BILL NUMBER: S7203
SPONSOR: KRUEGER
 
TITLE OF BILL:
An act to amend the state finance law, in relation to enacting the trop-
ical rainforest economic & environmental sustainability act; and to
amend the economic development law, in relation to establishing the
supply chain transparency assistance program
 
PURPOSE:
The purpose of the bill is to ensure companies contracting with the
state are not contributing to tropical forest degradation or tropical
deforestation directly or through their supply chains.
 
SUMMARY OF SPECIFIC PROVISIONS:
Section 1: Names the act the "Tropical Rainforest Economic & Environ-
mental Sustainability Act."
Section 2: Legislative findings.
Section 3: Amends subdivision 1 of section 165 of the state finance law.
Updates the species included in the list of tropical hardwoods subject
to purchasing limitations. Updates the definition of "tropical forests"
and "tropical wood products," and adds definitions of "peat" and "trop-
ical peat lands."
Section 4: Amends subdivision 2 of section 165 of the state finance law.
Removes certain exemptions from purchasing limitations for tropical
hardwoods. Creates a time-limited exemption for ekki wood used by the
Metropolitan Transportation Authority for the purpose of railroad ties
in the New York City Transit system, as well as greenheart wood used by
a ferry service directly owned and operated by an agency of a city of
one million or more, and greenheart wood used on bridges manages by the
department of transportation of a city of one million or more.
Section 5: Amends section 165 of the state finance law by adding a new
subdivision 9.
-Paragraph a: Establishes definitions.
-Paragraph b: Requires state contractors and subcontractors selling
covered tropical forest-risk product types to the state to certify,
after completing due diligence measures determined in regulations by
DEC, that the products do not contain tropical forest-risk commodities
that originated on land where tropical deforestation or tropical forest
degradation occurred on or after January 1st, 2023. This requirement
would not apply to primary, secondary, or tertiary packaging for certain
purposes. Requires contractors to cooperate with state agencies investi-
gating compliance. Additionally, requires large contractors whose annual
revenue is greater than $100 million to certify that they have adopted a
tropical forest policy as defined in the statute. Creates a broad
exemption to the certification requirement in a situation where a state
agency or authority fails to receive any offers in response to a solic-
itation for products covered by the bill. If such exemption is not used
by an agency or authority for three consecutive years, that agency or
authority will lose the ability to use the exemption going forward.
Creates an additional exemption for centralized contracts developed by
OGS if the Commissioner determines that the provisions of the bill will
result in the failure to receive any bids. Establishes that, until Janu-
ary 1st, 2032, the provisions of this paragraph will only apply to
contracts worth more than one million dollars, or contractors with annu-
al revenue greater than ten million dollars.
-Paragraph c: Establishes an opportunity for contractors found to be in
violation to come into compliance, followed by possible sanctions
including voiding the contract, and/or assessing a penalty that is the
greater of $1,000 or an amount equal to 20% of the value of the product
furnished to the state in violation of the statute.
-Paragraph d: Details the process of investigating complaints.
-Paragraph e: When a state agency or authority's contract for the
purchase of covered commodities or products is to be awarded to the
lowest responsible bidder, establishes a contracting preference for New
York-based small and medium-sized businesses, MWBEs, or businesses
supplying New York State products, provided that they are otherwise
qualified and that their bids are not more than 10% greater than the
lowest qualified non-preferred bid. Provides for exemptions if the
contracting agency or authority determines that such bid preference
would be against the public interest, increase costs by an unreasonable
amount, or that New York State products cannot be obtained in sufficient
quantities.
-Paragraph f: Requires the DEC Commissioner to convene four meetings
with relevant stakeholders prior to the issuance of regulations.
-Paragraph g: Requires the DEC Commissioner, on or before July 1st,
2027, in consultation with the OGS Commissioner, to issue regulations
for implementation and to assist contractors with compliance.
-Paragraph h: Exempts from certification requirements credit card
purchases of $15,000 or less.
-Paragraph i: Establishes that this subdivision shall apply to all
contracts entered into, extended, or renewed on or after January 1st,
2028.
-Paragraph j: Requires the DEC Commissioner to issue a biennial report
on the implementation of this legislation.
Section 6: Amends the Economic Development Law to create the Supply
Chain Transparency Assistance Program.
Section 7: Effective date.
 
JUSTIFICATION:
Tropical forests cover roughly 7 percent of Earth's surface, but harbor
close to 50 percent of all species on Earth. Those species are now going
extinct at a rate that is at least 100 to 1,000 times higher than
historical levels, due to human activity.
Globally, an estimated 18,000,000 acres of forest, an area more than
half the size of New York State, are lost every year to deforestation
according to the Food and Agriculture Organization of the United
Nations, with over one-half of Earth's tropical forests already gone.
At the current pace, the entirety of Earth's tropical rainforests will
be degraded or destroyed within the next 100 years.
A significant amount of the world's greenhouse gas emissions come from
deforestation and forest degradation. Taking into account carbon seques-
tration potential, stopping the loss of tropical forests, mangroves, and
wetlands could provide over 20 percent of necessary climate mitigation
by 2030.
Loss of biodiversity resulting from forest degradation and deforesta-
tion, as well as human encroachment on formerly undisturbed ecosystems,
increases the risks of zoonotic disease pandemics such as COVID-19.
In addition, tropical deforestation in many countries is closely associ-
ated with violations of the land rights of indigenous peoples and local
communities and with the exploitation of workers, including forced labor
and child labor, and in many cases is enabled by corruption, criminali-
ty, and violence against conservationists and land defenders. The prima-
ry factor leading to tropical deforestation is degradation and road-
building associated with logging for timber, while the largest direct
cause of tropical deforestation is industrial-scale production of agri-
cultural commodities. Together, these are increasingly known as
"forest-risk commodities."
New York, which has one of the largest economies in the world and a
state government with significant purchasing power, is inadvertently
promoting and sanctioning tropical primary forest degradation and trop-
ical deforestation through the purchase of goods and products that have
been produced in supply chains that contribute to tropical primary
forest degradation and tropical deforestation.
This bill will update and close loopholes in existing statutes that
limit the purchase of tropical hardwoods, and create a new statute
requiring contractors that sell tropical forest-risk commodities to
state agencies or authorities to certify that they are not contributing
to tropical forest degradation or tropical deforestation directly or
through their supply chains.
The bill would also create a Supply Chain Transparency Assistance
Program to help New York's small- and medium-sized businesses, as well
as minority-and women-owned businesses who choose to establish more
ethical and sustainable supply chains, while ensuring they have the
tools they need to compete in the national and global marketplace.
 
LEGISLATIVE HISTORY:
 
FISCAL IMPACT ON THE STATE:
Undetermined.
 
EFFECTIVE DATE:
Amendments to subdivisions 1 and 2 of section 165 of the state finance
law shall take effect ninety days after the bill shall become a law and
shall apply to all contracts and binding contractual obligations entered
into on and after such effective date. The new subdivision 9 of section
165 of the state finance law shall apply to all contracts entered into,
extended, or renewed on or after January first, two thousand twenty-
eight.

Statutes affected:
S7203: 165 state finance law