§ 76-0103 — The climate change adaptation cost recovery program

§ 76-0103. The climate change adaptation cost recovery program.\n 1. There is hereby established a climate change adaptation cost\nrecovery program to be administered by the department.\n 2. The purposes of the program shall be the following:\n a. To secure compensatory payments from responsible parties based on a\nstandard of strict liability to provide a source of revenue for climate\nchange adaptive infrastructure projects within the state. Such payments\nin aggregate shall total the cost recovery amount and shall be due and\npayable on the applicable payment date.\n b. To determine proportional liability of responsible parties for the\ncost recovery amount pursuant to subdivision three of this section;\n c. To impose cost recovery demands on responsible parties and issue\nnotices of cost recovery demand;\n d. To accept and collect payment from responsible parties;\n e. To identify climate change adaptive infrastructure projects;\n f. To disperse funds to climate change adaptive infrastructure\nprojects; and\n g. To allocate funds in such a way as to achieve a goal that at least\nforty percent of the qualified expenditures from the program, but not\nless than thirty-five percent of such expenditures, shall go to climate\nchange adaptive infrastructure projects that benefit disadvantaged\ncommunities as defined in section 75-0101 of this chapter.\n 3. a. A responsible party shall be strictly liable, without regard to\nfault, for a share of the cost recovery amount, which shall be used for\nthe costs of climate change adaptive infrastructure projects, including\ntheir operation and maintenance, supported by the fund.\n b. With respect to each responsible party, the cost recovery demand\nshall be equal to an amount that bears the same ratio to the cost\nrecovery amount as the responsible party's applicable share of covered\ngreenhouse gas emissions bears to the aggregate applicable shares of\ncovered greenhouse gas emissions of all responsible parties.\n c. The applicable share of covered greenhouse gas emissions taken into\naccount under this section for any responsible party shall be the amount\nby which the covered greenhouse gas emissions attributable to such\nresponsible party exceeds one billion metric tons.\n d. In determining the amount of greenhouse gas emissions attributable\nto any entity, the department may: i. require an entity to provide\ninformation to the department related to past practices, production,\nextraction, refining, emissions, or other historical information about\nsuch entity necessary or appropriate to enable the department to\ndetermine whether such entity is a responsible party and, if so, the\namount of such responsible party's covered greenhouse gas emissions; ii.\napply consistent emissions factors, consistent with the climate\nleadership and community protection act pursuant to chapter one hundred\nsix of the laws of two thousand nineteen, to convert extraction and\nrefining data into greenhouse gas emissions; and iii. utilize\ninformation received from the department of taxation and finance\npursuant to subdivision (a) of section three hundred fourteen of the tax\nlaw.\n e. i. The department shall issue notices of cost recovery demand to\nall responsible parties at the times set forth in paragraph a of\nsubdivision four of this section. Payment of a cost recovery demand\nshall be made in full on the applicable payment date provided that,\nnotwithstanding paragraph a of subdivision two of this section, the\ndepartment may provide that a responsible party may elect to pay an\namount no greater than ninety-two percent of the amount of the cost\nrecovery demand after the applicable payment date. Any such payments\npermitted to be made after the applicable payment date shall be made\nwithin twenty-four years of the applicable payment date, shall be no\nless frequent than annual beginning in the year following the applicable\npayment date, and shall not increase over time.\n ii. Any responsible party who fails to make a payment required\npursuant to this subdivision shall pay a penalty of fifty per centum of\nthe unpaid payment amount, plus interest on the unpaid payment amount\ncomputed in accordance with section 6621(a)(2) of the United States\ninternal revenue code of 1986 (Public Law 99-514, 26 U.S.C. section 1 et\nseq.) from the date the payment was required to be paid.\n f. If there is any addition to the original amount of the final cost\nrecovery demand as of the applicable payment date for failure to timely\npay any amount required to be paid under this subdivision, a liquidation\nor sale of substantially all the assets of the responsible party\n(including in a proceeding under U.S. Code: Title 11 or similar case), a\ncessation of business by the responsible party, or any similar\ncircumstance, then the unpaid balance of all unpaid amounts shall be due\non the date of such event (or in the case of a proceeding under U.S.\nCode: Title 11 or similar case, on the day before the petition is\nfiled). The preceding sentence shall not apply to the sale of\nsubstantially all of the assets of a responsible party to a buyer if\nsuch buyer enters into an agreement with the department under which such\nbuyer is liable for all unpaid amounts due in the same manner as if such\nbuyer were the responsible party.\n 4. a. Within thirty months of the effective date of this article, the\ndepartment shall promulgate such regulations as are necessary or\nappropriate to carry out this article, including but not limited to:\n i. provisions for the department to require an entity to provide\ninformation to the department related to past practices, production,\nextraction, refining, emissions, or other historical information about\nsuch entity necessary or appropriate to enable the department to\ndetermine whether such entity is a responsible party and, if so, the\namount of such responsible party's covered greenhouse gas emissions;\n ii. adopting uniform and consistent methodologies using the best\navailable information, such as publicly available databases of\nhistorical production data, to determine responsible parties and their\napplicable share of covered greenhouse gas emissions consistent with the\nprovisions of this article;\n iii. registering entities that are responsible parties under the\nprogram;\n iv. issuing notices of cost recovery demand, no later than June\nthirtieth of the fourth calendar year following the effective date of\nthis article, for each responsible party's cost recovery demand;\n v. establishing a process such that:\n (1) a responsible party may file a request for reconsideration of its\ncost recovery demand with the department within sixty days following\nservice of the notice of cost recovery demand if within the United\nStates, and within ninety days following such service outside the United\nStates, and in doing so shall exhaust administrative remedies;\n (2) a request for reconsideration shall state the grounds for the\nrequest and include supporting documentation, which may include but is\nnot limited to documentation of the party's covered greenhouse gas\nemissions and the party's contacts with the state;\n (3) the department shall consider whether any such requests for\nreconsideration, including whether a responsible party refining\npetroleum products, or who is a successor in interest to such an entity,\nestablishes to the satisfaction of the department that a portion of the\ncost recovery demand amount was attributable to the refining of crude\noil extracted by a responsible party, or who is a successor in interest\nto such an entity, that was accounted for in determining the cost\nrecovery demand amount of such responsible party, and whether notices of\ncost recovery demand should be updated, and shall issue updated notices\nof cost recovery demand, if applicable, which shall include a statement\nof the grounds of the department's determination, within sixty days\nfollowing the expiration of all periods for submitting a request for\nreconsideration under item one of this subparagraph;\n (4) if notices of cost recovery demand issued pursuant to item three\nof this subparagraph result in a new responsible party receiving a\nnotice of cost recovery demand that was not issued a notice of cost\nrecovery demand by the date required by subparagraph iv of this\nparagraph, then, in the same manner as set forth in items one, two and\nthree of this subparagraph, such responsible party shall have sixty days\nfrom service within the United States, and ninety days from service\noutside the United States, to file a request for reconsideration, which\nfiling shall exhaust such responsible party's administrative remedies,\nand the department shall consider such request for reconsideration and\nissue updated notices of cost recovery demand, if applicable, in the\nmanner contemplated by item three of this subparagraph;\n (5) if any updating of notices of cost recovery demand pursuant to\nsuch processes for reconsideration results in a new responsible party\nthat was not previously issued a cost recovery demand, such new\nresponsible party shall also be given the opportunity to file a request\nfor reconsideration in the same manner as set forth in item four of this\nsubparagraph, and such process shall continue until no new responsible\nparty results from issuance of notices of cost recovery demand; and\n (6) if the processes in this subparagraph result in issuances of\nnotices of cost recovery demand after the applicable payment date, then\nthe applicable payment date shall be the date which is thirty days after\nthe final issuance of notices of cost recovery demand; and\n vi. accepting payments from, pursuing collection efforts against, and\nnegotiating settlements with responsible parties.\n b. The department shall hold at least two public hearings, one\nin-person and one virtual, on proposed regulations, with a minimum of\nthirty days' public notice in compliance with the provisions of article\nseven of the public officers law.\n 5. The department shall develop procedures to make publicly available,\nby posting on its website, all data related to fossil fuel extraction\nand refining by entities which the department obtains pursuant to the\nprogram, to the maximum extent practicable.\n 6. Within eighteen months of the promulgation of the final regulations\npursuant to subdivision four of this section, the department shall\ncomplete a statewide climate change adaptation and resilience plan,\nwhich shall be publicly available, including at a minimum on the\ndepartment's website, and updated no less than every three years\nfollowing the procedures of this subdivision, for the purpose of guiding\nthe dispersal of funds, pursuant to section ninety-seven-m of the state\nfinance law, to all regions of the state in a timely, efficient, and\nequitable manner in accordance with the provisions of this chapter. In\ncompleting such plan, the department shall:\n a. collaborate with the department of state, homes and community\nrenewal, the department of agriculture and markets, the New York state\nenergy research and development authority, the department of public\nservice, the department of transportation, the department of health, the\ndivision of budget and the division of homeland security and emergency\nservices;\n b. assess the adaptation needs of various areas vital to the state's\neconomy, normal functioning, and the health and well-being of New\nYorkers, including but not limited to: agriculture, biodiversity,\necosystem services, education, finance, healthcare, manufacturing,\nhousing and land use, retail, tourism (including state and municipal\nparks), transportation, and municipal and local government.\n c. identify major potential, proposed, and ongoing climate change\nadaptive infrastructure projects throughout the state;\n d. identify opportunities for alignment with existing federal, state,\nand local funding streams;\n e. identify potential municipal, not-for-profit, and community\norganization grant programs;\n f. include in such plan project criteria, project types and\nrecommendations for identifying and selecting climate change adaptive\ninfrastructure projects eligible to receive qualifying expenditures.\nWhen considering projects intended to stabilize tidal shorelines, the\ndepartment shall encourage the use of nature-based solutions;\n g. consult with stakeholders, including local governments, businesses,\nenvironmental advocates, the federally designated bulk system operator,\nrelevant subject area experts, and representatives of disadvantaged\ncommunities; and\n h. provide opportunities for public engagement in all regions of the\nstate, including by holding at least two public hearings, one in-person\nand one virtual, with meaningful opportunities for participation and\npublic comment from all segments of the population, including persons\nliving in disadvantaged communities as identified pursuant to section\n75-0111 of this chapter, a minimum of sixty days' public notice in\ncompliance with the provisions of article seven of the public officers\nlaw, on a draft of the plan, a summary and analysis of the public\ncomments and a description of any changes made to the plan based on the\npublic comments received.\n 7. Total qualifying expenditures shall be allocated in such a way as\nto achieve a goal that at least forty percent of the qualified\nexpenditures from the program, but not less than thirty-five percent of\nsuch expenditures, shall go to climate change adaptive infrastructure\nprojects that benefit disadvantaged communities as defined in section\n75-0101 of this chapter.\n 8. The department and the attorney general are hereby authorized to\nimplement and enforce the provisions of this article.\n 9. Moneys received from cost recovery demands shall be deposited in\nthe climate change adaptation fund established pursuant to section\nninety-seven-m of the state finance law.\n 10. a. The department shall conduct an evaluation of the climate\nchange adaptation cost recovery program. The purpose of this evaluation\nis to determine the effectiveness of the program in achieving its\npurposes as defined in subdivision two of this section. Such evaluation\nshall include, at minimum:\n i. a list of all responsible parties and their respective cost\nrecovery demands, as well as any changes to an entity's status as a\nresponsible party during the preceding program year;\n ii. an accounting of all cost recovery demands made to responsible\nparties, actual monies collected, and penalties or other collection\nmeasures taken during the preceding program year;\n iii. an accounting of all expenditures from the climate change\nadaptation fund established pursuant to section ninety-seven-m of the\nstate finance law, including at a minimum:\n (1) expenditures that benefit disadvantaged communities as defined in\nsection 75-0101 of this chapter;\n (2) expenditures by project type;\n (3) expenditures by percentage of overall funding used for grant\nprograms for municipalities and not-for-profit and community\norganizations; and\n (4) expenditures for administration and implementation support;\n iv. a review of climate change adaptive infrastructure projects'\nstatus, including the number of projects that have been completed and\nthose projects which have been identified and remain unfunded;\n v. a summary of the geographic distribution of climate change adaptive\ninfrastructure projects; and\n vi. identification of future spending needs.\n b. Such evaluation shall be made public on the department's website\nand provided to the governor, the temporary president of the senate and\nthe speaker of the assembly on or before January first of the second\ncalendar year following the year in which this article is enacted into\nlaw, and annually on or before September thirtieth thereafter.\n 11. The department shall publish all information, requests for\nproposals, application forms, procedures and guidelines relating to\nclimate change adaptive infrastructure projects on its website and in a\nmanner that is accessible to the public and all potential recipients.\n