Senate Bill S9740

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   9740
 
                             I N  S E N A T E
 
                               April 2, 2026
                                ___________
 
 Introduced  by Sen. KAVANAGH -- read twice and ordered printed, and when
   printed to be committed to the Committee on Consumer Protection
 
 AN ACT to amend the general business law, in relation to requiring fash-
   ion sellers to be accountable to environmental  standards  and  estab-
   lishing  the interstate fashion environment accountability act; and to
   amend the state finance law, in relation  to  establishing  a  fashion
   remediation fund
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Short title. This act shall be known and may  be  cited  as
 the "fashion environmental accountability act".
   §  2. The general business law is amended by adding a new section 399-
 mm to read as follows:
   § 399-MM. FASHION ENVIRONMENTAL ACCOUNTABILITY ACT.   1.  DEFINITIONS.
 AS  USED  IN  THIS SECTION, THE FOLLOWING TERMS SHALL HAVE THE FOLLOWING
 MEANINGS:
   (A) "DOING BUSINESS IN THIS STATE" SHALL MEAN ACTIVELY ENGAGING IN ANY
 TRANSACTION FOR THE PURPOSE OF FINANCIAL OR PECUNIARY GAIN OR PROFIT.
   (B) "GROSS RECEIPTS" SHALL MEAN THE GROSS AMOUNTS REALIZED,  OTHERWISE
 KNOWN AS THE SUM OF MONEY AND THE FAIR MARKET VALUE OF OTHER PROPERTY OR
 SERVICES  RECEIVED, ON THE SALE OR EXCHANGE OF PROPERTY, THE PERFORMANCE
 OF SERVICES, OR THE USE OF PROPERTY OR CAPITAL, INCLUDING RENTS,  ROYAL-
 TIES,  INTEREST,  AND DIVIDENDS, IN A TRANSACTION THAT PRODUCES BUSINESS
 INCOME, IN WHICH THE INCOME, GAIN, OR LOSS IS RECOGNIZED,  OR  WOULD  BE
 RECOGNIZED  IF  THE  TRANSACTION  WERE  IN  THE UNITED STATES, UNDER THE
 INTERNAL REVENUE CODE, AS  APPLICABLE  FOR  PURPOSES  OF  THIS  SECTION.
 AMOUNTS  REALIZED  ON  THE  SALE  OR  EXCHANGE  OF PROPERTY SHALL NOT BE
 REDUCED BY THE COST OF GOODS SOLD OR THE BASIS OF PROPERTY  SOLD.  GROSS
 RECEIPTS,  EVEN  IF  BUSINESS  INCOME,  SHALL  NOT INCLUDE THE FOLLOWING
 ITEMS:
   (I) REPAYMENT, MATURITY, OR REDEMPTION OF THE  PRINCIPAL  OF  A  LOAN,
 BOND, MUTUAL FUND, CERTIFICATE OF DEPOSIT, OR SIMILAR MARKETABLE INSTRU-
 MENT;
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD01707-09-6
              

 S. 9740                             2
 
   (II)  THE  PRINCIPAL  AMOUNT  RECEIVED UNDER A REPURCHASE AGREEMENT OR
 OTHER TRANSACTION PROPERLY CHARACTERIZED AS A LOAN;
   (III)  PROCEEDS FROM ISSUANCE OF THE TAXPAYER'S OWN STOCK OR FROM SALE
 OF TREASURY STOCK;
   (IV) DAMAGES AND OTHER AMOUNTS RECEIVED AS THE RESULT OF LITIGATION;
   (V) PROPERTY ACQUIRED BY AN AGENT ON BEHALF OF ANOTHER;
   (VI) TAX REFUNDS AND OTHER TAX BENEFIT RECOVERIES;
   (VII) PENSION REVERSIONS;
   (VIII) CONTRIBUTIONS TO CAPITAL, EXCEPT FOR  SALES  OF  SECURITIES  BY
 SECURITIES DEALERS;
   (IX) INCOME FROM DISCHARGE OF INDEBTEDNESS;
   (X)  AMOUNTS  REALIZED FROM EXCHANGES OF INVENTORY THAT ARE NOT RECOG-
 NIZED UNDER THE INTERNAL REVENUE CODE;
   (XI) AMOUNTS RECEIVED FROM TRANSACTIONS IN INTANGIBLE ASSETS  HELD  IN
 CONNECTION  WITH  A TREASURY FUNCTION OF THE TAXPAYER'S UNITARY BUSINESS
 AND THE GROSS RECEIPTS AND OVERALL NET GAINS FROM THE MATURITY,  REDEMP-
 TION,  SALE,  EXCHANGE, OR OTHER DISPOSITION OF THOSE INTANGIBLE ASSETS;
 AND
   (XII) AMOUNTS RECEIVED FROM HEDGING TRANSACTIONS INVOLVING  INTANGIBLE
 ASSETS.  A  "HEDGING  TRANSACTION"  MEANS  A  TRANSACTION RELATED TO THE
 TAXPAYER'S TRADING FUNCTION INVOLVING FUTURES AND  OPTIONS  TRANSACTIONS
 FOR  THE  PURPOSE  OF  HEDGING PRICE RISK OF THE PRODUCTS OR COMMODITIES
 CONSUMED, PRODUCED, OR SOLD BY THE TAXPAYER.
   (C) "FASHION SELLER" SHALL MEAN A BUSINESS ENTITY WHICH SELLS ARTICLES
 OF WEARING APPAREL, FOOTWEAR, OR FASHION BAGS THAT TOGETHER  EXCEED  ONE
 HUNDRED  MILLION DOLLARS IN ANNUAL GROSS RECEIPTS, BUT SHALL NOT INCLUDE
 THE SALE OF USED WEARING APPAREL, FOOTWEAR, OR FASHION BAGS,  NOR  SHALL
 IT INCLUDE MULTI-BRAND RETAILERS, EXCEPT WHERE:
   (I)  THE  APPAREL,  FOOTWEAR,  AND FASHION BAG PRIVATE LABELS OF THOSE
 COMPANIES TOGETHER EXCEED ONE HUNDRED MILLION DOLLARS IN GLOBAL REVENUE;
 OR
   (II) THE BUSINESS PRIMARILY OPERATES AS AN ONLINE PLATFORM OR  MARKET-
 PLACE  FACILITATING  THE  SALE OF THIRD-PARTY GOODS IN THE CATEGORIES OF
 APPAREL, FOOTWEAR, OR FASHION BAGS, AND AT LEAST FIFTY  PERCENT  OF  THE
 PLATFORM'S  TOTAL  SALES VOLUME COMES FROM THESE CATEGORIES, EVEN IF THE
 PLATFORM ITSELF DOES NOT OWN THE BRANDS.
   (D) "ARTICLE OF WEARING APPAREL" SHALL MEAN ANY COSTUME OR ARTICLE  OF
 CLOTHING WORN OR INTENDED TO BE WORN BY INDIVIDUALS.
   (E)  "FOOTWEAR" SHALL MEAN ANY COVERING WORN OR INTENDED TO BE WORN ON
 THE FOOT.
   (F) "FASHION BAG" SHALL MEAN  FLEXIBLE  PACKAGING  MADE  OF  TEXTILES,
 LEATHER  OR OTHER ANIMAL PRODUCTS, WOVEN MATERIAL OR OTHER SIMILAR MATE-
 RIALS INTENDED FOR REPEATED USE.
   (G) "DUE DILIGENCE" SHALL MEAN  THE  COMPREHENSIVE  PROCESS  COMPANIES
 SHALL  CARRY OUT TO IDENTIFY, CEASE, PREVENT, MITIGATE, ACCOUNT FOR, AND
 REMEDIATE ACTUAL AND POTENTIAL ADVERSE IMPACTS  TO  THE  ENVIRONMENT  IN
 THEIR OWN OPERATIONS AND IN THEIR SUPPLY CHAIN, IN COMPLIANCE WITH, AT A
 MINIMUM,  THE  STANDARDS  OUTLINED  IN  THE MOST RECENT ORGANISATION FOR
 ECONOMIC  CO-OPERATION  AND  DEVELOPMENT  GUIDELINES  FOR  MULTINATIONAL
 ENTERPRISES,  AND THE MOST RECENT ORGANISATION FOR ECONOMIC CO-OPERATION
 AND DEVELOPMENT DUE DILIGENCE GUIDANCE FOR RESPONSIBLE SUPPLY CHAINS  IN
 THE GARMENT AND FOOTWEAR SECTOR.
   (H)  "DUE  DILIGENCE  REPORT"  SHALL MEAN THE DOCUMENT PREPARED BY THE
 COMPANY TO COMMUNICATE ALL RELEVANT INFORMATION  CONCERNING  THE  EXIST-
 ENCE,  IMPLEMENTATION  AND  OUTCOMES OF DUE DILIGENCE IN ORDER TO COMPLY
 S. 9740                             3
 
 WITH THE REQUIREMENTS OF THIS SECTION, AND TO COMPLY WITH ANY  RULES  OR
 REGULATIONS ESTABLISHED PURSUANT TO THIS SECTION.
   (I)  "RISK-BASED  APPROACH"  SHALL MEAN COMMENSURATE TO THE LIKELIHOOD
 AND SEVERITY OF THE HARM.  THE FASHION SELLER SHALL PRIORITIZE THE ORDER
 IN WHICH IT TAKES ACTION BASED ON THE LIKELIHOOD AND SEVERITY  OF  HARM.
 SEVERITY  OF  IMPACTS  SHALL  BE  DETERMINED ACCORDING TO THEIR SCALE OR
 GRAVITY, SCOPE, AND IRREMEDIABLE CHARACTER.
   (J) "SUPPLY CHAIN TIERS" SHALL MEAN A FOUR TIER SYSTEM DEFINED AS  THE
 FOLLOWING:
   (I)  "TIER  ONE"  SHALL  MEAN SUPPLIERS WHO PRODUCE FINISHED GOODS FOR
 FASHION SELLERS, INCLUDING SUPPLIERS' SUBCONTRACTORS,  WHO  PROVIDE  THE
 FOLLOWING  SERVICES,  INCLUDING BUT NOT LIMITED TO SEWING AND EMBROIDER-
 ING;
   (II) "TIER TWO" SHALL MEAN SUPPLIERS TO TIER  ONE,  INCLUDING  SUBCON-
 TRACTORS, WHO PROVIDE THE FOLLOWING SERVICES OR GOODS, INCLUDING BUT NOT
 LIMITED  TO  KNITTING, WEAVING, WASHING, DYEING, FINISHING, PRINTING FOR
 FINISHED GOODS, AND COMPONENTS AND MATERIALS  FOR  FINISHED  GOODS  WHEN
 THEY ARE STAND-ALONE OPERATIONS AND NOT INTEGRATED WITH TIER ONE. COMPO-
 NENTS  SHALL  MEAN  MATERIALS USED TO BUILD A PRODUCT, INCLUDING BUT NOT
 LIMITED TO BUTTONS, ZIPPERS, RUBBER SOLES, DOWN, AND FUSIBLES;
   (III) "TIER THREE" SHALL MEAN SUPPLIERS TO TIER TWO SUPPLIERS, INCLUD-
 ING SUBCONTRACTORS, WHO PROCESS RAW MATERIALS, SUCH AS SPINNING; AND
   (IV) "TIER FOUR" SHALL MEAN COMPANIES, INCLUDING SUBCONTRACTORS,  THAT
 PROVIDE RAW MATERIALS TO TIER THREE.
   (K) "INDEPENDENTLY VERIFIED" SHALL MEAN AUDITED BY A VERIFICATION BODY
 ACCREDITED  BY  THE DEPARTMENT OF STATE AS DESCRIBED IN SUBDIVISION FIVE
 OF THIS SECTION.
   (L) "OPEN DATA PRINCIPLES" SHALL MEAN DATA THAT CAN  BE  FREELY  USED,
 REUSED AND REDISTRIBUTED BY ANYONE. SUCH DATA SHALL BE FINDABLE OR EASI-
 LY  DISCOVERABLE ON A WEBSITE OR WITHIN A DATABASE, ACCESSIBLE OR AVAIL-
 ABLE IN A MACHINE READABLE, CONVENIENT, MODIFIABLE FORM AND PUBLISHED AS
 A WHOLE, COMPLETE DATASET,  INTEROPERABLE  OR  ABLE  TO  BE  MIXED  WITH
 DIFFERENT  DATASETS, AND REUSABLE OR PROVIDED UNDER AN OPEN LICENSE THAT
 PERMITS REUSE AND REDISTRIBUTION, INCLUDING THE INTERMIXING  WITH  OTHER
 DATASETS.
   (M) "EMPLOYEE" SHALL MEAN ALL WORKERS, WHETHER FULL-TIME OR PART-TIME,
 PERMANENT OR FIXED-TERM, DIRECTLY CONTRACTED OR HIRED INDIRECTLY THROUGH
 AN AGENCY OR OTHER INTERMEDIARY.
   2. DUE DILIGENCE. (A) EVERY FASHION SELLER SHALL EFFECTIVELY CARRY OUT
 ENVIRONMENTAL  DUE  DILIGENCE FOR THE PORTIONS OF THEIR BUSINESS RELATED
 TO WEARING APPAREL, FOOTWEAR OR FASHION BAGS, INCLUDING WEARING APPAREL,
 FOOTWEAR OR FASHION BAGS  PRODUCED  AS  A  PRIVATE  LABEL,  WHICH  SHALL
 INCLUDE:
   (I) SUPPLY CHAIN MAPPING:
   (1) COMPANIES TAKING A RISK-BASED APPROACH AND IMPLEMENTING GOOD FAITH
 EFFORTS   TO  MAP  SUPPLIERS  ACROSS  TIER  ONE  THROUGH  TIER  FOUR  OF
 PRODUCTION.
   (2) DISCLOSURE OF SUPPLIERS OF THE PRODUCTION SUPPLY CHAIN  INCLUDING:
 THE NAME, PARENT COMPANY AND PRODUCT TYPE, FILED BY THE FOLLOWING:
   (A)  TIER ONE SUPPLIERS SHALL BE DISCLOSED WITHIN TWELVE MONTHS OF THE
 EFFECTIVE DATE OF THIS SECTION, AND SHALL CONTAIN A MINIMUM  OF  EIGHTY-
 FIVE PERCENT OF SUPPLIERS BY VOLUME.
   (B)  TIER  TWO  SUPPLIERS  SHALL  BE DISCLOSED WITHIN TWO YEARS OF THE
 EFFECTIVE DATE OF THIS SECTION, AND SHALL CONTAIN A MINIMUM OF  SEVENTY-
 FIVE PERCENT OF SUPPLIERS BY VOLUME.
 S. 9740                             4
 
   (C)  TIER  THREE SUPPLIERS SHALL BE DISCLOSED WITHIN FOUR YEARS OF THE
 EFFECTIVE DATE OF THIS SECTION AND SHALL  CONTAIN  A  MINIMUM  OF  FIFTY
 PERCENT OF SUPPLIERS BY VOLUME OR DOLLAR VALUE.
   (D)  TIER  FOUR  SUPPLIERS  SHALL BE DISCLOSED WITHIN SIX YEARS OF THE
 EFFECTIVE DATE OF THIS SECTION AND SHALL  CONTAIN  A  MINIMUM  OF  FIFTY
 PERCENT OF SUPPLIERS BY VOLUME OR DOLLAR VALUE.
   (II) IN CARRYING OUT EFFECTIVE DUE DILIGENCE, FASHION SELLERS SHALL BE
 IN COMPLIANCE WITH THE ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVEL-
 OPMENT GUIDELINES FOR MULTINATIONAL ENTERPRISES AND THE ORGANISATION FOR
 ECONOMIC CO-OPERATION AND DEVELOPMENT DUE DILIGENCE GUIDANCE FOR RESPON-
 SIBLE  SUPPLY CHAINS IN THE GARMENT AND FOOTWEAR SECTOR, REQUIRING FASH-
 ION SELLERS TO, AT A MINIMUM:
   (1) EMBED RESPONSIBLE BUSINESS CONDUCT INTO THE COMPANY'S POLICIES AND
 MANAGEMENT SYSTEMS;
   (2) IDENTIFY AREAS OF SIGNIFICANT RISKS IN THE  CONTEXTS  OF  ITS  OWN
 ACTIVITIES AND BUSINESS AND SUPPLY CHAIN RELATIONSHIPS;
   (3)  IDENTIFY,  PRIORITIZE,  AND  ASSESS THE SIGNIFICANT POTENTIAL AND
 ACTUAL ADVERSE IMPACTS OF THOSE RISKS;
   (4) CEASE, PREVENT OR MITIGATE THOSE RISKS. THIS  SHALL  INCLUDE,  BUT
 NOT BE LIMITED TO:
   (A)  INCENTIVIZING  IMPROVED  SUPPLIER  PERFORMANCE  ON  ENVIRONMENTAL
 IMPACT BY EMBEDDING RESPONSIBLE PURCHASING PRACTICES IN ITS SUPPLY CHAIN
 RELATIONSHIPS AND CONTRACTS,  INCLUDING  BUT  NOT  LIMITED  TO  CONTRACT
 RENEWALS,  LONGER  TERM  CONTRACTS, PRICE PREMIUMS, PROVIDING REASONABLE
 ASSISTANCE TO SUPPLIERS SO THAT THEY CAN MEET  APPLICABLE  ENVIRONMENTAL
 STANDARDS  INCLUDING  BUT  NOT  LIMITED  TO  MEETING THE CARBON EMISSION
 REDUCTION TARGETS SET OUT IN THIS ACT,  AND  DEVELOPING  PRICING  MODELS
 THAT ACCOUNT FOR THE COST INVESTMENTS.
   (B) ESTABLISHING QUANTITATIVE BASELINE AND REDUCTION TARGETS ON GREEN-
 HOUSE  GAS  EMISSIONS.  GREENHOUSE  GAS  EMISSIONS  INVENTORY  SHALL  BE
 REPORTED ANNUALLY, STARTING IN TWO THOUSAND TWENTY-SEVEN  FOR  EMISSIONS
 IN THE PRIOR FISCAL YEAR; INCLUDE ABSOLUTE FIGURES; AND CONFORM WITH THE
 RULES  AND  REGULATIONS  MADE BY THE DEPARTMENT OF STATE IN CONSULTATION
 WITH THE DEPARTMENT OF ENVIRONMENTAL CONSERVATION BASED ON THE  ACCOUNT-
 ING  AND REPORTING REQUIREMENTS OF THE MOST RECENT GREENHOUSE GAS PROTO-
 COL CORPORATE ACCOUNTING AND REPORTING  STANDARD,  SCOPE  TWO  GUIDANCE,
 AND,  STARTING  IN  TWO THOUSAND TWENTY-EIGHT, THE MOST RECENT CORPORATE
 VALUE CHAIN SCOPE THREE ACCOUNTING AND REPORTING STANDARD PROMULGATED BY
 THE WORLD  RESOURCES  INSTITUTE  AND  THE  WORLD  BUSINESS  COUNCIL  FOR
 SUSTAINABLE  DEVELOPMENT. GREENHOUSE GAS EMISSIONS INVENTORY REPORTED IN
 THE DUE DILIGENCE REPORT REQUIRED PURSUANT TO SUBDIVISION THREE OF  THIS
 SECTION  SHALL  BE  INDEPENDENTLY  VERIFIED  NO LESS THAN ONCE EVERY TWO
 YEARS. FASHION SELLERS SHALL NOT BE SUBJECT TO AN ADMINISTRATIVE PENALTY
 UNDER THIS SECTION FOR ANY MISSTATEMENTS  WITH  REGARD  TO  SCOPE  THREE
 EMISSIONS DISCLOSURES MADE WITH A REASONABLE BASIS AND DISCLOSED IN GOOD
 FAITH.   GREENHOUSE GAS EMISSION REDUCTION TARGETS MUST BE NEAR-TERM AND
 LONG-TERM, COVERING SCOPES ONE, TWO AND THREE EMISSIONS, AND ALIGN  WITH
 THE  RULES  AND REGULATIONS MADE BY THE DEPARTMENT OF STATE IN CONSULTA-
 TION WITH THE DEPARTMENT OF ENVIRONMENTAL CONSERVATION BASED  ON,  AT  A
 MINIMUM, SCIENCE BASED TARGET INITIATIVE'S MOST RECENT TARGET VALIDATION
 CRITERIA  AS  PROMULGATED  BY  WORLD  RESOURCES  INSTITUTE,  CDP, UNITED
 NATIONS GLOBAL COMPACT AND THE WORLD WILDLIFE FUND.  COMPLIANCE WITH THE
 RULES AND REGULATIONS MADE BY THE DEPARTMENT OF STATE  SHALL  NOT  WAIVE
 COMPLIANCE REQUIREMENTS RELATED TO GREENHOUSE GAS EMISSIONS IN ANY OTHER
 PROVISION  OF  LAW.    FOR  FASHION SELLERS WITH GLOBAL REVENUE OVER ONE
 BILLION DOLLARS, THE ABSOLUTE  CONTRACTION  APPROACH  MUST  BE  USED  TO
 S. 9740                             5
 
 CALCULATE  SCOPE THREE EMISSIONS. FASHION SELLERS SHALL MEET TARGETS AND
 REPORT THEIR COMPLIANCE ON  AN  ANNUAL  BASIS  IN  THEIR  DUE  DILIGENCE
 REPORT,  AS  REQUIRED  PURSUANT TO SUBDIVISION THREE OF THIS SECTION. IF
 FOUND  TO  BE  OUT  OF  COMPLIANCE,  FASHION SELLERS SHALL HAVE EIGHTEEN
 MONTHS TO REMEDY THEIR EMISSIONS AND RETURN TO THE  NECESSARY  REDUCTION
 PATHWAY TO DELIVER ON THEIR TARGETS. IN NON-TARGET YEARS, NON-COMPLIANCE
 SHALL  MEAN AN INCREASE IN ABSOLUTE EMISSIONS IN FIVE CONSECUTIVE YEARS,
 FOR COMPANIES OVER A BILLION DOLLARS IN REVENUE. IN TARGET  YEARS,  NON-
 COMPLIANCE SHALL MEAN NOT REACHING THE TARGET;
   (C)  IN  ACCORDANCE  WITH INTERNATIONALLY RECOGNIZED METHODOLOGIES FOR
 CHEMICAL MANAGEMENT AND WASTEWATER TESTING,  REQUIRING  FASHION  SELLERS
 WITHIN  TWO YEARS OF THE EFFECTIVE DATE OF THIS SECTION, FOR ALL SIGNIF-
 ICANT TIER TWO DYEING, FINISHING, PRINTING AND GARMENT  WASHING  SUPPLI-
 ERS,  TO:  SAMPLE  AND  REPORT ON WASTEWATER CHEMICAL CONCENTRATIONS AND
 WATER USAGE; REPORT ON CHEMICAL INVENTORY; AND PROVIDE EVIDENCE THAT THE
 SUPPLIER IS IN COMPLIANCE WITH LOCAL  CHEMICAL  MANAGEMENT  LAWS.    FOR
 SIGNIFICANT  SUPPLIERS  THAT USE INDIRECT WASTEWATER MANAGEMENT, FASHION
 SELLERS SHALL REPORT  THE  CHEMICAL  CONCENTRATIONS  OF  THE  WASTEWATER
 TREATMENT  FACILITIES  REPORT ON THE PERCENTAGE OF SIGNIFICANT SUPPLIERS
 THAT HAVE CHEMICAL REMEDIATION PLANS IN PLACE AND WHAT THE FASHION SELL-
 ER IS DOING TO REMEDIATE.  REPORTS REQUIRED PURSUANT TO THIS ITEM  SHALL
 BE INDEPENDENTLY VERIFIED.  THREE YEARS AFTER THE EFFECTIVE DATE OF THIS
 SECTION,  FASHION SELLERS SHALL BE CONSIDERED OUT OF COMPLIANCE IF THEIR
 SIGNIFICANT TIER TWO DYEING, FINISHING, PRINTING AND  GARMENT  SUPPLIERS
 HAVE  NOT  MADE ADEQUATE PROGRESS IN REMEDIATION OF WASTEWATER POLLUTION
 CONCENTRATIONS AND CHEMICAL MANAGEMENT. FOR THE PURPOSES OF  THIS  ITEM,
 "SIGNIFICANT  SUPPLIERS"  SHALL MEAN SUPPLIERS REPRESENTING SEVENTY-FIVE
 PERCENT OF FABRIC BY VOLUME;
   (D) UTILIZING RESPONSIBLE EXIT OR DISENGAGEMENT STRATEGIES;
   (E) CONSULTING AND ENGAGING WITH  IMPACTED  AND  POTENTIALLY  IMPACTED
 STAKEHOLDERS AND RIGHTS HOLDERS AND THEIR REPRESENTATIVES;
   (5) TRACK IMPLEMENTATION AND RESULTS;
   (6)  PROVIDE  FOR  OR  CO-OPERATE  IN  REMEDIATION  IN THE EVENT OF AN
 ADVERSE IMPACT:
   (A) REMEDIES SHALL SEEK TO RESTORE THE AFFECTED LOCATIONS,  PLACES  OR
 PERSON  OR  PERSONS, WHERE PRACTICABLE, TO THE SITUATION THEY WOULD HAVE
 BEEN IN HAD THE ADVERSE IMPACT NOT OCCURRED AND SHALL ENABLE REMEDIATION
 THAT IS PROPORTIONATE TO THE  SIGNIFICANCE  AND  SCALE  OF  THE  ADVERSE
 IMPACT; AND
   (B)  REMEDIES SHALL INCLUDE, DEPENDING ON THE NATURE AND EXTENT OF THE
 ADVERSE IMPACT, REMEDIATION, RESTITUTION OR FINANCIAL  OR  NON-FINANCIAL
 COMPENSATION,  INCLUDING  ESTABLISHING COMPENSATION FUNDS FOR VICTIMS OR
 FOR FUTURE OUTREACH AND EDUCATIONAL PROGRAMS, PUNITIVE SANCTIONS INCLUD-
 ING THE DISMISSALS OF STAFF RESPONSIBLE FOR WRONGDOING, AND ESTABLISHING
 AND UNDERTAKING MEASURES TO PREVENT FUTURE ADVERSE  IMPACTS,  WHICH  MAY
 INCLUDE,  BUT  ARE NOT LIMITED TO THE DEVELOPMENT OF INTERNAL PROTOCOLS,
 PRACTICES AND PROCEDURES TO PREVENT FUTURE ADVERSE IMPACTS.
   (B) THE DUE DILIGENCE REQUIREMENTS PURSUANT TO THIS SUBDIVISION  SHALL
 NOT  BE  CONDITIONAL  UPON THE COMPANY BEING EFFECTIVELY INVOLVED IN THE
 SUBSIDIARY'S DAY-TO-DAY OPERATIONS OR EXERCISING A SUFFICIENT DEGREE  OF
 CONTROL ON COMPANIES WITHIN ITS SUPPLY CHAIN.
   3.  REPORTING.  EVERY  FASHION  SELLER SHALL DEVELOP AND SUBMIT TO THE
 DEPARTMENT OF STATE ANNUALLY, BEGINNING WITHIN EIGHTEEN  MONTHS  OF  THE
 EFFECTIVE DATE OF THIS SECTION, A DUE DILIGENCE REPORT.
   (A)  SUCH  REPORT, EXCLUDING THE INFORMATION REQUIRED IN CLAUSE TWO OF
 SUBPARAGRAPH (I) OF PARAGRAPH (A) OF SUBDIVISION TWO  OF  THIS  SECTION,
 S. 9740                             6
 
 SHALL ALSO BE MADE PUBLICLY AVAILABLE ON THE FASHION SELLER'S WEBSITE IN
 A MACHINE READABLE AND REUSABLE FORMAT, PUBLISHED IN LINE WITH OPEN DATA
 PRINCIPLES  THROUGH A CLEAR AND EASILY DISCOVERABLE LINK TO THE REQUIRED
 INFORMATION.  IN  THE EVENT THE FASHION SELLER DOES NOT HAVE AN INTERNET
 WEBSITE, THE COMPANY SHALL PROVIDE A WRITTEN DISCLOSURE  TO  ANY  PERSON
 WHO HAS REQUESTED INFORMATION WITHIN THIRTY DAYS OF RECEIVING A REQUEST.
 SUCH  REPORT  SHALL  ALSO  INCLUDE THE FASHION SELLER'S ANNUAL VOLUME OF
 MATERIAL PRODUCED, INCLUDING BREAKDOWN BY MATERIAL TYPE.
   (B) SUCH REPORT SHALL CONTAIN ANNUAL ACTIVITIES AND FINANCIAL SPENDING
 TO SUPPORT SUPPLY CHAIN DUE DILIGENCE.
   (C) THE DEPARTMENT OF STATE SHALL IDENTIFY AND NOTIFY FASHION  SELLERS
 THAT  HAVE  FAILED  TO FILE A DUE DILIGENCE REPORT THAT THEY HAVE THIRTY
 DAYS TO FILE SUCH REPORT BEFORE BEING PLACED ON A  PUBLIC  NON-COMPLIANT
 LIST  AND THAT THEY MAY BE REFERRED TO THE ATTORNEY GENERAL FOR INVESTI-
 GATION.
   (D) THE DEPARTMENT OF STATE SHALL REVIEW THE DUE DILIGENCE REPORTS FOR
 COMPLETENESS.
   (E) FASHION SELLERS SHALL HAVE TWELVE MONTHS FROM THE INTRODUCTION  OF
 ANY  UPDATED GUIDANCE DOCUMENTS TO INTEGRATE SUCH GUIDANCE INTO THE NEXT
 ANNUAL DUE DILIGENCE REPORT.
   (F) THE DEPARTMENT OF STATE SHALL ESTABLISH A STANDARDIZED  DUE  DILI-
 GENCE  REPORT  FORMAT  MODEL AND PUBLISH SUCH MODEL DUE DILIGENCE REPORT
 ONLINE FOR USE BY FASHION SELLERS IN COMPLIANCE WITH THIS SECTION.
   4. REGULATIONS. (A) THE DEPARTMENT OF  STATE  SHALL,  IN  CONSULTATION
 WITH  THE DEPARTMENT OF ENVIRONMENTAL CONSERVATION, PROMULGATE ALL RULES
 AND REGULATIONS NECESSARY TO IMPLEMENT THE PROVISIONS  OF  THIS  SECTION
 WITHIN SIX MONTHS FROM THE EFFECTIVE DATE OF THIS SECTION.
   (B)  THE  DEPARTMENT  OF STATE, IN CONSULTATION WITH THE DEPARTMENT OF
 ENVIRONMENTAL CONSERVATION, SHALL ALSO DEVELOP  AND  DISSEMINATE  EDUCA-
 TIONAL  MATERIALS TO FASHION SELLERS, INCLUDING PROVIDING ALERTS ON TIME
 SENSITIVE ISSUES, EMERGING ISSUES, AND HIGH-RISK COUNTRY SITUATIONS, AND
 ASSISTING FASHION SELLERS IN IMPROVING THE QUALITY OF  THEIR  DUE  DILI-
 GENCE PROCESSES.
   (C)  THE  DEPARTMENT  OF STATE SHALL DEVELOP REGULATIONS REGARDING THE
 INFORMATION REQUIRED TO BE REPORTED BY FASHION SELLERS IN THE DUE  DILI-
 GENCE  REPORT  IN  ITEM (C) OF CLAUSE FOUR OF SUBPARAGRAPH (II) OF PARA-
 GRAPH (A) OF SUBDIVISION TWO OF THIS SECTION. SUCH REGULATIONS SHALL  BE
 DEVELOPED IN CONSULTATION WITH THE DEPARTMENT OF ENVIRONMENTAL CONSERVA-
 TION.
   (D)  THE  DEPARTMENT  OF  STATE SHALL DEVELOP REGULATIONS ON REPORTING
 REQUIREMENTS THAT MINIMIZE DUPLICATION OF EFFORT AND  ALLOWS  A  FASHION
 SELLER  TO SUBMIT A DUE DILIGENCE REPORT TO THE DEPARTMENT OF STATE THAT
 IS PREPARED TO MEET OTHER NATIONAL AND INTERNATIONAL REPORTING  REQUIRE-
 MENTS, INCLUDING ANY REPORTS REQUIRED BY THE FEDERAL GOVERNMENT, AS LONG
 AS  SUCH  REPORTS  SATISFY ALL OF THE REQUIREMENTS OF SUBDIVISION TWO OF
 THIS SECTION.
   5. VERIFICATION. (A) THE DEPARTMENT OF STATE  SHALL,  IN  CONSULTATION
 WITH THE DEPARTMENT OF ENVIRONMENTAL CONSERVATION, DEVELOP A PROCESS FOR
 ACCREDITING  VERIFICATION  BODIES  AUTHORIZED  TO  PROVIDE  VERIFICATION
 SERVICES FOR THE PURPOSES OF THIS SECTION, INCLUDING WHICH  REQUIREMENTS
 THE ENTITY IS AUTHORIZED TO VERIFY.
   (B) SUCH PROCESS SHALL AT A MINIMUM CONSIDER:
   (I)  THE  DEMONSTRATED QUALIFICATIONS OF VERIFICATION STAFF, INCLUDING
 THEIR EDUCATION, EXPERIENCE, AND PROFESSIONAL  LICENSES.    VERIFICATION
 BODIES  MUST  EMPLOY AND RETAIN AT LEAST FIVE TOTAL FULL-TIME STAFF WITH
 EXPERTISE IN THE REQUIREMENTS THEY SEEK TO VERIFY UNDER THIS SECTION;
 S. 9740                             7
 
   (II) ANY JUDICIAL PROCEEDINGS, ENFORCEMENT ACTIONS, OR  ADMINISTRATIVE
 ACTIONS FILED AGAINST THE BODY WITHIN THE PREVIOUS FIVE YEARS; AND
   (III)  THE  POLICIES  AND  MECHANISMS IN PLACE TO PREVENT CONFLICTS OF
 INTEREST AND TO IDENTIFY AND  RESOLVE  POTENTIAL  CONFLICT  OF  INTEREST
 SITUATIONS  IF  THEY  ARISE.  THE DEPARTMENT SHALL REQUIRE APPLICANTS TO
 SUBMIT THE FOLLOWING INFORMATION, AT A MINIMUM:
   (1) IDENTIFICATION OF SERVICES PROVIDED BY THE VERIFICATION BODY,  THE
 INDUSTRIES  THAT THE BODY SERVES, AND THE LOCATIONS WHERE THOSE SERVICES
 ARE PROVIDED;
   (2) A DETAILED ORGANIZATIONAL CHART  THAT  INCLUDES  THE  VERIFICATION
 BODY, ITS MANAGEMENT STRUCTURE, AND ANY RELATED ENTITIES; AND
   (3)  THE VERIFICATION BODY'S INTERNAL CONFLICT OF INTEREST POLICY THAT
 IDENTIFIES ACTIVITIES AND LIMITS TO MONETARY OR NON-MONETARY GIFTS  THAT
 APPLY TO ALL EMPLOYEES AND PROCEDURES TO MONITOR CONFLICTS OF INTEREST.
   (C) VERIFICATION BODIES SHALL NOT BE AUTHORIZED TO PROVIDE SERVICES TO
 A  COMPANY  WHERE  A CONFLICT OF INTEREST EXISTS. A CONFLICT OF INTEREST
 SHALL INCLUDE:
   (I) WHERE THE VERIFICATION BODY AND REPORTING ENTITY SHARE ANY MANAGE-
 MENT STAFF OR BOARD OF  DIRECTORS  MEMBERSHIP,  OR  ANY  OF  THE  SENIOR
 MANAGEMENT  STAFF  OF  THE  REPORTING  ENTITY  HAVE BEEN EMPLOYED BY THE
 VERIFICATION BODY, OR VICE VERSA, WITHIN THE PREVIOUS FIVE YEARS;
   (II) ANY EMPLOYEE OF THE VERIFICATION  BODY,  OR  ANY  EMPLOYEE  OF  A
 RELATED  ENTITY,  OR A SUBCONTRACTOR WHO IS A MEMBER OF THE VERIFICATION
 TEAM HAS PROVIDED THE REPORTING ENTITY  WITH  SERVICES  RELATED  TO  THE
 AREAS  OF  VERIFICATION, OR ANY SERVICES DESIGNATED BY THE DEPARTMENT OF
 STATE, WITHIN THE PREVIOUS FIVE YEARS;
   (III) ANY STAFF MEMBER OF THE VERIFICATION BODY PROVIDES ANY  TYPE  OF
 NON-MONETARY  INCENTIVE  TO  A REPORTING ENTITY TO SECURE A VERIFICATION
 SERVICES CONTRACT; AND
   (IV) ANY ADDITIONAL CRITERIA PROVIDED BY THE DEPARTMENT OF STATE.
   (D) VERIFICATION BODIES THAT HAVE BEEN ACCREDITED BY THE DEPARTMENT OF
 STATE SHALL NOTIFY THE DEPARTMENT WITHIN THIRTY DAYS IF THEY  NO  LONGER
 MEET THE VERIFICATION REQUIREMENTS SET FORTH BY THIS SECTION.
   6. MONITORING AND ENFORCEMENT. (A) THE REQUIREMENTS IMPOSED ON FASHION
 SELLERS  BY  THIS SECTION SHALL BE MONITORED, INVESTIGATED, AND ENFORCED
 BY THE ATTORNEY GENERAL OR AN ADMINISTRATOR DESIGNATED BY  THE  ATTORNEY
 GENERAL TO BRING CIVIL PROCEEDINGS FOR AN INJUNCTION, OR FINES FOR MONE-
 TARY  DAMAGES  AS  DESCRIBED  IN THIS SECTION, OR CIVIL PERFORMANCE OF A
 STATUTORY DUTY. FASHION SELLERS SHALL BE DEEMED NON-COMPLIANT WITH  THIS
 SECTION  IF  THEY  FAIL  TO  CONDUCT EFFECTIVE DUE DILIGENCE PURSUANT TO
 SUBDIVISION TWO OF THIS SECTION OR FAIL TO FILE A DUE  DILIGENCE  REPORT
 PURSUANT TO SUBDIVISION THREE OF THIS SECTION.
   (B)  THE DEPARTMENT OF STATE SHALL IDENTIFY AND NOTIFY FASHION SELLERS
 THAT HAVE FAILED TO FILE A COMPLETE DUE DILIGENCE REPORT  IN  ACCORDANCE
 WITH THE RULES AND REGULATIONS PROMULGATED BY THE DEPARTMENT OF STATE IN
 CONSULTATION WITH THE DEPARTMENT OF ENVIRONMENTAL CONSERVATION.  IF SUCH
 FASHION  SELLERS FAIL TO FILE A COMPLETE REPORT, AFTER A PERIOD OF THREE
 MONTHS, THE DEPARTMENT OF STATE  SHALL  REFER  FASHION  SELLERS  TO  THE
 ATTORNEY GENERAL FOR ENFORCEMENT FOR FAILURE TO FILE A COMPLETE REPORT.
   (C)  THE  DEPARTMENT  OF  ENVIRONMENTAL  CONSERVATION SHALL REVIEW AND
 CERTIFY EFFECTIVE DUE DILIGENCE FOR ENVIRONMENTAL  MATTERS  IN  THE  DUE
 DILIGENCE REPORT AND IDENTIFY FASHION SELLERS FOR REFERRAL TO THE ATTOR-
 NEY GENERAL FOR ANY FAILURES.
   (D)  THE DEPARTMENT OF STATE SHALL COMPILE AND MAINTAIN A LIST OF NON-
 COMPLIANT FASHION SELLERS ON THE DEPARTMENT'S WEBSITE. THE DEPARTMENT OF
 STATE SHALL REFER TO THE ATTORNEY GENERAL FOR INVESTIGATION ANY  FASHION
 S. 9740                             8
 
 SELLER  WHO  FAILS  TO  FILE  A DUE DILIGENCE REPORT OR FAILS TO CONDUCT
 EFFECTIVE DUE DILIGENCE, ONCE ANY GRACE PERIOD LAPSES  AND  THE  FASHION
 SELLER REMAINS IN NON-COMPLIANCE.
   (E)  FASHION  SELLERS  FOUND  TO  HAVE FAILED TO CONDUCT EFFECTIVE DUE
 DILIGENCE PURSUANT TO SUBDIVISION TWO OF THIS SECTION OR FAILED TO  FILE
 A  COMPLETE  DUE  DILIGENCE REPORT PURSUANT TO SUBDIVISION THREE OF THIS
 SECTION, AFTER THE ATTORNEY GENERAL, OR THE  ATTORNEY  GENERAL'S  DESIG-
 NATED  ADMINISTRATOR,  AS APPLICABLE, HAS PROVIDED NOTICE OF NON-COMPLI-
 ANCE, AND AFTER A THREE-MONTH PERIOD  TO  MEET  OBLIGATIONS  UNDER  THIS
 SECTION  HAS  LAPSED,  MAY  BE  ASSESSED  A  CIVIL PENALTY NOT TO EXCEED
 FIFTEEN THOUSAND DOLLARS PER VIOLATION PER  DAY.  SUCH  FINES  SHALL  BE
 DEPOSITED  IN  THE COMMUNITY BENEFIT FUND ESTABLISHED BY SECTION NINETY-
 SEVEN-CCC OF THE STATE FINANCE LAW.
   (F) THE ATTORNEY GENERAL, OR THE ATTORNEY GENERAL'S DESIGNATED  ADMIN-
 ISTRATOR  SHALL  USE  A  RISK-BASED  APPROACH  IN  ENFORCEMENT AND SHALL
 PUBLISH ENFORCEMENT GUIDELINES.
   (G) ANY PERSON MAY REPORT A VIOLATION OF THIS SECTION TO THE  ATTORNEY
 GENERAL'S OFFICE.
   §  3.  The state finance law is amended by adding a new section 97-ccc
 to read as follows:
   § 97-CCC. FASHION REMEDIATION FUND.  1. THERE IS HEREBY ESTABLISHED IN
 THE JOINT CUSTODY OF THE COMPTROLLER, THE COMMISSIONER OF  TAXATION  AND
 FINANCE,  AND  THE  COMMISSIONER OF ENVIRONMENTAL CONSERVATION A SPECIAL
 FUND TO BE KNOWN AS THE FASHION REMEDIATION FUND.
   2. SUCH FUND SHALL CONSIST OF ALL MONEYS DEPOSITED PURSUANT  TO  PARA-
 GRAPH  (E) OF SUBDIVISION SIX OF SECTION THREE HUNDRED NINETY-NINE-MM OF
 THE GENERAL BUSINESS LAW.
   3. THE MONEYS IN THE FUND SHALL BE EXPENDED BY THE COMPTROLLER FOR THE
 PURPOSE OF IMPLEMENTING ONE OR MORE ENVIRONMENTAL  BENEFIT  PROJECTS  OR
 ENVIRONMENTAL  REMEDIATION PROJECTS THAT DIRECTLY AND VERIFIABLY BENEFIT
 THE WORKERS AND COMMUNITIES DIRECTLY IMPACTED, TO THE  EXTENT  PRACTICA-
 BLE, AT THE LOCATION THE INJURY HAS OCCURRED.
   4.  ON  OR BEFORE THE FIRST DAY OF FEBRUARY EACH YEAR, THE COMPTROLLER
 SHALL CERTIFY TO THE TEMPORARY PRESIDENT OF THE SENATE, AND THE  SPEAKER
 OF  THE  ASSEMBLY,  THE  AMOUNT OF MONEY DEPOSITED BY SOURCE IN THE FUND
 DURING THE PRECEDING CALENDAR YEAR, AS WELL AS  ALL  DISBURSEMENTS  FROM
 THE FUND DURING THE PRECEDING CALENDAR YEAR.
   5.  MONEYS  SHALL BE PAYABLE FROM THE FUND ON THE AUDIT AND WARRANT OF
 THE COMPTROLLER ON VOUCHERS CERTIFIED AND APPROVED BY  THE  COMMISSIONER
 OF ENVIRONMENTAL CONSERVATION AS APPLICABLE.
   §  4.  The  attorney  general  shall  certify to the governor that the
 office of the  attorney  general  is  prepared  to  execute  the  duties
 assigned  in subdivision 6 of section 399-mm of the general business law
 within one year following the effective date of this act. If, after  the
 expiration  of  one  year,  the  attorney  general requires more time to
 certify that the office of the attorney general is prepared  to  execute
 such  duties,  the  attorney general may, for good cause shown, apply to
 the governor for an extension of time. The governor may grant or deny an
 extension of up to one year according to their discretion.
   § 5. Severability. If any word, phrase, clause,  sentence,  paragraph,
 section, or part of this act shall be adjudged by any court of competent
 jurisdiction   to be invalid, such judgment shall not affect, impair, or
 invalidate the remainder thereof, but shall be confined in its operation
 to the word, phrase, clause, sentence, paragraph, section, or part ther-
 eof directly involved in the controversy in which such   judgment  shall
 have been rendered.
 S. 9740                             9
 
   §  6.  The department of state, in consultation with the department of
 environmental  conservation,  shall  promulgate  rules  and  regulations
 necessary  for  the implementation of this act within one hundred eighty
 days of the effective date of this act.
   §  7.  This act shall take effect immediately; provided, however, that
 sections one through three of this act shall take effect one year  after
 they  shall  have become a law; provided further, however, that subdivi-
 sion 6 of section 399-mm of the general business law as added by section
 two of this act shall take effect one year after  the  attorney  general
 certifies that the office of the attorney general is prepared to execute
 the  duties  assigned  in  such  subdivision. The attorney general shall
 notify the legislative bill drafting commission upon the  occurrence  of
 such certification in order that the commission may maintain an accurate
 and  timely  effective data base of the official text of the laws of the
 state of New York in  furtherance  of  effectuating  the  provisions  of
 section  44  of the legislative law and section 70-b of the public offi-
 cers law.