assembly Rule III, Sec 1(f)



 
BILL NUMBER: A7389C
 
SPONSOR: Kelles

 
TITLE OF BILL:
 
An act to amend the environmental conservation law, in relation to
establishing a moratorium on cryptocurrency mining operations that use
proof-of-work authentication methods to validate blockchain trans-
actions; and to require a comprehensive generic environmental impact
statement review
 
 
PURPOSE OR GENERAL IDEA OF BILL:
 
To establish a moratorium on cryptocurrency mining operations based on
proofof-work transaction authentication methods and require completion
of a comprehensive generic environmental impact study of cryptocurrency
mining operations using proof-of-work methodology in the State of New
York in the context of the Climate Leadership and Community Protection
Act (CLCPA) goals established in statute in 2019.
 
 
SUMMARY OF PROVISIONS:
 
Section 1 declares the legislative findings.
 
Section 2 places a two-year moratorium on air permit issuance- and
renewal for an electric generating facility that utilizes a carbon-based
fuel for cryptocurrency mining operations that use proof-of-work based
transaction validation methods.
 
Section 3 requires completion of a comprehensive generic environmental
impact statement by the New York State Department of Environmental
Conservation.
 
Section 4 requires one-hundred and twenty days of public comment on the
environmental impact statement and the holding of public hearings in
eight regions across the state prior to final issuance.

Section 5 requires issuance of a final generic environmental impact
statement after close of the public comment and public hearing period no
later than one year after the effective date of this act.
 
Section 6 provides definitions.
 
Section 7 provides the effective date.
 
 
JUSTIFICATION:
 
Block chain technology is an innovative technology that allows for the
recording and efficient transfer of information. The information in each
block is authenticated by users of the system in a transparent, decen-
tralized, and democratic manner. Each block has a unique identifier that
encodes the information of the block including code for the previous
information block from which the new information block was built creat-
ing a chain of information exchange known as a block chain.
 
Proof-of-Work is a unique methodology that has been used since 2009 to
create and authenticate new blocks on a block chain for cryptocurrency.
There are over 16 different methodologies of authenticating information
within a block. However, of these varied methods there is only one,
called Proof-of-Work that, by design, uses a substantial amount of
computational power to perform and thus uses a uniquely exorbitant
amount of energy. The Proof-of-Work authentication method was designed
to require individuals or companies to solve highly complex mathematical
equations in order to authenticate a transaction and earn valuable cred-
it. The more equations are solved by users the more complex the
equations get. By design, there is no software that can be created that
will be able to solve the equations better than brute force guesswork so
the only way to get an advantage and solve the equations faster is for
an individual or company to increase their computational power. This has
led to the expansion of large cryptocurrency mining operations consist-
ing of thousands of high power computers that run around the clock to
solve as many equations as possible and authenticate the most blocks.
 
There are an increasing number of cryptocurrency mining operations in
New York performing Proof-of-Work authentication of different block-
chains with some being built or modified to exclusively perform Proof-
of-Work authentications. Studies show that the magnitude of the computer
processing output required to authenticate a single block uses as much
energy as an average American household uses in a month.  The annual
global energy use for PoW authentication is equivalent to that of the
country of Sweden and exceeds the energy consumption of all the global
activity of major tech companies like Amazon, Google, and Facebook
combined.
 
The added energy usage and corresponding increased greenhouse gas emis-
sions from these new cryptocurrency mining operations performing Proof-
of-Work authentications in New York could hinder or prevent compliance
with the critical state carbon emissions goals put in law in the Climate
Leadership and Community Protection Act of 2019. Under this law, state-
wide greenhouse gas emissions must be reduced eighty-five percent by
2050 and the state economy must have net zero emissions across all
sectors.
 
We must determine whether growth of the Proof-of-Work authentication
cryptocurrency mining industry is incompatible with our greenhouse gas
emission targets established in law, or has other significant detri-
mental impacts to our air, water, or public health. By requiring a
statewide generic environmental impact statement, this crucial informa-
tion about the industry's impact upon our climate law, and associated
water, air and wildlife impacts, will be understood and can guide any
potential future policy related to industry regulation.
 
Climate change threatens the health, welfare, and economy of the state
with increasingly severe and widespread impacts to our communities due
to flooding, sea level rise, heat waves, coastal erosion, erratic and
unpredictable weather patterns, shifting climatic zones, loss of wild-
life, increased harmful algal blooms and invasive species, and increased
risk of disease. These consequences disproportionately impact environ-
mental justice communities making the need for this comprehensive
assessment both an environmental issue as well as a social justice
issue. We must not go backwards on our commitment, in law, to prevent
these disastrous impacts to the residents of New York.
 
 
LEGISLATIVE HISTORY:
 
New bill.
 
 
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:
 
NONE
 
 
EFFECTIVE DATE:
IMMEDIATELY

AB7389 Text:

 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                         7389--C
 
                               2021-2022 Regular Sessions
 
                   IN ASSEMBLY
 
                                       May 6, 2021
                                       ___________
 
        Introduced  by  M.  of  A.  KELLES, LUPARDO, ENGLEBRIGHT, THIELE, GLICK,
          MAGNARELLI, EPSTEIN, BURDICK, STECK, J. D. RIVERA, CLARK, NIOU,  FAHY,
          WALLACE,  BARRETT, CARROLL, L. ROSENTHAL, SEAWRIGHT, GALLAGHER, GONZA-
          LEZ-ROJAS, BURKE, STIRPE, MAMDANI, SIMON, GRIFFIN, ANDERSON,  McMAHON,
          MITAYNES, OTIS, McDONALD, GOTTFRIED, GALEF, DINOWITZ, PRETLOW, PAULIN,
          FORREST, ZINERMAN, SILLITTI, ZEBROWSKI, QUART, BURGOS, BICHOTTE HERME-
          LYN,  ABINANTI,  JACOBSON, LAVINE, SAYEGH -- read once and referred to
          the Committee on Banks -- reference changed to the Committee on  Envi-
          ronmental  Conservation -- committee discharged, bill amended, ordered
          reprinted as amended  and  recommitted  to  said  committee  --  again
          reported  from  said  committee  with amendments, ordered reprinted as
          amended and recommitted  to  said  committee  --  recommitted  to  the
          Committee  on  Environmental  Conservation 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  environmental  conservation law, in relation to
          establishing a moratorium on cryptocurrency mining operations that use
          proof-of-work authentication methods  to  validate  blockchain  trans-
          actions;  and  to require a comprehensive generic environmental impact
          statement review
 
          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:
 
     1    Section  1.    Legislative  findings. The legislature hereby finds and
     2  declares that:
     3    (a) Climate change threatens the health, welfare, and economy  of  the
     4  state with increasingly severe and widespread impacts to our communities
     5  due  to  flooding,  sea level rise, heat waves, coastal erosion, erratic
     6  and unpredictable weather patterns, shifting  climatic  zones,  loss  of
     7  wildlife,  increased  harmful  algal  blooms  and  invasive species, and
     8  increased risk of disease, in part, which  leads  directly  to  loss  of

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD11081-19-2
        A. 7389--C                          2
 
     1  life,  property  damage  and  reduction in value, ecological damage, and
     2  increased infrastructure costs;
     3    (b) It is the policy of the State of New York to conserve, improve and
     4  protect  its natural resources and environment and to prevent, abate and
     5  control water, land and air pollution, in order to enhance  the  health,
     6  safety and welfare of the people of the state and their overall economic
     7  and social well-being;
     8    (c)  To mitigate the current and future effects of climate change, the
     9  State of New York  implemented  the  Climate  Leadership  and  Community
    10  Protection  Act,  requiring  that  statewide greenhouse gas emissions be
    11  reduced eighty-five percent by 2050 and that  the  state  has  net  zero
    12  emissions in all sectors of the economy by that time;
    13    (d) Cryptocurrency mining operations running proof-of-work authentica-
    14  tion methods to validate blockchain transactions are an expanding indus-
    15  try in the State of New York; and
    16    (e)  The  continued  and  expanded  operation of cryptocurrency mining
    17  operations running  proof-of-work  authentication  methods  to  validate
    18  blockchain transactions will greatly increase the amount of energy usage
    19  in the state of New York, and impact compliance with the Climate Leader-
    20  ship and Community Protection Act.
    21    §  2.  The  environmental  conservation law is amended by adding a new
    22  section 19-0331 to read as follows:
    23  § 19-0331. Moratorium on air permit issuance and renewal.
    24    1. For the period commencing on the effective date of this section and
    25  ending two years after such date,  the  department,  after  consultation
    26  with  the department of public service, shall not approve a new applica-
    27  tion for or issue a new permit pursuant  to  this  article,  or  article
    28  seventy  of  this  chapter,  for  an  electric  generating facility that
    29  utilizes a carbon-based fuel and that provides, in  whole  or  in  part,
    30  behind-the-meter  electric energy consumed or utilized by cryptocurrency
    31  mining operations that use proof-of-work authentication methods to vali-
    32  date blockchain transactions.
    33    2. For the period commencing on the effective date of  this    section
    34  and  ending  two years after such date, the department shall not approve
    35  an application to renew an existing permit or  issue  a  renewal  permit
    36  pursuant  to  this  article  for  an  electric  generating facility that
    37  utilizes a carbon-based fuel and that provides, in  whole  or  in  part,
    38  behind-the-meter electric energy consumed or utilized by a cryptocurren-
    39  cy  mining  operation  that uses proof-of-work authentication methods to
    40  validate blockchain transactions if the  renewal  application  seeks  to
    41  increase  or  will allow or result in an increase in the amount of elec-
    42  tric energy consumed or utilized by a  cryptocurrency  mining  operation
    43  that  uses  proof-of-work  authentication methods to validate blockchain
    44  transactions.
    45    § 3. Generic environmental impact statement.  (a)  The  department  of
    46  environmental  conservation,  in  consultation  with  the  department of
    47  public service, shall prepare, pursuant to article eight of the environ-
    48  mental conservation law, a generic  environmental  impact  statement  on
    49  cryptocurrency  mining  operations that use proof-of-work authentication
    50  methods to validate blockchain transactions.
    51    (b) The generic environmental impact statement  shall  address,  at  a
    52  minimum:
    53    (i)  the  number  and location of existing cryptocurrency mining oper-
    54  ations that use proof-of-work authentication methods to validate  block-
    55  chain transactions in the state;
        A. 7389--C                          3
 
     1    (ii)  the  amount  of  electric energy consumed by each cryptocurrency
     2  mining operation that uses proof-of-work authentication methods to vali-
     3  date blockchain transactions;
     4    (iii)  the  sources of electric energy consumed by each cryptocurrency
     5  mining operation that uses proof-of-work authentication methods to vali-
     6  date blockchain transactions and the type of fuel used  by  each  energy
     7  source;
     8    (iv) the amount of greenhouse gas emissions and co-pollutants released
     9  by each energy source attributable to providing electric energy to cryp-
    10  tocurrency mining operations that use proof-of-work authentication meth-
    11  ods to validate blockchain transactions;
    12    (v)  the  anticipated increase, if any, of cryptocurrency mining oper-
    13  ations that use proof-of-work authentication methods to validate  block-
    14  chain  transactions  in the state and the anticipated expansion, if any,
    15  of existing operations;
    16    (vi) the potential impacts of electric energy consumption  by  crypto-
    17  currency mining operations that use proof-of-work authentication methods
    18  to  validate  blockchain transactions on the state's ability to meet the
    19  greenhouse gas emission reduction goals set forth  in  article  seventy-
    20  five of the environmental conservation law;
    21    (vii)  the  amount  of water usage, water quality and other ecological
    22  impacts, if any, of cooling water use  by  cryptocurrency  mining  oper-
    23  ations  that use proof-of-work authentication methods to validate block-
    24  chain transactions;
    25    (viii) the potential public health impacts, if any, due to reduced air
    26  and water quality in communities near cryptocurrency  mining  operations
    27  that  use  proof-of-work  authentication  methods to validate blockchain
    28  transactions;
    29    (ix) the potential statewide  public  health  impacts,  if  any,  from
    30  increased  greenhouse  gas  emissions  released by cryptocurrency mining
    31  operations that use proof-of-work  authentication  methods  to  validate
    32  blockchain transactions; and
    33    (x)  the social and economic costs and benefits, if any, of cryptocur-
    34  rency mining operations that use proof-of-work authentication methods to
    35  validate blockchain transactions.
    36    § 4. Any generic environmental impact statement draft shall be  posted
    37  on the department of environmental conservation's website and be subject
    38  to  120 days of public comment from the date of issuance. The department
    39  of environmental conservation shall conduct at least one public  hearing
    40  in  each  of  the  following regions of the state: western New York, the
    41  finger lakes, the southern tier, central New York,  the  Mohawk  valley,
    42  the north country, the capital region/Hudson valley, and the City of New
    43  York/Long  Island,  as  defined  by  the Empire State Development Corpo-
    44  ration, and provide meaningful opportunity for comment.
    45    § 5. The department shall issue a final generic  environmental  impact
    46  statement  after  close  of the public comment and public hearing period
    47  and no later than one year after the effective date of this act.
    48    § 6. For the purposes of this act:
    49    (a) "Cryptocurrency mining operations that use proof-of-work authenti-
    50  cation methods" shall mean the use of a consensus algorithm in a  block-
    51  chain  network  used  to  confirm and produce new blocks to the chain to
    52  validate a cryptocurrency transaction, where  competitors  complete  new
    53  blocks and where the algorithm changes the complexity of the competition
    54  in a manner that is designed to and/or results in increased energy usage
    55  for each competitor when the complexity is increased; and
        A. 7389--C                          4
 
     1    (b) "blockchain" shall mean a digital ledger in which transactions are
     2  recorded chronologically and publicly.
     3    §  7.  This  act  shall take effect immediately and shall apply to all
     4  permits or renewal applications filed after such date.