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A08352 Summary:

BILL NOA08352
 
SAME ASSAME AS S07428
 
SPONSORKelles
 
COSPNSREpstein, Rodriguez, Simon, Gottfried, Hevesi, Englebright, Gonzalez-Rojas, Forrest, Niou, Burgos, Weprin, Reyes, Fahy, Steck, Seawright, Fernandez, Mitaynes, Quart, Gallagher
 
MLTSPNSR
 
Add 399-mm, Gen Bus L; add 97-ccc, St Fin L
 
Requires fashion retail sellers and manufacturers to disclose environmental and social due diligence policies; establishes a community benefit fund for the purpose of implementing one or more environmental benefit projects that directly and verifiably benefit environmental justice communities.
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A08352 Actions:

BILL NOA08352
 
10/20/2021referred to consumer affairs and protection
01/05/2022referred to consumer affairs and protection
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A08352 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                          8352
 
                               2021-2022 Regular Sessions
 
                   IN ASSEMBLY
 
                                    October 20, 2021
                                       ___________
 
        Introduced by M. of A. KELLES -- read once and referred to the Committee
          on Consumer Affairs and Protection
 
        AN ACT to amend the general business law, in relation to requiring fash-
          ion  retail  sellers  and  manufacturers to disclose environmental and
          social due diligence policies; and to amend the state finance law,  in
          relation to establishing a community benefit 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 sustainability and social 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 sustainability and social accountability act.  1. As
     6  used in this section, the following terms shall have the following mean-
     7  ings:
     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
    17  Internal Revenue Code, as  applicable  for  purposes  of  this  section.
    18  Amounts  realized  on  the  sale  or  exchange  of property shall not be
    19  reduced by the cost of goods sold or the basis of property  sold.  Gross
    20  receipts,  even  if  business  income,  shall  not include the following
    21  items:

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD11977-05-1

        A. 8352                             2
 
     1    (1) repayment, maturity, or redemption of the  principal  of  a  loan,
     2  bond, mutual fund, certificate of deposit, or similar marketable instru-
     3  ment;
     4    (2)  the  principal  amount  received  under a repurchase agreement or
     5  other transaction properly characterized as a loan;
     6    (3) proceeds from issuance of the taxpayer's own stock or from sale of
     7  treasury stock;
     8    (4) damages and other amounts received as the result of litigation;
     9    (5) property acquired by an agent on behalf of another;
    10    (6) tax refunds and other tax benefit recoveries;
    11    (7) pension reversions;
    12    (8) contributions to capital, except for sales of securities by  secu-
    13  rities dealers;
    14    (9) income from discharge of indebtedness;
    15    (10)  amounts realized from exchanges of inventory that are not recog-
    16  nized under the Internal Revenue Code;
    17    (11) amounts received from transactions in intangible assets  held  in
    18  connection  with  a treasury function of the taxpayer's unitary business
    19  and the gross receipts and overall net gains from the maturity,  redemp-
    20  tion,  sale,  exchange, or other disposition of those intangible assets;
    21  and
    22    (12) amounts received from hedging transactions  involving  intangible
    23  assets.  A  "hedging  transaction"  means  a  transaction related to the
    24  taxpayer's trading function involving futures and  options  transactions
    25  for  the  purpose  of  hedging price risk of the products or commodities
    26  consumed, produced, or sold by the taxpayer.
    27    (c) "Fashion manufacturer" shall mean a business  entity  which  lists
    28  manufacturing  as  its  principal  business activity in the state of New
    29  York, as reported on the entity's state business tax return, and  prima-
    30  rily manufactures articles of wearing apparel or footwear.
    31    (d)  "Fashion  retail seller" shall mean a business entity which lists
    32  retail trade as its principal business activity  in  the  state  of  New
    33  York,  as reported on the entity's state business tax return, and prima-
    34  rily sells articles of wearing apparel or footwear.
    35    (e) "Article of wearing apparel" shall mean any costume or article  of
    36  clothing worn or intended to be worn by individuals.
    37    (f)  "Footwear" shall mean any covering worn or intended to be worn on
    38  the foot.
    39    (g) "Due diligence" shall mean the process companies should carry  out
    40  to  identify,  prevent, mitigate and account for how they address actual
    41  and potential adverse impacts in  their  own  operations,  their  supply
    42  chain  and other business relationships, as recommended in the Organisa-
    43  tion for Economic Co-operation and Development guidelines  for  multina-
    44  tional  enterprises,  the  Organisation  for  Economic  Co-operation and
    45  Development due diligence guidance for responsible business conduct  and
    46  United Nations guiding principles for business and human rights.
    47    2. Every fashion retail seller and fashion manufacturer doing business
    48  in  the state and having annual worldwide gross receipts that exceed one
    49  hundred million dollars shall disclose, as set forth in subdivision four
    50  of this section, its environmental and social  due  diligence  policies,
    51  processes  and outcomes, including significant real or potential adverse
    52  environmental and social impacts and disclose targets for prevention and
    53  improvement.
    54    3. The disclosure described in subdivision two of this  section  shall
    55  be  posted  on  the  fashion  retail  seller's or fashion manufacturer's
    56  website with a clear and easily understood link to the required informa-

        A. 8352                             3
 
     1  tion placed on such fashion retail seller's  or  fashion  manufacturer's
     2  homepage  within  twelve months of the enactment of such policies, proc-
     3  esses and outcomes, except as otherwise provided. In the event the fash-
     4  ion  retail  seller  or  fashion  manufacturer does not have an internet
     5  website, consumers shall be provided a written disclosure within  thirty
     6  days of receiving a written request for the disclosure from a consumer.
     7    4. The disclosure required pursuant to subdivision two of this section
     8  shall include, at a minimum:
     9    (a) supply chain mapping and disclosure, including:
    10    (i)  taking  a  risk-based  approach,  use  good  faith efforts to map
    11  suppliers across all tiers of production, from  raw  material  to  final
    12  production. A minimum of fifty percent of suppliers by volume across all
    13  tiers of production shall be mapped; and
    14    (ii)  using  good  faith  efforts  to map the suppliers and associated
    15  supply chains relevant to the prioritized risk, and obtain and  disclose
    16  the names of prioritized suppliers.
    17    (b)  impact and due diligence disclosure, including a social and envi-
    18  ronmental sustainability report, to include externally relevant informa-
    19  tion on due diligence policies, processes and  activities  conducted  to
    20  identify,  prevent, mitigate, and account for potential adverse impacts,
    21  including the findings and outcomes of  those  activities.  Such  report
    22  shall  include,  in  line  with the United Nations guiding principles on
    23  business and human rights, the International Labor Organization declara-
    24  tion on fundamental principles and rights at work, the Organisation  for
    25  Economic  Co-operation  and  Development  guidelines  for  multinational
    26  enterprises and the Organisation for Economic Co-operation and  Develop-
    27  ment due diligence guidance for responsible business conduct:
    28    (i)  a  link  on the fashion retail seller's or fashion manufacturer's
    29  website to relevant policies on responsible business conduct;
    30    (ii) information on  measures  taken  to  embed  responsible  business
    31  conduct into policies and management systems;
    32    (iii) the fashion retail seller's or fashion manufacturer's identified
    33  areas  of  significant  risks  in the contexts of its own activities and
    34  business relationships such as supply chains;
    35    (iv) the significant adverse impacts on risks identified,  prioritized
    36  and assessed in the context of its own activities and business relation-
    37  ships such as supply chains;
    38    (v) the prioritization criteria;
    39    (vi)  the  actions  taken  to prevent or mitigate those risks, such as
    40  corrective action plans, to be cited where  available,  including  esti-
    41  mated  timelines,  targets  and  benchmarks  for  improvement  and their
    42  outcomes;
    43    (vii) measures to track implementation and results; and
    44    (viii) the fashion retail seller's or fashion manufacturer's provision
    45  of or co-operation in any remediation.
    46    (c) impact disclosure on prioritized adverse environmental and  social
    47  impacts  within  eighteen  months after enactment of the policies, proc-
    48  esses, and outcomes, including:
    49    (i) a quantitative baseline and reduction targets on energy and green-
    50  house gas emissions, water, chemical management. Greenhouse gas  report-
    51  ing  shall  be  independently  verified,  include  absolute  figures and
    52  conform with  the  greenhouse  gas  protocol  corporate  accounting  and
    53  reporting standard and the greenhouse gas protocol corporate value chain
    54  scope three standard promulgated by the World Resources Institute;
    55    (ii)  annual volume of material produced, including breakdown by mate-
    56  rial type which shall be independently verified;

        A. 8352                             4
 
     1    (iii) how much production has been displaced with  recycled  materials
     2  as compared to growth targets which shall be independently verified;
     3    (iv) the median wages of workers of prioritized suppliers and how this
     4  compares with local minimum wage and living wages; and
     5    (v)  the  company's approach for incentivizing supplier performance on
     6  workers' rights; state any key  performance  indicators  or  performance
     7  incentives  used;  and  describe the incentives used to reward suppliers
     8  and encourage good performance. Examples may include contract  renewals,
     9  price premiums and the offer of longer-term contracts.
    10    (d)  what  targets,  fashion  retail sellers and fashion manufacturers
    11  have for impact reductions, and for tracking due  diligence  implementa-
    12  tion  and  results,  including  where  possible  estimated timelines and
    13  benchmarks for improvement. Climate  change  targets  must  be  absolute
    14  targets,  align  with  the  apparel  and  footwear  sector science-based
    15  targets guidance  promulgated  by  the  World  Resources  Institute  and
    16  include  all  scopes  of  production. Fashion retail sellers and fashion
    17  manufacturers shall meet targets and report their compliance on an annu-
    18  al basis.
    19    5. (a) The requirements imposed on fashion retail sellers and  fashion
    20  manufacturers by this section may be enforced by the attorney general or
    21  an  administrator  designated  by  the  attorney  general bringing civil
    22  proceedings for an injunction, monetary damages, or civil performance of
    23  a statutory duty.
    24    (i) The attorney general, or the attorney general's designated  admin-
    25  istrator  as applicable, shall annually publish and make publicly avail-
    26  able a report regarding compliance with this section, listing the  fash-
    27  ion  retail sellers and fashion manufacturers who are known to be out of
    28  compliance with this section and including an up-to-date report  on  the
    29  attorney general's monitoring of such compliance.
    30    (ii)  Fashion retail sellers and fashion manufacturers found to be out
    31  of compliance with this section  after  the  attorney  general,  or  the
    32  attorney  general's designated administrator as applicable, has provided
    33  notice of non-compliance, and after a three-month period to  meet  obli-
    34  gations under this section has lapsed, may be fined up to two percent of
    35  annual  revenues  of  four  hundred  fifty million dollars or more. Such
    36  fines shall be deposited in the community benefit  fund  established  by
    37  section ninety-seven-ccc of the state finance law.
    38    (b) Any citizen may commence a civil action:
    39    (1)  against  any  person  who is alleged to have violated or to be in
    40  violation of this section or an order by the attorney  general,  or  the
    41  attorney  general's designated administrator as applicable, with respect
    42  to the standards and requirements set forth in this section, including:
    43    (i) New York state;
    44    (ii) governmental instrumentality or agency to the extent permitted by
    45  the eleventh amendment to the United States constitution; and
    46    (iii) any business.
    47    (2) to compel the attorney general, or the attorney  general's  desig-
    48  nated administrator as applicable, to investigate an entity's compliance
    49  with  this section, to enforce compliance with this section, or to apply
    50  the prohibitions set forth in this section  to  any  business  operating
    51  within this state; and
    52    (3) against the attorney general, or the attorney general's designated
    53  administrator  as  applicable,  where there is an alleged failure of the
    54  attorney general or the attorney general's designated  administrator  to
    55  perform  any  act  or duty under this section which is not discretionary

        A. 8352                             5
 
     1  with the attorney general, or the attorney general's designated adminis-
     2  trator as applicable.
     3    §  3.  The state finance law is amended by adding a new section 97-ccc
     4  to read as follows:
     5    § 97-ccc. Community benefit fund. 1. There is  hereby  established  in
     6  the  joint  custody of the comptroller, the commissioner of taxation and
     7  finance, and the commissioner of environmental  conservation  a  special
     8  fund to be known as the community benefit fund.
     9    2. Such fund shall consist of all moneys deposited pursuant to subpar-
    10  agraph  (ii)  of  paragraph  (a)  of  subdivision  five of section three
    11  hundred ninety-nine-mm of the general business law.
    12    3. The moneys in the fund shall be  expended  by  the  department  for
    13  environmental  conservation  for the purpose of implementing one or more
    14  environmental benefit projects  that  directly  and  verifiably  benefit
    15  environmental justice communities.
    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.
    24    § 4. This act shall take effect immediately.
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