HOUSE DOCKET, NO. 2961        FILED ON: 1/19/2023

HOUSE  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  No. 3192

The Commonwealth of Massachusetts

_________________

PRESENTED BY:

Joan Meschino

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To the Honorable Senate and House of Representatives of the Commonwealth of Massachusetts in General
Court assembled:

The undersigned legislators and/or citizens respectfully petition for the adoption of the accompanying bill:

An Act relative to building energy and decarbonization.

_______________

PETITION OF:

HOUSE DOCKET, NO. 2961        FILED ON: 1/19/2023

HOUSE  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  No. 3192

The Commonwealth of Massachusetts

_______________

In the One Hundred and Ninety-Third General Court
(2023-2024)

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An Act relative to building energy and decarbonization.

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. Said Section 1 of chapter 23M is further amended by inserting the following definitions:-

“District heating and cooling system”, a local system consisting of a central generation source and network of pipes that use hot water, chilled water, or steam to provide space heating, cooling and/or hot water to multiple buildings.

“Energy storage system”, a commercially available technology that is capable of absorbing energy, storing it for a period of time and thereafter dispatching the energy; provided, however, that an energy storage system shall (1) use mechanical, chemical or thermal processes to store energy that was generated for use at a later time; (2) store thermal energy for direct heating or cooling use at a later time in a manner that avoids the need to use electricity at that later time; (3) use mechanical, chemical or thermal processes to store energy generated from renewable resources for use at a later time; or (4) use mechanical, chemical or thermal processes to capture or harness waste electricity and to store the waste electricity generated from mechanical processes for delivery at a later time.

“Microgrid”, a group of interconnected loads and distributed energy sources within clearly defined electrical boundaries that acts as a single controllable entity with respect to the grid and that connects and disconnects from such grid to enable it to operate in both grid connected and island mode.

SECTION 2. Subsection (c) of said section 21 of chapter 25 is hereby amended by inserting before the last sentence the following:-

The council shall not approve plans that it determines do not demonstrate alignment with Chapter 21N greenhouse gas emissions limits and sublimits during the three-year plan term.

SECTION 3. Section 22 of said chapter 25 of the General laws are hereby amended by striking out subsection (b) and inserting in place thereof the following:-

(b) The council shall, as part of the approval process by the department, seek to maximize net climate, environmental, equity, and economic benefits through energy efficiency, load management, and non-combustion renewable energy resources and to achieve energy, capacity, climate and environmental goals through a sustained and integrated statewide energy efficiency effort. The council shall review and approve demand resource program plans and budgets, work with program administrators in preparing energy resource assessments, determine the economic, system reliability, climate and air quality benefits of efficiency, non-combustion renewable energy, and load management resources, conduct and recommend relevant research, and recommend long term efficiency, renewable energy, and load management goals to achieve climate, environmental, and equity goals in a cost-effective manner. Approval of efficiency and demand resource plans and budgets shall require a two-thirds majority vote. Approval shall not be granted unless the council determines that program administrators have demonstrated the plan’s alignment with Chapter 21N greenhouse gas emissions limits and sublimits. 

The council shall, as part of its review of plans, examine opportunities to offer joint programs providing similar efficiency measures that save more than 1 fuel resource or to coordinate programs targeted at saving more than one fuel resource. Any costs for joint programs shall be allocated equitably among the efficiency programs. The council shall establish annually increasing targets for serving populations traditionally underserved by the program including but not limited to moderate-income ratepayers, renter ratepayers, ratepayers whose primary language is not English, small business ratepayers and ratepayers in Environmental Justice communities.

SECTION 4. Section 2 of chapter 25a is amended by striking out the first sentence in the second paragraph and inserting in place thereof:-

There shall be within the department 4 divisions: (i) a division of energy efficiency, which shall work with the department of public utilities regarding energy efficiency programs; (ii) a division of renewable and alternative energy development, which shall oversee and coordinate activities that seek to maximize the installation of renewable and alternative energy generating sources that will provide benefits to ratepayers, advance the production and use of biofuels and other alternative fuels as the division may define by regulation, and administer the renewable portfolio standard and the alternative portfolio standard; (iii) a division of building energy and emissions reductions which shall oversee and coordinate activities that seek to maximize building sector decarbonization; and (iv) a division of green communities, which shall serve as the principal point of contact for municipalities and other governmental bodies concerning all matters under the jurisdiction of the department of energy resources.

SECTION 5. Section 6 of said chapter 25A is hereby amended by inserting after clause (14) the following:-

(15) Regulations adopted by this section shall be reviewed and updated in increments of not less than three years and in alignment with the same cycle as the International Energy Conservation Code; provided further that the department in consultation with the board of building regulations and standards shall hold hearings to review such updates including not less than 3 held in different counties of the commonwealth for each review or update cycle with appropriate and reasonable advance notice to said communities.

SECTION 6. Section 10 of said chapter 25A is hereby amended by striking subsection (b) in its entirety and inserting in place thereof the following new subsection:- 

(b) The division shall establish a green communities program. The purpose of the program shall be to provide technical and financial assistance, in the form of grants and loans, to municipalities and other local governmental bodies that qualify as green communities and or green plus communities under this section. These loans and grants shall be used to finance all or a portion of the costs of studying, designing, constructing and implementing energy efficiency and climate change mitigation activities, including but not limited to, energy conservation and renewable energy measures and projects; procurement of energy management services; installation of energy management systems; adoption of demand side reduction initiatives; deployment of energy storage, microgrids, or district energy systems connected to renewable energy generation; purchase of zero-emissions vehicles; installation of electric vehicle charging equipment or infrastructure, or related technologies; coordination of residential or small business clean energy outreach, technical assistance, or financing programs; and the adoption of energy efficiency policies. They shall also be used to finance the siting and construction of renewable and alternative energy projects on municipally-owned land.

SECTION 7. Said section 10 of said chapter 25A is hereby further amended by inserting after subsection (c) the following new subsection:- 

(c ½ ) To qualify as a green plus community, a municipality or other governmental body shall: (1) file an application with the division in a form and manner to be prescribed by the division; (2) establish a greenhouse gas emissions baseline inventory for residential, commercial and industrial buildings sited within the municipality, which may also include transportation, waste, and other sources of emissions within the municipality; (3) put in place a comprehensive plan whose implementation begins within 1 year from the date of initial participation in the program, designed to reduce the greenhouse gas emissions baseline inventory by a percentage approved by the division that is not less than 20 per cent within 5 years of initial participation in the program; (4) adopt the municipal opt-in specialized stretch energy code established in subsection 14 of Section 6 of chapter 25A; and (5) fulfill qualifications subsection 2 through 6 inclusive of the green community program as described in section (c) or be served by a municipal lighting plant.

Preference shall be given to those municipalities that include additional sources of emissions within their greenhouse gas emissions baseline inventory. Not later than one year after the adoption of this section, the division shall adopt a tracking system for community-wide greenhouse gas emissions, to include but not be limited to the building, transportation, energy, land use, and waste sectors, that can be used by municipalities. The secretary may waive these requirements based on a written finding that due to unusual circumstances, a municipality cannot reasonably meet all of the requirements and the municipality has committed to alternative measures that advance the purposes of the green plus communities program as effectively as adherence to the requirements.

SECTION 8. Said section 10 of said chapter 25A is hereby further amended in subsection (d) by striking the figure “20,000,000” and inserting in place thereof “40,000,000 with not less than $10,000,000 going to green plus communities”.

SECTION 9. Said chapter 25A is hereby amended by adding after Section 20 the following sections:-

Section 20. (a) For the purposes of this section the following words shall have the following meanings:-

“building emissions”, greenhouse gas emissions as expressed in metric tons of carbon dioxide equivalent emitted as a result of operating a covered building and calculated in accordance with rules promulgated by the department.

“building emissions intensity”, for a covered building, the number obtained by dividing the building emissions by the gross floor area for such building, expressed in metric tons of carbon dioxide equivalent per square foot per year.

(b) The purpose of the building energy and emissions reduction division shall be to establish and administer programs and regulations for assessing annual energy use in and emissions from buildings to further the goal of achieving emissions limits and sublimits established in Chapter 21N. The division shall collaborate with other department divisions, the department of housing and economic development, MassDevelopment, Massachusetts Clean Energy Center, the net zero energy building advisory council established in section 23 of this chapter and other relevant stakeholders on the development of programs and regulations, as appropriate. The division shall take all reasonable steps to inform the owners of buildings of their obligations under this section in advance including but not limited to materials developed for outreach and education made available on the division’s website. Said materials shall be available in English and in other languages commonly spoken in the commonwealth. Such outreach shall include a list of city, state, federal, private and utility incentive programs related to building energy reduction, renewable energy, or building retrofits for which buildings reasonably could be eligible. 

(c) The division shall promulgate regulations establishing annual carbon intensity limits on building emissions or a building energy performance standard or a combination thereof for covered buildings in alignment with emissions limits and sublimits established in Chapter 21N. Covered buildings shall be established by the division and reflect a phased-in schedule that shall begin no later than January 1, 2026 beginning with large buildings no smaller than 20,000 square feet to be defined by the division and shall include all building types by 2028 and all buildings by 2032. The division may include exemptions for small accessory buildings or structures with no or minimal space conditioning, to be defined in regulations. Phases may be defined by, but are not limited to being defined by, size and type, such as commercial and industrial properties, residential buildings, and other specialized typologies. The building performance limits shall be set for periods of not more than five years and emissions limits shall decrease over time at a pace to at least align with emissions limits and sublimits established in Chapter 21N.

(d) The division shall promulgate regulations for alternative methods of compliance with building emissions intensity limits, energy use performance standards or a combination thereof as established by the division including but not limited to adjustments for the use of on-site renewable energy generation, adjustments for special categories of buildings or for special use, accommodations or support for buildings housing low- or moderate-income occupants, and alternative compliance payments. Alternative compliance payments shall be established such that low- and moderate-income households and small businesses are charged reduced amounts proportionate with their ability to pay. The division shall also establish fines for noncompliance which shall be higher than alternative compliance payments. Both alternative compliance payments and fines shall be deposited into the building energy retrofit program trust fund established in section 20 of this chapter.

(e) The division shall create and manage an online portal for the submission of required data by building owners, including the building’s baseline emissions and energy use for year one of the program and annual reports on that data thereafter.

(f) The division shall establish an annual deadline for receiving reports from building owners and a deadline extension or hardship waiver process for owners who, in the judgment of the division, demonstrate cause for a deadline extension or hardship waiver.

(g) Except as otherwise provided in this statute or otherwise provided by regulation, after a building is deemed a covered building, it shall not exceed the annual building performance limits for such building as determined by the division.

(h) The division shall make building information and data available to the public on its website. For each building, the information made available shall include, but is not limited to, building identification information and building emissions and energy data.

The department shall utilize such practices as are necessary to prevent the public disclosure of personal information regarding owners and tenants, and maintain a quality assurance process to improve the accuracy and completeness of the available information. The department shall provide owners with the opportunity to submit contextual information related to data and shall disclose such information on its website upon request by the owner. The website shall be made available in English and multiple other languages commonly spoken in the commonwealth.

(i) The division shall prepare an annual report that shall be posted on the department’s website and filed with the house and senate committees on ways and means and the joint committee on telecommunications, utilities and energy not later than December 31. The report shall include, but is not limited to, analysis on implementation of, compliance with, and results from the program including progress towards emissions limits and sublimits established in Chapter 21N. The division shall make available to a regional planning agency, municipality or other public agency requesting such information any data set forth in this section, utilizing such practices as are necessary to prevent the public disclosure of personal information regarding owners and tenants.

(j) The division shall promulgate regulations governing the building performance program after holding not less than 3 hearings held in different counties of the commonwealth.

Section 21. (a) There shall be a grant and loan program within the division known as the Building Energy and Emissions Retrofit Funding Program, hereafter referred to as the program, for the purpose of encouraging and supporting building owners to invest in deep energy retrofits and whole-building energy performance upgrades to their properties that reduce greenhouse gas emissions, create healthier homes and buildings, and are in alignment with achieving the GWSA limits and sublimits established under Chapter 21N. Eligible projects for funding shall include pre-weatherization barrier mitigation, pre-electrification barrier mitigation, and renewable energy systems, if part of a more comprehensive deep energy retrofit or whole-building energy performance upgrade. Conversions from one fossil fuel system to another or additions of fossil fuel systems or infrastructure shall not be funded by these programs.

The division shall develop the program in consultation with the net zero energy building advisory council established in section 23 of this chapter, the Department of Housing and Community Development, the Department of Public Utilities, the Department of Environmental Protection, the Energy Efficiency Advisory Council, the Department of Public Health, and the Massachusetts Clean Energy Center. Nothing in this section guarantees an individual or corporation a right to the benefits provided in this section.

(b) The division shall design and implement the program, which shall include a certification process to certify qualified expenses for a grant or loan under this section. Applications for the program shall be reviewed and grants or loans shall be awarded on no less than an annual basis.

(c) The division shall, (i) promote awareness of the program, including through coordination with relevant trade groups, community-based organizations, nonprofits, municipalities, regional planning agencies, and by integration in economic development marketing campaigns; and (ii) adopt measurable goals, performance measures, and an audit strategy to assess the utilization and performance of the program.

(d) The division shall prioritize regionally diverse investments in (i) property that is located in an environmental justice community as defined in section 62 of chapter 30; (ii) property that is low- or moderate-income or rental housing; (iii) property owned by municipalities; and (iv) projects that improve public health outcomes.

(e) The incentives shall be funded, at least in part, by the building energy retrofit program trust fund established in section 20 of chapter 25A. To the extent possible, the program shall seek to leverage existing state and federal programs including. but not limited to, Massachusetts School Building Authority and the Massachusetts Public Library Construction Program.

(f) The division shall promulgate rules, regulations and guidelines for the administration and oversight of this chapter which shall include definitions of deep energy retrofit, pre-weatherization barriers, and pre-electrification barriers and may allow for municipalities to establish or continue their own municipal program so long as it meets or exceeds the greenhouse gas emissions reductions of the Building Energy Retrofit Funding Program. The department shall commence awarding funds no later than January 1, 2025. 

Section 22. (a) The commissioner shall create and administer the building energy retrofit program trust fund into which shall be deposited: (i) any revenues or other financing sources directed to the fund by appropriation; (ii) bond revenues authorized by the general court and designated to be credited to the fund; (iii) any income derived from the investment credited to the fund; (iv) funds from public or private sources including, but not limited to, gifts, federal or private grants, donations, rebates and settlements received by the commonwealth that are designated to be credited to the fund; and (v) all other amounts credited or transferred into the fund from any other source.

(b) There shall be established upon the books of the commonwealth a separate fund to be known as the Building Energy Retrofit Trust Fund. There shall be credited to said fund all amounts received through (i) any revenues or other financing sources directed to the fund by appropriation; (ii) bond revenues authorized by the general court and designated to be credited to the fund; (iii) any income derived from the investment credited to the fund; (iv) funds from public or private sources including, but not limited to, gifts, federal or private grants, donations, rebates and settlements received by the commonwealth that are designated to be credited to the fund; and (v) all other amounts credited or transferred into the fund from any other source. All amounts credited to the fund shall be held in trust and shall be available for expenditure, without further appropriation, by the department for activities of the department related to section 18 and section 19 of this chapter. Any unexpended balance in the fund at the close of a fiscal year shall remain in the fund and shall be available for expenditure in the following fiscal year; provided however, that the fund shall not be in deficit at the end of any state fiscal year.

(c) The operating and administrative expenses shall not exceed 5 per cent of the annual total revenue expended from the fund.

(d) Annually, not later than December 1 of each year, the commissioner shall report on the activities of the fund to the clerks of the house of representatives, the senate and to the house and senate committees on ways and means, and the net zero energy building advisory council established in section 23 of this chapter. The report shall include an accounting of expenditures made from the fund with a description of the purpose of each expenditure, an accounting of amounts credited to the fund and any unexpended balance remaining in the fund.

Section 23. (a) The commissioner shall establish a net zero energy building advisory council which shall review and provide feedback on the implementation of programs under the building energy and emissions performance division with a focus on supporting development of net zero buildings in the commonwealth in alignment with the targets established in chapter 21N. The council shall be chaired by the commissioner or a designee and members shall include, but are not limited to: (i) The attorney general, or a designee; (ii) at least two residents of environmental justice communities as defined in section 62 of chapter 30; (iii) at least two certified minority-owned or women-owned small business enterprises that perform clean energy services; (iv) one representative of the public institutions of higher education included in section 5 of chapter 15A; (v) one representative of the MassHire State Workforce Board; (vi) one representative of the energy efficiency advisory council established in section 22 of chapter 25 who does not represent a state agency or utility that is otherwise seated on the council; (vii) one representative of a building trade association; (viii) one representative of the labor community; (ix) one residential architect; (x) one commercial architect; (xi) one building engineer; (xii) one non-profit that specializes in clean energy efficiency research; (xiii) one representative of the low-income energy affordability network; (xiv) two representatives of commonwealth cities and towns, one rural and one suburban; (xv) one representative of a regional planning agency; and (xvi) one expert in land use.

Non-voting members shall include the secretary of housing and community development or their designee; the commissioner of the department of public health or their designee the commissioner of the department of environmental protection or their designee; the CEO of Massachusetts Clean Energy Center or their designee; a representative of an investor-owned utility, and a representative of a municipal lighting plant or municipal light plant industry association.

Interested parties shall apply to the commissioner for designation as members. There shall be members from each county of the commonwealth represented on the council. In their initial appointments, the commissioner shall designate one third of members to serve for one year, one third to serve for a term of two years and the remaining third to serve for a term of three years and their successors shall serve for terms of three years. 

The advisory board may convene working groups. Such working groups may include individuals external to the advisory board. The commissioner shall invite the appropriate federal, state and local agencies and authorities to participate.

(b) The advisory council shall meet at least 4 times a year and shall hold at least 2 public hearings each year. The council shall review and monitor the recommendations for expenditure of grants and programs in the secretariat. In the event the council or members of the council disapproves of any such recommendation it may file a report noting its objection with the governor, the house and senate committees on ways and means and the joint committee on environment, natural resources and agriculture.

(c) Not later than December 1 of each year, the Department shall report on the activities of the council to the clerks of the house of representatives and the senate, to the house and senate committees on ways and means and to the chairs of the joint committee on telecommunications, utilities and energy.

SECTION 10. Subsection (o) of Section 94 of chapter 143 is hereby amended by adding at the end:-

“If the energy provisions of the state building code are not updated within said one year of any revision to the International Energy Conservation Code (IECC), the Board shall report on the status of approval of the latest International Energy Conservation Code and steps being taken to move towards expedient adoption. Reports shall be filed with the chairs of the joint committee on telecommunications, utilities and energy, the joint committee on consumer protection and professional licensure, the clerk of the house of representatives, and the clerk of the senate no later than 30 days beyond the one-year deadline described in this section, and again every 6 months, until the past due IECC provisions and any more stringent amendments are adopted.”

SECTION 11. The Department of Energy Resources, in consultation with Massachusetts Clean Energy Center, the Board of Building Regulations and Standards and the secretary of housing and economic development, shall issue a written report to the clerk of the house of representatives, the clerk of the senate and the joint committee on telecommunications, utilities, and energy within one year of adoption of this act which shall include, but is not limited to, analysis on the feasibility and timing for adopting the following: (i) mass timber buildings taller than five stories; (ii) reduction of embodied carbon; (iii) carbon storage in building materials; (iv) modular building systems; and (v) healthy non-toxic building materials.

The report shall include recommendations for any legislation that may be required to adopt these or other innovations in the commonwealth.

SECTION 12. Notwithstanding any special or general law, rule or regulation to the contrary, not later than January 1, 2025, the opt-in specialized stretch energy code as developed and promulgated under section 6 of chapter 25A shall be incorporated into the Stretch Energy Code in Appendix 115AA of the Massachusetts building energy code. Upon such incorporation, municipalities that previously adopted the opt-in specialized stretch energy code shall be part of the Stretch Energy Code in Appendix 115AA of the Massachusetts building energy code with no action required.

SECTION 13. Notwithstanding any special or general law, rule or regulation to the contrary, not later than January 1, 2028, the state board of building regulations and standards shall incorporate the Stretch Energy Code in Appendix 115AA of the Massachusetts building energy code into the base energy provisions of the state building code issued by the state board of building regulations under section 93 of chapter 143.