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A04306 Summary:

BILL NOA04306
 
SAME ASSAME AS S00732
 
SPONSORPaulin
 
COSPNSRBurdick, Simon, Colton, Steck, Thiele, Fahy
 
MLTSPNSR
 
Amd §75-0113, En Con L; add Art 12-B §§289-g - 289-j, Tax L
 
Establishes a carbon dioxide emissions price for electric generation from carbon-based fuel; creates a carbon dioxide emissions fund.
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A04306 Actions:

BILL NOA04306
 
02/14/2023referred to environmental conservation
01/03/2024referred to environmental conservation
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A04306 Memo:

NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
submitted in accordance with Assembly Rule III, Sec 1(f)
 
BILL NUMBER: A4306
 
SPONSOR: Paulin
  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 mass transit.   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 12-3. 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 fund shall be distributed, with sixty percent of such revenue distributed to low-income individuals and to support the transition to renewable energy and improve climate change adaptation in disadvantaged communities. 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 regu- lations 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 development. It is important that subsidies continue to be available to encourage 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-In%20contrast9620to% 20a11%20other,from%2020.0%20to%2010.2=:20MM TCO2e). An investment in mass transit is critical if New York is to reach its greenhouse. gas emissions reduction goals. Without a reliable mass tran- sit 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: A.1168, 2021 and 2022, referred to environmental conservation. / Same as S.4372, 2021 and 2022, referred to environmental conservation. A.11094, 2020, referred to environmental conservation.   FISCAL IMPLICATIONS: None   EFFECTIVE DATE: This act shall take effect immediately.
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