BILL NUMBER: S1347
SPONSOR: PARKER
 
TITLE OF BILL:
An act to amend the environmental conservation law and the tax law, in
relation to establishing a carbon dioxide emissions price for electric
generation from carbon-based fuel and creating a carbon dioxide emis-
sions fund
 
PURPOSE OR GENERAL IDEA OF BILL:
To establish a carbon dioxide emissions price to be used in the feder-
ally designated electric bulk system operator's proposed carbon pricing
mechanism for the wholesale competitive markets and distribute the
revenue to low-income individuals and communities and to support
masstransit.
 
SUMMARY OF PROVISIONS:
Section 1 provides legislative findings.
Section 2 amends the environmental conservation law to provide that the
social cost of carbon established for use by state agencies shall be
taken into account in carbon pricing mechanism programs in New York
State.
Section 3 amends the tax law to add a new article 12-B. 289-g sets forth
definitions. 289-h directs the department of environmental
conservation(DEC)to determine and establish a carbon dioxide emissions
price and transmit such price to the federally designated electric bulk
system operator in New York State for use in its proposal to introduce a
carbon pricing mechanism into the wholesale competitive markets, thereby
conveying support by the State of New York for the bulk system operator
to finalize the carbon pricing mechanism and submit it to the federal
energy regulatory commission (FERC) for approval. 289-i establishes the
carbon dioxide emissions fund and sets forth how the revenue in such a
fund shall be distributed, with sixty percent of such revenue distrib-
uted to low-income individuals and to support the transition to renewa-
ble energy and improve climate change adaptation in disadvantaged commu-
nities. The remaining forty percent will be used to support mass transit
to reduce carbon emissions. 289-j authorizes the department of taxation,
in coordination with DEC and the department of public service, to
promulgate rules and regulations as necessary to implement this act.
Section 4 provides the effective date.
 
JUSTIFICATION:
With the passage of the Climate Leadership and Community Protection
Act(CLCPA), New York has established nation-leading climate change
goals,including the requirement that 100% of electricity consumed in the
state will be derived from renewable resources by 2040. Under the CLCPA,
the department of environmental conservation (DEC) will establish a
social cost of carbon for use by state agencies. Alongside these state
efforts, the New York Independent System Operator (NYISO), has intro-
duced a first-in-the nation proposal to incorporate a carbon pricing
mechanism into New York's wholesale competitive electricity markets.
This bill would require the DEC's social cost of carbon to be considered
in carbon pricing mechanism programs in New York, so that its use is not
limited to state programs. This will help to align state and private
sector efforts and encourage a holistic approach to meeting the state's
ambitious climate goals.
Importantly, this bill would require DEC to determine and establish a
carbon dioxide emissions price to be used by the NYISO in its proposal
to introduce a carbon pricing mechanism into the competitive wholesale
electricity markets. NYISO's proposal must be approved by the federal
energy regulatory commission (FERC), and state support of the proposal
is required to move forward with the FERC approval process. The bill
explicitly states that transmitting this carbon dioxide emissions price
to the NYISO for use in its carbon pricing mechanism will convey the
necessary state support to allow NYISO to submit its proposal for
approval by FERC.
The bill establishes the carbon dioxide emissions fund to which revenues
from the carbon pricing mechanism will be transferred and sets forth the
way in which the fund shall be distributed. Sixty percent of the fund
will be distributed to benefit low-income individuals and disadvantaged
communities. Specifically, forty percent of revenue will be given
directly to low-income residents in the form of tax credits. By provid-
ing this money in the form of tax credits rather than a credit or offset
on utility bills, low-income individuals who rent their home and do not
directly pay a utility bill will still receive the money.
Twenty percent of the fund will be used to support the transition to
renewable energy and improve climate change adaptation in economically
disadvantaged communities, including subsidies for renewable energy.
Residents of economically disadvantaged communities are already exposed
to higher levels of environmental hazards, and these same communities
face a disproportionate impact from climate change. At the same
time,government subsidy programs for renewable energy are expected to be
phased out over the next several years as the state shifts to carbon
pricing as the primary method to encourage renewable energy develop-
ment.It is important that subsidies continue to be available to encour-
age the development of renewable energy in economically disadvantaged
areas specifically.
The remaining forty percent of the fund will be used to support mass
transit to reduce carbon emissions. In a 2019 report, the Citizen's
Budget Commission found that one-third of New York's total greenhouse
gas emissions were from the transportation sector
(https://cbcny.org/research/gettinggreener :-:text=
Tn%20contrast2Oto20a1 19620other,from%2020.0%20to2010.251520MM TCO2e).
An investment in mass transit is critical if New York is to reach its
greenhouse gas emissions reduction goals. Without a reliable mass trans-
it alternative, more vehicles will be on the roads. Mass transit moves
more people at once and heavy rail transit such as subways produce on
average 76-. lower greenhouse gas emissions per passenger mile than an
average single-occupancy vehicle, according to the Federal Transit
Administration. This legislation will allow the carbon pricing proposal
to move forward in the state's wholesale competitive electricity
markets, while ensuring that the money generated is directed to the
residents and communities most impacted by climate change and used to
further decrease greenhouse gas emissions.
 
PRIOR LEGISLATIVE HISTORY:
2023-24: S732 - referred to environmental conservation
2021-22: S4372 - referred to environmental conservation
 
FISCAL IMPLICATIONS:
None
 
EFFECTIVE DATE:
This act shall take effect immediately.