SECTION 1.  Section 3 of chapter 25A of the Massachusetts General Laws, as appearing in the 2012 Official Edition, is hereby amended by inserting the following definitions: —

“Carbon-based fuel”, coal, natural gas, renewable biomass as defined in section one of chapter 64A, petroleum product, and any other product that contains methane or contains carbon and emits carbon dioxide when combusted, that are used for fuel, heating, cooling, or industrial processes, which processes shall include electricity generation other than by a CO2 budget unit as defined in 310 CMR 7.70(1)(b). 

“Carbon-generated electricity”, electric energy produced using a carbon-based fuel and generated or transmitted by an electric power facility as defined in section one of chapter 164A.

“Carbon dioxide equivalent”, or “CO2e”, a unit of measure denoting the amount of emissions from a greenhouse gas, expressed as the amount of carbon dioxide by weight that produces the same global warming impact. 

“Carbon dioxide emissions charges”, the charges imposed on each ton of CO2e pursuant to this chapter. 

“Employer”, any person, state agency, or local governmental body who has employees working in the commonwealth.

“Fund”, the carbon dioxide emissions charges rebate fund established under section 13B of this chapter.

“Motor vehicle fuel”, fuel for the operation of a motor vehicle, provided, that “fuel” and “motor vehicle” shall have the same meanings as defined in section one of chapter 64A.

“Resident” shall have the same meaning as defined in section one of chapter 62. 

SECTION 2.  Section 6 of chapter 25A of the General Laws, as so appearing, is hereby amended by inserting after the last paragraph the following:

(13) administer the schedules of carbon dioxide emissions charges and the carbon dioxide emissions charges rebate fund, both established pursuant to this chapter. 

SECTION 3.  Chapter 25A of the General Laws, as so appearing, is hereby amended by inserting after section 13 the followings sections:

25A:13ACarbon dioxide emissions charges

Section 13A.  (a) The commissioner of energy resources shall collect carbon dioxide emissions charges on the distribution or sale of carbon-based fuels, including but not limited to products that contain methane.

(b) The charge in the first year of operation shall be $10 per ton of CO2e.  Said charges shall increase by $5 every year until the rate is $40 per ton of CO2e.  In the sixth year of implementation, and every two years thereafter, the commissioner of energy resources, in consultation with the commissioner of environmental protection, shall report to the house and senate committees on ways and means, the joint committee on telecommunications, utilities and energy, and the house and senate committees on global warming and climate change.  Said reports shall consider whether any increases or decreases in carbon dioxide emissions charges are recommended to account for inflation, to ensure progress towards reaching emissions limits for 2030, 2040, and 2050 included in or authorized by chapter 21N, the Climate Protection & Green Economy Act, or, pursuant to section 13B(d)(3) of this chapter, to mitigate serious negative impacts on economic sectors, economic sub-sectors or individual employers of the commonwealth caused by collection of carbon dioxide emissions charges.   

(c) The commissioner of energy resources shall determine the schedule of carbon dioxide emissions charges authorized under this chapter by multiplying the CO2e of each carbon-based fuel by the charge or charges established herein.  For the purpose of calculating said schedule, the commissioner, in consultation with the commissioner of environmental protection and the commissioner of revenue, shall determine the average CO2e of each carbon-based fuel.

(d) Notwithstanding any general or special law to the contrary, the charges authorized under this section shall not be imposed on any carbon-based fuel or source of carbon-based electricity if such imposition is superseded by federal law or regulation.

25A:13BCarbon dioxide emissions charges rebate fund

Section 13B.  (a) There shall be established on the books of the commonwealth a separate fund to be known as the carbon dioxide emissions charges rebate fund.  The commissioner of energy resources shall deposit all proceeds collected under section 13A into said fund.  None of said proceeds shall fund government operations of the commonwealth, other than to pay for reasonable administrative costs as provided under sub-section (b) of this section.  

(b) The commissioner of energy resources shall return all carbon dioxide emissions charge proceeds to residents and employers in the commonwealth in the form of rebates.  The aggregate amount of rebates returned to residents shall be reasonably equivalent to the aggregate amount of carbon dioxide emissions charge proceeds attributable to charges paid directly and indirectly by residents, and the aggregate amount of rebates returned to employers shall be reasonably equivalent to the aggregate amount of carbon dioxide emissions charge proceeds attributable to charges paid directly and indirectly by employers; provided, that the commissioner may retain a reasonable amount of charge proceeds to pay for the costs of administering the activities authorized by this chapter.  Proceeds shall be available for the purposes enumerated in this section without appropriation.              

(c)(1) The commissioner of energy resources shall estimate total rebates to be returned to residents pursuant to the terms of this chapter.

(2) The commissioner of energy resources shall set the amount of the individual rebate or rebates to residents; provided, that each resident shall receive an equal rebate, except that residents of rural municipalities shall receive an additional motor vehicle fuel rebate.  The commissioner shall annually determine the individual rebate or rebates per resident of the commonwealth.  For the purposes of this paragraph, a rural municipality is one in which residents drive, on average, 130% or more per year of the statewide average number of miles driven per household in the commonwealth.  The commissioner shall calculate the additional motor vehicle fuel rebate for rural residents by estimating the aggregate charges paid by all residents of the commonwealth on the distribution or sale of motor vehicle fuel, and dividing said estimate by the sum of the number of residents who do not reside in rural municipalities and 1.3 times the number of residents who reside in rural municipalities.  The result shall be the individual rebate per resident attributable to charges collected on motor vehicle fuel, which rebate shall be added to the rebate per resident attributable to charges collected on fuels other than motor vehicle fuels, both of which shall then be distributed to all residents of municipalities other than rural municipalities; provided, that the remaining portion of estimated total rebates shall be distributed in equal portions to all residents of rural municipalities.

(3) In rebating carbon dioxide emissions charge proceeds, the commissioner of energy resources shall coordinate with officials of the department of revenue, the executive office of health and human services, the executive office of housing and economic development and other agencies in making all reasonable efforts to identify the names and addresses of all residents, with special attention to the names and addresses of low-income residents.

(d)(1) The commissioner of energy resources shall estimate total rebates to be returned to employers.

(2) The commissioner of energy resources shall set each employer’s individual rebate based on the employer’s proportional share, in full-time equivalent employees, of statewide employment.  The commissioner shall annually determine the employer rebate per full-time equivalent employee; provided, that the commissioner shall not count as an employee any person who would not be considered an employee under chapter 148B; provided, further, that the commissioner shall count only bona fide employees working in the commonwealth. 

(3) The commissioner, in consultation with the commissioner of revenue and the commissioner of housing and economic development, shall, with special attention to manufacturing, identify economic sectors, economic sub-sectors or individual employers at risk of serious negative impacts as a consequence of the charges collected pursuant to this chapter.  The commissioner may, as mitigation, calculate the total proceeds collected from said sectors, subsectors or individual employers and may apportion the entirety of said proceeds to the affected sector, sub-sector or employers.   

(4) In rebating carbon dioxide emissions charge proceeds, the commissioner of energy resources shall ensure that all employers in the commonwealth receive said rebate, including those employers otherwise exempt from taxes under chapter 63 due to their status as not-for-profit organizations or government entities.

(e) The commissioner of energy resources shall not be subject to penalties or lawsuits for damages if the charges collected under this chapter are not precisely equal to rebates returned under this chapter; provided, that the commissioner shall make all reasonable efforts to return to residents and employers all charges collected under this chapter.  The salary payable to the governor, secretary of administration and finance and secretary of energy and environmental affairs for the year following the year in which charges collected under this chapter unreasonably exceed the rebates returned under this chapter shall be reduced by 15% until said excessive charges are returned.

25A:13CRegulations; Miscellaneous

Section 13C.  (a) The commissioner of energy resources, in consultation with the commissioner of revenue and the commissioner of environmental protection, shall promulgate rules and regulations necessary to carry out the provisions of this chapter. 

(b) The commissioner shall undertake all reasonable efforts to collect charges authorized pursuant to this chapter at the first point of distribution or sale within the commonwealth. 

(c) The commissioner shall consider alternative calendar schedules for distribution of the rebates authorized pursuant to this chapter, including partial or whole distributions early in the relevant revenue cycle.

(d) The commissioner may issue additional rebates or declare exemptions from charges in instances where charges have been paid but no emissions occur or are anticipated to occur.

(e) Within three years of the effective date of this legislation, the commissioner of energy resources shall prepare a report on options for and the implications of collecting charges for emissions of CO2e resulting from carbon-generated electricity produced or distributed in the commonwealth.  The implications considered shall include, but not be limited to, potential effects on the market for emission allowances created by the regional greenhouse gas initiative.