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Part 492, Climate Smart Community Projects - Regulatory Impact Statement

Regulatory Impact Statement
6 NYCRR Part 492, Climate Smart Community Projects

The New York State Department of Environmental Conservation (Department) proposes to create a new 6 NYCRR Part 492 describing the procedures applicable to "clean vehicle projects" and "climate adaptation and mitigation projects," authorized by Environmental Conservation Law (ECL) §§ 54-1511, 54-1521, and 54-1523. "Clean vehicle projects" include rebates available to municipalities for the purchase or lease of eligible vehicles (up to $5,000 per vehicle), and eligible infrastructure projects which support the public charging and/or fueling of eligible vehicles (up to $250,000 per facility). "Climate adaptation and mitigation projects" include competitive state assistance payments available to municipalities for climate adaptation and mitigation projects (up to $2,000,000) including, but not limited to, natural resiliency measures, nature based mitigation projects, relocation or retrofit of existing facilities due to flooding or sea level rise, greenhouse gas (GHG) emissions reduction outside the power sector, and climate change adaptation planning and supporting studies.

1. STATUTORY AUTHORITY

Environmental Conservation Law, §§ 1-0101, 3-0301, 54-1501, 54-1503, 54-1511, 54-1521, 54-1523

ECL § 1-0101 sets forth the policy of the Department to conserve, improve, and protect New York State's environment and natural resources, including the control of "air pollution, in order to enhance the health, safety and welfare of the people of the State and their overall economic and social well-being." ECL § 1-0101 further states that it is the policy of the State to coordinate its environmental plans, functions, powers, and programs with those of the federal government and other regions to manage air resources such that the State may fulfill its responsibility as trustee of the environment for present and future generations. This section also provides that it is the policy of the State to foster, promote, create, and maintain an environment where man and nature thrive in harmony by providing that care is taken with air resources shared between states.

ECL § 3-0301 provides that it is the responsibility of the Department to carry out the environmental policy of the State. In order to carry out that mandate, ECL § 3-0301(1)(a) gives the Commissioner the authority to "[c]oordinate and develop policies, planning and programs related to the environment of the State and regions thereof..." ECL § 3-0301(1)(b) instructs the Commissioner to promote and coordinate management of, among other things, air resources "to assure their protection, enhancement, provision, allocation and balanced utilization consistent with the environmental policy of the State and take into account the cumulative impact upon all such resources in making any determination in connection with any license, order, permit, certification or other similar action or promulgating any rule or regulation, standard or criterion." ECL § 3-0301(1)(i) charges the Commissioner with promoting and protecting the air resources of New York State, including providing for the prevention and abatement of air pollution. Section 3-0301(2)(a) gives the Commissioner the authority to adopt rules and regulations in order to implement the provisions of the ECL. ECL § 3-0301(2)(m) grants the Commissioner the authority to "adopt such rules, regulations, and procedures as may be necessary, convenient, or desirable to effectuate the purposes of this chapter."

ECL § 54-1501 defines Climate Smart Community (CSC) projects as, "adaptation and mitigation projects, including flood mitigation and coastal and riparian resiliency, GHG reductions outside the power sector and climate change adaptation planning, and clean vehicle projects."

ECL § 54-1503 specifically authorizes the Commissioner of the Department to undertake CSC projects and ECL § 54-1511 authorizes the Commissioner to provide, on a competitive basis, state assistance payments towards the cost of approved CSC projects provided that the Commissioner, "determines that future physical climate risk due to sea level rise, and/or storm surges and/or flooding, based on available date predicting the likelihood of future extreme weather events, including hazard risk analysis data if applicable, has been considered." This section also authorizes the Commissioner to enter into contracts with municipalities, and requires the Commissioner to promulgate rules and regulations governing eligibility, application and review procedures, and dispersal of state assistance payments. Pursuant to this section, state assistance payments may not exceed 50% of the total project cost or $2,000,000, whichever is less.

ECL § 54-1521 requires the Department, in consultation with NYSERDA, to promulgate rules and regulations to implement this title. ECL § 54-1521 also describes clean vehicle projects and defines the terms "eligible infrastructure project," "eligible purchase," and "eligible vehicle." ECL § 54-1521(2) permits the Commissioner, in consultation with the New York State Energy Research Development Authority (NYSERDA), to issue rebates for eligible infrastructure projects that support the development of clean vehicles, provided that the municipality may receive a maximum rebate of $250,000. ECL § 54-1521(3) authorizes the Commissioner, in consultation with NYSERDA, to issue rebates for the eligible purchases of clean vehicles, taking into account the electric range of the vehicles, and provided the rebate amount is not less than $750 and not more than $5,000 per vehicle.

ECL § 54-1523 describes climate adaptation and mitigation projects and authorizes the Commissioner to provide state assistance payment to municipalities on a competitive basis. This section also encourages the equitable regional distribution of state assistance payments, and forbids the expenditure of state funds for land acquisition.

2. LEGISLATIVE OBJECTIVES

ECL § 54-1503 authorizes the Commissioner to undertake CSC Projects and ECL § 54-1521(4) requires the Department, in consultation with NYSERDA, to promulgate rules to implement this title, including procedures and guidelines for claiming rebates for clean vehicle projects. According to the 2016 Regular Session Law Chapter 58, Part U, §8, the Commissioner is authorized to issue rebates through a request for proposal, "until January 1, 2018 or such time as regulations are adopted pursuant to section 54-1521 of the environmental conservation law, whichever is sooner." Similarly, ECL § 54-1511(4) specifically requires the Department to promulgate rules regarding climate adaptation and mitigation projects. Pursuant to the 2016 Regular Session Law Chapter 58, Part U, § 8, the Department is authorized to provide state assistance to municipalities for climate adaptation and mitigation projects through requests for proposals, "until January 1, 2018 or such time as regulations are adopted pursuant to section 54-1511 of the environmental conservation law, whichever is sooner." Therefore, consistent with the directives set forth in the legislation, the Department is seeking to promulgate rules and regulations to govern municipal eligibility, application review, and technical criteria for both types of CSC projects by January 1, 2018.

The Department proposes to create a new 6 NYCRR Part 492 covering both "clean vehicle projects" and "climate adaptation and mitigation projects," authorized by ECL § 54-1521 and ECL § 54-1523, respectively. These regulations will provide municipalities with criteria governing the program as described in ECL § 54-1511. For FY 2016/17, the Department implemented CSC projects through the Grants Gateway and NYS Consolidated Funding Application pursuant to 2016 Sess. Laws of N.Y., Chapter 58, Part U, §8. The Department has evaluated the results of the initial round to inform the development of these proposed regulations.

3. NEEDS AND BENEFITS

In 2015, Governor Cuomo signed the Under 2 MOU (Memorandum of Understanding), an agreement among states, provinces and cities worldwide affirming their collective commitment to reduce (GHG) emissions 80 percent by 2050. To help achieve this goal, New York set an aggressive target to reduce emissions 40 percent below 1990 levels by 2030 and 80 percent by 2050. These targets were confirmed by Executive Order 166 on June 1, 2017, which stated, "[i]t is the policy of the State of New York to reduce GHG emissions by forty percent by 2030, and eighty percent by 2050 from 1990 levels, across all emitting activities of the economy."

The programs covered under the proposed regulation provide funding for municipalities to support actions that provide public benefits related to environmental quality, emergency preparedness, economic health, and social resilience. These regulations are required by statute, and the programs covered help advance progress towards the GHG reduction targets and climate resiliency goals identified by Governor Cuomo. The proposed regulation is intended to provide clarity and certainty, and to encourage the application for and issuance of CSC grants.

Clean Vehicle Projects

The transportation sector is the largest contributor of GHG emissions in the state, currently accounting for 34% of the state's total GHG emissions. Compared to gasoline-powered cars, electric cars are more energy efficient and cost about 50 to 70 percent less to operate per mile. Governor Cuomo has signed the Zero Emission Vehicle (ZEV) MOU and the International ZEV Alliance to move the state forward on reducing emissions from automobiles. New York is also part of the twelve-state Transportation and Climate Initiative (TCI) coalition that is developing a potential market based approach to reducing emissions from the transportation sector.

The clean vehicle rebate program covered by Part 492 proposes funding to increase both the number of clean vehicles in municipal fleets (up to $5,000 per vehicle based on the electric range of the vehicle), as well as publicly accessible clean vehicle charging and refueling infrastructure (up to $250,000 per facility), vital to meeting New York's GHG emission reduction goals in the transportation sector.

Although subject to change, the Round One Request for Applications implemented factors to ensure the fairness, local commitment, and cost-effectiveness of the program. Rebates were awarded on a first-come, first-serve basis for eligible projects including purchase or lease of clean vehicles or installation of electric vehicle supply equipment (EVSE) or hydrogen fuel cell refueling infrastructure. Infrastructure projects were also required to meet a minimum score for technical criteria, to ensure they were feasible and appropriate for local conditions. Recipients of rebates for infrastructure projects were required to provide a 20% match for awarded funds to demonstrate local commitment. Cost-effectiveness of the proposed infrastructure was ensured for EVSE projects by capping rebate awards at $8000 per port (or $32,000 per pedestal for DC Fast-Charge infrastructure), amounts developed in consultation with NYSERDA that represent a reasonable cost for infrastructure.

The Department will evaluate each round of the clean vehicle program and make changes, if necessary, in future Requests for Applications. The Department may make changes to improve program delivery and reflect shifts in available funding, market value of equipment and other costs, electric range of available vehicles, technological improvements, and state or regional emissions reduction priorities.

Climate Adaptation and Mitigation Projects

NYSERDA's ClimAID assessment (2011, 2014) projects a wide range of impacts local governments in New York State will face as the climate changes. Average temperatures are projected to increase 4 - 10°F by 2100. Precipitation is also projected to increase, occur with greater variability year-to-year, and occur more frequently in the form of downpours. These climatic changes will bring greater risks as a result of flooding, extreme heat, exacerbation of respiratory conditions, and the introduction of new disease vectors and pests, among other hazards.

Sea level is also projected to rise across New York's coastal area by up to 6 feet by 2100, increasing risks from flooding and storm surge. Governor Cuomo signed the Community Risk and Resiliency Act (CRRA) in 2014 to address these risks. CRRA requires that applicants to certain State programs demonstrate that they have considered future physical climate risks from storm surges, and sea-level rise or flooding. CRRA also requires the Department to establish official State sea-level rise projections to provide the basis for adaptation decisions and other decision making.

The climate adaptation and mitigation projects covered by the proposed Part 492 are defined at ECL § 54-1523(1)(a)-(g), and cover a wide range of municipal activities including natural resiliency measures and conservation or restoration of riparian and tidal marsh migration areas; relocation or retrofit of facilities to address sea-level rise, storm surge, and flooding; flood risk reduction; GHG emission reductions outside the power sector; and certification under the Climate Smart Communities program. The new Title 15 EPF program targets both climate adaptation and mitigation (GHG reduction) activities, and provides the Department with the ability to make awards based solely on climate benefit.

The new proposed Part 492 would add a funding component to the existing CSC Program. The CSC Program encourages local governments to reduce GHG emissions and increase local resilience to a changing climate through adoption of a municipal resolution "pledging" to initiate and advance efforts that benefit the climate.

Although subject to change, the Round One Request for Applications implemented factors to ensure fairness, maximize the effectiveness of funding, address financial hardship, promote local climate action, and advance State priorities. Eligible project types and costs were developed in order to address the CRRA adaptation priorities and emissions reduction in the state's largest non-power sector sources (transportation and landfill methane). In the scoring criteria, additional points were awarded to financial hardship communities, and to communities that previously demonstrated commitment to local climate action through the Climate Smart Communities program.

The Department will evaluate each round of the climate adaptation and mitigation funding program and make changes, if necessary, in future Requests for Applications. Such changes would reflect shifts in, among other factors, available funding, State priorities, available technologies and best practices, and climate conditions.

4. COSTS

As proposed, Part 492 will not impose any costs on any entity because the regulation is a voluntary funding program and does not impose any standards or compliance obligations. Therefore, there are no costs associated with the proposed Part 492. Likewise, the proposed regulation will not impose any additional costs on the Department or local government entities.

5. PAPERWORK

The proposed rule is not expected to create any significant increase in the amount of required paperwork necessary to apply for state assistance through Title 15 of the Environmental Protection Fund.

6. LOCAL GOVERNMENT MANDATES

The proposed rule does not create any local government mandates. The programs are voluntary grant programs.

7. DUPLICATION

This proposal is not intended to duplicate any state or federal regulations or statutes. The final rule will conform to the requirements of the ECL.

8. ALTERNATIVES

There is no legal alternative to this rulemaking because it is required by legislation. Therefore, there is no "no action" alternative available to the Department.
The department will, however, continually evaluate the success of the program and may change future Request for Applications to reflect shifts in available funding, State priorities, available technologies and best practices, and climate conditions.

9. FEDERAL STANDARDS

There are currently no federal standards that apply to Title 15 of the Environmental Protection Fund.

10. COMPLIANCE SCHEDULE

Due to legislative mandate, Part 492 should be promulgated by January 1, 2018. Applicants will be required to comply with the effective date of the rule.