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A00107 Summary:

COSPNSRLifton, Steck, Jaffee, Gottfried, Blake, Sepulveda, Walker, Barron, Seawright, Williams, Mosley, Rivera, Simon, Ortiz, Peoples-Stokes, Solages
MLTSPNSRCook, De La Rosa, Rodriguez, Thiele
Add Art 12-B §§289-g - 289-k, Tax L
Establishes a tax on carbon-based fuels.
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A00107 Memo:

submitted in accordance with Assembly Rule III, Sec 1(f)
SPONSOR: Cahill (MS)
  TITLE OF BILL: An act to amend the tax law, in relation to establishing a tax on carbon-based fuels to mitigate greenhouse gas emissions causing anthro- pogenic climate change   PURPOSE OR GENERAL IDEA OF BILL: To assist in NY's goal to substantially reduce CO2 emissions, while investing in clean energy and modernized infrastructure.   SUMMARY OF SPECIFIC PROVISIONS: § 289-g of Section 1 provides definitions for "carbon-based fuel," "carbon generated electricity," "carbon dioxide equivalent," "carbon dioxide emissions tax," "fuel distributor," "carbon dioxide emissions fund (fund)," "motor vehicle fuel," and "utility." § 289-h of Section 1 provides for the administration of emissions charg- es. § 289-i of Section 1 provides for the establishment of the carbon diox- ide emissions tax. § 289-j of Section 1 provides for development of a carbon dioxide emis- sions fund. § 289-k of Section 1 allows for the Departments of Taxation & Finance and Environmental Conservation to promulgate rules and regs. Section 2 provides that this act shall take effect 90 days after being signed into law and that all rules/regs are completed before the effec- tive date.   JUSTIFICATION: This carbon tax bill will reduce carbon emissions in New York State, helping New York to reach its target of reducing carbon dioxide emis- sions by 80% of 1990 levels by the year 2050. The bill aims to protect the poorest classes while using a portion of the revenue to adapt to climate change, increase investment in infrastructure, and enhance the use of renewable energy. Hence the bill is revenue neutral for the most vulnerable groups, and uses revenue from less vulnerable groups to offset the impacts and prevent future climate change. The scientific community has widely recognized the imminent threat presented by climate change, and a market-based solution offsetting climate altering emissions will play a large role in preventing the irreversible impacts of a warmer climate. Already New York State has witnessed the devastating effects of Hurricane Sandy and other extreme weather events. A market - based solution such as a carbon tax has been embraced widely by economists, including those in New York State, as well as by citizens' groups and political leaders on both sides of the aisle.   PRIOR LEGISLATIVE HISTORY: 2015-2016: A8372 - Referred to Ways and Means   FISCAL IMPLICATIONS: TBD.   EFFECTIVE DATE: This bill would take effect 90 days after becoming law.
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A00107 Text:

                STATE OF NEW YORK
                               2017-2018 Regular Sessions
                   IN ASSEMBLY
                                     January 4, 2017
        Introduced  by M. of A. CAHILL, LIFTON, STECK, JAFFEE, GOTTFRIED, BLAKE,
          SEPULVEDA, WALKER -- Multi-Sponsored by -- M. of A.  COOK,  RODRIGUEZ,
          THIELE -- read once and referred to the Committee on Ways and Means
        AN  ACT  to  amend  the  tax  law,  in relation to establishing a tax on
          carbon-based  fuels  to  mitigate  greenhouse  gas  emissions  causing
          anthropogenic climate change
          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:
     1    Section 1. The tax law is amended by adding a new article 12-B to read
     2  as follows:
     3                                ARTICLE 12-B
     4                          TAX ON CARBON-BASED FUELS
     5  Section 289-g. Definitions.
     6          289-h. Administration of emissions charges.
     7          289-i. Carbon dioxide emissions tax.
     8          289-j. Carbon dioxide emissions fund.
     9          289-k. Regulations.
    10    § 289-g. Definitions. For the purposes of this article, the  following
    11  terms shall have the following meanings:
    12    1.  "Carbon-based  fuel"  means  coal, natural gas, renewable biomass,
    13  petroleum products, and any other product that contains carbon and emits
    14  carbon dioxide, methane, nitrous oxide, or other greenhouse  gases  when
    15  combusted, that are used for fuel, heating, cooling, or industrial proc-
    16  esses, which processes shall include electricity generation.
    17    2. "Carbon-generated electricity" means electric energy produced using
    18  a  carbon-based  fuel  that  is  generated or transmitted by an electric
    19  power facility.
    20    3. "Carbon dioxide equivalent" means a unit of  measure  denoting  the
    21  amount  of  emissions  from a greenhouse gas, expressed as the amount of
    22  carbon dioxide by weight that produces the same global warming impact.

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

        A. 107                              2
     1    4. "Carbon dioxide emissions tax" means a tax imposed on each  ton  of
     2  carbon dioxide equivalency.
     3    5.  "Fuel  distributor"  means any person, firm, association or corpo-
     4  ration, that imports or causes to be imported into the state,  for  use,
     5  distribution, storage or sale within the state, any carbon-based fuel as
     6  defined  in  subdivision one of this section; and also any person, firm,
     7  association or  corporation  that  produces,  refines,  manufactures  or
     8  compounds carbon-based fuel within the state.
     9    6.  "Fund" means the carbon dioxide emissions fund established by this
    10  article.
    11    7. "Motor vehicle fuel" means fuel for the operation of a motor  vehi-
    12  cle.
    13    8. "Utility" means any such gas corporation, electric corporation, gas
    14  and electric corporation, steam corporation, municipality, or any entity
    15  that,  in  any  manner,  sells  or  facilitates  the sale, furnishing or
    16  provision of gas  or  electronic  commodity  to  residential  customers;
    17  provided, however, that the term shall not include any municipality that
    18  is  exempt  from regulation by the public service commission pursuant to
    19  paragraph g of subdivision five of section  one  thousand  five  of  the
    20  public authorities law.
    21    §  289-h. Administration of emissions charges. The department of envi-
    22  ronmental conservation shall administer the schedules of carbon  dioxide
    23  emissions  charges  and  the  carbon dioxide emissions fund, both estab-
    24  lished pursuant to this article. Such tax shall be imposed on each  fuel
    25  distributor  and  utility at a rate and schedule to be determined by the
    26  department of environmental conservation in accordance with section  two
    27  hundred  eighty-nine-i  of  this article for a carbon-based fuel that is
    28  either:
    29    1. sold by a fuel distributor to consumers in this state in the previ-
    30  ous calendar year; or
    31    2. used to produce carbon-generated electricity that is supplied by  a
    32  utility to consumers in this state in the previous calendar year.
    33    §  289-i.  Carbon  dioxide  emissions  tax.  1. The department and the
    34  department of environmental conservation shall establish a carbon  diox-
    35  ide  emissions  tax  on  the  distribution or sale of carbon-based fuels
    36  which shall be no less than thirty-five dollars per ton of carbon  diox-
    37  ide  equivalency and shall increase by fifteen dollars per ton of carbon
    38  dioxide equivalency annually to a maximum  of  one  hundred  eighty-five
    39  dollars per ton of carbon dioxide equivalency.
    40    2.  In  the  fourth year of implementation, and biannually thereafter,
    41  the department of environmental conservation shall publish a report  for
    42  the  legislature and shall post the report on an internet website acces-
    43  sible to the public. Such report shall consider whether any increases or
    44  decreases in the carbon dioxide emissions  tax  as  authorized  by  this
    45  section are recommended to account for inflation, and to ensure progress
    46  towards reaching emissions levels to mitigate climate change in further-
    47  ance of established state policy.
    48    3. The department shall determine total taxable emissions annually for
    49  each distributor or utility using the carbon dioxide equivalent for each
    50  carbon-based  fuel  based  on  information  that shall be provided in an
    51  annual report to the department by the distributor or utility about  the
    52  amount  of  carbon-based  fuel  or  carbon-generated electricity sold to
    53  consumers within the state during  the  preceding  calendar  year.  Such
    54  annual report shall also include any information required by the depart-
    55  ment by rule or regulation.

        A. 107                              3
     1    4.  The  department  and  the department of environmental conservation
     2  shall be authorized to develop  any  rule  or  regulation  necessary  to
     3  collect and administer the carbon dioxide emissions tax authorized under
     4  this article.
     5    5. Notwithstanding any general or special law to the contrary, the tax
     6  authorized  under  this section shall not be imposed on any carbon-based
     7  fuel or source of carbon-based electricity if such imposition is  super-
     8  seded by federal law or regulation.
     9    §  289-j. Carbon dioxide emissions fund. 1. The department of environ-
    10  mental conservation shall establish the carbon dioxide  emissions  fund,
    11  and  the department's office of climate change shall serve as the fund's
    12  administrator. The department of environmental conservation shall depos-
    13  it all proceeds collected in accordance with section two hundred  eight-
    14  y-nine-i  of  this  article  into  the fund. No such proceeds shall fund
    15  government operations of the state, other than  to  pay  for  reasonable
    16  administrative costs as provided under subdivision two of this section.
    17    2.  The  office  of  climate  change shall return sixty percent of all
    18  carbon dioxide emissions charge proceeds to very low to moderate  income
    19  residents of the state in the form of tax credits in order to offset the
    20  regressive nature of such fees. The amount of such credit shall be based
    21  on estimates and averages of expense and consumption trends for very low
    22  to  moderate income residents determined by the office of climate change
    23  in conjunction with  the  department  in  accordance  with  section  two
    24  hundred eighty-nine-k of this article. Such credit shall be progressive-
    25  ly  issued to very low to moderate income residents. Such income catego-
    26  ries shall mean those with income  below  fifty  percent  for  very  low
    27  income residents, income between fifty and eighty percent for low income
    28  residents, and income between eighty-one and one hundred fifteen percent
    29  for  moderate  income residents, of the area median income as determined
    30  by the department of housing and urban development.
    31    3. The office of climate change shall distribute evenly the  remaining
    32  forty  percent  of proceeds of such fund in order to support the transi-
    33  tion to one hundred percent clean energy in the state, to  support  mass
    34  transit  to reduce carbon emissions, and to improve climate change adap-
    35  tation. Such funds shall include but not  be  limited  to  payments  and
    36  subsidies for renewable energy, energy conservation and efficiency meas-
    37  ures,  improvements  in  infrastructure,  improvements  in  mass transit
    38  capacity, agricultural  adaptation  measures,  protection  of  low-lying
    39  areas  including  coastlines, and emergency responses to extreme weather
    40  events.
    41    § 289-k. Regulations. 1. The department  and  department  of  environ-
    42  mental conservation shall promulgate such rules and regulations as shall
    43  be necessary to implement the provisions of this article.
    44    2.  The  department  and  the department of environmental conservation
    45  shall undertake all reasonable efforts  to  collect  charges  authorized
    46  pursuant  to  this  article  at  the first point of distribution or sale
    47  within the state.
    48    § 2. This act shall take effect on the ninetieth day  after  it  shall
    49  have  become  a  law; provided, however, that effective immediately, the
    50  addition, amendment and/or repeal of any rule  or  regulation  necessary
    51  for  the implementation of this act on its effective date are authorized
    52  and directed to be made and completed on or before such effective date.
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