New York Senate Proposes Climate Corporate Data Accountability Act – SB 3456; Companion Bill to NY Assembly Bill A4282

Last week, the New York State Senate in its Environmental Conservation Committee proposed Bill SB 3456 which is a companion bill to Assembly Bill A4282. See attached draft copy at https://www.nysenate.gov/legislation/bills/2025/S3456

These bills, if enacted, would become the second set of bills passed in the United States which are aimed at requiring entities with connections to New York to report on their greenhouse gas emissions under Scope 1, Scope 2 and Scope 3 beginning in 2027. New York would join California as the second state in the US in requiring this type of reporting for companies with over $1 Billion in revenue.

Between New York at $1.6 Trillion of real GDP and California at $2.9 Trillion of real GDP, these two states together would represent more than 17.5% of the US’s real GDP being subject to Scope 1, 2 and 3 reporting requirements for greenhouse gas emissions.

California passed their version of a very similar reporting bill, SB 253, in 2023, with an effective date of January 2026. New York’s bill, if enacted, required regulations to be passed by December 31, 2026 with an effective reporting requirement for entities subject to the bill during 2027 for Scope 1 and 2 and 2028 for Scope 3.

As readers will likely recall, the SEC has pursued a similar path during 2023 and 2024, issuing proposed rules, and then final rules and then revised final rules which were then challenged and consolidated into one case in the 8th Circuit. The SEC’s final rules only required reporting on Scope 1 and 2 after receiving a backlash of comments about Scope 3. Currently, as of February 11, 2025, the SEC’s acting Chairman Mark Uyeda said that the commission will pause litigation of its climate disclosure rule in the 8th Circuit case, effectively ending, for now at least, the SEC’s pursuit of federal rules focusing on climate disclosure of Scope 1 and 2 greenhouse gases for reporting companies.

Despite the SEC’s position, it appears that states will continue to pursue their own path regarding climate disclosure. While California’s law had been challenged by various parties, earlier this month on February 3, 2025, the District Court for the Central District of California issued an order (https://www.troutman.com/a/web/gEwAfXN75c6MMmenKh3yd3/us_dis_cacd_2_24cv801_d96315207e190_order_granting_defendants_motion_to_dismiss_plaint.pdf) dismissing constitutional challenges posed to SB 253 and SB 261 and clears a path for the California Air Resources Board to develop necessary implementing regulations.

The New York bill is very similar to the California bill and requires reporting starting in 2027 and additional reporting in 2028. It also requires a third party report of limited assurance on Scope 1 and 2 in 2027 and a reasonable assurance report starting in 2031.

If New York follows the path of California here, companies with limited contacts to New York will find themselves subject to this reporting regime and need to put in the work to measure, monitor and report on their Scope 1, 2 and 3 greenhouse gas emissions if they have sales of over $1 Billion Dollars (and those sales need NOT be in New York alone, rather they are in the aggregate and likely will include subsidiary and related entities).

Green Spouts: While it is highly likely that various parties like the US Chamber of Commerce (who sued California for implementing SB 261 and 253) will also attempt to block New York from implementing its version of SB 3456, given the District Court’s ruling noted above, it appears that if passed in New York, that the constitutional challenges raised by the plaintiffs are not likely to withstand New York court scrutiny and New York could join California as requiring such reporting as early as 2027. Again, the Bill needs to clear the Senate Environmental Committee and then needs to be voted on and approved by the Senate and also needs Assembly approval and the Governor’s signature, but it appears that these steps are not only possible but likely in 2025, partially/fully in reaction to the Federal government’s overall environmental position and its position taken in withdrawing from the SEC Final rules on climate disclosure. This author’s view is that the Bill will likely pass in New York and be signed by the Governor, will attract challenges like California’s version did and that those challenges under New York law will survive such a challenge and that the law will become a reality during 2025/2026.

Duane Morris has an active Sustainability and Risk Mitigation Team to help organizations and individuals plan, respond to, and execute on your Sustainability and Risk Mitigation planning and initiatives. For more information, please contact Brad A. Molotsky, David Amerikaner, Sheila Rafferty-Wiggins, Jeff Hamera, Jolie-Anne Ansley, Robert Montejo, or the attorney in the firm with whom you are regularly in contact.

New York passes second in the nation “Polluter Pays” Superfund Type Law – $75B Fund to be Created for infrastructure projects by attempting to hold Fossil Fuel Companies Strictly Liable for past actions.

As of December 27, 2024, New York becomes the second state in the US, after Vermont, to pass a version of a polluter pays climate change bill entitled the “Climate Change Superfund Act” (the “CCSA”).

The new law, which can be found at Article 76 – Climate Change Adaption Cost Recovery Program and requires the State Comptroller along with the Department of Taxation, to report, by January 2026, on the costs to residents and the State from greenhouse gas emissions that occurred between January 1, 2000, and December 31, 2018. This comprehensive assessment is intended to include impacts on agriculture, biodiversity, ecosystem services, education, finance, healthcare, manufacturing, housing, real estate, retail, tourism, transportation, and municipal and local government, using federal data to attribute emissions to specific greenhouse gas emitting fossil fuel companies. The fund to be raised from the CCSA is $75 Billion Dollars.  These funds, when collected from the responsible parties, will be thereafter used to help fund climate change adaptive infrastructure projects.

The law recognizes that the amount that will be charged to the companies who have emitted greenhouse gases over the State standard “represents a small percentage of the extraordinary cost for New York State for repairing from and preparing for climate change-driven extreme events over the next 25 years.”  The State found that the “largest one hundred fossil fuel producing companies are responsible for more than 70% of global greenhouse gas emissions since 1998.”

The CCSA law follows Vermont’s polluter-pays model, targeting companies involved in fossil fuel extraction, storage, production, refinement, transport, manufacture, distribution, sale and the use of fossil fuels or petroleum products extracted, produced, refined or sold that are linked to greenhouse gas emissions during the 2000 to 2018 specified period. Companies that have exceeded the 1 billion metric ton emissions mark are required to pay for their pro rata share of climate adaption measures needed by the State.  The funds collected will then be specifically allocated to “climate change adaptive infrastructure” improvements such as roads and bridge upgrades, storm water management and drainage systems, coastal wetlands projects, making defensive upgrades to subways and transit systems, preparing for, and recovering from hurricanes and other extreme weather events, sewer treatment plant upgrades and retrofits and energy-efficient building enhancements.

The CCSA takes the position, much like the Federal Superfund laws, that the polluter in this case is strictly liable for its applicable share of costs incurred for climate change adaptation projects. Entities that are part of a controlled group are jointly and severally liable for the applicable costs.

The theory behind the approach to the CCSA is that the companies who have specifically contributed to greenhouse gas impacts are the ones required to fund necessary upgrades to existing or necessary climate change adaptive infrastructure and other “climate change adaptation projects” as defined under the CCSA.  A State report due within 1 year is required to measure and provide a summary of various costs that have been incurred due to the greenhouse gases that were emitted during the relevant time-period and costs that are projected to be incurred in the future within the State to abate the effects of covered greenhouse gas emissions from 1-1-2000 through 12-31-2018. The State provided specific guidance under the CCSA regarding the conversion of coal (i.e., 942.5 Metric Tons of Carbon Dioxide released/1 Million pounds of coal used by such company), crude oil (i.e., 432,180 Metric Tons of carbon dioxide/1 Million barrels of crude oil used by such company) and natural gas (e.g., 53,440 Metric Tons of carbon dioxide/1 Million cubic feet of natural gas used by such company) used by the applicable companies into greenhouse gas emission numerics for purposes of measuring impact and, if applicable, calculating the overage above the 1 Billion Metric Ton standard set by the CCSA.

The CCSA also set forth certain mandatory prevailing wage and apprenticeship requirements for public entities utilizing funds from the climate fund to pay for climate change adaption projects. The CCSA also includes certain “labor harmony” requirements, certain “made in the US” requirements for various components of public entity projects, and also requires that the Comptroller and the Commissioner of Taxation keep the climate fund comprised of responsible party payments in a separate dedicated account that is NOT comingled with other funds of the State.

Within 1 year, the department is required to promulgate regulations and adopt methodologies to determine responsible parties and their share of applicable costs of covered greenhouse gas emissions and thereafter to issue notices of cost recovery demand amounts against the responsible parties.

Within 2 years, the department is required to complete a statewide climate change adaption master plan for guiding the dispersal of funds in a timely, efficient, and equitable manner to all regions of the State.  The dispersal of funds will also take into account a stated goal of at least 35% of the expenditures being made to climate change adaptive infrastructure projects that benefit “disadvantaged communities”.

Green Spouts: The CCSA is the second of its kind state law that attempts to hold a polluter strictly liable for past acts that have created a negative impact on the State’s infrastructure and climate adaptability. The CCSA makes any entity or successor company that engaged in the trade or business of fossil fuel extraction or refining crude oil between 1-1-2000 and 12-31-2018 strictly liable for its share of costs incurred by the State.  The emitters are being held responsible for their respective portion of greenhouse gas emissions above the 1 billion metric tons noted above.  Interestingly, New York in joining Vermont are NOT alone here, as Maryland and Massachusetts are considering similar legislation as well. Whether this type of State Superfund strict liability law gets traction and passage by other states remains to be seen but it is surely a further evolution/development and one which bears watching, especially in light of the upcoming change in Administration federally which will likely see the Federal government take a step back from its climate initiatives and by default will leave the leadership role for climate change initiatives in the hands of state and local government.

Duane Morris has an active Sustainability and Risk Mitigation Team to help organizations and individuals plan, respond to, and execute on your Sustainability and ESG planning and initiatives. For more information, please contact Brad A. Molotsky, David Amerikaner, Sheila Rafferty-Wiggins, Jeff Hamera, Jolie-Anne Ansley, Robert Montejo, or the attorney in the firm with whom you are regularly in contact.

Vermont passes the first of its kind Climate Superfund Cost Recovery Program – Polluters to be held Strict Liability

As of July 1, 2024, Vermont’s Climate Superfund Recovery Program (the “CSRP”) has now officially taken effect.  After the Legislature passed the CSRP, Governor Phil Scott (R) did NOT veto it, rather he allowed it to become law without his signature.

The new law, which can be found at  https://legislature.vermont.gov/bill/status/2024/S.259, and requires the State Treasurer along with the Agency of Natural Resources, to report, by January 2026, on the costs to residents and the State from greenhouse gas emissions that occurred between January 1, 1995 and December 31, 2024. This comprehensive assessment is intended to include impacts on public health, natural resources, agriculture, economic development, and housing, using federal data to attribute emissions to specific fossil fuel companies.

The law creates a polluter-pays model, targeting companies involved in fossil fuel extraction or crude oil refining linked to over 1 billion metric tons of greenhouse gas emissions during the 1995 to 2024 specified period. Companies that have exceeded the 1 billion metric ton mark are required to pay for their pro rata share of climate adaption measures needed by the State.  The funds collected will then be specifically allocated to infrastructure improvements such as roads and bridge upgrades, storm water management and drainage systems, sewer treatment plant upgrades and retrofits and energy-efficient building enhancements.
The CSRP takes the position, much like the Federal Superfund laws, that the polluter in this case is strictly liable for its applicable share of costs incurred for climate change adaptation projects. Entities that are part of a controlled group are jointly and severally liable for the applicable costs.

 

The theory behind the approach to the CSRP is that the companies whom have specifically contributed to greenhouse gas impacts are the ones required to fund necessary upgrades to existing or necessary resiliency infrastructure and other “climate change adaptation projects” as defined under the CSRP.  The State Treasurer’s report is required to measure and provide a summary of various costs that have been incurred due to the greenhouse gases that were emitted during the relevant time period and costs that are projected to be incurred in the future within the State to abate the effects of covered greenhouse gas emissions from 1-1-95 through 12-31-25.

Green Spouts: The CSRP is the first of its kind state law that attempts to hold a polluter strictly liable for past acts that have created a negative impact on the State’s infrastructure and climate adaptability. The CSRP makes any entity or successor company that engaged in the trade or business of fossil fuel extraction or refining crude oil between 1-1-95 and 12-31-24 strictly liable for its share of costs incurred by the State.  The emitters are being held responsible for their respective portion of green house gas emissions above the 1 billion metric tons noted above.  Interestingly, Vermont is NOT alone here, as New York, Maryland and Massachusetts are considering similar legislation as well. Whether this type of State Superfund  strict liability law gets traction and passage by other states remains to be seen but it is surely an interesting development and one which bears watching, especially in light of the upcoming election.

Duane Morris has an active ESG and Sustainability Team to help organizations and individuals plan, respond to, and execute on your Sustainability and ESG planning and initiatives. For more information, please contact Brad A. Molotsky, David Amerikaner, Sheila Rafferty-Wiggins, Alice Shanahan, Jeff Hamera, Nanette Heide, Jolie-Anne Ansley, Robert Montejo or the attorney in the firm with whom you are regularly in contact.

Investments in Clean Buildings Announced by New York Governor

On the Duane Morris Construction Law Blog, attorney Jose A. Aquino writes that:

New York Governor Kathy Hochul announced new investments in clean and efficient buildings. As part of her 2023 State of the State, Governor Hochul introduced a series of building decarbonization initiatives, including zero-emission for new construction and the phase out of the sale of new fossil fuel heating equipment.

Read the full post.

 

ESG – State Plastic Bag and Straw Bans – An Update


Earlier this year, Duane Morris Governmental Services published an Alert that discussed states and municipalities across the country banning plastic bags in force. In addition to putting prohibitions on plastic bags, states and localities have also been looking at plastic straw bans as advocates look to reduce plastic pollution as plastics are not biodegradable and cannot break down naturally. It is estimated that Americans use 500 million drinking straws every day. While some legislation only contains plastic straw bans, other legislation loops plastic straws in with other plastic prohibitions.

Connecticut:
Lawmakers in Connecticut introduced HB 6502 earlier this year to prohibit the automatic distribution of single-use plastic straws at certain eating establishments. Specifically, the bill would, effective January 1, 2022, prohibit full-service restaurants from providing customers with single-use plastic straws unless they request it or if the customer has a disability. The legislation defines a “full-service restaurant” as an establishment that primarily services food to be consumed on-site and where an employee does the following: (1) escorts and seats the customer, (2) takes the customer’s food and beverage order after the customer is seated, (3) delivers the order and any requested related items to the customer, and (4) brings the check for the order to the customer’s table.

Violations under the bill would result in a restaurant owner or operator receiving warnings for a first or second violation and a fine for a third violation. The fine would be $25 for each day of the violation, up to $300 in a single year. Enforcement power would belong to a municipal or district health department that has jurisdiction over the restaurant. The plastic straw ban bill additionally does not prohibit municipalities from adopting or implementing ordinances or rules that further restrict a full-service restaurant from providing customers single-use plastic straws, as long as the ordinance or rule does not prohibit a restaurant from providing a single-use plastic straw to someone with a disability.

HB 6502 additionally would phase out the use of particular polystyrene trays and food containers.

Maine:
In March 2021, Maine lawmakers introduced LD 602, which would prohibit the manufacture, sale, and distribution, at retail or wholesale, of single-use plastic straws, splash sticks, and beverage lid plugs made entirely or partly of plastic.

The legislation further prohibits food and eating establishments from providing such items to customers at a point of sale or making them available to customers otherwise. However, food and eating establishments are allowed to provide single-use drinking straws, splash sticks, or beverage lid plugs not made of plastic only upon a customer’s request. The establishment must further collect a fee from the customer of no less than $0.05 for each item provided.

Massachusetts:
Massachusetts lawmakers introduced H. 998 earlier this year to restrict the distribution of single-use plastic straws by prohibiting food establishments from providing such straws to customers unless requested by the customer. H. 998 defines a “food establishment” as an operation that stores, prepares, packages, serves, vends, or otherwise provides food for human consumption, including but not limited to any establishment requiring a permit to operate under the State Food Code.

The bill states that the straw ban shall not include a straw made from non-plastic materials, such as paper, pasta, sugar cane, wood, or bamboo.

In mid-June, lawmakers scheduled a virtual hearing to address the plastic straw ban legislation. However, the bill has not seen any action since.

Mississippi:
This past session, Mississippi lawmakers introduced Senate Bill 2071, which would have prohibited a food establishment from providing a single-use plastic straw unless a consumer requested such a straw.

The bill’s definition of a “food establishment” is comprehensive. The bill’s definition of a food establishment is as follows: all sales outlets, stores, shops, or other places of business located within the State of Mississippi that operate primarily to sell or convey food directly to the ultimate consumer, including any place where food is prepared, mixed, cooked, baked, smoked, preserved, bottled, packaged, handled, stored, manufactured and sold or offered for sale, including, but not limited to, any fixed or mobile restaurant, drive-in, coffee shop, cafeteria, short order cafe, delicatessen, luncheonette, grill, sandwich shop, soda fountain, tavern, bar, cocktail lounge, nightclub, roadside stand, prepared food take-out place, catering kitchen, commissary, grocery store, public food market, food stand or similar place in which food or drink is prepared for sale or for service on the premises or elsewhere, and any other establishment or operation where food is processed, prepared, stored, served or provided for the public for charge.

SB 2071 died in committee in February 2021.

New York:
Two companion bills in New York have been introduced this year related to plastic straws. A207 and S1505 would allow restaurants to only provide single-use plastic straws unless requested by a customer. The legislation otherwise prohibits restaurants from providing customers with single-use plastic straws or single-use plastic stirrers. Further, the bill specifies that restaurants providing compostable straws or stirrers to customers must have access to curbside food waste collection for composting.

The bills define a restaurant as any diner or other eating or beverage establishment that offers food or beverages for sale to the public, guests, members, or patrons, whether consumption occurs on or off the premises.

Neither bill has advanced this session.

Rhode Island:
In July, Governor Daniel McKee signed House Bill 5131/ Senate Bill 155 into law. The new law prohibits a food service establishment from providing a single-use plastic straw to a consumer unless the consumer requests it. The bill will take effect January 1, 2022, and tasks the director of health with promulgating and adopting rules and regulations to enforce the new plastic straw ban.

Rhode Island’s new plastic straw ban defines a “single-use plastic straw” as a single-use, disposable tube made predominantly of plastic derived from either petroleum or a biologically based polymer, such as corn or other plant sources, used to transfer a beverage from a container to the mouth of the person drinking the beverage. Single-use straws, under the bill, do not include a straw made from non-plastic materials, including, but not limited to, paper, pasta, sugar cane, wood, or bamboo.

The bill further defines a “food service establishment” as any fixed or mobile restaurant, coffee shop, cafeteria, short-order cafe, luncheonette, grill, tearoom, sandwich shop, soda fountain, tavern; bar, cocktail lounge, night club, roadside stand, industrial feeding establishment, cultural heritage education facility, private, public or nonprofit organization or institution routinely serving food, catering kitchen, commissary or similar place in which food or drink is prepared for sale or for service on the premises or elsewhere, and any other eating or drinking establishment or operation where food is served or provided for the public with or without charge.

New Jersey:

On Nov. 4, 2020, Governor Murphy signed into law P.L. 2020, c117, which prohibits the use of single-use plastic carryout bags in all stores and food service businesses statewide and single-use paper carryout bags in grocery stores that occupy at least 2,500 square feet beginning May 4, 2022.

Beginning May 4, 2022, New Jersey businesses may not sell or provide single-use plastic carryout bags to their customers. Those businesses that decide to sell or provide reusable carryout bags must ensure that the bags meet the requirements as defined in the law.

The law defines reusable bags as ones that:

  • Are made of polypropylene fabric, PET non-woven fabric, nylon, cloth, hemp product, or other washable fabric; and
  • Have stitched handles; and
  • Are designed and manufactured for multiple reuses.

Under the new law, polystyrene foam food service products and foods sold or provided in polystyrene foam food service products will also be banned as of May 4, 2022, and food service businesses will only be allowed to provide single-use plastic straws by request starting Nov. 4, 2021.

However, the following products will be exempt for an additional two years, until May 4, 2024:

  • Disposable, long-handled polystyrene foam soda spoons when required and used for thick drinks;
  • Portion cups of two ounces or less, if used for hot foods or foods requiring lids;
  • Meat and fish trays for raw or butchered meat, including poultry, or fish that is sold from a refrigerator or similar retail appliance;
  • Any food product pre-packaged by the manufacturer with a polystyrene foam food service product; and
  • Any other polystyrene foam food service product as determined necessary by the DEP.

Triple Bottom Line – While it is often inconvenient to not be in a position to carry goods from a store or restaurant in a plastic bag or to drink from a plastic straw, as more states focus on the burgeoning problem of plastic waste entering the water supply and creating land fill capacity concerns, it is very likely that more and more states will continue to enact some level of plastic bag and plastic straw bans as a means to begin to combat this issue.  Recycling of plastic would also start to begin to address the issue but has not become an economic reality as of yet given the cost to build facilities that could gather and recycle the applicable plastic in bags and straws and similar materials.

Duane Morris has an active ESG and Sustainability Team to help organizations and individuals plan, respond to, and execute on Sustainability and ESG planning and initiatives within their own space. We would be happy to discussion your proposed project with you. For more information, or if you have any questions about this post, please contact Ryan Stevens, the author or Brad A. Molotsky, Nanette Heide, Seth Cooley, David Amerikaner, Jolie-Anne Ansley, Hari Kumar, or the attorney in the firm with whom you are regularly in contact.

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The opinions expressed on this blog are those of the author and are not to be construed as legal advice.

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