What's happening
This bill establishes a tax on carbon-based fuels in New York to reduce greenhouse gas emissions and fund climate initiatives.
Why it matters
Imposes a steadily increasing carbon tax. The tax starts at $35 per ton of carbon dioxide equivalent and increases by $15 each year, capping at $185 per ton. This escalating structure is likely to create stronger incentives for fuel distributors, utilities, and consumers to reduce fossil fuel use over time.
Protects low- and moderate-income residents. Sixty percent of the tax revenue is directly returned to very low to moderate income New Yorkers through progressive tax credits, aiming to offset the regressive impact of higher energy prices and help ensure climate policy doesn't disproportionately burden vulnerable households.
Directs significant funding to climate solutions. The remaining forty percent of revenue is earmarked for investments in clean energy, mass transit, infrastructure improvements, and climate adaptation efforts, potentially accelerating the state's transition to a low-carbon economy and increasing resilience to extreme weather.
Mandates ongoing review and public reporting. The Department of Environmental Conservation must publish biennial reports evaluating whether the tax rate should be adjusted for inflation or emission reduction targets, providing legislative oversight and opportunities to refine the policy for effectiveness and fairness.
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Who cares
Headline styles
Tax Carbon-Based Fuels
Plain English, a few words. Used as the page title.
Sponsors
History
- Referred to budget and revenue
- Referred to budget and revenue
Companion bill
The same bill in the other chamber. A bill becomes law when one version passes both houses and the governor signs it, so either number can carry it.
Tax Carbon-Based Fuels
In Assembly Committee · Ways And Means · Sponsor Kevin Cahill
Full text
3 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
3608
2019-2020 Regular Sessions
IN SENATE
February 11, 2019
Introduced by Sens. PARKER, BAILEY, BRESLIN, HOYLMAN, KAVANAGH, KRUEGER, MONTGOMERY, SANDERS, SEPULVEDA, SERRANO -- read twice and ordered printed, and when printed to be committed to the Committee on Budget and Revenue
AN ACT to amend the tax law, in relation to establishing a tax on carbon-based fuels to mitigate greenhouse gas emissions causing anthropogenic climate change
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. The tax law is amended by adding a new article 12-B to read as follows:
ARTICLE 12-B
TAX ON CARBON-BASED FUELS Section 289-g. Definitions.
289-h. Administration of emissions charges.
289-i. Carbon dioxide emissions tax.
289-j. Carbon dioxide emissions fund.
289-k. Regulations.
§ 289-g. Definitions. For the purposes of this article, the following terms shall have the following meanings:
1. "Carbon-based fuel" means coal, natural gas, renewable biomass, petroleum products, and any other product that contains carbon and emits carbon dioxide, methane, nitrous oxide, or other greenhouse gases when combusted, that are used for fuel, heating, cooling, or industrial processes, which processes shall include electricity generation.
2. "Carbon-generated electricity" means electric energy produced using a carbon-based fuel that is generated or transmitted by an electric power facility.
3. "Carbon dioxide equivalent" means a unit of measure denoting the amount of emissions from a greenhouse gas, expressed as the amount of carbon dioxide by weight that produces the same global warming impact.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD01897-01-9
S. 3608 2
4. "Carbon dioxide emissions tax" means a tax imposed on each ton of carbon dioxide equivalency.
5. "Fuel distributor" means any person, firm, association or corporation, that imports or causes to be imported into the state, for use, distribution, storage or sale within the state, any carbon-based fuel as defined in subdivision one of this section; and also any person, firm, association or corporation that produces, refines, manufactures or compounds carbon-based fuel within the state.
6. "Fund" means the carbon dioxide emissions fund established by this article.
7. "Motor vehicle fuel" means fuel for the operation of a motor vehicle.
8. "Utility" means any such gas corporation, electric corporation, gas and electric corporation, steam corporation, municipality, or any entity that, in any manner, sells or facilitates the sale, furnishing or provision of gas or electronic commodity to residential customers; provided, however, that the term shall not include any municipality that is exempt from regulation by the public service commission pursuant to paragraph g of subdivision five of section one thousand five of the public authorities law.
§ 289-h. Administration of emissions charges. The department of environmental conservation shall administer the schedules of carbon dioxide emissions charges and the carbon dioxide emissions fund, both established pursuant to this article. Such tax shall be imposed on each fuel distributor and utility at a rate and schedule to be determined by the department of environmental conservation in accordance with section two hundred eighty-nine-i of this article for a carbon-based fuel that is either:
1. sold by a fuel distributor to consumers in this state in the previous calendar year; or
2. used to produce carbon-generated electricity that is supplied by a utility to consumers in this state in the previous calendar year.
§ 289-i. Carbon dioxide emissions tax. 1. The department and the department of environmental conservation shall establish a carbon dioxide emissions tax on the distribution or sale of carbon-based fuels which shall be no less than thirty-five dollars per ton of carbon dioxide equivalency and shall increase by fifteen dollars per ton of carbon dioxide equivalency annually to a maximum of one hundred eighty-five dollars per ton of carbon dioxide equivalency.
2. In the fourth year of implementation, and biannually thereafter, the department of environmental conservation shall publish a report for the legislature and shall post the report on an internet website accessible to the public. Such report shall consider whether any increases or decreases in the carbon dioxide emissions tax as authorized by this section are recommended to account for inflation, and to ensure progress towards reaching emissions levels to mitigate climate change in furtherance of established state policy.
3. The department shall determine total taxable emissions annually for each distributor or utility using the carbon dioxide equivalent for each carbon-based fuel based on information that shall be provided in an annual report to the department by the distributor or utility about the amount of carbon-based fuel or carbon-generated electricity sold to consumers within the state during the preceding calendar year. Such annual report shall also include any information required by the department by rule or regulation.
S. 3608 3
4. The department and the department of environmental conservation shall be authorized to develop any rule or regulation necessary to collect and administer the carbon dioxide emissions tax authorized under this article.
5. Notwithstanding any general or special law to the contrary, the tax authorized under this section shall not be imposed on any carbon-based fuel or source of carbon-based electricity if such imposition is superseded by federal law or regulation.
§ 289-j. Carbon dioxide emissions fund. 1. The department of environmental conservation shall establish the carbon dioxide emissions fund, and the department's office of climate change shall serve as the fund's administrator. The department of environmental conservation shall deposit all proceeds collected in accordance with section two hundred eighty-nine-i of this article into the fund. No such proceeds shall fund government operations of the state, other than to pay for reasonable administrative costs as provided under subdivision two of this section.
2. The office of climate change shall return sixty percent of all carbon dioxide emissions charge proceeds to very low to moderate income residents of the state in the form of tax credits in order to offset the regressive nature of such fees. The amount of such credit shall be based on estimates and averages of expense and consumption trends for very low to moderate income residents determined by the office of climate change in conjunction with the department in accordance with section two hundred eighty-nine-k of this article. Such credit shall be progressively issued to very low to moderate income residents. Such income categories shall mean those with income below fifty percent for very low income residents, income between fifty and eighty percent for low income residents, and income between eighty-one and one hundred fifteen percent for moderate income residents, of the area median income as determined by the department of housing and urban development.
3. The office of climate change shall distribute evenly the remaining forty percent of proceeds of such fund in order to support the transition to one hundred percent clean energy in the state, to support mass transit to reduce carbon emissions, and to improve climate change adaptation. Such funds shall include but not be limited to payments and subsidies for renewable energy, energy conservation and efficiency measures, improvements in infrastructure, improvements in mass transit capacity, agricultural adaptation measures, protection of low-lying areas including coastlines, and emergency responses to extreme weather events.
§ 289-k. Regulations. 1. The department and department of environmental conservation shall promulgate such rules and regulations as shall be necessary to implement the provisions of this article.
2. The department and the department of environmental conservation shall undertake all reasonable efforts to collect charges authorized pursuant to this article at the first point of distribution or sale within the state.
§ 2. This act shall take effect on the ninetieth day after it shall have become a law. Effective immediately, the addition, amendment and/or repeal of any rule or regulation necessary for the implementation of this act on its effective date are authorized to be made and completed on or before such effective date.
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend the tax law, in relation to establish- ing a tax on carbon-based fuels to mitigate greenhouse gas emissions causing anthropogenic climate change
Purpose or general idea of bill
To assist in NY's goal to substantially reduce CO2 emissions, while investing in clean energy and modernized infrastructure.
Summary of specific provisions
§ 289-g of Section 1 provides definitions for "carbon-based fuel," "carbon generated electricity," "carbon dioxide equivalent," "carbon dioxide emissions tax," "fuel distributor," "carbon dioxide emissions fund (fund)," "motor vehicle fuel," and "utility."
§ 289-h of Section 1 provides for the administration of emissions charg- es.
§ 289-i of Section 1 provides for the establishment of the carbon diox- ide emissions tax. § 289-j of Section 1 provides for development of a carbon dioxide emissions fund.
§ 289-k of Section 1 allows for the Departments of Taxation & Finance and Environmental Conservation to promulgate rules and regs.
Section 2 provides that this act shall take effect 90 days after being signed into law and that all rules/regs are completed before the effec- tive date.
Justification
This carbon tax bill will reduce carbon emissions in New York State, helping New York to reach its target of reducing carbon dioxide emis- sions by 80% of 1990 levels by the year 2050. The bill aims to protect the poorest classes while using a portion of the revenue to adapt to climate change, increase investment in infrastructure, and enhance the use of renewable energy. Hence the bill is revenue neutral for the most vulnerable groups, and uses revenue from less vulnerable groups to offset the impacts and prevent future climate change.
The scientific community has widely recognized the imminent threat presented by climate change, and a market-based solution offsetting climate altering emissions will play a large role in preventing the irreversible impacts of a warmer climate. Already New York State has witnessed the devastating effects of Hurricane Sandy and other extreme weather events. A market - based solution such as a carbon tax has been embraced widely by economists, including those in New York State, as well as by citizens' groups and political leaders on both sides of the aisle.
Prior legislative history
2017/18 S2846 Referred to Investigations and Government Operations 2015-16: S.6037 - Referred to Rules/Referred to Investigations and Government Operations
Fiscal implications
TBD.
Effective date
This bill would take effect 90 days after becoming Iaw.This bill would take effect 90 days after becoming law.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.