Gov. Kathy Hochul has concerns about signing a bill aiming to cut down on New York's impact on global deforestation, with executive staff telling lawmakers she's perplexed about potential impacts on small businesses across the state.

Lawmakers passed a bill at the end of session, known as the Tropical Deforestation-Free Procurement Act, which would prohibit the state from contracting with companies that use tropical hardwoods or products that contribute to deforestation. 

Soy, beef, palm oil, coffee, cocoa, paper and other products could not be sourced from land with an at-risk forest, and contractors would have to submit data to the state proving where products originate from. 

"We don't understand how much damage is being done," bill sponsor Sen. Liz Krueger said Friday. "I like cocoa, I like coffee, and do I really want to destroy the planet in order to get my morning cup? I hope not. ...So this bill would say, New York state, when you contract with companies to spend our taxpayer money to buy things you cannot contract with companies who are getting any of their products from the destruction of these tropical forests all over the world."

Krueger, who chairs the Senate Finance Committee, says rainforests in places like Brazil, Venezuela and the Philipines provide critical protections against climate change.

Around 15 billion trees are cut down every year, or close to 42 million trees per day, according to the Nature Conservancy.

But legislation left unsigned by this point in the year is typically left because of outstanding questions or a lack of support from the Second Floor. Opponents are worried about negative impacts the change would have on small businesses as well as minority and women-owned businesses. 

Hochul's staff have told lawmakers the governor shares those concerns. 

"And with all due respect, I think they're wrong," Krueger said. "The answer is in the bill."

The legislation creates a supply chain transparency assistance program to help small and women and minority-owned businesses find sustainably sourced materials and remain competitive for state projects. 

State agencies that use the largest amount of tropical hardwood, like the Office of General Services and Metropolitan Transportation Authority, would have several years to transition to other products.

The European Union also recently adopted a similar policy, which the senator argues means New York must follow suit to not leave in-state enterprises behind.

"With all due respect, to anyone who's a New York company, if you want to sell to Europe and you do, you're going to have to follow these rules anyway," Krueger said. "So it's actually helpful for us to do this in New York because we can then be part of the process to help you find out the supply chain for companies that you buy products from."

Environmental organizations and activists have turned up the pressure, petitioning the governor for her support to sign the bill by sending her letters in the last two weeks. But Hochul often heavily considers concerns of business leaders across the state in deciding to sign legislation. 

If she signs the measure, it would be the first law of its kind in the nation after California Gov. Gavin Newsom vetoed a similar proposal in 2021.

Assembly Minority Leader Will Barclay says it's a change that should be done at the federal level to have the intended impact.

"Who wants to see tropical forests being cut down?" Barclay said. "But ultimately, you know, we have to pass, we have to govern and we have to pass legislation that actually works."

Lawmakers did not include fiscal impact in the legislation, and Krueger says the potential costs are unclear.

"It's probably going to end up costing the state a lot more money," Barclay added.

But supporters argue the change cannot wait, urging her colleagues to fight climate change and protect future generations.

Former state Sen. George Amedore is the vice president of Amedore Homes Inc. — a Capital Region business that has been in his family for three generations.

He says it's often difficult for builders to know the origin of recycled products, and the law could drive contractors to depend on synthetic materials worse for the environment overall.

"What's the replacement? They're not going to be natural," Amedore said. "They're going to be made in factories that are going to be made with resins, petroleums, chemicals... They're going to be the replacement of the exact product this bill is trying to prohibit being used."

The former senator questions how small businesses would be penalized if a particle, or small part of a product, is sourced from a place that would be prohibited.

Bill sponsors argue the legislation will have minimal impact on construction contractors. If it becomes law, the onus is placed on the state agency, not the contractor, to ensure tropical hardwoods are not materials used in state contracts. Businesses that contract with the state are responsible for not sourcing soy, palm oil, coffee, cocoa, paper and other commodities listed in the bill.

Tropical hardwoods are generally not used in the construction of homes and buildings.

Amedore also said the federal government and U.S. Department of Agriculture already has specific regulations about where builders source their products and related chain supply. He's urging Gov. Hochul to veto the legislation and leave this oversight to officials at the national level. 

"We can say it's all about saving the tropical rainforest, but it goes much further than that," he said.

Other small and medium-sized contractors Friday said they have not developed strong opinions about the legislation since it was first proposed last year. Projects frequently come with specifications and builders are accustomed to meeting the specifications of what a customer wants, they said.