Amendment #176 to S3064

Massachusetts Climate Bank

Ms. Meschino of Hull moves to amend the bill by adding the following section:

SECTION XXXX: The General Laws are hereby amended by inserting after section 14 of chapter 23J the following new section:-

 Section 15.

 (a) Definitions.

 As used in this chapter the following words shall have the following meanings unless the context clearly requires otherwise:-

 “Bank”, the Massachusetts Climate Bank established pursuant to subsection (b).

 “Board”, the Massachusetts Climate Board established pursuant to subsection (c).

 “Bonds” or “notes”, such bonds and notes as are issued by the bank pursuant to this chapter.

 “Climate and clean energy innovations”, all innovations, or uses of technologies, services, solutions, or innovative financing to address climate resiliency, mitigate greenhouse gas emissions or support clean energy, including advancing compliance with the statewide greenhouse gas emission limits and sub-limits established pursuant to chapter 21N.

 “Rural Communities”, are municipalities with population densities of less than 500 persons per square mile or a population of less than 7,000 persons, in each case as shown in the most recent U.S. decennial census.

 (b) Establishment.

 There is hereby created a body politic and corporate and a public instrumentality to be known as the Massachusetts Climate Bank, which shall be an independent public authority not subject to the supervision and control of any other executive office, department, commission, board, bureau, agency or political subdivision of the commonwealth except as specifically provided in any general or special law. The exercise by the authority of the powers conferred by this chapter shall be considered to be the performance of an essential public function.

 (c) Duration.

 The bank shall be governed by the board and shall continue as long as it shall have bonds or notes or guarantee commitments outstanding and until its existence is terminated by law. Upon the termination of the existence of the bank, all right, title and interest in and to all of its assets and all of its obligations, duties, covenants, agreements and obligations shall vest in and be possessed, performed and assumed by the Commonwealth.

 (d) Duty and Purpose.

 It shall be the duty and purpose of the bank to: (1) evaluate, coordinate and facilitate innovative financing solutions for climate and clean energy innovations in the public, private, and non-profit sectors throughout the commonwealth and in line with achieving the commonwealth’s greenhouse gas emissions limits and sub-limits pursuant to chapter 21N; (2) provide financial products including loan refinancing, loan guarantees, credit enhancements, debt securitization, insurance, portfolio insurance, and other forms of financing support, technical assistance or risk management to qualified climate and clean energy innovations; (3) foster the development and consistent application of transparent underwriting standards, standard contractual terms, and measurement and verification protocols for qualified climate and clean energy innovations; (4) facilitate the transition from a carbon-based economy to a clean energy economy; (5) facilitate job creation through the construction and operation of climate and clean energy innovations; (6) facilitate climate resilience in disadvantaged and low-income communities; (7) eliminate the use of fossil fuels and carbon emitting fuels throughout the commonwealth and across all sectors; and (8) promote climate resilience in rural and coastal communities.

 (e) Governance.

 (1) The bank shall be governed, and its corporate powers exercised by a board of directors known as the Massachusetts Climate Finance Board. The board shall consist of 11 members: 1 of whom shall be the commissioner of banks or their designee; 1 of whom shall be the secretary of administration and finance or their designee;  1 of whom shall be the secretary of energy and environmental affairs or their designee; 1 of whom shall be the climate chief or their designee;  and 7 members appointed by the governor, 1 of whom shall be experienced in the field of evaluating and underwriting sustainability-focused  public or private finance transactions, 1 of whom shall be a historically under-represented group with experience in the field of banking, public or private finance transactions selected from a list of 3 nominees submitted by the president of the senate, 1 of whom shall have at least 10 years’ experience in climate impact and resiliency including land, water, or air issues, 1 of whom shall be a technical expert with at least 10 years’ experience in the securitization and structuring of ecosystem service credits, 1 of whom has expertise in sustainability investment measurement and reporting selected from a list of 3 nominees submitted by the speaker of the house of representatives, 1 of whom shall be the leader of a reserve banking organization providing funds to other banks selected from a list of 3 nominees submitted by the president of the senate, and 1 of whom shall be a representative of historically climate-impacted rural or coastal towns or municipalities selected from a list of 3 nominees submitted by the speaker of the house of representatives. Each of the 7 directors appointed by the governor shall serve for a term of 3 years, potentially extendable by another 2 years with board consent.

 (2) The climate chief designee shall serve as the chairperson of the board and board members shall annually elect a vice-chairperson of the board. Each director shall serve without compensation but may be reimbursed for actual and necessary expenses reasonably incurred in the performance of their duties, including reimbursement for reasonable travel.

 (3) A majority of directors shall constitute a quorum and the affirmative vote of a majority of directors present at a duly called meeting if a quorum is present, shall be necessary for any action to be taken by the board.

 (4) The board shall have the power to appoint and employ an executive director who shall be the chief executive, administrator and operational officer of the bank and shall direct and supervise the administrative affairs and the general management of the bank. The executive director may, subject to the general supervision of the board, employ other employees, consultants, agents, including legal counsel and advisors, and shall attend meetings of the board.

 (5) The board shall elect a treasurer and a secretary. The secretary of the board shall keep a record of the proceedings of the board and shall be custodian of all books, documents, and papers filed by the board and of its minute book and seal. The secretary of the board shall cause copies to be made of all minutes and other records and documents of the bank and shall certify that such copies are true copies, and all persons dealing with the bank may rely upon such certification.             

 (6) An action of the bank may take effect immediately and need not be published or posted unless otherwise provided by law.

 (7) In furtherance of the public purposes set forth in subsection (d), the bank may expend money to: (i) make grants, contracts, loans, equity investments, energy production credits, ensure climate mitigation covenants or green covenants, bill credits or rebates or make other forms of financial or technical assistance or instruments available to customers and government entities; (ii) provide financial or debt service obligation assistance; or (iii) take any other action, in such forms, under such terms and conditions and under such selection procedures as the bank deems appropriate and otherwise in a manner consistent with good business practices; provided that the bank shall endeavor to leverage the full range of resources, expertise and participation of other states and instrumentalities in the design and implementation of programs conducted pursuant to this section.

 (f) Powers.

 The bank shall have all powers necessary and convenient to carry out and effectuate its purposes, including, without limiting the generality of the foregoing, the power to:

 (1) adopt and amend by-laws, regulations and procedures for the governance of its affairs and the conduct of its business for the administration and enforcement of this chapter notwithstanding chapter 30A;

 (2) exercise any powers necessary for the commonwealth to be in compliance with federal law;

 (3) maintain offices at places within the commonwealth and conduct meetings of the bank in accordance with its by-laws;

 (4) promote economy and efficiency and leverage other government funding and private sector investment;

 (5) establish criteria and establish procedures for project selection for use in selecting qualifying climate and clean energy innovations to receive funds, provided not less than 20% of such funds are designated for rural communities and coastal communities in direct project investments;

 (6) enter into agreements and transactions with other government, state and municipal agencies and other public institutions and private individuals, partnerships, firms, corporations, associations and other entities on behalf of the bank;

 (7) institute and administer separate accounts and funds for the purposes of making allocations, grants or loans to qualifying climate and clean energy innovations to receive funds pursuant to section 5;

 (8) sue and be sued in its own name, plead and be impleaded;

 (9) issue bonds, notes and other evidences of indebtedness as provided in this chapter;

 (10) lease, assign, sell, exchange, transfer, convey, grant, pledge, or mortgage assets, title to which has been acquired in any manner;

 (11) acquire real and personal property, or any interest in real or personal property, by gift, purchase, transfer, foreclosure, lease, or otherwise, including rights or easements; hold, sell, assign, lease, encumber, mortgage or otherwise dispose of any real or personal property, or any interest therein, or mortgage any interest owned by it or under its control, custody or in its possession; release or relinquish any right, title, claim, lien, interest, easement or demand however acquired, including any equity or right of redemption in property foreclosed by it; take assignments of leases and rentals, proceed with foreclosure actions or take any other actions necessary or incidental to the performance of its corporate purposes including, but not limited to, making or delegating to a lessee or a licensee to make improvements or alterations to the real property of the bank, or any interest thereon or engage in construction on or renovation at such property or interest;

 (12) invest funds held in reserves or sinking funds or funds not required for immediate disbursement in such investments as may be provided in a financing document relating to the use of such funds or, if not so provided, as the board may determine;

 (13) appear on its own behalf before boards, commissions, departments or other agencies of municipal, state or other government;

 (14) obtain insurance;

 (15) apply for and accept subventions, grants, loans, advances and contributions from any source of money, property, labor or other things of value, to be held, used and applied for its corporate purposes; provided, however, that the bank shall not accept funding from any source, including any government agency, if the receipt of said funding would limit the bank's ability to promote its public purposes; and provided further, that all such funds shall be placed, in their entirety, in the bank;

 (16) provide and pay for such advisory services and technical assistance as may be necessary or desired to carry out the purposes of this chapter;

 (17) establish and collect such fees and charges as the bank without further appropriation shall determine to be reasonable, and receive and apply revenues from fees and charges to the purposes of the bank or allotment by the commonwealth or any political subdivision thereof; provided, however, that all said revenues shall be placed, in their entirety, in the bank;

 (18) make loans to any person for the acquisition, construction, alteration or any combination thereof, or other financing of a project including, but not limited to, loans to lending institutions under terms and conditions requiring the proceeds of such loans to be used by such lending institutions for the making of loans to users for qualified projects;

 (19) disburse, appropriate, grant, loan or allocate funds for the purposes of investing in climate and clean energy as directed in this chapter;

 (20) provide assistance to local entities and authorities, public bodies and private corporations for the purposes of maximizing opportunities for expanding climate and clean energy innovations, attracting new climate and clean energy entities and advanced technology investments, fostering new innovative research and creating new manufacturing and development initiatives in the commonwealth;

 (21) prepare, publish and distribute, with or without charge, as the bank may determine, such studies, reports and bulletins and other material as the bank deems appropriate;

 (22) exercise any other powers of a corporation organized under chapter 156B;

 (23) engage accountants, architects, attorneys, engineers, planners, real estate experts and other consultants as may be necessary in its judgment to carry out the purposes of this section and to fix their compensation;

 (24) take any actions necessary or convenient to the exercise of any power or the discharge of any duty provided for by this section; and

 (25) enter into agreements or other transactions with any person, including without limitation any public entity or other governmental instrumentality or agency in connection with its powers and duties under this section.

 Irrespective of the above powers, the bank may not invest in or hold common stock or another equity investment in natural gas and utility scale biomass projects.

 (g)   Financing and Capitalization.   

 (1) The bank may establish and maintain such funds and accounts as are necessary. Such funds shall be credited with appropriations authorized by the general court, bond or note proceeds, grants, gifts, donations, bequests or other monies received in accordance with law. Any unexpended funds at the end of the fiscal year shall not revert to the General Fund and shall be carried over from year to year and may be expended in subsequent years without appropriation.

(2) The bank may also accept deposits of government assets and funds from any state public institution, and may pay interest on deposits of public funds and offer other financial products to public entities.

 (3) The bank may issue and sell bonds or notes of the bank for the purpose of providing funds to finance qualifying climate and clean energy innovations. Any bond or note issued under this section: (i) shall constitute the corporate obligation of the bank; (ii) shall not constitute a debt of the commonwealth within the meaning or application of the constitution of the commonwealth; and (iii) shall be payable solely as to both principal and interest from (a) the proceeds of bonds or notes, if any; (b) investment earnings on the proceeds of bonds or notes; or (c) other funds available to the bank for such purpose.

 (4) The bank may set up and maintain such separate funds and accounts as are necessary to provide and direct funding to qualifying climate and clean energy innovations. Such funds or accounts shall be credited with any appropriations authorized by the general court, bond or note proceeds, grants, gifts, donations, bequests or other monies received in accordance with the law. The bank may make loans from such funds or accounts.

 (5) By request of the governor, the state treasurer may also issue and sell bonds within a given fiscal year to capitalize the bank.

 Nothing in this section shall be construed to create a general obligation of the commonwealth.

 (g) Public Benefit Framework and Reporting.

 In addition to its purposes as defined in section (d), the bank is directed to create a public sustainability benefit policy to fulfill the purpose of the bank as defined by section (d). The board shall adopt a written public sustainability benefit policy that includes reporting metrics as well as procedures. The board shall file a copy of that policy with the governor, the comptroller, the clerks of the house of representatives and senate, and the house, within 30 days after its adoption. Whenever the board changes its public sustainability benefit policy, it shall file a copy of the new policy with the governor, the comptroller, the clerks of the house of representatives and senate.

 The public sustainability benefit policy shall include a statement that material, relevant, and decision-useful sustainability factors related to the goals of the bank have been or are regularly considered by the bank, within the bounds of financial and fiduciary prudence, in evaluating investment decisions.

 The bank shall annually report to the governor, the comptroller, the clerks of the house of representatives and senate, on the financial condition and performance of the bank and provide an analysis of the bank's effect on the State to ensure that it is consistent with the bank's purposes set forth in section (d), particularly the bank's effect on the public sustainability benefit goals derived from goals of the bank.

 (h) Administration.

 (1) The bank shall be subject to applicable provisions of chapters 30A, 66, 268A and 268B, except that confidential commercial or financial information may be protected from disclosure as provided by law.

 (2) The bank shall establish such procedures, criteria, and agreements as it deems necessary to evaluate and finance climate and clean energy innovations.

 (3) Within 180 days of enactment, the board shall establish bylaws, policies, and procedures governing the operations of the bank not addressed specifically by the legislation

 (j) Regulations.

 The board shall adopt policies and procedures as necessary to implement this chapter.

Additional co-sponsor(s) added to Amendment #176 to S3064

Massachusetts Climate Bank