Bill S.2154

SENATE DOCKET, NO. 1596 FILED ON: 2/17/2021

SENATE . . . . . . . . . . . . . . No. 2154

By Mr. Cyr, a petition (accompanied by bill, Senate, No. 2154) of Julian Cyr for legislation to provide for the investment in and expansion of the offshore wind industry in the Commonwealth. Telecommunications, Utilities and Energy.

The Commonwealth of Massachusetts

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In the One Hundred and Ninety-Second General Court
(2021-2022)

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An Act to provide for the investment in and expansion of the offshore wind industry in the Commonwealth.

Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority of the same, as follows:

SECTION 1. To provide for supplementing certain items in the general appropriation act and other appropriation acts for fiscal year 2022 the sums set forth in section 2 are hereby appropriated from the General Fund unless specifically designated otherwise in this act or in those appropriation acts, for several purposes and subject to the conditions specified in this act or in those appropriation acts, and subject to the laws regulating the disbursement of public funds for the fiscal year ending June 30, 2022; provided, however that notwithstanding any general or special law to the contrary, appropriations made in this act shall not revert and shall be available for expenditure until June 30, 2023. These sums shall be in addition to any amounts previously appropriated and made available for the purposes of those items.

SECTION 2. To provide for a program of infrastructure development, improvements and various capital investments, the sums set forth in this section for the several purposes and subject to the conditions specified in this act, are hereby made available, subject to the laws regulating the disbursement of public funds and approval thereof.

EXECUTIVE OFFICE OF ENERGY AND ENVIRONMENTAL AFFAIRS

Massachusetts Clean Energy Center

2000-0110. For the Massachusetts Offshore Wind Industry Investment Fund established by section 9A of chapter 23J of the General Laws; provided, however that $50,000,000 shall be used for port infrastructure development and revitalization in the commonwealth for the purpose of supporting the offshore wind industry …………………………………..………$500,000,000

SECTION 3. Section 1 of chapter 23J of the General Laws, as so appearing in the 2018 Official Edition, is hereby amended by adding after the definition of “fund” the following definition:-

“Offshore wind company”, a business corporation, partnership, firm, unincorporated association or other entity engaged in offshore wind development, manufacturing or commercialization in the commonwealth and any affiliate thereof, which is, or the members of which are, subject to taxation under chapter 62, 63, 64H or 64I.

SECTION 4. Chapter 23J of the General Laws, as so appearing in the 2018 Official Edition, is hereby amended by adding after section 8 the following new section:-

Section 8A. (a) There shall be established a commonwealth offshore wind industry investment program which shall be administered by the center. The purpose of the program shall be to develop and expand offshore wind industry-related employment opportunities in the commonwealth and to promote renewable energy-related innovations and economic development benefits to the commonwealth by supporting and stimulating siting, development, manufacturing and commercialization in the offshore wind industry. Offshore wind companies certified pursuant to subsection (b) shall be eligible for participation in the program as well as higher education institutions within the commonwealth that offer job training programs or degree program tracks in the clean energy field. Not less than twenty per cent of offshore wind companies that receive investment from the program per calendar year shall be small businesses incorporated within the commonwealth with not more than fifty employees that work full time.

(b) The center may, upon a majority vote of the board, certify a offshore wind company as a certified offshore wind company upon: (i) the timely receipt, as determined by the center, of a certification proposal supported by independently verifiable information, signed under the pains and penalties of perjury by a person expressly authorized to contract on behalf of the offshore wind company and which shall include, but not be limited to: (A) an estimate of the projected new state revenue the offshore wind company expects to generate during the period for which the company seeks certification, together with a plan, including precise goals and objectives, by which the offshore wind company proposes to achieve the projected new state revenue; and (B) documentation of an agreement, if any, between the offshore wind company and banking institutions with which the offshore wind company shall have agreed to establish accounts and by which the banking institutions shall have agreed to commit a specified percentage of the funds deposited in the accounts for loans made thereby to companies under the small business capital access program established pursuant to section 57 of chapter 23A; and (ii) findings made by the center, based on the certification proposal, documents submitted therewith and any additional investigation by the center, and incorporated in its approval, that: (A) the offshore wind company shall meet all statutory requirements and any other criteria that the center may prescribe including, but not limited to criteria in the following areas: the offshore wind company's potential for leveraging additional funding or attracting additional resources to the commonwealth; the offshore wind company's potential to promote offshore wind manufacturing in the commonwealth; and the offshore wind company’s potential to create employment in the commonwealth; and (B) a certified offshore wind company shall meet the new state revenue and employment growth projections, as specified in the certification proposal, over the period for which it receives benefits.

(c) A certified offshore wind company may, upon a majority vote of the board, be eligible for the following benefits which shall be awarded by the board on a competitive basis: (1) benefits from the offshore wind tax incentive program established by subsection (d); (2) grants, loans or other investments from the Massachusetts Offshore Wind Industry Investment Fund established by section 9A; (3) assistance from the center in accessing economic incentive programs within the Massachusetts office of business development, including access to the technical, human, financial, training, educational and site-finding resources necessary to expand or locate in the commonwealth; (4) assistance from the center in obtaining federal grants; (5) preference for funding for offshore wind industry job training programs; or (7) preference for pre-permitted industrial land as identified by the Massachusetts Development Finance Agency.

(d) There shall be established an offshore wind industry tax incentive program. The center, in consultation with the department, may annually authorize incentives, including incentives carried forward or refunded pursuant to subsections (m), (n) and (r) of section 6 of chapter 62, paragraph 17 of section 30 of chapter 63, the second time it appears, section 31M of said chapter 63, the second time it appears, paragraph 6 of subsection (f) of section 38 of said chapter 63, subsection (j) of section 38M of said chapter 63, section 38U of said chapter 63, section 38V of said chapter 63, section 38W of said chapter 63, section 38CC of said chapter 63, the second paragraph of subsection (c) of section 42B of said chapter 63 and subsection (xx) of section 6 of chapter 64H in a cumulative amount, including the current year cost of incentives allowed in previous years, that shall not exceed $30,000,000 annually. The center may, in consultation with the department, limit any incentive to a specific dollar amount or time duration or in any other manner deemed appropriate by the department; provided, however, that the department shall only allocate any such incentives among commonwealth certified offshore wind companies pursuant to subsection (b) and shall award such tax incentives pursuant to subsection (c).

The center shall provide an estimate to the secretary of administration and finance of the tax cost of extending benefits to a proposed project before certification, as approved by the commissioner of revenue, based on reasonable projections of project activities and costs. Tax incentives shall not be available to a certified offshore wind company unless expressly granted by the secretary of administration and finance in writing.

(e)(1) Certification granted pursuant to subsection (b) shall be valid for 5 years starting with the tax year in which certification is granted. Each certified offshore wind company shall file an annual report with the center detailing whether it has met the specific targets established in the proposal pursuant to subclause (A) of clause (i) of subsection (b).

(2) The certification of a offshore wind company may be revoked by the center after an independent investigation and determination that representations made by the certified offshore wind company in its certification proposal are materially at variance with the conduct of the offshore wind company after receiving certification; provided, however, that the center shall review the certified offshore wind company at least annually; provided, further, that a project with an actual return on investment that is less than 70 per cent of the return on investment projected in the certification proposal shall be deemed to contain a material variance for a revocation determination. If the center determines not to revoke certification upon a finding that the actual return on investment for the project is less than 70 per cent, the center shall provide its reasons for the decision in writing to the secretary of administration and finance, the commissioner of revenue and the clerks of the house of representatives and the senate, who shall forward the same to the house and senate committees on ways and means, the joint committee on revenue, the joint committee on telecommunications, utilities and energy, and the joint committee on economic development and emerging technologies. The center shall post these reasons on the internet for public access.

(3) Under this subsection, revocation shall take effect on the first day of the tax year in which the center determines that a material variance commenced. The commissioner of revenue shall, as of the effective date of the revocation, disallow any credits, exemptions or other tax benefits allowed by the original certification of tax benefits under this section. The department shall issue regulations to recapture the value of any credits, exemptions or other tax benefits allowed by the certification under this section; provided, however, that the recapture provisions in subsection (m) of section 6 of chapter 62 and section 38U of chapter 63 shall apply. If the original certification allowed sales and use tax exemptions pursuant to subsection (xx) of section 6 of chapter 64H, the purchaser shall accrue use tax as of the date of revocation on a portion of the sales price on which exemption was claimed that is proportionate to the remaining useful life of the property.

(4) Nothing in this subsection shall limit any legal remedies available to the commonwealth against any certified offshore wind company.

(f) Capital funding may be revoked only by the center after an independent investigation and determination that representations made by the offshore wind company in its certification proposal are materially at variance with the conduct of the offshore wind company after certification; provided, further, that a offshore wind company generating less than 70 per cent of the projected new state revenue in the certification proposal shall be deemed to contain a material variance for the purposes of a revocation determination. If the center does not revoke certification despite said material variance, the center shall provide its reasons for the decision in writing to the secretary of administration and finance, the commissioner of revenue and the clerks of the house of representatives and the senate, who shall forward the same to the house and senate committees on ways and means, the joint committee on bonding, capital expenditures and state assets, the joint committee on telecommunications, utilities and energy, and the joint committee on economic development and emerging technologies. A notice of revocation under this subsection shall specify the date on which the revocation is effective, which shall be the date of the notice or the date on which the center determined that the material variance commenced. The secretary of administration and finance shall, as of the effective date of the revocation, disallow any loans, grants or other benefits allowed by the original certification under this section. The department may issue regulations to recapture any grants or loans allowed by the certification under this section.

(g) The center shall revoke the certification of an offshore wind company when independent investigations conducted in 2 consecutive years determine that representations made by the offshore wind company in its project proposal are deemed materially at variance, pursuant to paragraph (2) of subsection (e) or subsection (f).

(h) The board, in consultation with the executive office of administration and finance, the executive office of energy and environmental affairs, and the executive office of housing and economic development, shall promulgate rules, regulations or guidelines necessary to carry out the provisions of this section.

SECTION 5. Chapter 23J of the General Laws, as so appearing in the 2018 Official Edition, is hereby amended by adding after section 9 the following new section:-

Section 9A. (a) There shall be established and placed within the center a fund to be known as the Massachusetts Offshore Wind Industry Investment Fund, hereinafter in this section referred to as the fund, to be held by the center separate and apart from its other funds. The fund shall be credited any appropriations, bond proceeds or other monies authorized by the general court and specifically designated to be credited thereto, such additional funds as are subject to the direction and control of the center, any pension funds, federal grants or loans, royalties or private investment capital which may properly be applied in furtherance of the objectives of the fund, any proceeds from the sale of qualified investments secured or held by the fund, any fees and charges imposed relative to the making of qualified investments as defined by the center, secured or held by the fund and any other monies which may be available to the center for the purposes of the fund from any other source or sources. Any revenues, deposits, receipts, or funds received through the receipt of royalties, interest, dividends, or the sale of equity instruments shall be deposited in the fund, and shall be available to the center for the purposes described in this section, without further appropriation. All available moneys in the fund that are unexpended at the end of each fiscal year shall not revert to the General Fund and shall be available for expenditure in the subsequent fiscal year.

(b) The center shall invest and reinvest the fund and the income thereof only as follows: (1) making qualified equity investments pursuant to subsection (c); (2) investing funds not required for immediate disbursement in the purchase of such securities as may be lawful investments for fiduciaries in the commonwealth; (3) paying binding obligations associated with such qualified investments which shall be secured by the fund as the same become payable; and (4) paying principal or interest on qualified investments secured by the fund or paying any redemption premium required to be paid when such qualified investments shall be redeemed prior to maturity; provided, however, that monies in the fund shall not be withdrawn at any time in such an amount as would reduce the amount of the fund to less than the minimum requirement thereof established by the board, except for the purpose of paying binding obligations associated with qualified investments which shall be secured by the fund as the same become payable.

(c) The fund shall be held and applied by the center, subject to the approval of the board, to make qualified investments, grants, research and other funding and loans designed to advance the following public purposes for the offshore wind industry in the commonwealth: (1) to stimulate increased financing for the siting and expansion of permanent offshore wind manufacturing facilities in the commonwealth by providing financing for the construction or expansion of such new facilities; (2) to make targeted investments to promote manufacturing activities for new or existing advanced technologies and offshore wind research; (3) to provide funds for the revitalization and infrastructure for ports in the commonwealth to support the offshore wind industry in the commonwealth; (4) to provide workforce training grants to prepare individuals for offshore wind careers; (5) to provide funding for development, coordination and marketing of higher education programs; (6) to make qualified grants to certified offshore wind companies for site remediation, preparation and ancillary infrastructure improvement projects; and (7) to otherwise further the public purposes set forth herein.

(d) The center shall make no such qualified investment pursuant to clause (1) of subsection (b) unless: (1) said investment has been approved by a majority vote of the board; (2) the recipient is a certified offshore wind industry company pursuant to section 8A; (3) the center finds, to the extent possible, that a definite benefit to the commonwealth's economy may reasonably be expected from said qualified investment; provided, further, that in evaluating a request or application for funding, the center shall consider the following: (i) the appropriateness of the project; (ii) whether the project has significant potential to expand employment; (iii) the project's potential to enhance technological advancements; (iv) the project's potential for leveraging additional funding or attracting resources to the commonwealth; and (v) the project's potential to promote manufacturing in the commonwealth; (4) to the extent said investment is a capital investment, the investment has been approved by the secretary of the executive office of administration and finance upon request of the center; provided, however, that said request shall be submitted to the secretary in writing and shall, include but not be limited to: (i) a description of the project or program to be funded; (ii) the economic benefits to the commonwealth which can reasonably be expected from said project or program; (iii) a copy of the proposed contract or other document executing the transaction between the center and the recipient of the funds; (iv) a description of the contractual or other legal remedies available to the center upon non-performance of the contract or other document executing the transaction by the recipient including, but not limited to, any provisions for restitution or reimbursement of the funds granted, loaned or otherwise invested in or with the recipient; and (v) any other information as the secretary may determine; and (5) said qualified investment conforms with the rules approved by the board.

Said rules shall set the terms and conditions for investments which shall constitute qualified investments including, but not limited to, loans, guarantees, loan insurance or reinsurance, equity investments, grants awarded pursuant to clause (3) of subsection (c), other financing or credit enhancing devices, as established by the center directly or on its own behalf or in conjunction with other public instrumentalities, or private institutions or the federal government. Said rules shall provide that qualified investments made pursuant to clauses (1) and (2) of said subsection (c) shall involve a transaction with the participation of at least 1 at-risk private party.

Said rules shall establish the terms, procedures, standards and conditions which the center shall employ to identify qualified applications, process applications, make investment determinations, safeguard the fund, advance the objective of increasing employment opportunities, oversee the progress of qualified investments and secure the participation of other public instrumentalities, private institutions or the federal government in such qualified investments. Said rules shall provide for negotiated intellectual property agreements between the center and a qualified investment recipient which shall include the terms and conditions by which the fund's support may be reduced or withdrawn.

(f) The center may solicit investments by private institutions or investors in the activities of the fund and may reach agreements with such private institutions or investors regarding the terms of any such investments including, but not limited to, the rights of such investors to participate in the income or appropriation of the fund. To further the objective of securing investments by private institutions or investors in the activities of the fund pursuant to the preceding sentence, the center may develop a proposal creating a separate investment entity which shall permit the commingling of the fund's resources with the maximum participation by such private institutions or investors in a manner consistent with the public purpose of the fund and under the terms and conditions established to protect and preserve the assets of the fund.

(g) Copies of the approved rules, and any modifications, shall be submitted to the clerks of the house of representatives and the senate, who shall forward the same to the house and senate committees on ways and means and the joint committee on economic development and emerging technologies.

(h) Qualified investment transactions made by the center pursuant to this section shall not, except as specified in this chapter, be subject to chapter 175, or any successor thereto, and shall be payable solely from the Massachusetts Offshore Wind Industry Investment Fund established by this section and shall not constitute a debt or pledge of the full faith and credit of the commonwealth, the center or any subdivision of the commonwealth.

(i) The center shall not make expenditure from or commitment of the assets of the fund including, but not limited to, the making of qualified investments secured by the fund, if following the making of said qualified investment, the amount of the fund shall be less than the minimum requirement established by the board.

SECTION 6. Subsection b of section 83C of chapter 169 of the Acts of 2008, as amended by chapter 188 of the Acts of 2016, is hereby amended by striking out the following:-

“; provided, however, that the department of public utilities shall not approve a long-term contract that results from a subsequent solicitation and procurement period if the levelized price per megawatt hour, plus associated transmission costs, is greater than or equal to the levelized price per megawatt hour plus transmission costs that resulted from the previous procurement”

SECTION 7. Said section 83C is hereby further amended by inserting after the word “project” at the end of subsection (d) the following:-

;provided, further that preference shall be given to proposals that demonstrate economic development contributions to the commonwealth.

SECTION 8. Said section 83C is hereby further amended by inserting after subsection (d) the following new subsection:-

(e) The winning bid shall be chosen by the selection committee which shall consider all proposals and criteria in subsection (d) when making a final decision. The committee shall consist of the following members: the secretary of energy and environmental affairs, which shall be the chair; the attorney general; and the secretary of the executive office of housing and economic development.

Name:	District/Address:
Julian Cyr	Cape and Islands
Marc R. Pacheco	First Plymouth and Bristol	7/27/2021