A07389 Summary:

BILL NOA07389C
 
SAME ASSAME AS S06486-D
 
SPONSORKelles
 
COSPNSRLupardo, Englebright, Thiele, Glick, Magnarelli, Epstein, Burdick, Steck, Rivera JD, Clark, Niou, Fahy, Wallace, Barrett, Carroll, Rosenthal L, Seawright, Gallagher, Gonzalez-Rojas, De La Rosa, Burke, Pichardo, Stirpe, Mamdani, Simon, Griffin, Anderson, McMahon, Mitaynes, Otis, McDonald, Gottfried, Galef, Dinowitz, Pretlow, Paulin, Forrest, Zinerman, Sillitti, Zebrowski, Quart, Burgos, Bichotte Hermelyn, Abinanti, Jacobson, Lavine, Sayegh, Colton, Cruz
 
MLTSPNSR
 
Add §19-0331, En Con L
 
Establishes a moratorium on cryptocurrency mining operations that use proof-of-work authentication methods to validate blockchain transactions; provides that such operations shall be subject to a full generic environmental impact statement review.
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A07389 Actions:

BILL NOA07389C
 
05/06/2021referred to banks
05/20/2021reference changed to environmental conservation
06/04/2021amend (t) and recommit to environmental conservation
06/04/2021print number 7389a
10/22/2021amend and recommit to environmental conservation
10/22/2021print number 7389b
01/05/2022referred to environmental conservation
03/18/2022amend (t) and recommit to environmental conservation
03/18/2022print number 7389c
03/22/2022reported referred to ways and means
04/25/2022reported referred to rules
04/25/2022reported
04/25/2022rules report cal.84
04/25/2022ordered to third reading rules cal.84
04/26/2022passed assembly
04/26/2022delivered to senate
04/26/2022REFERRED TO ENERGY AND TELECOMMUNICATIONS
06/02/2022SUBSTITUTED FOR S6486D
06/02/20223RD READING CAL.1923
06/02/2022PASSED SENATE
06/02/2022RETURNED TO ASSEMBLY
11/22/2022delivered to governor
11/22/2022signed chap.628
11/22/2022approval memo.26
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A07389 Committee Votes:

ENVIRONMENTAL CONSERVATION Chair:Englebright DATE:03/22/2022AYE/NAY:23/7 Action: Favorable refer to committee Ways and Means
EnglebrightAyeSmullenNay
GlickAyeMillerNay
ColtonAyeTagueNay
CymbrowitzAyeManktelowNay
O'DonnellAyeBrownAye
GuntherAyeDursoNay
ThieleAyeLemondesNay
AbinantiAyeSimpsonNay
FahyAye
OtisAye
WilliamsAye
BarrettAye
CarrollAye
BurkeAye
GriffinAye
EpsteinAye
McMahonAye
BurdickAye
LunsfordAye
KellesAye
Gonzalez-RojasAye
SeptimoAye

RULES Chair:Gottfried DATE:04/25/2022AYE/NAY:21/8 Action: Favorable
HeastieExcusedBarclayNay
GottfriedAyeHawleyNay
NolanExcusedGiglioNay
WeinsteinAyeBlankenbushNay
PretlowAyeNorrisNay
CookAyeMontesanoNay
GlickAyeRaNay
AubryAyeBrabenecNay
EnglebrightAye
DinowitzAye
ColtonAye
MagnarelliAye
PaulinAye
Peoples-StokesAye
BenedettoAye
LavineAye
LupardoAye
ZebrowskiAye
ThieleAye
BraunsteinAye
DickensAye
DavilaAye
HyndmanAye

WAYS AND MEANS Chair:Weinstein DATE:04/25/2022AYE/NAY:20/15 Action: Favorable refer to committee Rules
WeinsteinAyeRaNay
GlickAyeFitzpatrickNay
FahyAyeHawleyNay
PretlowAyeMontesanoNay
ColtonAyeBlankenbushNay
CookAyeNorrisNay
CahillAyeBrabenecNay
AubryAyePalmesanoNay
CusickAyeByrneNay
BenedettoAyeAshbyNay
WeprinNay
RamosAye
BraunsteinAye
McDonaldAye
RozicNay
DinowitzAye
JoynerNay
MagnarelliAye
ZebrowskiAye
BronsonNay
OtisAye
SeawrightAye
HyndmanNay
WalkerAye
BichotteAye

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A07389 Floor Votes:

DATE:04/26/2022Assembly Vote  YEA/NAY: 91/56
AbbateYClarkYFriendNOKellesYOtisYSimpsonNO
AbinantiYColtonYFrontusYKimYPalmesanoNOSmithNO
AndersonYConradYGalefYLalorNOPaulinYSmullenNO
AngelinoNOCookYGallagherYLavineYPeoples-StokesYSolagesY
AshbyNOCruzYGallahanNOLawlerNOPheffer AmatoNOSteckY
AubryYCunninghamYGandolfoNOLemondesNOPretlowYSternY
BarclayNOCusickYGibbsYLucasYQuartYStirpeY
BarnwellYCymbrowitzYGiglio JANOLunsfordYRaNOTagueNO
BarrettYDarlingNOGiglio JMNOLupardoYRajkumarYTannousisNO
BenedettoYDavilaYGlickYMagnarelliYRamosYTapiaY
BichotteYDe Los SantosYGonzalez-RojasYMamdaniYReillyNOTaylorNO
BlankenbushNODeStefanoNOGoodellNOManktelowNOReyesYThieleY
BrabenecNODickensNOGottfriedYMcDonaldYRivera J YVanelNO
BraunsteinYDilanERGriffinYMcDonoughNORivera JDYWalczykNO
BronsonNODinowitzYGuntherYMcMahonYRosenthal D NOWalkerY
Brown E NODiPietroNOHawleyNOMeeksYRosenthal L YWallaceY
Brown K NODursoNOHevesiYMikulinNORozicYWalshNO
BurdickYEichensteinNOHunterYMillerNOSalkaNOWeinsteinY
BurgosYEnglebrightYHyndmanNOMitaynesYSantabarbaraYWeprinNO
BurkeYEpsteinYJacksonYMontesanoNOSayeghYWilliamsNO
ButtenschonYFahyYJacobsonYMorinelloNOSchmittNOWoernerY
ByrneNOFallNOJean-PierreNONiouYSeawrightYZebrowskiY
ByrnesNOFernandezYJensenNONolanERSeptimoYZinermanY
CahillYFitzpatrickNOJonesYNorrisNOSillittiYMr. SpeakerY
CarrollYForrestYJoynerYO'DonnellYSimonY

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A07389 Memo:

NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
submitted in accordance with Assembly Rule III, Sec 1(f)
 
BILL NUMBER: A7389C
 
SPONSOR: Kelles
  TITLE OF BILL: An act to amend the environmental conservation law, in relation to establishing a moratorium on cryptocurrency mining operations that use proof-of-work authentication methods to validate blockchain trans- actions; and to require a comprehensive generic environmental impact statement review   PURPOSE OR GENERAL IDEA OF BILL: To establish a moratorium on cryptocurrency mining operations based on proofof-work transaction authentication methods and require completion of a comprehensive generic environmental impact study of cryptocurrency mining operations using proof-of-work methodology in the State of New York in the context of the Climate Leadership and Community Protection Act (CLCPA) goals established in statute in 2019.   SUMMARY OF PROVISIONS: Section 1 declares the legislative findings. Section 2 places a two-year moratorium on air permit issuance- and renewal for an electric generating facility that utilizes a carbon-based fuel for cryptocurrency mining operations that use proof-of-work based transaction validation methods. Section 3 requires completion of a comprehensive generic environmental impact statement by the New York State Department of Environmental Conservation. Section 4 requires one-hundred and twenty days of public comment on the environmental impact statement and the holding of public hearings in eight regions across the state prior to final issuance. Section 5 requires issuance of a final generic environmental impact statement after close of the public comment and public hearing period no later than one year after the effective date of this act. Section 6 provides definitions. Section 7 provides the effective date.   JUSTIFICATION: Block chain technology is an innovative technology that allows for the recording and efficient transfer of information. The information in each block is authenticated by users of the system in a transparent, decen- tralized, and democratic manner. Each block has a unique identifier that encodes the information of the block including code for the previous information block from which the new information block was built creat- ing a chain of information exchange known as a block chain. Proof-of-Work is a unique methodology that has been used since 2009 to create and authenticate new blocks on a block chain for cryptocurrency. There are over 16 different methodologies of authenticating information within a block. However, of these varied methods there is only one, called Proof-of-Work that, by design, uses a substantial amount of computational power to perform and thus uses a uniquely exorbitant amount of energy. The Proof-of-Work authentication method was designed to require individuals or companies to solve highly complex mathematical equations in order to authenticate a transaction and earn valuable cred- it. The more equations are solved by users the more complex the equations get. By design, there is no software that can be created that will be able to solve the equations better than brute force guesswork so the only way to get an advantage and solve the equations faster is for an individual or company to increase their computational power. This has led to the expansion of large cryptocurrency mining operations consist- ing of thousands of high power computers that run around the clock to solve as many equations as possible and authenticate the most blocks. There are an increasing number of cryptocurrency mining operations in New York performing Proof-of-Work authentication of different block- chains with some being built or modified to exclusively perform Proof- of-Work authentications. Studies show that the magnitude of the computer processing output required to authenticate a single block uses as much energy as an average American household uses in a month. The annual global energy use for PoW authentication is equivalent to that of the country of Sweden and exceeds the energy consumption of all the global activity of major tech companies like Amazon, Google, and Facebook combined. The added energy usage and corresponding increased greenhouse gas emis- sions from these new cryptocurrency mining operations performing Proof- of-Work authentications in New York could hinder or prevent compliance with the critical state carbon emissions goals put in law in the Climate Leadership and Community Protection Act of 2019. Under this law, state- wide greenhouse gas emissions must be reduced eighty-five percent by 2050 and the state economy must have net zero emissions across all sectors. We must determine whether growth of the Proof-of-Work authentication cryptocurrency mining industry is incompatible with our greenhouse gas emission targets established in law, or has other significant detri- mental impacts to our air, water, or public health. By requiring a statewide generic environmental impact statement, this crucial informa- tion about the industry's impact upon our climate law, and associated water, air and wildlife impacts, will be understood and can guide any potential future policy related to industry regulation. Climate change threatens the health, welfare, and economy of the state with increasingly severe and widespread impacts to our communities due to flooding, sea level rise, heat waves, coastal erosion, erratic and unpredictable weather patterns, shifting climatic zones, loss of wild- life, increased harmful algal blooms and invasive species, and increased risk of disease. These consequences disproportionately impact environ- mental justice communities making the need for this comprehensive assessment both an environmental issue as well as a social justice issue. We must not go backwards on our commitment, in law, to prevent these disastrous impacts to the residents of New York.   LEGISLATIVE HISTORY: New bill.   FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS: NONE   EFFECTIVE DATE: IMMEDIATELY
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A07389 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                         7389--C
 
                               2021-2022 Regular Sessions
 
                   IN ASSEMBLY
 
                                       May 6, 2021
                                       ___________
 
        Introduced  by  M.  of  A.  KELLES, LUPARDO, ENGLEBRIGHT, THIELE, GLICK,
          MAGNARELLI, EPSTEIN, BURDICK, STECK, J. D. RIVERA, CLARK, NIOU,  FAHY,
          WALLACE,  BARRETT, CARROLL, L. ROSENTHAL, SEAWRIGHT, GALLAGHER, GONZA-
          LEZ-ROJAS, BURKE, STIRPE, MAMDANI, SIMON, GRIFFIN, ANDERSON,  McMAHON,
          MITAYNES, OTIS, McDONALD, GOTTFRIED, GALEF, DINOWITZ, PRETLOW, PAULIN,
          FORREST, ZINERMAN, SILLITTI, ZEBROWSKI, QUART, BURGOS, BICHOTTE HERME-
          LYN,  ABINANTI,  JACOBSON, LAVINE, SAYEGH -- read once and referred to
          the Committee on Banks -- reference changed to the Committee on  Envi-
          ronmental  Conservation -- committee discharged, bill amended, ordered
          reprinted as amended  and  recommitted  to  said  committee  --  again
          reported  from  said  committee  with amendments, ordered reprinted as
          amended and recommitted  to  said  committee  --  recommitted  to  the
          Committee  on  Environmental  Conservation in accordance with Assembly
          Rule  3,  sec.  2  --  committee  discharged,  bill  amended,  ordered
          reprinted as amended and recommitted to said committee
 
        AN  ACT  to  amend  the  environmental  conservation law, in relation to
          establishing a moratorium on cryptocurrency mining operations that use
          proof-of-work authentication methods  to  validate  blockchain  trans-
          actions;  and  to require a comprehensive generic environmental impact
          statement review
 
          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:
 
     1    Section  1.    Legislative  findings. The legislature hereby finds and
     2  declares that:
     3    (a) Climate change threatens the health, welfare, and economy  of  the
     4  state with increasingly severe and widespread impacts to our communities
     5  due  to  flooding,  sea level rise, heat waves, coastal erosion, erratic
     6  and unpredictable weather patterns, shifting  climatic  zones,  loss  of
     7  wildlife,  increased  harmful  algal  blooms  and  invasive species, and
     8  increased risk of disease, in part, which  leads  directly  to  loss  of

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD11081-19-2

        A. 7389--C                          2
 
     1  life,  property  damage  and  reduction in value, ecological damage, and
     2  increased infrastructure costs;
     3    (b) It is the policy of the State of New York to conserve, improve and
     4  protect  its natural resources and environment and to prevent, abate and
     5  control water, land and air pollution, in order to enhance  the  health,
     6  safety and welfare of the people of the state and their overall economic
     7  and social well-being;
     8    (c)  To mitigate the current and future effects of climate change, the
     9  State of New York  implemented  the  Climate  Leadership  and  Community
    10  Protection  Act,  requiring  that  statewide greenhouse gas emissions be
    11  reduced eighty-five percent by 2050 and that  the  state  has  net  zero
    12  emissions in all sectors of the economy by that time;
    13    (d) Cryptocurrency mining operations running proof-of-work authentica-
    14  tion methods to validate blockchain transactions are an expanding indus-
    15  try in the State of New York; and
    16    (e)  The  continued  and  expanded  operation of cryptocurrency mining
    17  operations running  proof-of-work  authentication  methods  to  validate
    18  blockchain transactions will greatly increase the amount of energy usage
    19  in the state of New York, and impact compliance with the Climate Leader-
    20  ship and Community Protection Act.
    21    §  2.  The  environmental  conservation law is amended by adding a new
    22  section 19-0331 to read as follows:
    23  § 19-0331. Moratorium on air permit issuance and renewal.
    24    1. For the period commencing on the effective date of this section and
    25  ending two years after such date,  the  department,  after  consultation
    26  with  the department of public service, shall not approve a new applica-
    27  tion for or issue a new permit pursuant  to  this  article,  or  article
    28  seventy  of  this  chapter,  for  an  electric  generating facility that
    29  utilizes a carbon-based fuel and that provides, in  whole  or  in  part,
    30  behind-the-meter  electric energy consumed or utilized by cryptocurrency
    31  mining operations that use proof-of-work authentication methods to vali-
    32  date blockchain transactions.
    33    2. For the period commencing on the effective date of  this    section
    34  and  ending  two years after such date, the department shall not approve
    35  an application to renew an existing permit or  issue  a  renewal  permit
    36  pursuant  to  this  article  for  an  electric  generating facility that
    37  utilizes a carbon-based fuel and that provides, in  whole  or  in  part,
    38  behind-the-meter electric energy consumed or utilized by a cryptocurren-
    39  cy  mining  operation  that uses proof-of-work authentication methods to
    40  validate blockchain transactions if the  renewal  application  seeks  to
    41  increase  or  will allow or result in an increase in the amount of elec-
    42  tric energy consumed or utilized by a  cryptocurrency  mining  operation
    43  that  uses  proof-of-work  authentication methods to validate blockchain
    44  transactions.
    45    § 3. Generic environmental impact statement.  (a)  The  department  of
    46  environmental  conservation,  in  consultation  with  the  department of
    47  public service, shall prepare, pursuant to article eight of the environ-
    48  mental conservation law, a generic  environmental  impact  statement  on
    49  cryptocurrency  mining  operations that use proof-of-work authentication
    50  methods to validate blockchain transactions.
    51    (b) The generic environmental impact statement  shall  address,  at  a
    52  minimum:
    53    (i)  the  number  and location of existing cryptocurrency mining oper-
    54  ations that use proof-of-work authentication methods to validate  block-
    55  chain transactions in the state;

        A. 7389--C                          3
 
     1    (ii)  the  amount  of  electric energy consumed by each cryptocurrency
     2  mining operation that uses proof-of-work authentication methods to vali-
     3  date blockchain transactions;
     4    (iii)  the  sources of electric energy consumed by each cryptocurrency
     5  mining operation that uses proof-of-work authentication methods to vali-
     6  date blockchain transactions and the type of fuel used  by  each  energy
     7  source;
     8    (iv) the amount of greenhouse gas emissions and co-pollutants released
     9  by each energy source attributable to providing electric energy to cryp-
    10  tocurrency mining operations that use proof-of-work authentication meth-
    11  ods to validate blockchain transactions;
    12    (v)  the  anticipated increase, if any, of cryptocurrency mining oper-
    13  ations that use proof-of-work authentication methods to validate  block-
    14  chain  transactions  in the state and the anticipated expansion, if any,
    15  of existing operations;
    16    (vi) the potential impacts of electric energy consumption  by  crypto-
    17  currency mining operations that use proof-of-work authentication methods
    18  to  validate  blockchain transactions on the state's ability to meet the
    19  greenhouse gas emission reduction goals set forth  in  article  seventy-
    20  five of the environmental conservation law;
    21    (vii)  the  amount  of water usage, water quality and other ecological
    22  impacts, if any, of cooling water use  by  cryptocurrency  mining  oper-
    23  ations  that use proof-of-work authentication methods to validate block-
    24  chain transactions;
    25    (viii) the potential public health impacts, if any, due to reduced air
    26  and water quality in communities near cryptocurrency  mining  operations
    27  that  use  proof-of-work  authentication  methods to validate blockchain
    28  transactions;
    29    (ix) the potential statewide  public  health  impacts,  if  any,  from
    30  increased  greenhouse  gas  emissions  released by cryptocurrency mining
    31  operations that use proof-of-work  authentication  methods  to  validate
    32  blockchain transactions; and
    33    (x)  the social and economic costs and benefits, if any, of cryptocur-
    34  rency mining operations that use proof-of-work authentication methods to
    35  validate blockchain transactions.
    36    § 4. Any generic environmental impact statement draft shall be  posted
    37  on the department of environmental conservation's website and be subject
    38  to  120 days of public comment from the date of issuance. The department
    39  of environmental conservation shall conduct at least one public  hearing
    40  in  each  of  the  following regions of the state: western New York, the
    41  finger lakes, the southern tier, central New York,  the  Mohawk  valley,
    42  the north country, the capital region/Hudson valley, and the City of New
    43  York/Long  Island,  as  defined  by  the Empire State Development Corpo-
    44  ration, and provide meaningful opportunity for comment.
    45    § 5. The department shall issue a final generic  environmental  impact
    46  statement  after  close  of the public comment and public hearing period
    47  and no later than one year after the effective date of this act.
    48    § 6. For the purposes of this act:
    49    (a) "Cryptocurrency mining operations that use proof-of-work authenti-
    50  cation methods" shall mean the use of a consensus algorithm in a  block-
    51  chain  network  used  to  confirm and produce new blocks to the chain to
    52  validate a cryptocurrency transaction, where  competitors  complete  new
    53  blocks and where the algorithm changes the complexity of the competition
    54  in a manner that is designed to and/or results in increased energy usage
    55  for each competitor when the complexity is increased; and

        A. 7389--C                          4
 
     1    (b) "blockchain" shall mean a digital ledger in which transactions are
     2  recorded chronologically and publicly.
     3    §  7.  This  act  shall take effect immediately and shall apply to all
     4  permits or renewal applications filed after such date.
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