Amendment #1187 to H.4400

Amendment #1187 to H4400

Tax Swap

Mr. Goldstein-Rose of Amherst moves to amend the bill by adding the following sections:

SECTION XXXX. Chapter 11 of the General Laws, as so appearing, is hereby amended by inserting after section 12 the following section:-

12A. Audits of heating oil retailers to administer carbon pollution price

Section 12A. Every retailer of building heating oil that serves customers in Massachusetts shall be required to keep auditable records of every retail sale made in Massachusetts. Such records shall be regularly audited, and funds from the Carbon Pollution Price Fund shall be available to cover the expenses of such audits, within the 2 per cent administrative cost allowed under section 2WWWW of chapter 29. Such records shall be available to the commissioner of energy resources and the commissioner of revenue to ensure that the carbon pollution price is charged on all petroleum fuel that is to be sold to consumers in Massachusetts, including sales made by companies based outside of Massachusetts, and not on fuel that is sold at wholesale in Massachusetts but will be sold at retail outside Massachusetts and will not be consumed in Massachusetts.

SECTION XXXX. Chapter 14 of the General Laws, as so appearing, is hereby amended by inserting after section 3A the following sections:-

3B. Definitions

Section 3B. The following phrases shall have the following meanings for the purposes of section 3C of this chapter –

“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.

“Employer”, any person, state agency, legal business, whether for profit or not for profit, or local governmental body that 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.

“Resident”, as defined in section 1 of chapter 62.

3C. Carbon pollution pricing

Section 3C. (a) To correct the negative externality of carbon pollution, the commissioner shall collect a price at the first point of sale within the commonwealth on all fossil fuels that are to be used for heating or transportation, except sales at wholesale to public transit agencies, at the rate specified in accordance with this section.

(b) The commissioner shall add an amount to the carbon pollution price for natural gas based on the estimate provided by the commissioner of energy resources in accordance with subsection (d) of section 13A of chapter 25A.

(c) No fuel that substitutes for fossil fuels priced under this section, but is artificially created by sequestering carbon dioxide from the atmosphere, shall be subject to the price under this section.

(d) 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 $25 per metric ton from January 1, 2019 through June 30, 2019 and during the entirety of fiscal year 2020. Every fiscal year thereafter, the rate shall be an amount equal to the previous fiscal year’s rate adjusted for inflation plus an amount that, adjusted for inflation, would be equal to $15 in 2016. In any year in which the U.S. Federal government charges a similar price on fossil fuels, unless the Federal price varies by state to account for state prices, 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.

(e) All money collected pursuant to this section shall be deposited in the Carbon Pollution Price Fund established in section 2WWWW of chapter 29.

(f) The commissioner shall estimate each fiscal year quarter how much additional revenue the commonwealth would lose if the sales tax rate were reduced by an additional 1 percentage point, except while the sales tax rate is 6.25 per cent the commissioner shall estimate instead how much revenue would be lost if the rate were reduced by 1.25 percentage points. If Section 2 of chapter 64H is no longer in effect, this estimate shall not be required.

SECTION XXXX. Chapter 23J of the General Laws is hereby amended by inserting after section 12, as appearing in the 2014 Official Edition, the following section:-

13. Clean energy investments to mitigate regressivity

Section 13. (a) The center shall use excess revenue from the carbon pollution price charged in accordance with section 3C of chapter 14, after disbursements into the General Fund required by section 2WWWW of chapter 29, to make investments that mitigate regressive effects of higher energy prices.

(b) The center may give dividends to some or all commonwealth residents and employers; may carry out clean energy projects, including heating efficiency or public transit projects, targeted to benefit low-income families and communities; may carry out or support coordinated clean energy technology development or demonstration projects in a way that will benefit low-income communities; or may implement any combination of such; provided that such expenditures shall in aggregate mitigate regressive effects of higher energy prices due to the carbon pollution price charged pursuant to section 3C of chapter 14.

(c) Any dividend checks sent pursuant to this section shall not be considered income for purposes of chapter 62 or chapter 63.

(d) The center may create one or more programs to provide re-employment and/or retraining to any workers who are presumed to have lost their jobs directly as a result of the carbon pollution price.

(e) The center may identify companies in the commonwealth which pay a significant portion of their expenses on additional energy costs due to the carbon pollution price, and for which at least 80 per cent of their sales revenue is from sales to companies or individuals outside Massachusetts, and which the center finds would not remain competitive because their product is not subject to the Massachusetts sales tax which is to be proportionally reduced as the carbon pollution price is implemented. The center may provide competitiveness dividends to such companies in an amount determined appropriate by the center.

(f) The center may create a program to accept applications for and pay carbon credits to any entity which captures and permanently sequesters atmospheric carbon dioxide, including through sustainable agriculture or direct atmospheric carbon capture systems.

(g) The center shall adopt any rules and regulations necessary or expedient to carry out the purposes of this section.

SECTION XXXX. Section 3 of chapter 25A of the Massachusetts General Laws, as appearing in the 2012 Official Edition, is hereby amended by inserting the following definitions: —

“Employer”, any person, state agency, legal business, whether for profit or not for profit, or local governmental body that 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.

“Resident”, as defined in section 1 of chapter 62.

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

13A. Carbon pollution pricing

Section 13A. (a) The commissioner shall provide the commissioner of revenue with sufficient information to collect the carbon pollution price in accordance with section 3C of chapter 14.

(b) Any entity which is the first seller within the commonwealth of petroleum products to be consumed within the commonwealth shall pay the carbon pollution price on a quarterly basis to account for the sale of those petroleum products that are being sold for the first time within the commonwealth. The commissioner shall identify all such entities which make the first sale, whether at wholesale or retail, of petroleum products within the commonwealth and provide such information to the commissioner of energy resources. Where possible, the price shall be charged at petroleum terminals or sales off a petroleum pipeline, but the commissioner shall track all heating and transportation fuels entering the commonwealth for consumption in the commonwealth and shall also identify gasoline, heating oil, or other fuel retailers to pay the price on behalf of their retail sales for any fuel that has not yet had the price charged.

(c) Any local distribution company for natural gas shall pay the price quarterly on behalf of all of its distribution customers. The commissioner shall identify all other entities which sell natural gas for consumption within Massachusetts, excluding natural gas used for electricity generation, and provide a list to the commissioner of revenue. Each local distribution company for natural gas shall recover the costs of the carbon pollution price through its rate base as part of the supply line on each customer’s bill.

(d) The commissioner 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, whether or not such methane escapes within Massachusetts, and the commissioner of revenue shall add an additional charge commensurate with that estimate to the base price for all natural gas, based on the CO2e carbon pollution price rate.

(e) The department of energy resources shall adopt any rules and regulations necessary or expedient to carry out the functions of this section.

SECTION XXXX. 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 section:-

Section 2WWWW.

(a) There shall be a Carbon Pollution Price Fund to be administered by the Department of Revenue and the Massachusetts Clean Energy Technology Center to consist of: (i) money collected pursuant to section 3C of chapter 14; (ii) revenue from appropriations or other monies authorized by the general court and specifically designated to be credited to the fund; (iii) interest earned on such revenues (iv) funds from public or private sources, including, but not limited to, gifts, grants, and donations. Any monies remaining in the fund at the end of a fiscal year shall not revert to the General Fund. Money in the fund shall be available without appropriation for the purposes provided for in this section.

(b) Each fiscal year quarter the commissioner of energy resources in consultation with the commissioner of revenue shall estimate how much revenue is expected to be collected from the carbon pollution price during the coming 12 months.

(c) Each year the commissioner of revenue shall estimate the amount of revenue the commonwealth would have collected that year if all other factors were the same and if the sales tax rate were 6.25 per cent, and shall publish that number along with actual commonwealth revenue collected or expected to be collected from the sales tax, if any. The difference in the two numbers shall be known as the “sales tax loss amount.” An amount of money equal to the sales tax loss amount shall be deposited each year, in periodic installments, from the Carbon Pollution Price Fund into the General Fund and as required into any other funds that under the general laws are guaranteed a certain amount of revenue from the sales tax.

(d) Up to 2 per cent of money deposited into the Carbon Pollution Price Fund each year shall be available to the Department of Revenue, the Department of Energy Resources, the Department of the State Auditor, and the Massachusetts Clean Energy Technology Center to cover administrative costs associated with implementing section 3C of chapter 14, section 13A of chapter 25A, section 12A of chapter 11, and the requirements of this section.

(e) All remaining balance after the disbursement into the General Fund required by this section and after administrative costs are covered, shall be expended by the Massachusetts Clean Energy Technology Center pursuant to section 13 of chapter 23J.

SECTION XXXX. The Commissioner of Revenue shall begin to collect the additional charge required pursuant to subsection (b) of section 3C of chapter 14 of the General Laws on or before December 10, 2019.

SECTION XXXX. Section 2 of chapter 64H is hereby amended by replacing ‘6.25’ with ‘5’.

SECTION XXXX. Section 2 of chapter 64H is hereby amended by replacing ‘5’ with ‘4’.

SECTION XXXX. Section 2 of chapter 64H is hereby amended by replacing ‘4’ with ‘3’.

SECTION XXXX. Section 2 of chapter 64H is hereby amended by replacing ‘3’ with ‘2’.

SECTION XXXX. Section 2 of chapter 64H is hereby amended by replacing ‘2’ with ‘1’.

SECTION XXXX. Section 2 of chapter 64H is hereby repealed.

SECTION XXXX. Section XX of this act shall go into effect on January 1, 2019.

SECTION XXXX. Section XX of this act shall go into effect in the first fiscal year quarter in which projected revenue for the coming 12 months into the Carbon Pollution Price Fund, according to the estimate required by subsection (b) of section 2WWWW of chapter 29, exceeds by 30 per cent the amount of revenue that would be lost over the coming 12 months by such a reduction in the sales tax, according to the estimate required by subsection (f) of section 3C of chapter 14.