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AB3967 Summary:

Add Art 21-B §§530 - 534, amd §171, Tax L; add §99-aa, St Fin L
Relates to establishing a tax on carbon emissions and to establishing the carbon tax revenue fund; establishes an excise tax on carbon-based fuel sold in the state; establishes an initial rate of five dollars per ton of carbon.
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AB3967 Text:

                STATE OF NEW YORK
                               2017-2018 Regular Sessions
                   IN ASSEMBLY
                                    January 30, 2017
        Introduced  by M. of A. ORTIZ -- 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
          emissions; and to amend the state finance law, in relation  to  estab-
          lishing the carbon tax revenue fund

          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 21-B to read
     2  as follows:
     3                                ARTICLE 21-B
     4                           TAX ON CARBON EMISSION
     5  Section 530. Definitions.
     6          531. Imposition and rate of tax.
     7          532. Exemptions.
     8          533. Penalties and interest.
     9          534. Deposit and disposition of revenue.
    10    § 530. Definitions. As used in this article, the following terms shall
    11  have the following meanings:
    12    (a) "Carbon-based fuel" means coal, natural  gas,  petroleum  products
    13  and  any  other  product  used  for  fuel that contains carbon and emits
    14  carbon dioxide when combusted; provided, however, that carbon-based fuel
    15  shall not include any product used for  fuel  that  is  derived  from  a
    16  resource that is less than one thousand years old in its natural state.
    17    (b)  "Distributor" means a person who imports or causes to be imported
    18  carbon-based fuel for use, distribution, or sale within the state, or  a
    19  person  who  produces,  refines, manufactures, or compounds carbon-based
    20  fuel within the state for use, distribution, or sale.
    21    (c) "Petroleum products" means propane, gasoline,  unleaded  gasoline,
    22  kerosene, number 2 heating oil, diesel fuel, kerosene base jet fuel, and
    23  number 4, number 5 and number 6 residual oil for utility and non-utility
    24  uses,  and  all petroleum derivatives, whether in bond or not, which are
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.

        A. 3967                             2
     1  commonly burned to produce heat, power, electricity or motion  or  which
     2  are commonly processed to produce synthetic gas for burning.
     3    (d)  "Retail  Customer" means a person who purchases carbon-based fuel
     4  for his or her own consumption.
     5    (e) "Retail Purchase" means a purchase of carbon-based fuel made by  a
     6  person for his or her own consumption.
     7    §  531.  Imposition  and  rate  of tax. (a) There is hereby levied and
     8  imposed a tax at a rate of  five  dollars  per  ton  of  carbon  in  any
     9  carbon-based fuel that is sold to retail customers in the state. The tax
    10  shall increase by at least the rate of annual inflation plus one percent
    11  for  the first ten years that this section is in effect, and by at least
    12  the rate of annual inflation thereafter. The department shall  calculate
    13  the tax liability associated with any retail purchase by multiplying the
    14  rate  designated  in  this section by the total amount of carbon in each
    15  carbon-based fuel sold to retail consumers in the state. For the purpose
    16  of calculating the tax, the  department  of  environmental  conservation
    17  shall  determine  the percentage of carbon in each carbon-based fuel and
    18  report those percentages to the department.
    19    (b) A distributor shall pay to the  commissioner  an  excise  tax  per
    20  gallon  determined by the department pursuant to subdivision (a) of this
    21  section upon each gallon of carbon-based fuel sold by  such  distributor
    22  in  the  state  during the calendar month covered by the return required
    23  pursuant to subdivision (c) of this section. The tax imposed under  this
    24  section  shall  be  collected  by the distributor upon completion of any
    25  sale or delivery of fuel.
    26    (c) Every distributor that makes sales subject to the tax  imposed  by
    27  this  section  shall, on or before the twentieth day of each month, file
    28  with the commissioner a return on forms to be prescribed by the  commis-
    29  sioner,  showing  its receipts from the retail sale of carbon-based fuel
    30  during the preceding calendar month and the amount of tax  due  thereon.
    31  Such  returns shall contain such further information as the commissioner
    32  may require.  Every distributor required to file  a  return  under  this
    33  section shall, at the time of filing such return, pay to the commission-
    34  er  the total amount of tax due on its retail sales of carbon-based fuel
    35  for the period covered by such return. If a return  is  not  filed  when
    36  due,  the tax shall be due on the day on which the return is required to
    37  be filed.
    38    § 532. Exemptions. The following shall be exempt from the tax  imposed
    39  by section five hundred thirty-one of this article:
    40    (a) carbon-based fuel sold to the United States government, its subdi-
    41  visions,  or under any other circumstances in which the state is without
    42  power to impose the tax; and
    43    (b) carbon-based fuel sold by a  distributor  that  has  already  been
    44  subjected  to the tax imposed by section five hundred thirty-one of this
    45  article, if the sales invoice clearly indicates the amount of fuel  that
    46  has already been subjected to the tax.
    47    §  533.  Penalties and interest. (a) A distributor who fails to file a
    48  return or to pay any tax within the time required by or pursuant to this
    49  article (determined with regard to any extension of time for  filing  or
    50  paying) shall be subject to a penalty of ten per centum of the amount of
    51  tax determined to be due as provided in this article plus one per centum
    52  of  such  amount  for  each  month or fraction thereof during which such
    53  failure continues after the expiration of the  first  month  after  such
    54  statement was required to be filed or such tax became due, not exceeding
    55  thirty per centum in the aggregate.

        A. 3967                             3
     1    (b)  If  any  amount  of  tax  is  not paid on or before the last date
     2  prescribed in this article for payment, interest on such amount  at  the
     3  underpayment rate set by the commissioner of taxation and finance pursu-
     4  ant  to  subdivision  twenty-sixth of section one hundred seventy-one of
     5  this  chapter  shall  be  paid for the period from such last date to the
     6  date paid, whether or not any extension of time for payment was granted.
     7  Interest under this subsection shall not be paid if the  amount  thereof
     8  is less than one dollar.
     9    §  534.  Deposit  and disposition of revenue. All taxes, interest, and
    10  penalties collected or received by  the  commissioner  of  taxation  and
    11  finance  under  the  taxes imposed by this article shall be deposited in
    12  the carbon tax revenue fund and disposed of pursuant to section  ninety-
    13  nine-aa of the state finance law.
    14    § 2. The state finance law is amended by adding a new section 99-aa to
    15  read as follows:
    16    §  99-aa.  Carbon  tax revenue fund. 1. There is hereby established in
    17  the joint custody of the state comptroller and commissioner of  taxation
    18  and finance a fund to be known as the "carbon tax revenue fund".
    19    2.  Such  account  shall consist of revenues from all taxes, interest,
    20  and penalties imposed by article twenty-one-B of the tax law.
    21    3. On or before the first day of February each year,  the  comptroller
    22  shall certify to the governor, temporary president of the senate, speak-
    23  er  of  the assembly, chair of the senate finance committee and chair of
    24  the assembly ways and means committee, the amount of money deposited  in
    25  the  carbon  tax  revenue fund during the preceding calendar year as the
    26  result of revenue derived pursuant to article twenty-one-B  of  the  tax
    27  law.
    28    4.  Moneys  of  the  fund may be invested by the state comptroller and
    29  income from such investments shall be credited to the fund.
    30    5. Moneys of the fund shall be appropriated  by  the  legislature  and
    31  paid out pursuant to the terms of such appropriation.
    32    § 3. Paragraph a of subdivision 26th of section 171 of the tax law, as
    33  amended  by section 1 of subpart D of part V-1 of chapter 57 of the laws
    34  of 2009, is amended to read as follows:
    35    a. Set the overpayment and underpayment rates of interest for purposes
    36  of  articles  twelve-A,   eighteen,   twenty   [and],   twenty-one   and
    37  twenty-one-B  of  this  chapter. Such rates shall be the overpayment and
    38  underpayment rates of interest set pursuant to subsection (e) of section
    39  one thousand ninety-six of this chapter, but the underpayment rate shall
    40  not be less than seven and one-half percent per annum.  Any  such  rates
    41  set  by  such commissioner shall apply to taxes, or any portion thereof,
    42  which remain or become due or overpaid (other  than  overpayments  under
    43  such  article twenty and not including reimbursements, if any, under any
    44  of such articles) on or after the date on which such rates become effec-
    45  tive and shall apply only with respect to interest computed  or  comput-
    46  able  for  periods or portions of periods occurring in the period during
    47  which such rates are in effect. In computing the amount of any  interest
    48  required  to  be paid under such articles by such commissioner or by the
    49  taxpayer, or any other amount determined by reference to such amount  of
    50  interest, such interest and such amount shall be compounded daily.
    51    § 4. This act shall take effect on the one hundred twentieth day after
    52  it shall have become a law.  Effective immediately, the addition, amend-
    53  ment  and/or repeal of any rules or regulations necessary for the imple-
    54  mentation of this act on its effective date are authorized to be made on
    55  or before such date.
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