66-K - Allowance credit trading or sales.

§  66-k.  Allowance  credit  trading  or  sales.  1.  Definitions. For  purposes of this section, the following terms shall have  the  following  meanings:    (a) "SO2" shall mean sulfur dioxide.    (b)  "SO2  allowance  credit"  shall  mean  any SO2 credit issued to a  generating source within the United States pursuant to the provisions of  title four of the Federal Clean Air Act Amendments of 1990.    (c) "select SO2 allowance credits" shall mean any SO2 allowance credit  issued to generating sources located within the boundaries of the  state  of New York.    (d)  "acid  precipitation  source  states"  shall  mean  the following  states:  New Jersey, Pennsylvania, Maryland, Delaware,  Virginia,  North  Carolina,  Tennessee, West Virginia, Ohio, Michigan, Illinois, Kentucky,  Indiana and Wisconsin.    2. Air pollution mitigation offset. (a) The commission shall assess an  air pollution mitigation offset equal to any sum received by any utility  corporation, person or entity entering into contracts or engaging in the  sale or trade of select SO2 allowance credits  for  use  in  operations,  permits  or for maintaining compliance with SO2 emission requirements in  acid precipitation  source  states,  where  such  select  SO2  allowance  credits  are  found to have been transferred to the allowance deductions  reserve account by a generating source located in an  acid  rain  source  state.    (b)  Any utility corporation, person or entity entering into contracts  or engaging in the sale or trade of any  select  SO2  allowance  credits  shall  provide  the  commission  with  written  notice of any select SO2  allowance transaction with five business days of such transaction.  Such  notice   shall  include  the  purchase  price,  and  shall  provide  the  commission a copy of the Allowance Transfer Form of  the  United  States  Environmental Protection Agency upon the issuance and/or signing of said  form relating to the sale, exchange or trade by the utility corporation,  person  or  entity,  its subsidiaries, agents, employees, successors and  assigns of select SO2 allowance credits.    (c) The commission will annually review information contained  in  the  SO2   allowance   tracking   database  operated  by  the  United  States  Environmental Protection Agency for select SO2 allowances as  identified  by their unique serial number.    (d)  Any  moneys  collected  as  an  air  pollution  mitigation offset  pursuant to this subdivision shall be deposited  in  the  air  pollution  mitigation  fund  established  pursuant  to section ninety-nine-g of the  state finance law and administered by the New York state energy research  and development authority  pursuant  to  subdivision  ten-a  of  section  eighteen hundred fifty-four of the public authorities law.    3. Exemptions. (a) The commission, in consultation with the department  of  environmental  conservation,  shall produce by rule or order a model  restrictive covenant for use  by  any  utility  corporation,  person  or  entity  entering  into  contracts  or  engaging  in the sale or trade of  select SO2 allowance credits. The model restrictive covenant will  be  a  self-enforcing contract that shall include at a minimum, the requirement  to  give  notice  to  the  commission  of  any SO2 allowance transaction  covered by the restrictive covenant; the requirement that any subsequent  holders of the SO2 allowance covered by the restrictive covenant include  an identical restrictive covenant in any document relating to  the  sale  or  purchase of the covered SO2 allowances; provisions restricting usage  in acid precipitation source states; and provisions for the  enforcement  of the terms of the restrictive covenant by the state of New York.    (b)  Any utility corporation, person or entity entering into contracts  or engaging in the sale or trade of select  SO2  allowance  credits  mayattach  a  restrictive  covenant as a standard provision in any document  relating to the sale or trade by  the  utility  corporation,  person  or  entity,  its subsidiaries, agents, employees, successors and assigns, of  select  SO2  allowance  credits.  Such restrictive covenant must conform  with the required provisions of the model restrictive covenant  produced  by the commission pursuant to this subdivision.    (c)  Any  utility  corporation, person or entity acting in conformance  with the provisions  of  this  subdivision  shall  be  exempt  from  the  assessment of an air pollution mitigation offset.    4.  Nothing  contained  in  this  section  shall  restrict  a  utility  corporation  from  use  or  transfer  of  SO2  allowances  at  New  York  facilities  owned,  controlled  or  operated now or in the future by the  utility corporation, its successors, assigns or purchasers that come  to  own, control or operate such facilities.    5.  Nothing  in  this  section  shall discourage or prohibit allowance  trades (such as for retirement purposes) that  will  have  a  beneficial  impact on sensitive receptor areas in the state of New York.    6.  Nothing  within  this section will invalidate or subvert any prior  contractual  commitments  and/or   obligations   made   by   a   utility  corporation,  person  or  entity  identified  in subdivision two of this  section prior to the effective date of this section.