Bill Text: NY A08469 | 2023-2024 | General Assembly | Introduced
Bill Title: Establishes an economy-wide cap and invest program to support greenhouse gas emissions reductions in the state by setting a maximum allowable amount of greenhouse gas emissions by covered entities and regulating the sale or auction of greenhouse gas emissions allowances to covered entities.
Spectrum: Partisan Bill (Democrat 21-0)
Status: (Introduced) 2024-01-03 - referred to environmental conservation [A08469 Detail]
Download: New_York-2023-A08469-Introduced.html
STATE OF NEW YORK ________________________________________________________________________ 8469 2023-2024 Regular Sessions IN ASSEMBLY December 29, 2023 ___________ Introduced by M. of A. KELLES -- read once and referred to the Committee on Environmental Conservation AN ACT to amend the environmental conservation law and the public authorities law, in relation to establishing an economy-wide cap and invest program to support greenhouse gas emissions reductions in the state The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. Legislative findings and declaration. 1. Pursuant to arti- 2 cle 75 of the environmental conservation law, as added by the Climate 3 Leadership and Community Protection Act, the department of environmental 4 conservation must promulgate regulations, by January 1, 2024, to ensure 5 achievement of the statewide greenhouse gas emission limits, as defined 6 and established therein. Among other requirements, the regulations 7 promulgated by such department pursuant to section 75-0109 of the envi- 8 ronmental conservation law must ensure that the aggregate emissions of 9 greenhouse gases from greenhouse gas emission sources will not exceed 10 the statewide greenhouse gas emissions limits established in section 11 75-0107 of the environmental conservation law; include legally enforcea- 12 ble emissions limits, performance standards, or measures or other 13 requirements to control emissions from greenhouse gas emission sources; 14 prioritize emissions and co-pollutant reductions in disadvantaged commu- 15 nities; do not result in a net increase in co-pollutant emissions or 16 otherwise disproportionately burden disadvantaged communities; and 17 reflect, in substantial part, the findings of the scoping plan prepared 18 by the Climate Action Council pursuant to section 75-0103 of the envi- 19 ronmental conservation law. 20 2. The scoping plan prepared by the Climate Action Council pursuant to 21 section 75-0103 of the environmental conservation law recommends that 22 the department of environmental conservation and the New York state 23 energy research and development authority adopt an economy-wide cap and EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD11961-03-3A. 8469 2 1 invest program to, among other purposes, ensure achievement of the 2 statewide greenhouse gas limits, as defined and established in article 3 75 of the environmental conservation law. 4 3. An economy-wide cap and invest program, established through regu- 5 lation by the department of environmental conservation and the New York 6 state energy research and development authority, would meet the require- 7 ments of section 75-0109 of the environmental conservation law. 8 § 2. Subdivision 1 of section 75-0101 of the environmental conserva- 9 tion law, as added by chapter 106 of the laws of 2019, is amended and 10 fourteen new subdivisions 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 11 27, 28 and 29 are added to read as follows: 12 1. "Allowance" means an authorization to emit, during a specified 13 year, up to [one ton] a fixed amount of carbon dioxide equivalent, as 14 determined and issued by the department. 15 16. "Authority" means the New York state energy research and develop- 16 ment authority. 17 17. "Cap and invest program" means an economy-wide program, as estab- 18 lished through regulations adopted by the department and the authority, 19 including, but not limited to, the following parameters: an annually 20 declining "cap" or limit for the maximum amount of greenhouse gas emis- 21 sions from all regulated sources in aggregate; an annual emissions cap 22 that ensures that overall statewide greenhouse gas emissions are lower 23 than the limits set forth in section 75-0107 of this article; a market- 24 based, allowance-based system which creates and issues a certain number 25 of allowances to persons, companies, organizations or other entities for 26 sale by auction or by direct allocation; a requirement that the total 27 number of allowances made available in a compliance period shall be less 28 than the annual emissions cap; a design to prioritize emissions 29 reductions in disadvantaged communities, as defined in section 75-0111 30 of this article, and setting a lower cap for emissions within such 31 communities and within a five-mile radius of such communities to achieve 32 such priority. 33 18. "Commission" means the New York public service commission. 34 19. "Compliance obligation" means the requirement of a covered entity 35 to submit allowances sufficient for all emissions with respect to a 36 compliance period to the authority. 37 20. "Compliance period" means a one-year period during which a covered 38 entity's carbon dioxide equivalent emissions shall not exceed the allow- 39 ances obtained and submitted by such covered entity to the authority for 40 such period. 41 21. "Covered source" means a greenhouse gas emissions source which is 42 regulated to the cap and invest program, and subject to paragraph b of 43 subdivision two of section 75-0109 of this article. 44 22. "Energy-intensive and trade-exposed facilities" or "EITEs" means 45 businesses identified by the department pursuant to subdivision three of 46 section 75-0121 of this article; provided that the department shall not 47 include facilities that participate in and support proof-of-work cryp- 48 to-mining operations as energy-intensive and trade-exposed facilities or 49 EITEs. 50 23. "First compliance period" means the compliance period beginning 51 June first, two thousand twenty-four. 52 24. "Greenhouse gas emissions reduction account" means a general 53 account to be established by the authority, into which the department 54 shall allocate allowances. 55 25. "Link" or "linkage" means the establishment of a bilateral or 56 multilateral non-binding agreement that connects two or more market-A. 8469 3 1 based programs designed to reduce carbon-dioxide equivalent emissions 2 and which: 3 a. articulates a mutual understanding of how participating jurisdic- 4 tions will collaborate to facilitate reductions of carbon-dioxide equiv- 5 alent emissions; 6 b. authorizes processes for ensuring that the satisfaction of compli- 7 ance obligations in one participating jurisdiction partially or fully 8 satisfies, as appropriate, compliance obligations of regulated entities 9 in other participating jurisdictions; and 10 c. otherwise provides for the coordination of activities to facilitate 11 the operation of a joint market. 12 26. "Participating jurisdictions" means jurisdictions which are 13 linked. 14 27. "Reserve allowance" means an allowance provided by the department 15 pursuant to subdivision five of section 75-0121 of this article. 16 28. "Working group" means the climate justice working group. 17 29. "Best available technology" and "emissions mitigation" means tech- 18 nologies and mitigation techniques currently being used anywhere in the 19 world to reduce emissions and increase efficiency. Such technologies and 20 mitigation techniques shall not include the use of alternate fuel 21 combustion, or carbon capture and sequestration. 22 § 3. Subdivision 2 of section 75-0109 of the environmental conserva- 23 tion law is amended by adding two new paragraphs e and f to read as 24 follows: 25 e. Notwithstanding any other provision of law or regulation to the 26 contrary, utilize software systems and/or electronic mechanisms to 27 ensure adequate data collection and assess greenhouse gas emission 28 source compliance with department regulations. 29 f. At the discretion of the department, require greenhouse gas emis- 30 sion sources to submit compliance items electronically and maintain and 31 utilize electronic signatures for verification purposes. 32 § 4. Section 75-0109 of the environmental conservation law is amended 33 by adding five new subdivisions 5, 6, 7, 8 and 9 to read as follows: 34 5. No later than one year after the effective date of this section, 35 the department shall set statewide greenhouse gas emissions limits for 36 each compliance period for the purpose of determining interim progress 37 in achieving the statewide greenhouse gas emissions limits set forth in 38 section 75-0107 of this article. Such statewide greenhouse gas emissions 39 limits shall be set by the department as interim greenhouse gas emis- 40 sions reduction targets to inform decision-making regarding the need to 41 reduce total allowable greenhouse gas emissions under the cap and invest 42 program, and shall be reviewed annually. If, in the determination of the 43 department, such statewide greenhouse gas emissions limits are set at a 44 level which is insufficient to incentivize state greenhouse gas emis- 45 sions reductions progress necessary to achieve the emissions reduction 46 targets set forth in section 75-0107 of this article, the department 47 shall immediately modify the statewide greenhouse gas emissions limits 48 set pursuant to this subdivision to correct such insufficiency, begin- 49 ning with the next compliance period. 50 6. No later than January first, two thousand twenty-four, the depart- 51 ment shall assess and set site or facility specific caps for each 52 stationary source emitter of greenhouse gas for each compliance period 53 in disadvantaged communities for the purpose of determining interim 54 progress in achieving the statewide greenhouse gas emissions limits set 55 forth in section 75-0107 of this article. Such site or facility specific 56 caps on greenhouse gas emissions shall be set by the department asA. 8469 4 1 interim greenhouse gas emissions reduction targets to inform decision- 2 making under the cap and invest program, and shall be reviewed annually. 3 7. No later than January first, two thousand twenty-four, the depart- 4 ment shall assess and set site or facility specific caps for each 5 stationary source emitter of greenhouse gas for each compliance period 6 in disadvantaged communities for the purpose of determining interim 7 progress in achieving the statewide greenhouse gas emissions limits set 8 forth in section 75-0107 of this article. Such site or facility specific 9 caps on greenhouse gas emissions shall be set by the department as 10 interim greenhouse gas emission reduction targets to inform decision- 11 making regarding the need to reduce total allowable greenhouse gas emis- 12 sions under the cap and invest program and shall be reviewed annually. 13 8. No later than January first, two thousand twenty-four, the depart- 14 ment shall set sector specific benchmarks and goals for the reduction of 15 greenhouse gas emissions in each compliance period for the purpose of 16 determining interim progress in achieving the statewide greenhouse gas 17 emissions limits set forth in section 75-0107 of this article. Such 18 sector specific goals on greenhouse gas emissions shall be set by the 19 department as interim greenhouse gas emission reduction targets to 20 inform decision-making regarding the need to reduce or eliminate total 21 allowable greenhouse gas emissions under the cap and invest program, 22 including measures to prioritize greenhouse gas emissions and co-pollu- 23 tant reductions in disadvantaged communities, and shall be reviewed 24 annually. 25 9. All revenue, interest, and penalties received under programs and 26 regulations adopted pursuant to this article shall be deposited in the 27 greenhouse gas emissions reduction account. 28 § 5. Subdivision 1 of section 75-0111 of the environmental conserva- 29 tion law is amended by adding a new paragraph d to read as follows: 30 d. Working group members shall receive no compensation for their 31 services but shall be reimbursed for actual and necessary expenses 32 incurred in the performance of their duties. 33 § 6. Paragraphs a and b of subdivision 2 of section 75-0111 of the 34 environmental conservation law, as added by chapter 106 of the laws of 35 2019, are amended to read as follows: 36 a. The [council] working group shall hold at least six regional public 37 hearings on the draft criteria and the draft list of disadvantaged 38 communities, including three meetings in the upstate region and three 39 meetings in the downstate region, and shall allow at least one hundred 40 twenty days for the submission of public comment. 41 b. The [council] working group shall also ensure that there are mean- 42 ingful opportunities for public comment for all segments of the popu- 43 lation that will be impacted by the criteria, including persons living 44 in areas that may be identified as disadvantaged communities under the 45 proposed criteria. 46 § 7. Paragraph b of subdivision 2 of section 75-0119 of the environ- 47 mental conservation law, as added by chapter 106 of the laws of 2019, is 48 amended to read as follows: 49 b. An assessment of existing regulations [and], whether modifications 50 are needed to ensure fulfillment of the statewide greenhouse gas emis- 51 sions limits, and a description of any such modifications the department 52 has made and intends to make pursuant to sections 75-0121 and 75-0125 of 53 this article. 54 § 8. The environmental conservation law is amended by adding five new 55 sections 75-0121, 75-0123, 75-0125, 75-0127 and 75-0129 to read as 56 follows:A. 8469 5 1 § 75-0121. Cap and invest program; allocation of allowances. 2 1. a. There is hereby created an economy-wide cap and invest program 3 pursuant to the requirements of sections 75-0107 and 75-0109 of this 4 article through emissions reductions methods adopted and implemented by 5 the department and the authority. The department and the authority shall 6 undertake such adoption and implementation so as to provide for the 7 program to begin as of the start of the first compliance period. The cap 8 and invest program shall be subject to public notice and comment, 9 including at least five public hearings, and shall include substantial 10 consultation with the climate justice working group and members of 11 disadvantaged communities. 12 b. The cap and invest program shall provide for annually declining 13 aggregate greenhouse gas emissions limits by setting a maximum allowable 14 amount of greenhouse gas emissions from all covered sources in a given 15 compliance period. 16 c. A certain number of allowances shall be created by the department 17 to be transferred to the greenhouse gas emissions reduction account so 18 as to be made available by the authority to the covered sources pursuant 19 to this section and subdivision twenty-five of section eighteen hundred 20 fifty-four of the public authorities law. The total number of allowances 21 created and transferred so as to be made available by the authority for 22 auction or sale in a given compliance period shall not exceed the cap 23 for such compliance period. 24 d. All covered sources must register with the department in a form and 25 manner to be prescribed by the department and shall be subject to such 26 requirements as the department may establish by regulation to ensure 27 compliance with this article. 28 e. In implementing the cap and invest program, the department shall 29 prioritize greenhouse gas emissions and co-pollutant reductions in 30 disadvantaged communities, including but not limited to, by establishing 31 maximum allowable greenhouse gas limits for all individual sources 32 located in or proximate to, or otherwise contributing to the pollution 33 burden in, a disadvantaged community. Maximum allowable greenhouse gas 34 emissions limits on individual sources shall decline at a rate which is 35 proportional to the decline of the cap. Such emissions limits shall be 36 sufficient to ensure that disadvantaged communities experience pollution 37 reduction at rates exceeding the rates of pollution reduction in other 38 communities as a result of the cap and invest program, and are not 39 disproportionately negatively affected as a result of the cap and invest 40 program pursuant to paragraph c of subdivision three of section 75-0109 41 of this article, taking into account the characteristics of such commu- 42 nities and such sources. The department may set emissions limits at a 43 lower level for sources located in or proximate to, or otherwise 44 contributing to the pollution burden in, a disadvantaged community than 45 would otherwise be required under the cap and invest program. 46 f. The department shall provide for appropriate mechanisms to address 47 covered sources for which regulation under the cap and invest program is 48 preempted by federal law. 49 g. The department and the authority shall coordinate with the commis- 50 sion to determine a timeline and related planning process for the 51 retirement of fossil fuel generation facilities or their conversion to 52 renewable energy facilities to ensure the emissions reductions necessary 53 to comply with the statewide greenhouse gas emissions limits established 54 by section 75-0107 of this article. 55 2. The department shall transfer all allowances, as created and issued 56 by the department pursuant to the cap and invest program established byA. 8469 6 1 subdivision one of this section, to the greenhouse gas emissions 2 reduction account for auction, sale, or direct allocation thereof in the 3 manner set forth in this article and in subdivision twenty-five of 4 section eighteen hundred fifty-four of the public authorities law; 5 provided, however, that the department shall not allocate permits for 6 zero or de minimis cost. 7 3. a. The department shall adopt regulations that establish criteria 8 and methods for determining energy intensity and trade exposure for the 9 purpose of identifying facilities which may be significantly impacted by 10 the cap and invest program such that they may be designated as EITEs in 11 a manner which is consistent with the treatment of EITEs in the scoping 12 plan, including appendix C thereof. The department shall ensure that 13 any designated EITEs attempt strategies to proactively reduce the risk 14 of leakage by relying on incentive-oriented approaches or technical 15 support prior to approving any reduced cost allowances. The development 16 of such regulations shall include at least three public hearings and 17 other efforts to provide meaningful opportunities for public comment 18 from all persons who will be impacted by the scoping plan, including but 19 not limited to, persons working for EITEs and persons living in disad- 20 vantaged communities. Such regulations shall be developed in compliance 21 with the provisions of paragraph b of this subdivision. 22 b. Such regulations shall: 23 (i) identify a procedure for demonstrating that such facilities are 24 using best available technology for control of greenhouse gas emissions 25 and best available energy efficiency practices to reduce such emissions 26 and incorporate co-pollutant reduction measures or mitigation require- 27 ments for such facilities located in or proximate to disadvantaged 28 communities; provided, however, that the term "best available technolo- 29 gy" shall not include the use of alternate fuel combustion, or carbon 30 capture and sequestration; 31 (ii) consider how program design can further mitigate the cost of 32 reducing emissions for such facilities while providing an incentive to 33 improve efficiency and reduce emissions; provided, however that such 34 mitigation shall not include the use of alternate fuel combustion, or 35 carbon capture and sequestration; 36 (iii) incorporate co-pollutant reduction measures or co-pollutant 37 mitigation requirements for such facilities located in or proximate to, 38 or otherwise contributing to the pollution burden in, a disadvantaged 39 community; 40 (iv) ensure that actual emissions reductions by each emitter are in 41 compliance with site or facility specific caps for facilities located in 42 or proximate to, or otherwise contributing to the pollution burden in, 43 disadvantaged communities; and 44 (v) provide for an application process for a facility to be designated 45 by the department as an EITE, which such application shall include: 46 (A) such information as the department may request to establish wheth- 47 er such facility satisfies the energy intensity and trade exposure 48 criteria established pursuant to paragraph a of this subdivision; 49 (B) a description of the expected impact of the cap and invest program 50 on such facility; 51 (C) such facility's plans to reduce emissions of greenhouse gases and 52 co-pollutants; and 53 (D) contractual commitment on the part of the facility to avoid leak- 54 age and continue to meet such economic development or economic mainte- 55 nance requirements as determined to be appropriate by the department, inA. 8469 7 1 consultation with the authority and the department of economic develop- 2 ment. 3 c. Upon a satisfactory showing by an EITE to the department that such 4 EITE will be significantly negatively impacted by compliance with the 5 cap and invest program so as to result in leakage, the department and 6 the authority may, in a manner not inconsistent with any other provision 7 of this article or the scoping plan, provide for allowances to initially 8 be issued to eligible EITEs at reduced cost. The amount of such reduced 9 cost shall be that amount which is necessary to prevent leakage with 10 respect to the facility, as determined by the department, in consulta- 11 tion with the authority and the department of economic development, as 12 long as the EITE employs best available technology to reduce its emis- 13 sions; provided, however, that the term "best available technology" will 14 not include the use of alternate fuel combustion, or carbon capture and 15 sequestration. For the first compliance period, any allowances issued 16 to an EITE at reduced cost shall not represent more than the minimum 17 amount of allowances necessary to authorize such EITE to emit an amount 18 of carbon dioxide equivalent emissions equal to such EITE's average 19 annual carbon dioxide equivalent emissions for the three years following 20 the effective date of this section as determined by the department. Such 21 amount shall be adjusted downward as necessary to account for the 22 requirement that such EITE employ best available technology to reduce 23 its emissions. In subsequent compliance periods, any allocation to EITEs 24 of allowances at reduced cost shall decline in proportion to the 25 reduction in total available allowances for a given compliance period in 26 accordance with the cap for such compliance period. An EITE shall not 27 be issued an allowance at reduced cost for an amount which is less than 28 the amount paid by such EITE for a reduced cost allowance in the previ- 29 ous compliance period. 30 d. EITEs shall not receive allowances at reduced cost after the tenth 31 compliance period. The department shall cease the issuance of allowances 32 to an EITE at reduced cost if it determines that: 33 (i) issuance of allowances at reduced cost to such EITE is no longer 34 necessary to limit leakage; 35 (ii) such EITE is not employing best available technology to reduce 36 emissions; 37 (iii) such EITE is located in or proximate to, or otherwise contribut- 38 ing to the polluting burden in, a disadvantaged community, and such 39 EITE's co-pollutant emissions have increased relative to the previous 40 compliance period; 41 (iv) such EITE no longer qualifies as an EITE pursuant to paragraph b 42 of this subdivision; or 43 (v) such EITE made material misstatements on its application for EITE 44 designation, or materially violated (A) the terms of any approval of 45 such application, (B) any agreement in respect thereof, or (C) any law, 46 rule, or regulation adopted pursuant to this article or article nineteen 47 of this chapter, including without limitation the individual source 48 emissions limits set pursuant to paragraph e of subdivision one of this 49 section. 50 e. If the actual greenhouse gas equivalent emissions of an EITE exceed 51 the allowances issued to such EITE at reduced cost for that compliance 52 period, such EITE must acquire additional allowances at full price and 53 submit such allowances as necessary to satisfy its compliance obligation 54 during such compliance period. 55 f. If the department issues allowances to EITEs at reduced cost, the 56 department shall:A. 8469 8 1 (i) conduct regular audits of such EITEs to determine whether such 2 EITEs continue to qualify as EITEs for purposes of receiving reduced 3 cost allowances under this subdivision; and 4 (ii) regularly review the need to issue allowances to EITEs at reduced 5 cost. 6 g. The department shall create an online public database on its 7 website and report to the governor and the legislature at least every 8 compliance period on the emissions and location of all EITEs at least 9 once per compliance period. 10 h. Notwithstanding anything in this subdivision to the contrary, the 11 total number of allowances issued at reduced cost for a compliance peri- 12 od shall not exceed fifteen percent of the total allowances for such 13 compliance period. To the extent that this paragraph limits the number 14 of reduced cost allowances otherwise allocated to EITEs pursuant to this 15 subdivision, allocations of reduced cost allowances shall be reduced as 16 necessary, in a manner to be determined appropriate by the department, 17 in consultation with the authority. 18 4. a. The department shall provide support to the authority for the 19 auction or sale of allowances pursuant to subdivision twenty-five of 20 section eighteen hundred fifty-four of the public authorities law. 21 b. The department, in consultation with the authority, shall adopt 22 such rules and regulations as it deems necessary to govern the auction 23 or sale of allowances, and may enter into such contracts as may be 24 necessary or convenient for such purpose. 25 c. The department, in coordination with the authority, shall adopt 26 such rules and regulations as it deems necessary to protect the confi- 27 dentiality of purchasers of allowances, guard against bidder collusion 28 and minimize the potential for market manipulation of the auction or 29 sale of allowances. 30 5. The department may reserve a small portion of allowances under the 31 cap for purposes of market stability and to incentivize additional emis- 32 sions reductions so long as such allowances are not in addition to the 33 total allowances under the cap. Such allowances may be transferred to 34 the greenhouse gas emissions reduction account upon notice to the 35 department by the authority at such times as is deemed necessary by the 36 authority. Such reserve allowances may be auctioned or sold in a manner 37 and at a time as determined to be appropriate by the authority. Such 38 reserve allowances shall be auctioned or sold for a price which is equal 39 to or greater than the maximum allowance price provided for in subdivi- 40 sion two of section 75-0125 of this article. The sale of these allow- 41 ances may be used for cost containment, provided that such sale does not 42 violate any other section of this article or exceed the current annual 43 cap. 44 § 75-0123. Use of allowances. 45 1. Allowances must be submitted to the department for the full amount 46 of greenhouse gas emissions emitted during a given compliance period. If 47 greenhouse gas emissions emitted during a given compliance period exceed 48 allowances submitted for such compliance period, such shortfall shall be 49 penalized pursuant to section 75-0129 of this article. 50 2. Any allowances not submitted at the end of the compliance period in 51 which they are issued by the authority shall automatically expire one 52 hundred eighty days after the end of such compliance period if not 53 submitted prior to such date of expiration. 54 3. Allowances shall not be tradable, sellable, exchangeable, or other- 55 wise transferable. 56 § 75-0125. Price of allowances.A. 8469 9 1 1. In consultation with the authority, the department shall establish 2 by regulation a minimum allowance price for each compliance period and a 3 schedule for the amount by which the minimum allowance price shall 4 increase every year. Except with respect to allowances provided at 5 reduced cost to EITEs pursuant to subdivision three of section 75-0121 6 of this article, allowances shall not be sold or auctioned at an amount 7 lower than such minimum allowance price for the applicable compliance 8 period. 9 2. In consultation with the authority, the department shall determine 10 and establish a maximum allowance price for each compliance period and a 11 schedule for the maximum price to increase by a predetermined amount 12 every year at a rate which is greater than or equal to the rate of 13 increase of the price floor set by the price floor increase schedule 14 pursuant to subdivision one of this section. The price ceiling schedule 15 must be set at a level sufficient to incentivize investments to achieve 16 further greenhouse gas emission reductions beyond those enabled by the 17 price ceiling for a given compliance period. 18 3. In consultation with the authority, the department shall increase 19 the price floor and price ceiling for any given compliance period above 20 the schedules of price increases set forth in subdivisions one and two 21 of this section if necessary to ensure achievement of the emissions 22 reductions necessary to comply with the statewide greenhouse gas emis- 23 sions limits established by section 75-0107 of this article. The depart- 24 ment shall assess whether such increases are necessary on at least an 25 annual basis. In making such assessment, the department shall consider 26 actual emissions reductions, progress towards achieving the statewide 27 greenhouse gas emissions limits established by section 75-0107 of this 28 article, and performance with respect to the statewide greenhouse gas 29 emissions limits established pursuant to subdivision five of section 30 75-0109 of this article. 31 4. a. The department shall make all determinations under this section 32 with reference to the following considerations: 33 (i) the need for certainty in achieving the emissions reduction 34 requirements set forth in section 75-0107 of this article and the state- 35 wide greenhouse gas emissions limits established pursuant to section 36 75-0109 of this article; 37 (ii) the social cost of carbon as determined pursuant to section 38 75-0113 of this article; 39 (iii) other greenhouse gas pricing programs throughout the world, and 40 the successes and failures of such programs with respect to the pricing 41 of allowances; 42 (iv) the statewide greenhouse gas emissions report developed pursuant 43 to section 75-0105 of this article; 44 (v) cost-of-living inflation, with reference to the United States 45 bureau of labor statistics consumer price index or, if such index is not 46 available, another appropriate index approved by the department; and 47 (vi) such other information as may be necessary or convenient to 48 comply with the provisions of this section. 49 b. The department and the authority may seek and obtain such informa- 50 tion as may be necessary or convenient for the determination of the 51 pricing of allowances from other state or federal agencies or the feder- 52 ally designated electric bulk system operator. 53 § 75-0127. Linkage with other jurisdictions. 54 1. The department shall determine an equitable and efficient manner to 55 link the cap and invest program with the regional greenhouse gas initi- 56 ative. Such linkage shall provide that any source subject to theA. 8469 10 1 regional greenhouse gas initiative and the cap and invest program shall 2 receive interjurisdictional credit for greenhouse gas emissions 3 reductions and amounts paid for allowances acquired under the respective 4 programs through a reduction in the price of an allowance equivalent to 5 the amount paid for an allowance for an equivalent amount of emissions 6 in another participating jurisdiction. In determining such reduction in 7 price, the department shall evaluate the relative cost of allowances 8 with respect to emissions covered by the regional greenhouse gas initi- 9 ative as compared to the cap and invest program, and make such determi- 10 nation in a manner that results in an equal treatment of the cost of 11 allowances relative to covered sources which are not subject to the 12 regional greenhouse gas initiative. No source otherwise subject to the 13 cap and invest program shall be excluded from the cap and invest program 14 because it is subject to the regional greenhouse gas initiative. 15 2. a. The department may link the cap and invest program with one or 16 more similar programs in jurisdictions other than the regional green- 17 house gas initiative if it determines that: 18 (i) Such linkage will result in cap and invest program market bene- 19 fits, reduce costs, and result in economic benefits to the people of the 20 state without reducing the overall emissions reductions or slowing or 21 reducing emissions reductions in disadvantaged communities; and 22 (ii) The department has: 23 (A) at least six months prior to any such linkage, released a plan for 24 any proposed linkage which includes (1) a detailed explanation of the 25 department's determinations with respect to this paragraph and para- 26 graphs a, b, and c of subdivision three of this section, and (2) proc- 27 esses for regular review and audit of such linkage; 28 (B) solicited public comment on such plan for a period of at least 29 thirty days; and 30 (C) considered such public comments and, if appropriate, updated the 31 plan in response to such public comments. 32 (D) if any analysis submitted as public comments shows that the link- 33 age will raise emissions or increase unequal cumulative pollution 34 burdens in disadvantaged communities, any such linkage shall be delayed 35 for at least twelve months while the impact of such linkage shall be 36 reassessed. 37 b. If any analysis of a plan for any proposed linkage submitted as 38 public comments shows that the linkage will raise emissions or increase 39 unequal cumulative pollution burdens in disadvantaged communities, then 40 the linkage must be delayed for at least twelve months, and the impact 41 of the linkage must be reassessed. 42 3. Any linkage shall provide assurance that: 43 a. It does not compromise, limit, or impinge upon the state's 44 progress, ability, or likelihood of meeting or exceeding the require- 45 ments of this article; 46 b. Credit for greenhouse gas emissions reductions under one program 47 shall not reduce compliance obligations in the other jurisdictional 48 program more than an equivalent amount of greenhouse gas emissions 49 reductions in such program; and 50 c. Such linkage will not result in increased co-pollutant emissions in 51 disadvantaged communities. 52 4. If the department determines that linkage with another similar 53 program made pursuant to subdivision two of this section no longer meets 54 the requirements set forth in paragraph a of such subdivision and para- 55 graphs a, b, and c of subdivision three of this section, the department 56 shall take immediate action to ensure compliance with such paragraphs.A. 8469 11 1 If such compliance is not achieved within one year of such determination 2 of non-compliance, the department shall discontinue such linkage within 3 one hundred eighty days thereafter. 4 5. Any linkage shall require approval of the legislature. 5 § 75-0129. Enforcement; penalties. 6 1. All covered entities are required to submit allowances in a timely 7 manner to satisfy compliance obligations under this article and shall 8 comply with all requirements for monitoring, reporting, holding, and 9 transferring emission allowances pursuant to the cap and invest program 10 established by section 75-0121 of this article and other provisions of 11 this chapter. 12 2. Any person that violates the provisions of this article or an order 13 issued under this article shall incur a penalty of up to twelve thousand 14 five hundred dollars per day for each day that such violation continues. 15 In the event of multiple violations, each violation shall be considered 16 a separate offense. 17 3. All penalties collected under subdivisions two and seven of this 18 section shall be credited to the New York climate action fund estab- 19 lished pursuant to section ninety-nine-qq of the state finance law, and 20 shall be subject to subdivisions twenty-seven, twenty-eight and twenty- 21 nine of section eighteen hundred fifty-four of the public authorities 22 law. 23 4. Any electric corporation, gas corporation, or combination gas and 24 electric corporation, as such terms are defined in section two of the 25 public service law, which pays a monetary penalty under this section 26 must notify its customers in published form within three months of 27 paying such monetary penalty. 28 5. In addition to the right conferred upon the department under subdi- 29 vision two of this section, the attorney general shall have the right to 30 seek the penalties set forth in subdivision two of this section in a 31 civil action brought pursuant to subdivision twelve of section sixty- 32 three of the executive law. 33 6. Nothing in this section shall relieve any person, private entity or 34 public agency or entity of compliance with other applicable federal, 35 state, or local laws or regulations or limit the existing authority of a 36 state, municipal or county agency or entity of adopting, implementing, 37 or enforcing greenhouse gas reduction measures including civil penalties 38 under section 71-4003 of this chapter. 39 § 9. Section 1854 of the public authorities law is amended by adding 40 five new subdivisions 27, 28, 29, 30 and 31 to read as follows: 41 27. To conduct, foster, assist, evaluate, and support programs and 42 services related to: greenhouse gas emissions or co-pollutant 43 reductions; research, analysis and support of climate mitigation, adap- 44 tation, and resilience; other measures as identified in the scoping plan 45 developed pursuant to section 75-0103 of the environmental conservation 46 law, including without limitation those measures identified relative to 47 a just transition or workforce development; fossil fuel generation 48 retirement planning; conversion of fossil fuel generation to renewable 49 energy planning; or measures identified in the state energy plan devel- 50 oped pursuant to article six of the energy law. 51 28. To establish, administer, implement, and support the greenhouse 52 gas emissions reduction account as defined in section 75-0101 of the 53 environmental conservation law, consistent with article seventy-five of 54 the environmental conservation law, and pursuant to regulations adopted 55 pursuant to such article and other existing authority, including by 56 making allowances available from such account for auction or sale pursu-A. 8469 12 1 ant to the cap and invest program, as defined by section 75-0101 of the 2 environmental conservation law. Such auction or sale shall be conducted 3 on a quarterly basis and in a manner that, subject to the other require- 4 ments of article seventy-five of the environmental conservation law and 5 regulations adopted pursuant thereto, is efficient, transparent, and 6 provides certainty for participants to the extent practicable, provided 7 that with respect to reserve allowances as defined in section 75-0101 of 8 the environmental conservation law, auctions need not be quarterly. The 9 authority shall establish procedures to guard against the potential for 10 market manipulation, including but not limited to bidder collusion or 11 other improper release or disclosure of any bidding information. A 12 violation of rules with respect to market manipulation shall be subject 13 to a civil penalty of sixty thousand dollars per violation for a first 14 violation, and one hundred twenty thousand dollars for each subsequent 15 violation, and any applicable criminal penalties. The authority shall 16 develop rules and procedures in respect of all such requirements. The 17 proceeds from the auction or sale of allowances and any penalties will 18 be placed into a segregated authority funding account, established 19 pursuant to section eighteen hundred fifty-nine of this title, and shall 20 not be commingled with other authority funds. Except as otherwise set 21 forth in this title, the authority may use a portion of such proceeds 22 for administrative costs, auction or sale, design and support costs, and 23 program design, implementation, and evaluation costs directly related to 24 implementing the cap and invest program, provided that such amounts 25 shall not exceed the greater of ten million dollars or one percent of 26 such aggregate annual proceeds. 27 29. Within thirty days following receipt of proceeds collected from 28 the auction or sale of allowances allocated by the department of envi- 29 ronmental conservation to the authority pursuant to subdivision two of 30 section 75-0121 of the environmental conservation law and regulations 31 adopted by the department of environmental conservation pursuant to 32 article seventy-five of the environmental conservation law and other 33 existing authority, the authority shall transfer such funds from such 34 segregated authority funding account to the New York climate action fund 35 established pursuant to section ninety-nine-qq of the state finance law. 36 30. Within sixty days following the deposit of proceeds collected from 37 the auction or sale of allowances as outlined in subdivision twenty-six 38 of this section, the authority shall issue to the governor and the 39 legislature, and post on its website, a detailed report which shall 40 include, but is not limited to, the amount of revenue generated by the 41 auction or sale of allowances under subdivision twenty-five of this 42 section, the number of entities that purchased allowances, the number of 43 entities that received reduced cost allowances, the number of allowances 44 sold at reduced cost, and the amounts paid for reduced cost allowances. 45 31. The authority shall annually issue to the governor and the legis- 46 lature, and post on its website, beginning the next fiscal year succeed- 47 ing the first allocation of funds from the climate and community 48 protection fund, a report detailing the use of such funds, including 49 information regarding the programs to which such funds are appropriated, 50 recipients of funds pursuant to such programs, and outcomes of such 51 programmatic spending. 52 § 10. Any and all funds received pursuant to sections 75-0121, 53 75-0123, 75-0125, 75-0127, and 75-0129 of the environmental conservation 54 law or subdivisions 27, 28, 29, 30, and 31 of section 1854 of the public 55 authorities law must be allocated pursuant to state law only to the New 56 York Climate Action Fund, and the state comptroller and office of budgetA. 8469 13 1 will ensure that no funds are used for any purpose not in compliance 2 with and in furtherance of the goals in the Climate Leadership and 3 Community Protection Act of 2019. 4 § 11. The public authorities law is amended by adding a new section 5 1885 to read as follows: 6 § 1885. Office of equity for energy and climate. 1. Definitions. As 7 used in this section, the following terms shall have the following mean- 8 ings: 9 (a) "Community solutions fund" shall mean the community directed 10 climate solutions fund established pursuant to subdivision three of this 11 section. 12 (b) "Office" shall mean the office of equity for energy and climate 13 established pursuant to subdivision two of this section. 14 (c) "Solutions grants program" shall mean the community directed 15 climate solutions grants program established pursuant to subdivision 16 four of this section. 17 2. Office of equity for energy and climate. (a) There is established 18 within the authority an office of equity for energy and climate. 19 (b) The purpose of the office of equity for energy and climate is to 20 support local and communally developed climate projects to support 21 disadvantaged communities, including by establishing and administering 22 the community solutions fund and the solutions grants program pursuant 23 to subdivisions three and four of this section. 24 3. The community directed climate solutions fund. There is established 25 within the office the community solutions fund, out of which the office 26 shall make grants pursuant to the solutions grants program. 27 4. Community directed climate solutions grants program. (a) The office 28 shall establish the community directed climate solutions grants program 29 to provide assistance to community-based organizations, projects, and 30 initiatives that may not meet application criteria for other assistance 31 programs, or for which other assistance programs are inadequate. 32 (b) The office shall design the solutions grants program, to the 33 extent practicable and permissible, to maximize the ability of grant 34 recipients to use such grants as matching funds in other assistance 35 program applications and/or to leverage the funding to receive addi- 36 tional grants from other assistance programs. 37 (c) The office shall identify the needs of disadvantaged communities 38 to prioritize grant allocation. Such identification process shall 39 include significant consultation with community stakeholders in a varie- 40 ty of disadvantaged communities throughout the state, at least three 41 public hearings, and other opportunities for public input. The office 42 shall also consult with the climate justice working group established 43 pursuant to section 75-0111 of the environmental conservation law. 44 (d) Applicants eligible for the solutions grants program. (i) Lead 45 applicants eligible for grants shall be constituency-based organiza- 46 tions, tribal nations, or, in communities where neither constituency- 47 based organizations or tribal nations exist or do not wish to apply for 48 such grants, a municipality. 49 (ii) Sub-applicants may include other non-profit organizations, 50 academic institutions, local businesses, municipalities and other simi- 51 larly-situated stakeholders. 52 (e) Community directed climate solutions grants program restrictions. 53 The following restrictions shall apply to the community directed climate 54 solutions grants program: 55 (i) Grants shall only be made for projects that reduce energy costs, 56 support community ownership and governance of energy infrastructure, orA. 8469 14 1 enhance climate change resiliency, including but not limited to 2 reduction of urban heat island effects and flooding protections. 3 (ii) At least seventy-five percent of funding allocated to the 4 solutions grants program must support projects located within disadvan- 5 taged communities. 6 (iii) Up to twenty-five percent of funding allocated to the solutions 7 grants program may support projects located outside disadvantaged commu- 8 nities, provided that such funding provides a benefit to disadvantaged 9 communities, including those benefits identified in subparagraph (i) of 10 this paragraph. 11 (iv) To the extent practicable, grants shall be distributed equitably 12 to disadvantaged communities throughout the state, based on population. 13 (v) Grants shall only be made for projects which satisfy the community 14 decision-making and accountability standards established pursuant to 15 subdivision five of this section. 16 (vi) Projects funded by grants made under the solutions grants program 17 shall be subject to the provisions of the labor law. 18 (vii) Preference shall be given to proposals that include significant 19 participation by minority and women-owned business enterprises. 20 5. The office shall develop and establish standards for community 21 decision-making and accountability mechanisms with respect to eligible 22 projects and the use of grant funding pursuant to the provisions of this 23 section. 24 6. Beginning one year after its establishment and annually thereafter, 25 the office shall submit a report to the climate justice working group 26 established pursuant to section 75-0111 of the environmental conserva- 27 tion law, the governor, and the legislature on the use of funds in the 28 community directed climate solutions fund, including information regard- 29 ing recipients of the solutions grants program. 30 § 12. Severability. If any provision of this article is, for any 31 reason, declared unconstitutional or invalid, in whole or in part, by 32 any court of competent jurisdiction, such portion shall be deemed sever- 33 able, and such unconstitutionality or invalidity shall not affect the 34 validity of the remaining portions of this article, which remaining 35 portions shall continue in full force and effect. 36 § 13. This act shall take effect immediately.