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: —

“Adult,” a resident of the Commonwealth age 18 or above.

“Minor,” a resident of the Commonwealth age 17 or below.

“Quintile 1,” the 20 percent of households in the Commonwealth with the lowest after-tax incomes.

“Quintile 2,” the 20 percent of households in the Commonwealth with the next-to-lowest after-tax incomes; also termed those households with incomes from the 20th to 40th percentile of all households in the Commonwealth.

“Quintile 3,” the middle 20 percent of households in the Commonwealth based on after-tax incomes; also termed those households from the 40th to 60th percentile of all households in the Commonwealth.

“Quintile 4,” the next to highest 20 percent of households based on after-tax incomes; also termed those households from the 60th to 80th percentile of all households in the Commonwealth.

“Quintile 5,” the 20 percent of households with the highest after-tax incomes of all households in the Commonwealth.

“DOR Commissioner”, the Commissioner of the Department of Revenue.

''Greenhouse gas'', carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs) and sulfur hexafluoride (SF6), and any other matter identified by the department of energy resources as a likely contributor to climate change.

“Greenhouse gas-emitting priority”, matter that emits or is capable of emitting a greenhouse gas when burned or released to the atmosphere and is identified as a priority under the terms of this act, except that natural gas, petroleum, coal and any solid, liquid or gaseous fuel derived therefrom shall be greenhouse gas-emitting priorities.

“Greenhouse gas pollution charges”, the charges imposed on each ton of CO2e pursuant

to this chapter.

“Employer”, any person, corporation, partnership, governmental body, or other entity that has employees working in the commonwealth.

“Green Infrastructure Fund”, a fund whose revenues are derived from the pollution charges defined in this section, and whose funds are used to finance the development of green infrastructure, according to section 13B.

“Greenhouse gas pollution charges fund”, the greenhouse gas pollution charges fund established under section 13C, also called the “pollution charges fund.” of this chapter.

“Lifecycle Emissions,” greenhouse gas emissions that are released during phases of a fuel or other product’s life, including those emissions released during extraction, processing, transportation, and disposal.

“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.

“Total rebate shares,” the sum of all Commonwealth residents age 18 or older, plus one-half the sum of all Commonwealth residents age 17 or younger.

“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 greenhouse gas pollution charges and the greenhouse gas pollution charges rebate fund, both established pursuant to this chapter. The department of energy resources shall delegate all collection of greenhouse gas pollution charges, distribution of rebates, and any other appropriate functions to the department of revenue.  The department of revenue will carry out all functions delegated to it by the department of energy resources.

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

25A:13A Greenhouse gas pollution schedule and charges

Section 13A. (a) The commissioner of energy resources shall, using the best information and science reasonably available, consider whether to identify any greenhouse gas-emitting matter, in addition to natural gas, petroleum, coal, and any solid, liquid or gaseous fuel derived therefrom, as a greenhouse gas-emitting priority for the purposes of this chapter; except that emissions from farm animals and crops shall not be designated greenhouse gas-emitting priorities.

(b) Government agencies whose primary purpose is to provide public transportation by bus, van, rail, ferry or other means that reduce the amount of driving by private motor vehicles shall be exempt from the greenhouse gas pollution charges.

(c) Greenhouse gas-producing substances used in power plants regulated by the Regional Greenhouse Gas Initiative, as defined in 310 CMR 7.70(1)(b), shall be exempt from the greenhouse gas pollution charges.

(d) The DOR commissioner, in consultation with the commissioner of energy resources shall collect greenhouse gas pollution charges on the distribution or sale of greenhouse gas-emitting priorities. The charge in the first year of operation shall be $20 per ton of CO2e. Said charges shall increase by $5 every year until the rate is $40 per ton of CO2e. In the fourth 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 greenhouse gas pollution 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 13C(h)(3) of this chapter, to mitigate serious  harm to economic sectors, economic sub-sectors or individual employers of the  commonwealth caused by collection of greenhouse gas pollution charges.

(e) The commissioner of energy resources shall determine the schedule of greenhouse gas pollution charges authorized under this chapter by multiplying the CO2e of each greenhouse gas-producing substance by the charge or charges established herein. For the purpose of calculating said schedule, the commissioner of energy resources, in consultation with the commissioner of environmental protection and the DOR commissioner, shall determine the average CO2e per unit of each greenhouse gas-producing substance. For substances where the CO2e per unit is not precisely known, because the rate of leakage of the substance into the atmosphere is uncertain or for other reasons, the commissioner shall use the best available information to estimate the average CO2e per unit of the substance used in the Commonwealth. 

(f) The DOR 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 of a greenhouse gas-producing substance.

(g) Greenhouse gas-emitting priorities may produce GHG emissions prior to and subsequent to their combustion or other use within the Commonwealth, including emissions during extraction, refining, processing, transportation, and disposal. Such emissions may be significant in relation to the emissions from combustion or other use within the Commonwealth. Within three (3) years of this act coming into effect, the commissioner of energy resources shall issue a report and recommendations to the General Court as to whether such “lifecycle” emissions should have the greenhouse gas pollution charge applied to them. 

(h) Notwithstanding any general or special law to the contrary, the charges authorized under this section shall not be imposed on any greenhouse gas-producing substance if such imposition is superseded by federal law or regulation.

25A:13B Green Infrastructure Fund

Section 13B

(a) There shall be established on the books of the commonwealth a separate fund to be known as the Green Infrastructure Fund (GIF). The DOR commissioner shall deposit 20% of proceeds collected under section 13A into said fund. The Green Infrastructure Fund will support investments in transportation, resiliency and clean energy projects that reduce greenhouse gas emissions, prepare for climate change impacts, assist low-income households and renters in reducing their energy costs, and create local economic development and employment.

(1) The Green Infrastructure Fund shall distribute 85 (eighty five) percent of its funds to municipalities, or to groups of municipalities acting together, or to regional agencies that represent municipalities or provide services to residents of municipalities, to accomplish the following purposes:

(i) Reduce greenhouse gas emissions from the transportation sector;

(ii) Strengthen natural systems and harden critical infrastructure to increase resiliency to climate change impacts; and

(iii) Support municipal energy efficiency and renewable energy projects that reduce emissions and costs

(2) The Green Infrastructure Fund shall distribute 15 (fifteen) percent of its funds for measures and programs to improve the energy efficiency of renter-occupied dwellings and to reduce energy costs for the occupants of said dwellings.

(3) Disbursements shall be awarded following approval by the Green Infrastructure Fund Board of Directors. 

(4) Priority disbursements will be awarded to projects that concur with investment principles established by the Board, in consultation with the Green Infrastructure Fund Task Force and the public.

(5) The commissioner of energy resources, in consultation with the DOR commissioner and the commissioner of environmental protection, may conclude that as the pollution charges grow in future years all the funds available cannot be cost-effectively spent by municipalities, groups of municipalities, or regional agencies and for energy efficiency measures in renter-occupied dwellings. Should the commissioner of energy resources make such a determination, he or she may order that a portion of the revenues designated for the Green Infrastructure Fund be used for programs that are authorized by state laws or regulations, and that reduce greenhouse gas pollution through funding energy efficiency, renewable energy, and/or public transportation.

(b)Equity

At least one-third of funding from the Green Infrastructure Fund shall be distributed to neighborhoods, municipalities, groups of municipalities, or regional agencies representing neighborhoods or municipalities whose median incomes per household are in the lowest third of median incomes for all municipalities in the Commonwealth. For purposes of this paragraph, to calculate the lowest third the median income of each municipality shall be weighted by the number of households in the municipality. 

(c) Governance

(1) A Green Infrastructure Fund Board of Directors shall be created, with its members chosen by the Governor of the Commonwealth. The Secretary of the Executive Office of Energy and Environmental Affairs shall serve as Chair of the  Green Infrastructure Fund Board,

with 8 additional members: (i) two representatives from regional planning associations representing difference regions of the state; (ii) the Department of Transportation; (iii) the Department of Environmental Protection, (iv) the Department of Energy Resources; (v) the Department of Housing and Community Development, (vi) the Office of the Treasurer, and (vii) the Massachusetts Clean Energy Center

(2) A Green Infrastructure Fund Task Force shall be created, with its members chosen by the Governor of the Commonwealth. It shall include 5 members representing the interests of: business, labor, the environment, low income, and community development organizations

(3) The Green Infrastructure Fund shall be administered by the Massachusetts Clean Energy Center using up to 5% of Green Infrastructure Fund proceeds to cover administrative costs, including support from expert consultants

25A:13C Greenhouse gas pollution charges fund

Section 13C. (a) There shall be established on the books of the commonwealth a separate fund to be known as the greenhouse gas pollution charges fund. The DOR commissioner shall deposit into said fund all proceeds collected under section 13A that remain after distribution of funds to the Green Infrastructure 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 DOR commissioner shall disburse all greenhouse gas pollution charge proceeds as follows. The aggregate amount of money attributable to purchase or use of greenhouse gas-emitting priorities by households shall be put into a household fund that is part of the greenhouse gas pollution charges fund. The aggregate amount of money attributable to purchase or use of greenhouse gas-emitting priorities by employers, or by other non-household entities, shall be put into an employers fund that is part of the greenhouse gas pollution charges fund. The DOR 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) Of the funds remaining in the household fund after the transfer to the green infrastructure fund, 25 percent of the total funds shall be used as follows:

Ten (10) percent of the household rebate fund shall be distributed to households in quintile 1, as defined in Section 1 above. This 10 percent shall be divided by the sum of the adults in quintile one plus one-half the minors in quintile one, with the resulting number termed the “quintile 1 initial rebate.” Each household in quintile 1 shall receive a rebate equal to the number of adults in the household times the quintile 1 initial rebate, plus the number of children in the household times one-half the quintile 1 initial rebate.

Ten (10) percent of the household rebate fund shall be distributed to the households in quintile 2. This 10 percent shall be divided by the sum of the adults in quintile 2 plus one-half the minors in quintile 2, with the resulting number termed the “quintile 2 initial rebate.” Each household in quintile 2 shall receive a rebate equal to the number of adults in the household times the quintile 2 initial rebate, plus the number of children in the household times one-half the quintile 2 initial rebate.

Five (5) percent of the household rebate fund shall be distributed to the households in Quintile 3. This five (5) percent shall be divided by the sum of the adults in quintile 3 plus one-half the minors in quintile 3, with the resulting number termed the “quintile 3 initial rebate.” Each household in quintile 3 shall receive a rebate equal to the number of adults in the household times the quintile 3 initial rebate, plus the number of children in the household times one-half the quintile 3 initial rebate.

(d) The DOR commissioner shall calculate the funds that will remain in the household fund after the allocation of funds in Section 13B(c) is carried out. Of these remaining funds, the DOR commissioner shall calculate the funds that derive from charges collected on the sale of motor vehicle fuel to households and the funds that derive from charges collected on the sale of heating fuels to households, based on the percentage that each constituted of the household fund before any allocations were made from it.

(e) From the funds that derive from charges collected on the sale of motor vehicle fuel to households, residents of rural municipalities shall receive a motor vehicle fuel rebate that is greater than the rebate provided for residents of non-rural households. For the purposes of this paragraph, a rural municipality is one in which the number of residents in the municipality is less than or equal to 500 per square mile of land in the municipality. The DOR Commissioner shall calculate the rebate shares of rural households by taking the sum of all adults in rural households and adding to it one-half the sum of minors in rural households. The DOR Commissioner shall calculate the rebate shares of non-rural households by taking the sum of all adults in non-rural households and adding to it one-half the sum of minors in non-rural households.

The DOR Commissioner shall divide the funds that derive from charges collected on the sale of motor vehicle fuel to households by the sum of the rebate shares of non-rural households and 1.3 times the rebate shares of rural households. The result shall be the rebate per non-rural adult attributable to charges collected on motor vehicle fuel. Each non-rural household shall receive a rebate equal to the rebate per non-rural adult times the number of adults in the household, plus the rebate per non-rural adult times one-half the number of minors in the household. Each rural household shall receive a rebate equal to 1.3 times the rebate per non-rural adult times the number of adults in the household, plus 1.3 times the rebate per non-rural adult times one-half the number of minors in the household.

(f) Ten (10) percent of the funds calculated in Section 13B(d) that derive from charges collected on the sale of heating fuels to households shall be allocated to the Commonwealth’s Low Income Home Energy Assistance Program and transferred to the department of housing and community development for incorporation into that program.

(g) The funds remaining in the household fund after the allocation of funds in Section 13B(f) shall be divided by the total rebate shares, as defined in Section 1 above, with the resulting number termed the “remaining rebate per adult.” Each household shall receive a rebate equal to the remaining rebate per adult times the number of adults in the household plus the remaining rebate per adult times one-half number of children in the household. 

(h) In rebating greenhouse gas pollution charge proceeds, the DOR Commissioner shall coordinate with officials of the department of energy resources, 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, so that they can receive rebates expeditiously.

(i) After distribution of 20 (twenty) percent of the money in the employers fund to the green infrastructure fund, the DOR commissioner shall use the remaining money in the employers fund to provide rebates to employers.

(1) The DOR commissioner 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.

(2) The DOR commissioner, in consultation with the commissioner of energy resources and the commissioner of housing and economic development, shall, with special attention to manufacturing, identify economic sectors or economic sub-sectors 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 or subsectors and may apportion part or all of said proceeds to the affected sector or sub-sector. In order to provide such mitigation, the DOR commissioner shall show that such impacts are likely to occur, due to competition from employers outside the Commonwealth in combination with energy costs constituting a substantial fraction of total operating costs in the economic sector or sub-sector.

(3) In rebating greenhouse gas pollution charge proceeds, the DOR commissioner 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.

(4) The DOR commissioner 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 in the aggregate all charges collected under this chapter, except for those funds placed in the fund for green infrastructure.

25A:13D Regulations; Miscellaneous

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

(b) The DOR 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 and on a regular basis throughout the revenue cycle. The method and schedule of distributions shall take into account (1) the needs of residents and employers, particularly low-income households, to obtain rebates corresponding to the time schedule in which they will be paying greenhouse gas pollution charges; (2) the need to make clear to residents and employers that they are receiving a rebate of pollution charges that is separate from other transactions they may have with the Commonwealth; and (3) the need to keep administrative costs of the system low, given that purposes (1) and (2) of this paragraph are also achieved.

(c) The commissioner of energy resources, commissioner of revenue, and secretary of housing and economic development shall jointly identify, on an annual basis, measures and programs best calculated to ensure the provision of low-income energy assistance and improvements in the energy efficiency of renter-occupied dwellings in the commonwealth. 

(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) The commissioner shall study the feasibility of imposing and collecting additional greenhouse gas emission charges on emissions, otherwise known as fugitive emissions, attributable to leakage from natural gas infrastructure.  The report shall include an analysis of the feasibility and expense of (i) calculating a reasonably accurate current statistical baseline, specific to the Commonwealth, of such emissions, and (ii) developing and deploying a means of calculating reasonably accurate updates of progress or lack thereof in reducing such emissions.  Within nine months of the effective date of this act, the commissioner shall submit the 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.

(f) 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.