S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   3459
 
                        2019-2020 Regular Sessions
 
                           I N  A S S E M B L Y
 
                             January 29, 2019
                                ___________
 
 Introduced  by  M. of A. ORTIZ, SIMOTAS -- read once and referred to the
   Committee on Ways and Means
 
 AN ACT to amend the tax law, in relation to establishing a tax on carbon
   emissions; and to amend the state finance law, in relation  to  estab-
   lishing the carbon tax revenue fund

   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. The tax law is amended by adding a new article 21-B to read
 as follows:
                               ARTICLE 21-B
                          TAX ON CARBON EMISSION
 SECTION 530. DEFINITIONS.
         531. IMPOSITION AND RATE OF TAX.
         532. EXEMPTIONS.
         533. PENALTIES AND INTEREST.
         534. DEPOSIT AND DISPOSITION OF REVENUE.
   § 530. DEFINITIONS. AS USED IN THIS ARTICLE, THE FOLLOWING TERMS SHALL
 HAVE THE FOLLOWING MEANINGS:
   (A) "CARBON-BASED FUEL" MEANS COAL, NATURAL  GAS,  PETROLEUM  PRODUCTS
 AND  ANY  OTHER  PRODUCT  USED  FOR  FUEL THAT CONTAINS CARBON AND EMITS
 CARBON DIOXIDE WHEN COMBUSTED; PROVIDED, HOWEVER, THAT CARBON-BASED FUEL
 SHALL NOT INCLUDE ANY PRODUCT USED FOR  FUEL  THAT  IS  DERIVED  FROM  A
 RESOURCE THAT IS LESS THAN ONE THOUSAND YEARS OLD IN ITS NATURAL STATE.
   (B)  "DISTRIBUTOR" MEANS A PERSON WHO IMPORTS OR CAUSES TO BE IMPORTED
 CARBON-BASED FUEL FOR USE, DISTRIBUTION, OR SALE WITHIN THE STATE, OR  A
 PERSON  WHO  PRODUCES,  REFINES, MANUFACTURES, OR COMPOUNDS CARBON-BASED
 FUEL WITHIN THE STATE FOR USE, DISTRIBUTION, OR SALE.
   (C) "PETROLEUM PRODUCTS" MEANS PROPANE, GASOLINE,  UNLEADED  GASOLINE,
 KEROSENE, NUMBER 2 HEATING OIL, DIESEL FUEL, KEROSENE BASE JET FUEL, AND
 NUMBER 4, NUMBER 5 AND NUMBER 6 RESIDUAL OIL FOR UTILITY AND NON-UTILITY
 USES,  AND  ALL PETROLEUM DERIVATIVES, WHETHER IN BOND OR NOT, WHICH ARE
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD07529-01-9

 A. 3459                             2
 
 COMMONLY BURNED TO PRODUCE HEAT, POWER, ELECTRICITY OR MOTION  OR  WHICH
 ARE COMMONLY PROCESSED TO PRODUCE SYNTHETIC GAS FOR BURNING.
   (D)  "RETAIL  CUSTOMER" MEANS A PERSON WHO PURCHASES CARBON-BASED FUEL
 FOR HIS OR HER OWN CONSUMPTION.
   (E) "RETAIL PURCHASE" MEANS A PURCHASE OF CARBON-BASED FUEL MADE BY  A
 PERSON FOR HIS OR HER OWN CONSUMPTION.
   §  531.  IMPOSITION  AND  RATE  OF TAX. (A) THERE IS HEREBY LEVIED AND
 IMPOSED A TAX AT A RATE OF  FIVE  DOLLARS  PER  TON  OF  CARBON  IN  ANY
 CARBON-BASED FUEL THAT IS SOLD TO RETAIL CUSTOMERS IN THE STATE. THE TAX
 SHALL INCREASE BY AT LEAST THE RATE OF ANNUAL INFLATION PLUS ONE PERCENT
 FOR  THE FIRST TEN YEARS THAT THIS SECTION IS IN EFFECT, AND BY AT LEAST
 THE RATE OF ANNUAL INFLATION THEREAFTER. THE DEPARTMENT SHALL  CALCULATE
 THE TAX LIABILITY ASSOCIATED WITH ANY RETAIL PURCHASE BY MULTIPLYING THE
 RATE  DESIGNATED  IN  THIS SECTION BY THE TOTAL AMOUNT OF CARBON IN EACH
 CARBON-BASED FUEL SOLD TO RETAIL CONSUMERS IN THE STATE. FOR THE PURPOSE
 OF CALCULATING THE TAX, THE  DEPARTMENT  OF  ENVIRONMENTAL  CONSERVATION
 SHALL  DETERMINE  THE PERCENTAGE OF CARBON IN EACH CARBON-BASED FUEL AND
 REPORT THOSE PERCENTAGES TO THE DEPARTMENT.
   (B) A DISTRIBUTOR SHALL PAY TO THE  COMMISSIONER  AN  EXCISE  TAX  PER
 GALLON  DETERMINED BY THE DEPARTMENT PURSUANT TO SUBDIVISION (A) OF THIS
 SECTION UPON EACH GALLON OF CARBON-BASED FUEL SOLD BY  SUCH  DISTRIBUTOR
 IN  THE  STATE  DURING THE CALENDAR MONTH COVERED BY THE RETURN REQUIRED
 PURSUANT TO SUBDIVISION (C) OF THIS SECTION. THE TAX IMPOSED UNDER  THIS
 SECTION  SHALL  BE  COLLECTED  BY THE DISTRIBUTOR UPON COMPLETION OF ANY
 SALE OR DELIVERY OF FUEL.
   (C) EVERY DISTRIBUTOR THAT MAKES SALES SUBJECT TO THE TAX  IMPOSED  BY
 THIS  SECTION  SHALL, ON OR BEFORE THE TWENTIETH DAY OF EACH MONTH, FILE
 WITH THE COMMISSIONER A RETURN ON FORMS TO BE PRESCRIBED BY THE  COMMIS-
 SIONER,  SHOWING  ITS RECEIPTS FROM THE RETAIL SALE OF CARBON-BASED FUEL
 DURING THE PRECEDING CALENDAR MONTH AND THE AMOUNT OF TAX  DUE  THEREON.
 SUCH  RETURNS SHALL CONTAIN SUCH FURTHER INFORMATION AS THE COMMISSIONER
 MAY REQUIRE.  EVERY DISTRIBUTOR REQUIRED TO FILE  A  RETURN  UNDER  THIS
 SECTION SHALL, AT THE TIME OF FILING SUCH RETURN, PAY TO THE COMMISSION-
 ER  THE TOTAL AMOUNT OF TAX DUE ON ITS RETAIL SALES OF CARBON-BASED FUEL
 FOR THE PERIOD COVERED BY SUCH RETURN. IF A RETURN  IS  NOT  FILED  WHEN
 DUE,  THE TAX SHALL BE DUE ON THE DAY ON WHICH THE RETURN IS REQUIRED TO
 BE FILED.
   § 532. EXEMPTIONS. THE FOLLOWING SHALL BE EXEMPT FROM THE TAX  IMPOSED
 BY SECTION FIVE HUNDRED THIRTY-ONE OF THIS ARTICLE:
   (A) CARBON-BASED FUEL SOLD TO THE UNITED STATES GOVERNMENT, ITS SUBDI-
 VISIONS,  OR UNDER ANY OTHER CIRCUMSTANCES IN WHICH THE STATE IS WITHOUT
 POWER TO IMPOSE THE TAX; AND
   (B) CARBON-BASED FUEL SOLD BY A  DISTRIBUTOR  THAT  HAS  ALREADY  BEEN
 SUBJECTED  TO THE TAX IMPOSED BY SECTION FIVE HUNDRED THIRTY-ONE OF THIS
 ARTICLE, IF THE SALES INVOICE CLEARLY INDICATES THE AMOUNT OF FUEL  THAT
 HAS ALREADY BEEN SUBJECTED TO THE TAX.
   §  533.  PENALTIES AND INTEREST. (A) A DISTRIBUTOR WHO FAILS TO FILE A
 RETURN OR TO PAY ANY TAX WITHIN THE TIME REQUIRED BY OR PURSUANT TO THIS
 ARTICLE (DETERMINED WITH REGARD TO ANY EXTENSION OF TIME FOR  FILING  OR
 PAYING) SHALL BE SUBJECT TO A PENALTY OF TEN PER CENTUM OF THE AMOUNT OF
 TAX DETERMINED TO BE DUE AS PROVIDED IN THIS ARTICLE PLUS ONE PER CENTUM
 OF  SUCH  AMOUNT  FOR  EACH  MONTH OR FRACTION THEREOF DURING WHICH SUCH
 FAILURE CONTINUES AFTER THE EXPIRATION OF THE  FIRST  MONTH  AFTER  SUCH
 STATEMENT WAS REQUIRED TO BE FILED OR SUCH TAX BECAME DUE, NOT EXCEEDING
 THIRTY PER CENTUM IN THE AGGREGATE.

 A. 3459                             3
 
   (B)  IF  ANY  AMOUNT  OF  TAX  IS  NOT PAID ON OR BEFORE THE LAST DATE
 PRESCRIBED IN THIS ARTICLE FOR PAYMENT, INTEREST ON SUCH AMOUNT  AT  THE
 UNDERPAYMENT RATE SET BY THE COMMISSIONER OF TAXATION AND FINANCE PURSU-
 ANT  TO  SUBDIVISION  TWENTY-SIXTH OF SECTION ONE HUNDRED SEVENTY-ONE OF
 THIS  CHAPTER  SHALL  BE  PAID FOR THE PERIOD FROM SUCH LAST DATE TO THE
 DATE PAID, WHETHER OR NOT ANY EXTENSION OF TIME FOR PAYMENT WAS GRANTED.
 INTEREST UNDER THIS SUBSECTION SHALL NOT BE PAID IF THE  AMOUNT  THEREOF
 IS LESS THAN ONE DOLLAR.
   §  534.  DEPOSIT  AND DISPOSITION OF REVENUE. ALL TAXES, INTEREST, AND
 PENALTIES COLLECTED OR RECEIVED BY  THE  COMMISSIONER  OF  TAXATION  AND
 FINANCE  UNDER  THE  TAXES IMPOSED BY THIS ARTICLE SHALL BE DEPOSITED IN
 THE CARBON TAX REVENUE FUND AND DISPOSED OF PURSUANT TO SECTION  NINETY-
 NINE-FF OF THE STATE FINANCE LAW.
   § 2. The state finance law is amended by adding a new section 99-ff to
 read as follows:
   §  99-FF.  CARBON  TAX REVENUE FUND. 1. THERE IS HEREBY ESTABLISHED IN
 THE JOINT CUSTODY OF THE STATE COMPTROLLER AND COMMISSIONER OF  TAXATION
 AND FINANCE A FUND TO BE KNOWN AS THE "CARBON TAX REVENUE FUND".
   2.  SUCH  ACCOUNT  SHALL CONSIST OF REVENUES FROM ALL TAXES, INTEREST,
 AND PENALTIES IMPOSED BY ARTICLE TWENTY-ONE-B OF THE TAX LAW.
   3. ON OR BEFORE THE FIRST DAY OF FEBRUARY EACH YEAR,  THE  COMPTROLLER
 SHALL CERTIFY TO THE GOVERNOR, TEMPORARY PRESIDENT OF THE SENATE, SPEAK-
 ER  OF  THE ASSEMBLY, CHAIR OF THE SENATE FINANCE COMMITTEE AND CHAIR OF
 THE ASSEMBLY WAYS AND MEANS COMMITTEE, THE AMOUNT OF MONEY DEPOSITED  IN
 THE  CARBON  TAX  REVENUE FUND DURING THE PRECEDING CALENDAR YEAR AS THE
 RESULT OF REVENUE DERIVED PURSUANT TO ARTICLE TWENTY-ONE-B  OF  THE  TAX
 LAW.
   4.  MONEYS  OF  THE  FUND MAY BE INVESTED BY THE STATE COMPTROLLER AND
 INCOME FROM SUCH INVESTMENTS SHALL BE CREDITED TO THE FUND.
   5. MONEYS OF THE FUND SHALL BE APPROPRIATED  BY  THE  LEGISLATURE  AND
 PAID OUT PURSUANT TO THE TERMS OF SUCH APPROPRIATION.
   § 3. Paragraph a of subdivision 26th of section 171 of the tax law, as
 amended  by section 1 of subpart D of part V-1 of chapter 57 of the laws
 of 2009, is amended to read as follows:
   a. Set the overpayment and underpayment rates of interest for purposes
 of  articles  twelve-A,   eighteen,   twenty   [and],   twenty-one   AND
 TWENTY-ONE-B  of  this  chapter. Such rates shall be the overpayment and
 underpayment rates of interest set pursuant to subsection (e) of section
 one thousand ninety-six of this chapter, but the underpayment rate shall
 not be less than seven and one-half percent per annum.  Any  such  rates
 set  by  such commissioner shall apply to taxes, or any portion thereof,
 which remain or become due or overpaid (other  than  overpayments  under
 such  article twenty and not including reimbursements, if any, under any
 of such articles) on or after the date on which such rates become effec-
 tive and shall apply only with respect to interest computed  or  comput-
 able  for  periods or portions of periods occurring in the period during
 which such rates are in effect. In computing the amount of any  interest
 required  to  be paid under such articles by such commissioner or by the
 taxpayer, or any other amount determined by reference to such amount  of
 interest, such interest and such amount shall be compounded daily.
   § 4. This act shall take effect on the one hundred twentieth day after
 it shall have become a law.  Effective immediately, the addition, amend-
 ment  and/or repeal of any rules or regulations necessary for the imple-
 mentation of this act on its effective date are authorized to be made on
 or before such date.