SECTION 1. Chapter 23J of the General Laws is hereby amended by inserting after section 12, as appearing in the 2014 Official Edition, the following 6 sections:-
Section 13. “Carbon dioxide equivalent” (“CO2e”), a unit of measure denoting the equivalent mass of carbon dioxide that produces the same amount of global warming impact as a certain mass of any greenhouse gas over 10 years, as found by the Energy Information Administration of the United States Department of Energy.
“Electricity fuel mix”, the mix of fuels for any 3-month period used to create electricity by generators within the control area of ISO-NE.
“Employer”, any person, state agency, legal business, whether for profit or not for profit, or local governmental body who is located in Massachusetts and employs Massachusetts residents.
“Fossil fuel” coal, natural gas, or any petroleum product intended to be burned for electricity generation, heating, or transportation.
“ISO-NE”, the Independent System Operator-New England, the regional transmission organization for New England licensed by the Federal Energy Regulatory Commission pursuant to the Federal Power Act of 1935.
“Resident”, as defined in section 1 of chapter 62.
Section 14. (a) To correct the negative externality of carbon pollution, the center shall assess and collect a price at the first point of sale within the commonwealth on all fossil fuels, at the rate specified in accordance with this section.
(b) Any entity which is the first seller of petroleum products to be consumed or distributed within the commonwealth shall pay the price on a quarterly basis to the center to account for the sale of such petroleum products at their first point of sale within the commonwealth for consumption or distribution within Massachusetts. The center shall identify all such entities which are the first seller of petroleum products within the state and ensure payments are properly made.
(c) Any distributor of electricity, including investor-owned utilities, municipal utilities, and all competitive suppliers of electricity to end users, shall pay the price quarterly to the center to account for all electricity such distributers buy directly from a generation station outside of the commonwealth, on a per-kilowatt-hour basis. The CO2e of every kilowatt hour of electricity shall be determined by taking the weighted average of the natural gas, coal, and oil portions of the fuels used to generate the electricity and multiplying each of those portions separately by the amount of CO2e emissions created per kilowatt hour of electricity produced by each such fuel, as those carbon intensity levels are from time to time determined by the Energy Information Agency of the United States Department of Energy. Distributors of electricity shall pay a weighted average in the same manner for the natural gas, coal, and oil portions of the ISO-NE electricity fuel mix for electricity that the distributor purchased on the ISO-NE spot market in the past quarter; provided that the center shall create a formula to estimate the portion of the ISO-NE mix which was generated in the commonwealth, and that portion shall be subtracted from the price.
Each supplier of electricity shall pass along the full cost of the price to all electricity customers, in a fully reconciling rate mechanism based upon a per-kilowatt-hour charge as a new line labeled “Carbon Pollution Price” on the generation side of electric bills of all classes of ratepayers.
(d) Any entity in the commonwealth which has bought carbon allowances through the regional greenhouse gas initiative clearing auctions in the past quarter shall be reimbursed quarterly by the center, provided that such reimbursement may not be greater than the total increased expenses which the center estimates the entity has incurred due to the price in the past quarter.
(e) Any local distribution company for natural gas shall pay the price quarterly to the center on behalf of all of its distribution customers. The price shall be calculated by multiplying the number of cubic feet of natural gas used by each customer by the amount of CO2e released by burning 1 cubic foot natural gas, as that value is from time to time determined by the Energy Information Agency of the United States department of energy.
The local distribution company for natural gas shall pass on the cost of the carbon price to end users in proportion to the amount of natural gas each customer uses.
(f) The department of energy resources shall estimate the amount of CO2e released in the form of escaped methane due to the extraction, transport, or distribution of natural gas before the point of consumption in Massachusetts, and the center shall add an additional per-cubic-foot charge commensurate with that estimate to the price for all natural gas or natural-gas-based electricity, based on the rate specified in this section.
(g) The price assessed on a given amount of fossil fuel shall be the number of metric tons of CO2e that would be released if that amount of fossil fuel were burned, excluding any carbon dioxide that is to be permanently sequestered, times the carbon price rate. The carbon price rate shall be $15 per metric ton from January 1, 2018 through June 30, 2018 and during the entirety of fiscal year 2019, and shall increase by $10, adjusted for inflation, every fiscal year thereafter. In any year in which the U.S. Federal government charges a similar price on fossil fuels, the Massachusetts rate shall be reduced by an amount equal to the Federal rate, provided however that the Massachusetts rate may not be less than zero.
(h) All money collected pursuant to this section shall be deposited in the Clean Energy Dividend Fund established in section 2WWWW of chapter 29.
Section 15. (a) Within 2 weeks after the end of each fiscal year quarter, the center, in coordination with the state treasurer, shall issue a check drawn from the Clean Energy Dividend Fund to every household in Massachusetts and every employer in Massachusetts, labeled “Clean Energy Dividend,” in an amount to be determined pursuant to this section. The center shall ensure that individuals and families who are homeless, in transition, or otherwise may not receive checks in the mail shall still receive their dividend in any other appropriate manner determined by the center. Such checks for residents shall include the following description: “Massachusetts has a carbon pricing system to account for the pollution content of fossil fuels. You are receiving this check because you are a resident of Massachusetts. This check is for an amount proportional to the number of adult residents in this household. You may use this money to cover the slight increases in energy prices you may notice, or if you use less energy in any way, you may consider this check additional, tax-exempt, income, and spend it on whatever you like. These quarterly dividend checks will increase as revenue from the carbon price increases.” Such checks for employers shall include the following description: “Massachusetts has a carbon pricing system to account for the pollution content of fossil fuels. You are receiving this check because you are an employer in Massachusetts. This check is for an amount proportional to the number of full-time-equivalent employees you employ in Massachusetts. You may use this money to cover the slight increases in energy prices you may notice, or if you use less energy in any way, you may consider this check additional, tax-exempt, income, and spend it on whatever you like. These quarterly dividend checks will increase as revenue from the carbon price increases.” For checks to households in rural municipalities, a note substantively similar to “Because you live in a rural municipality, your per-person dividend is slightly higher than that for residents of non-rural municipalities” shall be added to the description.
(b) The center shall estimate the net increase in energy costs due to the carbon price for the preceding quarter for an average single-person household at the 60th percentile of income for Massachusetts. Such estimated figure shall be made public by the center and shall be known as the per-person sum.
(c) The clean energy dividend sent to each household shall be in an amount equal to the per-person sum multiplied by the number of residents 18 years of age or older in that household, plus the “rural rebate amount” as defined below.
(d) The dividend check to each employer shall be in an amount equal to the per-person sum multiplied by the full-time-equivalent number of employees employed in Massachusetts by that employer, provided, that any person who would not be considered an employee under chapter 151A shall not count as an employee; provided, further, that only bona fide employees working in the commonwealth shall be counted.
(e) The “rural rebate amount” shall be 0.2 multiplied by the per-person amount for households residing in rural municipalities and 0 for households residing in other municipalities. For the purposes of this paragraph, a “rural municipality” shall mean a municipality in which residents drive, on average, 130 per cent or more per year of the statewide average number of miles driven per household in the commonwealth.
(f) The dividend check sent pursuant to this section shall not be considered income for purposes of chapter 62 or chapter 63.
Section 16. (a) At any time when the actual balance of the Clean Energy Dividend Fund, established in section 2WWWW of chapter 29, is less than the amount needed to cover clean energy dividend disbursements made pursuant to section 15, the per-person sum shall be equal to the total balance of the fund, minus reasonable administrative costs, divided by the sum of:
(i) 1.2 multiplied by the number of adult residents in the commonwealth who reside in rural municipalities;
(ii) the number of adult residents of the commonwealth who reside in municipalities other than rural municipalities; and
(iii) the full-time-equivalent number of employees who would count in calculations of employer dividends for the purposes of subsection (d) of section 15.
(b) Dividends shall then be administered as usual in accordance with subsections (c)-(f) of section 15.
Section 17. (a) The center shall create or partner with other entities to create at least 1 independent facility to manufacture, test, and demonstrate emerging battery technologies. The facility shall carry out coordinated manufacturing of test cells based on sound lab-stage ideas or by contract with private companies, conduct tests and relevant measurements or contract with other facilities to do so, and build testbed facilities and demonstration sites to prove new battery technologies at commercial scale, including grid-scale demonstration. The facility may provide or assist in applications for grants to university labs that partner with the facility to work out engineering issues with technologies as they develop. The Clean Energy Technology Commission established pursuant to section 18 shall oversee this facility. To the extent appropriate, a statewide coalition of partners shall be consulted or formally organized to carry out the purposes of this section.
(b) The center may also create similar pre-commercialization facilities or projects for other realms of energy technology including but not limited to other battery technologies, non-battery energy storage systems, solar fuels, atmospheric carbon sequestration, and biofuels. The Clean Energy Technology Commission established pursuant to section 18 shall oversee such pre-commercialization facilities.
Section 18. There is hereby established the Clean Energy Technology Commission to consist of 1 appointee of the Governor, who may not be an elected official, 1 appointee of the speaker of the house of representatives, who may be a member of the general court, 1 appointee of the senate president, who may be a member of the general court, and 2 members with expertise in technology development and commercialization to be appointed jointly by the other 3 members. The 5 voting commission members shall choose 1 of themselves to serve as chair and coordinate the functions of the commission and the facilities it oversees. The executive director of the center shall always be a nonvoting member of the commission and may not be appointed as 1 of the 5 voting members.
The commission shall hire the director of each facility or project created pursuant to section 17, and shall advise and assist in the coordination of goals and operations of such facilities. The commission shall make recommendations to the general court on appropriations to further the work of the battery testing facility and any other such facilities.
The commission shall create programs tied to the pre-commercialization facilities to help bring proven technologies to the point of full-scale manufacturing in the commonwealth, with special attention to connecting with and building expertise and capacity in the industry. The commission shall form partnerships with existing companies with large-scale engineering or manufacturing expertise and capacity, to bring new technologies quickly into production.
SECTION 2. The General Laws are hereby amended by inserting after chapter 23M the following chapter:-
CHAPTER 23N. THE MASSACHUSETTS CLEAN ENERGY TRUST
Section 1. For purposes of this chapter, the following words shall, unless the context clearly requires otherwise, have the following meanings:
“Board”, the board of trustees establishes in section 2.
“Center”, the Massachusetts Clean Energy Technology Center established in chapter 23J.
“Fund”, Massachusetts Clean Energy Fund established in section 2XXXX of chapter 29.
“Trust”, Massachusetts Clean Energy Trust established in this chapter.
Section 2. (a) An unpaid board of trustees consisting of the state treasurer, ex officio, the executive director of the center, ex officio, and the commissioner of the department of energy resources, ex officio, is hereby constituted as a public instrumentality of the commonwealth to be known as the Massachusetts Clean Energy Trust to administer the Massachusetts Clean Energy Fund established in section 2XXXX of chapter 29 and for the purpose of financing clean energy development and deployment pursuant to this chapter. The trust is hereby constituted a public instrumentality and the exercise by the trust of the powers conferred by this chapter shall be considered to be the performance of an essential governmental function.
(b) The state treasurer shall serve as chairperson of the board of trustees of the trust. The board shall annually elect 1 of its members as vice-chairperson. Each member of the board may appoint a designee pursuant to section 6A of chapter 30. Two members of the board of trustees shall constitute a quorum and the affirmative vote of 2 trustees shall be necessary and shall suffice for any action taken by the board. Any action of the board may take effect immediately and need not be published or posted unless otherwise provided by law. No vacancy in the membership of the board shall impair the right of a quorum to exercise the powers of the board. The trust shall be subject to all provisions of said chapter 30A; provided, however, that the provisions of said chapter 30A shall not apply to rules, regulations, procedures and guidelines adopted by the board pursuant to this chapter, and records pertaining to the administration of the trust shall be subject to the provisions of section 42 of chapter 30 and section 10 of chapter 66. All monies of the trust shall be deemed to be public funds for purposes of chapter 12A. The operations of the trust shall also be subject to the provisions of chapter 268A and chapter 268B to the same extent as the office of the state treasurer.
Section 3. (a) The purposes for which the trust is created and for which the fund shall be received, held, administered and disbursed by the board of trustees shall be the provision of financial assistance for clean energy development and deployment as necessary to implement the provisions of this chapter. The board shall apply and disburse monies and revenues of the fund without appropriation or allotment by the commonwealth.
(b) Without limiting the generality of the foregoing and other powers of the trust, the board of trustees shall have the power:
(i) to adopt and amend by-laws and such rules, regulations and procedures for the conduct of the business of the trust as the board shall deem necessary to carry out the provisions of this chapter;
(ii) to apply for, receive, administer and comply with the conditions and requirements respecting any grant, gift or appropriation of property, services or monies;
(iii) to issue and sell bonds and apply the proceeds thereof for the purposes of this chapter, including for the provision of funds to finance projects that qualify pursuant to subsection (b) of section 7, and to pledge or assign or create security interests in the fund and the receipts thereto to secure bond;
(iv) to make loans and other forms of financial assistance for clean energy development and deployment, including funding for projects that qualify pursuant to subsection (b) of section 7;
(v) to enter into contracts, arrangements and agreements with other persons and execute and deliver all trust agreements, loan agreements and other instruments necessary or convenient to the exercise of the powers of the trust;
(vi) to obtain insurance and enter into agreements of indemnification necessary or convenient to the exercise of the powers of the trust;
(vii) to sue and be sued and to prosecute and defend actions relating to the affairs of the trust and the fund; provided, however, that the trust is not authorized to become a debtor under the United States Bankruptcy Code;
(viii) to engage accounting, management, legal, financial, consulting and other professional services necessary to the conduct of the programs of the trust;
(ix) to enage and consult with the Massachusetts clean energy technology center for the implementation of sections 5 to 9, inclusive.
(c) The trust shall not be authorized or empowered (1) to be or to constitute a bank or trust company within the jurisdiction or under the control of the department of banking and insurance of the commonwealth or the comptroller of the currency or the treasury department of the United States, or (2) to be or constitute a bank, banker or dealer in securities within the meaning of, or subject to the provisions of, any securities, securities exchange or securities dealers' law of the United States or the commonwealth.
Section 4. (a) The board of trustees shall receive in trust, hold, administer and disburse the following monies:
(i) disbursements from the Clean Energy Dividend Fund established in section 2WWWW of chapter 29;
(ii) amounts appropriated by the commonwealth to the trust for purposes of the fund;
(iii) proceeds of bonds of the trust to the extent required by the board's resolution for issuance of such bonds or any applicable trust agreement;
(iv) loan repayments and other payments received by the trust;
(v) investment earnings on monies in the fund; and
(vi) any other amounts required to be credited to the fund by any law, any federal or state grant contract, any loan agreement or trust agreement of the board or which the board shall otherwise determine to deposit therein.
(b) Whenever the board takes discretionary action, it shall be guided by the purpose of best effecting the purposes of this chapter to support the financing of the development and deployment of clean energy systems. The provisions of section 6B of chapter 29 shall not apply to grants received by the trust for purposes of the fund from the United States. The state treasurer shall be the treasurer-custodian of the fund, and, subject to any applicable trust agreement, the state treasurer is authorized to invest monies held in the fund in such investments as may be legal investments for funds of the commonwealth.
(c) The trust may establish in any trust agreement or otherwise as the board shall determine 1 or more other funds and accounts for revenues and other monies of the trust not required to be held in the fund and to apply and disburse such monies and revenues to the purposes of the trust.
Section 5. In consultation with the center, the trust shall develop a comprehensive application process by which persons may submit projects to be reviewed and approved by the center; provided, however, no project shall be approved unless it is qualified pursuant to subsection (b) of section 7. An approved project shall be considered a qualifying plan. Once approved by the center, the center shall notify the trust in writing and the trust shall enter into funding agreements with the proponents of such qualifying plans which shall detail the terms of any disbursement of funds from the trust for the plan and specific terms for the repayment or recoupment of funds. The center may promulgate rules and regulations necessary to implement this section and section 7.
Section 6. In consultation with the center, the board shall establish proactive procedures for identifying and acting on opportunities to promote clean energy technology development or deployment.
Section 7. (a) The trust shall offer loans, loan guarantees, debt securitization, insurance, portfolio insurance, and other forms of financing support or risk management for qualified projects, carried out by public or private entities.
(b) A project shall be qualified if the center determines that it is a project involving the deployment of technologies or changes to systems that will:
(i) reduce carbon emissions, accounting for lifetime emissions of carbon dioxide, methane, and other greenhouse gases;
(ii) break even, have a net savings, or make a profit for the trust over a period of 30 years;
(iii) reduce energy costs to all end-users in the covered area; and
(iv) be carried out in Massachusetts.
Section 8. The trust may issue dividends to entities which can demonstrate that they permanently sequester atmospheric carbon dioxide, including relevant agricultural entities. Entities may apply to the center and shall be certified by a process to be determined by the trust and the center. Dividends shall be issued annually in an amount equal to the total number of metric tons of carbon dioxide sequestered, as verified by the center, times the current price per metric ton of the carbon price set forth in section 14 of chapter 23J.
Section 9. At least 10 per cent of any new revenue received each year by the trust shall be disbured into the Massachusetts Clean Energy Technology fund established in section 2YYYY of chapter 29 for grants or capital costs to carry out coordinated technology development and demonstration projects pursuant to section 17 of chapter 23J, which shall not be subject to the requirements of subsection (b) of section 7, but which shall be carried out in Massachusetts and shall focus on developing, prototyping, testing, proving, or demonstrating technologies that once proven would be commercially viable and useful for projects that qualify pursuant to said subsection (b) of said section 7.
SECTION 3. Chapter 29 of the General Laws is hereby amended by inserting after section 2VVVV, inserted by section 41 of chapter 133 of the acts of 2016, the following 3 sections:-
Section 2WWWW. There shall be a Clean Energy Dividend Fund to be administered by the Massachusetts Clean Energy Technology Center to consist of: (i) money collected pursuant to section 14 of chapter 23J; (ii) appropriations or other monies authorized by the general court and specifically designated to be credited to the fund; and (iii) funds from public or private sources, including, but not limited to, gifts, grants, and donations. No money from the fund shall be made available for the general operations of the government. Money in the fund shall be available without appropriation in accordance with sections 15 and 16 of chapter 23J.
Up to 2 per cent of money deposited into the fund each year shall be available to cover administrative costs associated with implementing sections 14, 15, and 16 of chapter 23J. Any remaining balance after clean energy dividends and Regional Greenhouse Gas Initiative reimbursements are paid pursuant to said section 15 of said chapter 23J and after administrative costs are paid, shall be deposited into the Massachusetts Clean Energy Fund established in section 2XXXX.
Section 2XXXX. There shall be established and set up on the books of the commonwealth a separate fund, to be known as the Massachusetts Clean Energy Fund, consisting of amounts credited to the fund under section 2WWWW and chapter 23N. The fund shall be administered under said chapter 23N by the board of trustees of the Massachusetts Clean Energy Trust created under that chapter and shall be held in trust exclusively for the purposes described in that chapter. The state treasurer shall be treasurer-custodian of the fund and shall have the custody of its monies and securities.
Section 2YYYY. There shall be a Massachusetts Clean Energy Technology Fund to be administered by the Massachusetts Clean Energy Technology Center to consist of: (i) disbursments made pursuant to section 9 of chapter 23N; (ii) appropriations or other monies authorized by the general court and specifically designated to be credited to the fund; and (iii) funds from public or private sources, including, but not limited to, gifts, grants, and donations. No money from the fund shall be made available for the general operations of the government. Money in the fund shall be available without appropriation for grants or capital costs to carry out coordinated technology development and demonstration projects pursuant to section 17 of chapter 23J, subject to the provisions of said section 9 of said chapter 23N.
SECTION 4. Chapter 63 of the General Laws is hereby amended by inserting after section 38FF the following section:-
Section 38GG. (a) Any company that qualifies pursuant to subsection (b) shall be exempt from all state taxes and excises due pursuant to this chapter and chapter 62 provided that the company has been certified pursuant to subsection (c).
(b) A company shall qualify for the exemption established in this section if it meets all of the following criteria:
(i) The company is headquartered in Massachusetts;
(ii) The company and any corporations of which it is a subsidiary are owned by a person or entity based in Massachusetts;
(iii) The company has more than 80 per cent of its employees and contractors in Massachusetts; and
(iv) At least 90 per cent of the company’s operations are research, development, demonstration, or manufacturing of technologies that reduce overall greenhouse gas emissions while providing energy more cheaply to end-users.
(c) The Massachusetts clean energy technology center shall certify companies as qualifying under this section. The center shall adopt a procedure to accept and review applications by companies to be qualified in accordance with this section.
SECTION 5. Subsection (f) of section 1A of chapter 164 of the General Laws, as amended by sections 1 and 2 of chapter 75 of the acts of 2016, is hereby further amended by striking out the first sentence and inserting in place thereof the following sentence:-
Neither this section nor sections 1B to 1H, inclusive, shall preclude an electric company or a distribution company from constructing, owning and operating generation facilities that produce solar or wind energy.
SECTION 6. Said chapter 164 is hereby amended by inserted after section 1L the following section:-
Section 1M. Notwithstanding any general or special law to the contrary, electric companies, distribution companies and municipal-owned electric utilities, may own and operate an unlimited amount of solar or wind generation capacity, excluding residential solar capacity, provided however that in any year the amount of new solar or wind capacity installed by, installed on the property of, or owned by an electric company or distribution company may not exceed the amount of other new solar or wind capacity that company has interconnected within its distribution area during the same year.
SECTION 7. Section 138 of said chapter 164 is hereby amended by striking out, in line 72, as appearing in the 2014 Official Edition, the words “but less than or equal to 2 megawatts”.
SECTION 8. Section 139 of said chapter 164 , as amended by sections 5 and 6 of chapter 75 of the acts of 2016, is hereby further amended by striking out subsection (f) and inserting in place thereof the following subsection:-
(f) For the purpose of calculating the aggregate capacity, the capacity of a solar net metering facility shall be 80 per cent of the facility’s direct current rating at standard test conditions and the capacity of any other net metering facility shall be the nameplate rating.
SECTION 9. To provide necessary infrastructure for clean energy technology development and deployment, the Governor shall direct all relevant executive offices to provide a thorough and speedy set of recommendations for infrastructure improvements and investments in their areas of expertise or jurisdiction, which lists shall be finalized by December 1, 2017. The Governor shall carry out such recommendations which the Governor is already empowered to carry out, and shall recommend to the General Court further measures which would provide useful infrastructure for the development and deployment of clean energy technologies and the expansion and retention of a thriving clean energy and energy storage industry in Massachusetts.
SECTION 10. To open the energy system for innovation, competition, and commercialization of technologies, the Governor shall conduct a thorough and speedy review of all regulations which affect the research, testing, demonstration, manufacturing, and installation of clean energy and energy storage technologies, and shall repeal or revise any regulation that is burdensome to the same. Such review shall be completed and its findings implemented no later than December 1, 2017.
Nothing in this section shall be construed to prevent the promulgation and enforcement of regulations necessary to protect the safety and health of residents of the Commonwealth.
SECTION 11. The Massachusetts Clean Energy Technology Center shall publish and begin to collect the additional charge required pursuant to subsection (f) of section 14 of chapter 23J of the General Laws on or before December 10, 2018.
SECTION 12. Section 38G of chapter 63 of the General Laws shall apply for fiscal years 2019 to 2023, inclusive, and shall thereafter be repealed.
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