STATE OF NEW YORK ________________________________________________________________________ 4558--A 2025-2026 Regular Sessions IN SENATE February 7, 2025 ___________ Introduced by Sens. HOYLMAN-SIGAL, BRISPORT, CLEARE, FERNANDEZ, GIANAR- IS, GONZALEZ, GOUNARDES, HARCKHAM, HINCHEY, JACKSON, KAVANAGH, KRUEG- ER, LIU, MAY, MYRIE, RIVERA, S. RYAN, SALAZAR, SEPULVEDA, SERRANO, SKOUFIS, WEBB -- read twice and ordered printed, and when printed to be committed to the Committee on Consumer Protection -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee 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: 1 Section 1. Short title. This act shall be known and may be cited as 2 the "fashion environmental accountability act". 3 § 2. The general business law is amended by adding a new section 399- 4 mm to read as follows: 5 § 399-mm. Fashion environmental accountability act. 1. Definitions. 6 As used in this section, the following terms shall have the following 7 meanings: 8 (a) "Doing business in this state" shall mean actively engaging in any 9 transaction for the purpose of financial or pecuniary gain or profit. 10 (b) "Gross receipts" shall mean the gross amounts realized, otherwise 11 known as the sum of money and the fair market value of other property or 12 services received, on the sale or exchange of property, the performance 13 of services, or the use of property or capital, including rents, royal- 14 ties, interest, and dividends, in a transaction that produces business 15 income, in which the income, gain, or loss is recognized, or would be 16 recognized if the transaction were in the United States, under the 17 Internal Revenue Code, as applicable for purposes of this section. EXPLANATION--Matter in italics (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD01707-03-5
S. 4558--A 2 1 Amounts realized on the sale or exchange of property shall not be 2 reduced by the cost of goods sold or the basis of property sold. Gross 3 receipts, even if business income, shall not include the following 4 items: 5 (i) repayment, maturity, or redemption of the principal of a loan, 6 bond, mutual fund, certificate of deposit, or similar marketable instru- 7 ment; 8 (ii) the principal amount received under a repurchase agreement or 9 other transaction properly characterized as a loan; 10 (iii) proceeds from issuance of the taxpayer's own stock or from sale 11 of treasury stock; 12 (iv) damages and other amounts received as the result of litigation; 13 (v) property acquired by an agent on behalf of another; 14 (vi) tax refunds and other tax benefit recoveries; 15 (vii) pension reversions; 16 (viii) contributions to capital, except for sales of securities by 17 securities dealers; 18 (ix) income from discharge of indebtedness; 19 (x) amounts realized from exchanges of inventory that are not recog- 20 nized under the Internal Revenue Code; 21 (xi) amounts received from transactions in intangible assets held in 22 connection with a treasury function of the taxpayer's unitary business 23 and the gross receipts and overall net gains from the maturity, redemp- 24 tion, sale, exchange, or other disposition of those intangible assets; 25 and 26 (xii) amounts received from hedging transactions involving intangible 27 assets. A "hedging transaction" means a transaction related to the 28 taxpayer's trading function involving futures and options transactions 29 for the purpose of hedging price risk of the products or commodities 30 consumed, produced, or sold by the taxpayer. 31 (c) "Fashion seller" shall mean a business entity which sells articles 32 of wearing apparel, footwear, or fashion bags that together exceed one 33 hundred million dollars in annual gross receipts, but shall not include 34 the sale of used wearing apparel, footwear, or fashion bags, nor shall 35 it include multi-brand retailers, except where the apparel, footwear, 36 and fashion bag private labels of those companies together exceed one 37 hundred million dollars in global revenue. 38 (d) "Article of wearing apparel" shall mean any costume or article of 39 clothing worn or intended to be worn by individuals. 40 (e) "Footwear" shall mean any covering worn or intended to be worn on 41 the foot. 42 (f) "Fashion bag" shall mean flexible packaging made of textiles, 43 leather or other animal products, woven material or other similar mate- 44 rials intended for repeated use. 45 (g) "Due diligence" shall mean the comprehensive process companies 46 shall carry out to identify, cease, prevent, mitigate, account for, and 47 remediate actual and potential adverse impacts to the environment in 48 their own operations and in their supply chain, in compliance with, at a 49 minimum, the standards outlined in the most recent Organisation for 50 Economic Co-operation and Development Guidelines for Multinational 51 Enterprises, and the most recent Organisation for Economic Co-operation 52 and Development Due Diligence Guidance for Responsible Supply Chains in 53 the Garment and Footwear Sector. 54 (h) "Due diligence report" shall mean the document prepared by the 55 company to communicate all relevant information concerning the exist- 56 ence, implementation and outcomes of due diligence in order to comply
S. 4558--A 3 1 with the requirements of this section, and to comply with any rules or 2 regulations established pursuant to this section. 3 (i) "Risk-based approach" shall mean commensurate to the likelihood 4 and severity of the harm. The fashion seller shall prioritize the order 5 in which it takes action based on the likelihood and severity of harm. 6 Severity of impacts shall be determined according to their scale or 7 gravity, scope, and irremediable character. 8 (j) "Supply chain tiers" shall mean a four tier system defined as the 9 following: 10 (i) "Tier one" shall mean suppliers who produce finished goods for 11 fashion sellers, including suppliers' subcontractors, who provide the 12 following services, including but not limited to sewing and embroider- 13 ing; 14 (ii) "Tier two" shall mean suppliers to tier one, including subcon- 15 tractors, who provide the following services or goods, including but not 16 limited to knitting, weaving, washing, dyeing, finishing, printing for 17 finished goods, and components and materials for finished goods when 18 they are stand-alone operations and not integrated with tier one. Compo- 19 nents shall mean materials used to build a product, including but not 20 limited to buttons, zippers, rubber soles, down, and fusibles; 21 (iii) "Tier three" shall mean suppliers to tier two suppliers, includ- 22 ing subcontractors, who process raw materials, such as spinning; and 23 (iv) "Tier four" shall mean companies, including subcontractors, that 24 provide raw materials to tier three. 25 (k) "Independently verified" shall mean audited by a verification body 26 accredited by the department of state as described in subdivision five 27 of this section. 28 (l) "Open data principles" shall mean data that can be freely used, 29 reused and redistributed by anyone. Such data shall be findable or easi- 30 ly discoverable on a website or within a database, accessible or avail- 31 able in a machine readable, convenient, modifiable form and published as 32 a whole, complete dataset, interoperable or able to be mixed with 33 different datasets, and reusable or provided under an open license that 34 permits reuse and redistribution, including the intermixing with other 35 datasets. 36 (m) "Employee" shall mean all workers, whether full-time or part-time, 37 permanent or fixed-term, directly contracted or hired indirectly through 38 an agency or other intermediary. 39 2. Due diligence. (a) Every fashion seller shall effectively carry out 40 environmental due diligence for the portions of their business related 41 to wearing apparel, footwear or fashion bags, including wearing apparel, 42 footwear or fashion bags produced as a private label, which shall 43 include: 44 (i) supply chain mapping: 45 (1) companies taking a risk-based approach and implementing good faith 46 efforts to map suppliers across tier one through tier four of 47 production. 48 (2) disclosure of suppliers of the production supply chain including: 49 the name, parent company and product type, filed by the following: 50 (A) Tier one suppliers shall be disclosed within twelve months of the 51 effective date of this section, and shall contain a minimum of eighty- 52 five percent of suppliers by volume. 53 (B) Tier two suppliers shall be disclosed within two years of the 54 effective date of this section, and shall contain a minimum of seventy- 55 five percent of suppliers by volume.
S. 4558--A 4 1 (C) Tier three suppliers shall be disclosed within four years of the 2 effective date of this section and shall contain a minimum of fifty 3 percent of suppliers by volume or dollar value. 4 (D) Tier four suppliers shall be disclosed within six years of the 5 effective date of this section and shall contain a minimum of fifty 6 percent of suppliers by volume or dollar value. 7 (ii) in carrying out effective due diligence, fashion sellers shall be 8 in compliance with the Organisation for Economic Co-operation and Devel- 9 opment Guidelines for Multinational Enterprises and the Organisation for 10 Economic Co-operation and Development Due Diligence Guidance for Respon- 11 sible Supply Chains in the Garment and Footwear Sector, requiring fash- 12 ion sellers to, at a minimum: 13 (1) embed responsible business conduct into the company's policies and 14 management systems; 15 (2) identify areas of significant risks in the contexts of its own 16 activities and business and supply chain relationships; 17 (3) identify, prioritize, and assess the significant potential and 18 actual adverse impacts of those risks; 19 (4) cease, prevent or mitigate those risks. This shall include, but 20 not be limited to: 21 (A) incentivizing improved supplier performance on environmental 22 impact by embedding responsible purchasing practices in its supply chain 23 relationships and contracts, including but not limited to contract 24 renewals, longer term contracts, price premiums, providing reasonable 25 assistance to suppliers so that they can meet applicable environmental 26 standards including but not limited to meeting the carbon emission 27 reduction targets set out in this act, and developing pricing models 28 that account for the cost investments. 29 (B) establishing quantitative baseline and reduction targets on green- 30 house gas emissions. Greenhouse gas emissions inventory shall be 31 reported annually, starting in two thousand twenty-seven for emissions 32 in the prior fiscal year; include absolute figures; and conform with the 33 rules and regulations made by the department of state in consultation 34 with the department of environmental conservation based on the account- 35 ing and reporting requirements of the most recent Greenhouse Gas Proto- 36 col Corporate Accounting and Reporting Standard, Scope Two Guidance, 37 and, starting in two thousand twenty-eight, the most recent Corporate 38 Value Chain Scope Three accounting and reporting standard promulgated by 39 the World Resources Institute and the World Business Council for 40 Sustainable Development. Greenhouse gas emissions inventory reported in 41 the due diligence report required pursuant to subdivision three of this 42 section shall be independently verified no less than once every two 43 years. Fashion sellers shall not be subject to an administrative penalty 44 under this section for any misstatements with regard to scope three 45 emissions disclosures made with a reasonable basis and disclosed in good 46 faith. Greenhouse gas emission reduction targets must be near-term and 47 long-term, covering scopes one, two and three emissions, and align with 48 the rules and regulations made by the department of state in consulta- 49 tion with the department of environmental conservation based on, at a 50 minimum, Science Based Target initiative's most recent target validation 51 criteria as promulgated by World Resources Institute, CDP, United 52 Nations Global Compact and the World Wildlife Fund. Compliance with the 53 rules and regulations made by the department of state shall not waive 54 compliance requirements related to greenhouse gas emissions in any other 55 provision of law. For fashion sellers with global revenue over one 56 billion dollars, the absolute contraction approach must be used to
S. 4558--A 5 1 calculate scope three emissions. Fashion sellers shall meet targets and 2 report their compliance on an annual basis in their due diligence 3 report, as required pursuant to subdivision three of this section. If 4 found to be out of compliance, fashion sellers shall have eighteen 5 months to remedy their emissions and return to the necessary reduction 6 pathway to deliver on their targets. In non-target years, non-compliance 7 shall mean an increase in absolute emissions in five consecutive years, 8 for companies over a billion dollars in revenue. In target years, non- 9 compliance shall mean not reaching the target; 10 (C) in accordance with internationally recognized methodologies for 11 chemical management and wastewater testing, requiring fashion sellers 12 within two years of the effective date of this section, for all signif- 13 icant tier two dyeing, finishing, printing and garment washing suppli- 14 ers, to: sample and report on wastewater chemical concentrations and 15 water usage; report on chemical inventory; and provide evidence that the 16 supplier is in compliance with local chemical management laws. For 17 significant suppliers that use indirect wastewater management, fashion 18 sellers shall report the chemical concentrations of the wastewater 19 treatment facilities report on the percentage of significant suppliers 20 that have chemical remediation plans in place and what the fashion sell- 21 er is doing to remediate. Reports required pursuant to this item shall 22 be independently verified. Three years after the effective date of this 23 section, fashion sellers shall be considered out of compliance if their 24 significant tier two dyeing, finishing, printing and garment suppliers 25 have not made adequate progress in remediation of wastewater pollution 26 concentrations and chemical management. For the purposes of this item, 27 "significant suppliers" shall mean suppliers representing seventy-five 28 percent of fabric by volume; 29 (D) utilizing responsible exit or disengagement strategies; 30 (E) consulting and engaging with impacted and potentially impacted 31 stakeholders and rights holders and their representatives; 32 (5) track implementation and results; 33 (6) provide for or co-operate in remediation in the event of an 34 adverse impact: 35 (A) remedies shall seek to restore the affected locations, places or 36 person or persons, where practicable, to the situation they would have 37 been in had the adverse impact not occurred and shall enable remediation 38 that is proportionate to the significance and scale of the adverse 39 impact; and 40 (B) remedies shall include, depending on the nature and extent of the 41 adverse impact, remediation, restitution or financial or non-financial 42 compensation, including establishing compensation funds for victims or 43 for future outreach and educational programs, punitive sanctions includ- 44 ing the dismissals of staff responsible for wrongdoing, and establishing 45 and undertaking measures to prevent future adverse impacts, which may 46 include, but are not limited to the development of internal protocols, 47 practices and procedures to prevent future adverse impacts. 48 (b) The due diligence requirements pursuant to this subdivision shall 49 not be conditional upon the company being effectively involved in the 50 subsidiary's day-to-day operations or exercising a sufficient degree of 51 control on companies within its supply chain. 52 3. Reporting. Every fashion seller shall develop and submit to the 53 department of state annually, beginning within eighteen months of the 54 effective date of this section, a due diligence report. 55 (a) Such report, excluding the information required in clause two of 56 subparagraph (i) of paragraph (a) of subdivision two of this section,
S. 4558--A 6 1 shall also be made publicly available on the fashion seller's website in 2 a machine readable and reusable format, published in line with open data 3 principles through a clear and easily discoverable link to the required 4 information. In the event the fashion seller does not have an internet 5 website, the company shall provide a written disclosure to any person 6 who has requested information within thirty days of receiving a request. 7 Such report shall also include the fashion seller's annual volume of 8 material produced, including breakdown by material type. 9 (b) Such report shall contain annual activities and financial spending 10 to support supply chain due diligence. 11 (c) The department of state shall identify and notify fashion sellers 12 that have failed to file a due diligence report that they have thirty 13 days to file such report before being placed on a public non-compliant 14 list and that they may be referred to the attorney general for investi- 15 gation. 16 (d) The department of state shall review the due diligence reports for 17 completeness. 18 (e) Fashion sellers shall have twelve months from the introduction of 19 any updated guidance documents to integrate such guidance into the next 20 annual due diligence report. 21 (f) The department of state shall establish a standardized due dili- 22 gence report format model and publish such model due diligence report 23 online for use by fashion sellers in compliance with this section. 24 4. Regulations. (a) The department of state shall, in consultation 25 with the department of environmental conservation, promulgate all rules 26 and regulations necessary to implement the provisions of this section 27 within six months from the effective date of this section. 28 (b) The department of state, in consultation with the department of 29 environmental conservation, shall also develop and disseminate educa- 30 tional materials to fashion sellers, including providing alerts on time 31 sensitive issues, emerging issues, and high-risk country situations, and 32 assisting fashion sellers in improving the quality of their due dili- 33 gence processes. 34 (c) The department of state shall develop regulations regarding the 35 information required to be reported by fashion sellers in the due dili- 36 gence report in item (C) of clause four of subparagraph (ii) of para- 37 graph (a) of subdivision two of this section. Such regulations shall be 38 developed in consultation with the department of environmental conserva- 39 tion. 40 (d) The department of state shall develop regulations on reporting 41 requirements that minimize duplication of effort and allows a fashion 42 seller to submit a due diligence report to the department of state that 43 is prepared to meet other national and international reporting require- 44 ments, including any reports required by the federal government, as long 45 as such reports satisfy all of the requirements of subdivision two of 46 this section. 47 5. Verification. (a) The department of state shall, in consultation 48 with the department of environmental conservation, develop a process for 49 accrediting verification bodies authorized to provide verification 50 services for the purposes of this section, including which requirements 51 the entity is authorized to verify. 52 (b) Such process shall at a minimum consider: 53 (i) the demonstrated qualifications of verification staff, including 54 their education, experience, and professional licenses. Verification 55 bodies must employ and retain at least five total full-time staff with 56 expertise in the requirements they seek to verify under this section;
S. 4558--A 7 1 (ii) any judicial proceedings, enforcement actions, or administrative 2 actions filed against the body within the previous five years; and 3 (iii) the policies and mechanisms in place to prevent conflicts of 4 interest and to identify and resolve potential conflict of interest 5 situations if they arise. The department shall require applicants to 6 submit the following information, at a minimum: 7 (1) identification of services provided by the verification body, the 8 industries that the body serves, and the locations where those services 9 are provided; 10 (2) a detailed organizational chart that includes the verification 11 body, its management structure, and any related entities; and 12 (3) the verification body's internal conflict of interest policy that 13 identifies activities and limits to monetary or non-monetary gifts that 14 apply to all employees and procedures to monitor conflicts of interest. 15 (c) Verification bodies shall not be authorized to provide services to 16 a company where a conflict of interest exists. A conflict of interest 17 shall include: 18 (i) where the verification body and reporting entity share any manage- 19 ment staff or board of directors membership, or any of the senior 20 management staff of the reporting entity have been employed by the 21 verification body, or vice versa, within the previous five years; 22 (ii) any employee of the verification body, or any employee of a 23 related entity, or a subcontractor who is a member of the verification 24 team has provided the reporting entity with services related to the 25 areas of verification, or any services designated by the department of 26 state, within the previous five years; 27 (iii) any staff member of the verification body provides any type of 28 non-monetary incentive to a reporting entity to secure a verification 29 services contract; and 30 (iv) any additional criteria provided by the department of state. 31 (d) Verification bodies that have been accredited by the department of 32 state shall notify the department within thirty days if they no longer 33 meet the verification requirements set forth by this section. 34 6. Monitoring and enforcement. (a) The requirements imposed on fashion 35 sellers by this section shall be monitored, investigated, and enforced 36 by the attorney general or an administrator designated by the attorney 37 general to bring civil proceedings for an injunction, or fines for mone- 38 tary damages as described in this section, or civil performance of a 39 statutory duty. Fashion sellers shall be deemed non-compliant with this 40 section if they fail to conduct effective due diligence pursuant to 41 subdivision two of this section or fail to file a due diligence report 42 pursuant to subdivision three of this section. 43 (b) The department of state shall identify and notify fashion sellers 44 that have failed to file a complete due diligence report in accordance 45 with the rules and regulations promulgated by the department of state in 46 consultation with the department of environmental conservation. If such 47 fashion sellers fail to file a complete report, after a period of three 48 months, the department of state shall refer fashion sellers to the 49 attorney general for enforcement for failure to file a complete report. 50 (c) The department of environmental conservation shall review and 51 certify effective due diligence for environmental matters in the due 52 diligence report and identify fashion sellers for referral to the attor- 53 ney general for any failures. 54 (d) The department of state shall compile and maintain a list of non- 55 compliant fashion sellers on the department's website. The department of 56 state shall refer to the attorney general for investigation any fashion
S. 4558--A 8 1 seller who fails to file a due diligence report or fails to conduct 2 effective due diligence, once any grace period lapses and the fashion 3 seller remains in non-compliance. 4 (e) Fashion sellers found to have failed to conduct effective due 5 diligence pursuant to subdivision two of this section or failed to file 6 a complete due diligence report pursuant to subdivision three of this 7 section, after the attorney general, or the attorney general's desig- 8 nated administrator, as applicable, has provided notice of non-compli- 9 ance, and after a three-month period to meet obligations under this 10 section has lapsed, may be assessed a civil penalty not to exceed 11 fifteen thousand dollars per violation per day. Such fines shall be 12 deposited in the community benefit fund established by section ninety- 13 seven-ccc of the state finance law. 14 (f) The attorney general, or the attorney general's designated admin- 15 istrator shall use a risk-based approach in enforcement and shall 16 publish enforcement guidelines. 17 (g) Any person may report a violation of this section to the attorney 18 general's office. 19 § 3. The state finance law is amended by adding a new section 97-ccc 20 to read as follows: 21 § 97-ccc. Fashion remediation fund. 1. There is hereby established in 22 the joint custody of the comptroller, the commissioner of taxation and 23 finance, and the commissioner of environmental conservation a special 24 fund to be known as the fashion remediation fund. 25 2. Such fund shall consist of all moneys deposited pursuant to para- 26 graph (e) of subdivision six of section three hundred ninety-nine-mm of 27 the general business law. 28 3. The moneys in the fund shall be expended by the comptroller for the 29 purpose of implementing one or more environmental benefit projects or 30 environmental remediation projects that directly and verifiably benefit 31 the workers and communities directly impacted, to the extent practica- 32 ble, at the location the injury has occurred. 33 4. On or before the first day of February each year, the comptroller 34 shall certify to the temporary president of the senate, and the speaker 35 of the assembly, the amount of money deposited by source in the fund 36 during the preceding calendar year, as well as all disbursements from 37 the fund during the preceding calendar year. 38 5. Moneys shall be payable from the fund on the audit and warrant of 39 the comptroller on vouchers certified and approved by the commissioner 40 of environmental conservation as applicable. 41 § 4. The attorney general shall certify to the governor that the 42 office of the attorney general is prepared to execute the duties 43 assigned in subdivision 6 of section 399-mm of the general business law 44 within one year following the effective date of this act. If, after the 45 expiration of one year, the attorney general requires more time to 46 certify that the office of the attorney general is prepared to execute 47 such duties, the attorney general may, for good cause shown, apply to 48 the governor for an extension of time. The governor may grant or deny an 49 extension of up to one year according to their discretion. 50 § 5. Severability. If any word, phrase, clause, sentence, paragraph, 51 section, or part of this act shall be adjudged by any court of competent 52 jurisdiction to be invalid, such judgment shall not affect, impair, or 53 invalidate the remainder thereof, but shall be confined in its operation 54 to the word, phrase, clause, sentence, paragraph, section, or part ther- 55 eof directly involved in the controversy in which such judgment shall 56 have been rendered.
S. 4558--A 9 1 § 6. The department of state, in consultation with the department of 2 environmental conservation, shall promulgate rules and regulations 3 necessary for the implementation of this act within one hundred eighty 4 days of the effective date of this act. 5 § 7. This act shall take effect immediately; provided, however, that 6 sections one through three of this act shall take effect one year after 7 they shall have become a law; provided further, however, that subdivi- 8 sion 6 of section 399-mm of the general business law as added by section 9 two of this act shall take effect one year after the attorney general 10 certifies that the office of the attorney general is prepared to execute 11 the duties assigned in such subdivision. The attorney general shall 12 notify the legislative bill drafting commission upon the occurrence of 13 such certification in order that the commission may maintain an accurate 14 and timely effective data base of the official text of the laws of the 15 state of New York in furtherance of effectuating the provisions of 16 section 44 of the legislative law and section 70-b of the public offi- 17 cers law.