Bill H.3235

HOUSE DOCKET, NO. 2914 FILED ON: 1/19/2023

HOUSE . . . . . . . . . . . . . . . No. 3235

By Representative Vitolo of Brookline, a petition (accompanied by bill, House, No. 3235) of Tommy Vitolo and Kevin G. Honan for legislation to authorize cities and towns to impose a methane emissions surcharge and non-pipeline alternatives. Telecommunications, Utilities and Energy.

The Commonwealth of Massachusetts

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

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An Act authorizing municipalities to impose a methane emissions surcharge and authorize non-pipeline alternatives.

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. (a) Notwithstanding the provisions of section 53 of chapter 44 of the General Laws, or any other general or special law to the contrary, a city or town that accepts the provisions of this section pursuant to section 4 of chapter 4 of the General Laws shall establish a separate account to be known as the Emissions Reduction Fund of which the municipal treasurer shall be the custodian. The authority to approve expenditures from the fund shall be limited to the legislative body and the municipal treasurer shall pay such expenses in accordance with chapter 41 of the General Laws.

The following monies shall be deposited in the Emissions Reduction Fund: (i) all funds collected pursuant to local surcharges or bond proceeds in anticipation of revenue from such surcharges; (ii) all funds received from the commonwealth or any other source for such purposes; and (iii) proceeds from the disposition of a real property interest that was acquired with funds from the Emissions Reduction Fund. The treasurer may deposit or invest the proceeds of the fund in savings banks, trust companies incorporated under the laws of the commonwealth, banking companies incorporated under the laws of the commonwealth that are members of the Federal Deposit Insurance Corporation, or national banks, or may invest the proceeds in paid up shares and accounts of and in co-operative banks or in shares of savings and loan associations or in shares of federal savings and loan associations doing business in the commonwealth or in the manner authorized by section 54 of chapter 44 of the General Laws, and any income therefrom shall be credited to the fund.

(b) Municipal boards and commissions shall, from time to time, make recommendations to the legislative body of the municipality to fund programs or activities to promote emissions reductions. The boards and commissions may include in their recommendations to the legislative body of the municipality a recommendation to set aside for later spending funds for specific purposes that are consistent with emissions reduction but for which sufficient revenues are not then available in the Emissions Reduction Fund to accomplish that specific purpose or to set aside for later spending funds for general purposes that are consistent with emissions reduction.

(c) After receiving such recommendations from municipal boards and commissions, the legislative body of the municipality may then take such action and approve such appropriations from the Emissions Reduction Fund established pursuant to subsection (a) in an amount not to exceed the amounts recommended; provided, however, that nothing herein shall be deemed to constrain the legislative body of the municipality from appropriating such additional amounts as it deems appropriate to carry out the recommendations from a source other than the Emissions Reduction Fund.

(d) A real property interest that is purchased with monies from the Emissions Reduction Fund shall be bound by a permanent deed restriction that meets the requirements of chapter 184 of the General Laws, limiting the use of the property to the purpose for which it was acquired. The deed restriction shall run with the land and shall be enforceable by the municipality. The deed restriction may also run to the benefit of a nonprofit, charitable corporation or foundation selected by the municipality with the right to enforce the restriction.

(e) Real property interests acquired under this section shall be owned and managed by the municipality, but the legislative body of the municipality may delegate management of such property to any other municipal board or commission, as it may deem appropriate. The legislative body of the municipality may also delegate management of such property to a nonprofit organization created under chapter 180 or chapter 203 of the General Laws.

(f) The municipal treasurer shall keep a full and accurate account of all appropriations or expenditures made from the Emissions Reduction Fund. The municipal treasurer shall also keep records of any real property interests acquired, disposed of, or improved by the municipality, including the names and addresses of the grantors or grantees and the nature and amount of the consideration paid. The records and accounts shall be public records.

(g) Funds in the Emissions Reduction Fund may be made available and used by the municipality as the local share for state or federal grants upon approval by the legislative body of the municipality.

(h) The Emissions Reduction Fund shall have a limit of $15,000,000 in inflation-adjusted 2022 dollars, for unallocated funds. If at the end of any fiscal year there are more dollars in the fund than the limit, excluding: (1) any portion of funds already allocated by the legislative body of the municipality; (2) any portion of funds deposited within that fiscal year; and (3) any portion of funds provided by the commonwealth rather than from local revenue, such excess shall be transferred to the municipality’s free cash. The legislative body of the municipality may modify the limit.

(i) At any point more than 5 years after its establishment, the legislative body of the municipality may choose to terminate the Emissions Reduction Fund. If terminating the Emissions Reduction Fund, the legislative body of the municipality may transfer remaining funds to other funds or to free cash, and may choose whether to terminate individual programs generating revenue for the Fund or to redirect those programs to generate revenue for another purpose.

SECTION 2. (a) Notwithstanding the provisions of any general or special law to the contrary, a city or town that accepts the provisions of this section pursuant to section 4 of chapter 4 of the General Laws may impose a surcharge on the use of natural gas within the municipality. The surcharge shall apply to all properties in the municipality served by gas companies as defined in section 1 of chapter 164 of the General Laws. The surcharge shall be assessed and collected on gas bills for properties located in the municipality. The amount of such surcharge, to be determined by legislative body of the municipality, shall be no greater than 25 per cent of all charges for gas service on the customer’s bill.

(b) There shall be a complete exemption from the natural gas surcharge for qualifying residential customers who already receive a means-tested discounted rate from the utility, or for qualifying residential customers whose income in the immediately prior year was less than 200 per cent of the area median income, provided that the legislative body of the municipality may increase this percentage. For the purposes of this section, the term “area median income” shall mean the median family income for the Boston-Cambridge-Quincy area, adjusted for family size, as established by the United States Department of Housing and Urban Development. The exemption shall be applied to the primary residence of the taxpayer only.

(i) the applicant or joint applicants’ prior year income would make the applicant or joint applicants eligible for the exemption; or the applicant or joint applicants receive gas service from the utility under a means-tested discounted rate; or the applicant or joint applicants are qualified participants in the Low Income Home Energy Assistance Program administered by the department of housing and community development;

(ii) the qualifying residential property is occupied by the applicant or joint applicants as their primary residence; and

(iii) applicants complete annual certification, meeting the stated criteria relative to income and residency.

(d) The legislative body of the municipality may wholly or partially exempt any set of gas utility customers from this surcharge, and a locally established Emissions Reduction Fund may wholly or partially reimburse any resident for a surcharge paid by their condominium association or landlord.

(e) Upon initial connection to gas service, and every April thereafter, the utility shall provide an application, the contents of which shall be created in consultation with and subject to the approval of either the municipal treasurer or the municipal assessor, to determine whether a customer qualifies for a total or partial exemption from the surcharge. A person who seeks to qualify for an exemption shall complete said application. Qualifying applicants shall be entitled to the exemption. The application shall be completed in each year for which the applicant seeks the exemption.

(f) The gas company shall collect all amounts received pursuant to the surcharge established in subsection (a) and maintain them in a segregated account. The gas company shall remit all funds collected under the surcharge no later than the 15th of the month following receipt of such amounts, to the Emissions Reduction Fund established by the municipality. Late payments of the surcharge shall be exempt from the calculation of any late payment charges otherwise authorized for utility bills. Annually, the gas company shall provide an audited report to the municipality of all collections and disbursements of funds made pursuant to this act.

SECTION 3. (a) Notwithstanding any general or special law to the contrary, a gas company as defined in section 1 of chapter 164 of the General Laws shall offer a program of financing for alternatives to the gas company’s distribution of natural gas to all gas customers in a city or town that accepts the provisions of this section pursuant to section 4 of chapter 4 of the General Laws. Such program shall include, but need not be limited to, financing for:

(i) the sale or lease, installation and servicing of ground source or air source heat pumps and other electric heating or cooling devices;

(ii) the sale or lease, installation and servicing of electric appliances to replace or supplement gas appliances, including but not limited to hot water heaters, dryers and ranges; and

(iii) the sale or lease, installation and servicing of renewable energy storage and generation equipment.

(b) The gas company shall offer on-bill financing for the non-pipeline alternatives provided for in subsection (a) and may also base all or portions of the financing costs for these investments if they serve to accelerate electrification.

(c) A gas company may, subject to all applicable local by-laws and regulations, engage in renewable energy generation and storage in the municipality.

Name:	District/Address:	Date Added:
Tommy Vitolo	15th Norfolk	1/18/2023
Kevin G. Honan	17th Suffolk	2/2/2023