N.Y. Environmental Conservation Law § 76-0103: The climate change adaptation cost recovery program

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

1. There is hereby established a climate change adaptation cost

recovery program to be administered by the department.

2. The purposes of the program shall be the following:

a. To secure compensatory payments from responsible parties based on a

standard of strict liability to provide a source of revenue for climate

change adaptive infrastructure projects within the state. Such payments

in aggregate shall total the cost recovery amount and shall be due and

payable on the applicable payment date.

b. To determine proportional liability of responsible parties for the

cost recovery amount pursuant to subdivision three of this section;

c. To impose cost recovery demands on responsible parties and issue

notices of cost recovery demand;

d. To accept and collect payment from responsible parties;

e. To identify climate change adaptive infrastructure projects;

f. To disperse funds to climate change adaptive infrastructure

projects; and

g. To allocate funds in such a way as to achieve a goal that at least

forty percent of the qualified expenditures from the program, but not

less than thirty-five percent of such expenditures, shall go to climate

change adaptive infrastructure projects that benefit disadvantaged

communities as defined in section 75-0101 of this chapter.

3. a. A responsible party shall be strictly liable, without regard to

fault, for a share of the cost recovery amount, which shall be used for

the costs of climate change adaptive infrastructure projects, including

their operation and maintenance, supported by the fund.

b. With respect to each responsible party, the cost recovery demand

shall be equal to an amount that bears the same ratio to the cost

recovery amount as the responsible party's applicable share of covered

greenhouse gas emissions bears to the aggregate applicable shares of

covered greenhouse gas emissions of all responsible parties.

c. The applicable share of covered greenhouse gas emissions taken into

account under this section for any responsible party shall be the amount

by which the covered greenhouse gas emissions attributable to such

responsible party exceeds one billion metric tons.

d. In determining the amount of greenhouse gas emissions attributable

to any entity, the department may: i. require an entity to provide

information to the department related to past practices, production,

extraction, refining, emissions, or other historical information about

such entity necessary or appropriate to enable the department to

determine whether such entity is a responsible party and, if so, the

amount of such responsible party's covered greenhouse gas emissions; ii.

apply consistent emissions factors, consistent with the climate

leadership and community protection act pursuant to chapter one hundred

six of the laws of two thousand nineteen, to convert extraction and

refining data into greenhouse gas emissions; and iii. utilize

information received from the department of taxation and finance

pursuant to subdivision (a) of section three hundred fourteen of the tax

law.

e. i. The department shall issue notices of cost recovery demand to

all responsible parties at the times set forth in paragraph a of

subdivision four of this section. Payment of a cost recovery demand

shall be made in full on the applicable payment date provided that,

notwithstanding paragraph a of subdivision two of this section, the

department may provide that a responsible party may elect to pay an

amount no greater than ninety-two percent of the amount of the cost

recovery demand after the applicable payment date. Any such payments

permitted to be made after the applicable payment date shall be made

within twenty-four years of the applicable payment date, shall be no

less frequent than annual beginning in the year following the applicable

payment date, and shall not increase over time.

ii. Any responsible party who fails to make a payment required

pursuant to this subdivision shall pay a penalty of fifty per centum of

the unpaid payment amount, plus interest on the unpaid payment amount

computed in accordance with section 6621(a)(2) of the United States

internal revenue code of 1986 (Public Law 99-514, 26 U.S.C. section 1 et

seq.) from the date the payment was required to be paid.

f. If there is any addition to the original amount of the final cost

recovery demand as of the applicable payment date for failure to timely

pay any amount required to be paid under this subdivision, a liquidation

or sale of substantially all the assets of the responsible party

(including in a proceeding under U.S. Code: Title 11 or similar case), a

cessation of business by the responsible party, or any similar

circumstance, then the unpaid balance of all unpaid amounts shall be due

on the date of such event (or in the case of a proceeding under U.S.

Code: Title 11 or similar case, on the day before the petition is

filed). The preceding sentence shall not apply to the sale of

substantially all of the assets of a responsible party to a buyer if

such buyer enters into an agreement with the department under which such

buyer is liable for all unpaid amounts due in the same manner as if such

buyer were the responsible party.

4. a. Within thirty months of the effective date of this article, the

department shall promulgate such regulations as are necessary or

appropriate to carry out this article, including but not limited to:

i. provisions for the department to require an entity to provide

information to the department related to past practices, production,

extraction, refining, emissions, or other historical information about

such entity necessary or appropriate to enable the department to

determine whether such entity is a responsible party and, if so, the

amount of such responsible party's covered greenhouse gas emissions;

ii. adopting uniform and consistent methodologies using the best

available information, such as publicly available databases of

historical production data, to determine responsible parties and their

applicable share of covered greenhouse gas emissions consistent with the

provisions of this article;

iii. registering entities that are responsible parties under the

program;

iv. issuing notices of cost recovery demand, no later than June

thirtieth of the fourth calendar year following the effective date of

this article, for each responsible party's cost recovery demand;

v. establishing a process such that:

(1) a responsible party may file a request for reconsideration of its

cost recovery demand with the department within sixty days following

service of the notice of cost recovery demand if within the United

States, and within ninety days following such service outside the United

States, and in doing so shall exhaust administrative remedies;

(2) a request for reconsideration shall state the grounds for the

request and include supporting documentation, which may include but is

not limited to documentation of the party's covered greenhouse gas

emissions and the party's contacts with the state;

(3) the department shall consider whether any such requests for

reconsideration, including whether a responsible party refining

petroleum products, or who is a successor in interest to such an entity,

establishes to the satisfaction of the department that a portion of the

cost recovery demand amount was attributable to the refining of crude

oil extracted by a responsible party, or who is a successor in interest

to such an entity, that was accounted for in determining the cost

recovery demand amount of such responsible party, and whether notices of

cost recovery demand should be updated, and shall issue updated notices

of cost recovery demand, if applicable, which shall include a statement

of the grounds of the department's determination, within sixty days

following the expiration of all periods for submitting a request for

reconsideration under item one of this subparagraph;

(4) if notices of cost recovery demand issued pursuant to item three

of this subparagraph result in a new responsible party receiving a

notice of cost recovery demand that was not issued a notice of cost

recovery demand by the date required by subparagraph iv of this

paragraph, then, in the same manner as set forth in items one, two and

three of this subparagraph, such responsible party shall have sixty days

from service within the United States, and ninety days from service

outside the United States, to file a request for reconsideration, which

filing shall exhaust such responsible party's administrative remedies,

and the department shall consider such request for reconsideration and

issue updated notices of cost recovery demand, if applicable, in the

manner contemplated by item three of this subparagraph;

(5) if any updating of notices of cost recovery demand pursuant to

such processes for reconsideration results in a new responsible party

that was not previously issued a cost recovery demand, such new

responsible party shall also be given the opportunity to file a request

for reconsideration in the same manner as set forth in item four of this

subparagraph, and such process shall continue until no new responsible

party results from issuance of notices of cost recovery demand; and

(6) if the processes in this subparagraph result in issuances of

notices of cost recovery demand after the applicable payment date, then

the applicable payment date shall be the date which is thirty days after

the final issuance of notices of cost recovery demand; and

vi. accepting payments from, pursuing collection efforts against, and

negotiating settlements with responsible parties.

b. The department shall hold at least two public hearings, one

in-person and one virtual, on proposed regulations, with a minimum of

thirty days' public notice in compliance with the provisions of article

seven of the public officers law.

5. The department shall develop procedures to make publicly available,

by posting on its website, all data related to fossil fuel extraction

and refining by entities which the department obtains pursuant to the

program, to the maximum extent practicable.

6. Within eighteen months of the promulgation of the final regulations

pursuant to subdivision four of this section, the department shall

complete a statewide climate change adaptation and resilience plan,

which shall be publicly available, including at a minimum on the

department's website, and updated no less than every three years

following the procedures of this subdivision, for the purpose of guiding

the dispersal of funds, pursuant to section ninety-seven-m of the state

finance law, to all regions of the state in a timely, efficient, and

equitable manner in accordance with the provisions of this chapter. In

completing such plan, the department shall:

a. collaborate with the department of state, homes and community

renewal, the department of agriculture and markets, the New York state

energy research and development authority, the department of public

service, the department of transportation, the department of health, the

division of budget and the division of homeland security and emergency

services;

b. assess the adaptation needs of various areas vital to the state's

economy, normal functioning, and the health and well-being of New

Yorkers, including but not limited to: agriculture, biodiversity,

ecosystem services, education, finance, healthcare, manufacturing,

housing and land use, retail, tourism (including state and municipal

parks), transportation, and municipal and local government.

c. identify major potential, proposed, and ongoing climate change

adaptive infrastructure projects throughout the state;

d. identify opportunities for alignment with existing federal, state,

and local funding streams;

e. identify potential municipal, not-for-profit, and community

organization grant programs;

f. include in such plan project criteria, project types and

recommendations for identifying and selecting climate change adaptive

infrastructure projects eligible to receive qualifying expenditures.

When considering projects intended to stabilize tidal shorelines, the

department shall encourage the use of nature-based solutions;

g. consult with stakeholders, including local governments, businesses,

environmental advocates, the federally designated bulk system operator,

relevant subject area experts, and representatives of disadvantaged

communities; and

h. provide opportunities for public engagement in all regions of the

state, including by holding at least two public hearings, one in-person

and one virtual, with meaningful opportunities for participation and

public comment from all segments of the population, including persons

living in disadvantaged communities as identified pursuant to section

75-0111 of this chapter, a minimum of sixty days' public notice in

compliance with the provisions of article seven of the public officers

law, on a draft of the plan, a summary and analysis of the public

comments and a description of any changes made to the plan based on the

public comments received.

7. Total qualifying expenditures shall be allocated in such a way as

to achieve a goal that at least forty percent of the qualified

expenditures from the program, but not less than thirty-five percent of

such expenditures, shall go to climate change adaptive infrastructure

projects that benefit disadvantaged communities as defined in section

75-0101 of this chapter.

8. The department and the attorney general are hereby authorized to

implement and enforce the provisions of this article.

9. Moneys received from cost recovery demands shall be deposited in

the climate change adaptation fund established pursuant to section

ninety-seven-m of the state finance law.

10. a. The department shall conduct an evaluation of the climate

change adaptation cost recovery program. The purpose of this evaluation

is to determine the effectiveness of the program in achieving its

purposes as defined in subdivision two of this section. Such evaluation

shall include, at minimum:

i. a list of all responsible parties and their respective cost

recovery demands, as well as any changes to an entity's status as a

responsible party during the preceding program year;

ii. an accounting of all cost recovery demands made to responsible

parties, actual monies collected, and penalties or other collection

measures taken during the preceding program year;

iii. an accounting of all expenditures from the climate change

adaptation fund established pursuant to section ninety-seven-m of the

state finance law, including at a minimum:

(1) expenditures that benefit disadvantaged communities as defined in

section 75-0101 of this chapter;

(2) expenditures by project type;

(3) expenditures by percentage of overall funding used for grant

programs for municipalities and not-for-profit and community

organizations; and

(4) expenditures for administration and implementation support;

iv. a review of climate change adaptive infrastructure projects'

status, including the number of projects that have been completed and

those projects which have been identified and remain unfunded;

v. a summary of the geographic distribution of climate change adaptive

infrastructure projects; and

vi. identification of future spending needs.

b. Such evaluation shall be made public on the department's website

and provided to the governor, the temporary president of the senate and

the speaker of the assembly on or before January first of the second

calendar year following the year in which this article is enacted into

law, and annually on or before September thirtieth thereafter.

11. The department shall publish all information, requests for

proposals, application forms, procedures and guidelines relating to

climate change adaptive infrastructure projects on its website and in a

manner that is accessible to the public and all potential recipients.