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SENATE DOCKET, NO. 1862 FILED ON: 1/20/2023
SENATE . . . . . . . . . . . . . . No. 675
The Commonwealth of Massachusetts
_________________
PRESENTED BY:
Paul W. Mark
_________________
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 creating a climate bank in Massachusetts.
_______________
PETITION OF:
NAME:DISTRICT/ADDRESS :Paul W. MarkBerkshire, Hampden, Franklin and
Hampshire
Susannah M. Whipps2nd Franklin2/13/2023Joanne M. ComerfordHampshire, Franklin and Worcester2/13/2023John J. CroninWorcester and Middlesex2/13/2023Jack Patrick Lewis7th Middlesex2/13/2023James K. Hawkins2nd Bristol2/13/2023Thomas M. Stanley9th Middlesex2/13/2023Vanna Howard17th Middlesex2/16/2023James B. EldridgeMiddlesex and Worcester2/21/2023Steven Owens29th Middlesex2/21/2023John Barrett, III1st Berkshire2/21/2023Rebecca L. RauschNorfolk, Worcester and Middlesex2/23/2023Patricia D. JehlenSecond Middlesex3/6/2023 1 of 15
SENATE DOCKET, NO. 1862 FILED ON: 1/20/2023
SENATE . . . . . . . . . . . . . . No. 675
By Mr. Mark, a petition (accompanied by bill, Senate, No. 675) of Paul W. Mark, Susannah M.
Whipps, Joanne M. Comerford, John J. Cronin and other members of the General Court for
legislation to create a climate bank in Massachusetts. Financial Services.
The Commonwealth of Massachusetts
_______________
In the One Hundred and Ninety-Third General Court
(2023-2024)
_______________
An Act creating a climate bank in Massachusetts.
Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority
of the same, as follows:
1 The General Laws are hereby amended by inserting after section 14 of chapter 23J the
2following new section:-
3 Section 15.
4 (a) As used in this chapter the following words shall have the following meanings unless
5the context clearly requires otherwise:-
6 “Bank”, the Massachusetts Climate Bank established pursuant to subsection (b).
7 “Board”, the Massachusetts Climate Board established pursuant to subsection (c).
8 “Bonds” or “notes”, such bonds and notes as are issued by the bank pursuant to this
9chapter. 2 of 15
10 “Climate and clean energy innovations”, all innovations, or uses of technologies,
11services, and solutions, or innovative financing to address climate resiliency, mitigate
12greenhouse gas emissions or support clean energy. This could include greenhouse gas mitigation
13through decarbonization or deployment of climate and clean energy innovations to advance
14compliance with the statewide greenhouse gas emission limits and sub-limits established
15pursuant to chapter 21N.
16 “Center'', the Massachusetts clean technology energy center established by chapter 23J
17section 2.
18 “Secretary”, the secretary of the executive office of energy and environmental affairs.
19 (b) There shall be established and placed within the center a body politic and corporate to
20be known as the Massachusetts Climate Bank. The bank is hereby constituted a public
21instrumentality and the exercise by the bank of the powers conferred by this chapter shall be
22considered to be the performance of an essential governmental function.
23 The bank is hereby placed in the center but shall not be subject to the supervision or
24control of any board, bureau, department or other center of the commonwealth, except as
25specifically provided in this chapter.
26 (c) The bank shall be governed by the board and shall continue as long as it shall have
27bonds or notes or guarantee commitments outstanding and until its existence is terminated by
28law. Upon the termination of the existence of the bank, all right, title and interest in and to all of
29its assets and all of its obligations, duties, covenants, agreements and obligations shall vest in and
30be possessed, performed and assumed by the center. 3 of 15
31 (d) It shall be the duty and purpose of the bank to: (1) evaluate, coordinate and facilitate
32innovative financing solutions for climate and clean energy innovations in the public, private,
33and non-profit sectors throughout the commonwealth and in line with achieving the
34commonwealth’s greenhouse gas emissions limits and sub-limits pursuant to chapter 21N; (2)
35provide loans including loan refinancing, loan guarantees, credit enhancements, debt
36securitization, insurance, portfolio insurance, and other forms of financing support, technical
37assistance or risk management to qualified climate and clean energy innovations; (3) foster the
38development and consistent application of transparent underwriting standards, standard
39contractual terms, and measurement and verification protocols for qualified climate and clean
40energy innovations; (4) ease the economic effects of transitioning from a carbon-based economy
41to a clean energy economy; (5) facilitate job creation through the construction and operation of
42climate and clean energy innovations; (6) facilitate and accelerate the deployment of climate and
43clean energy innovations and promote climate resilience in disadvantaged and low-income
44communities; and (7) work to eliminate the use of fossil fuels and carbon emitting fuels
45throughout the commonwealth and across all sectors.
46 (e) The bank shall be governed, and its corporate powers exercised by a board of
47directors known as the Massachusetts Climate Finance Board. The board shall consist of 11
48members, 1 of whom shall be the commissioner of banks, who shall serve ex officio, or her
49designee, 1 of whom shall be the secretary of energy and environmental affairs, who shall serve
50ex officio, or her designee, 1 of whom shall be the executive director of the center, who shall
51serve ex officio, and 8 members appointed by the governor, 2 of whom shall be experienced in
52the field of evaluating and underwriting sustainability-focused (Environmental, Social and
53Governance) public or private finance transactions, 1 of whom shall be a historically under- 4 of 15
54represented group (women, or minority) with experience in the field of banking, public or private
55finance transactions selected from a list of 3 nominees submitted by the president of the senate, 1
56of whom shall have at least 10 years’ experience in climate impact and resiliency including land,
57water, or air issues, 1 of whom shall be a technical expert with at least 10 years’ experience in
58the field of the design or construction of high-performance buildings, 1 of whom has expertise in
59sustainability (Environmental, Social and Governance) investment measurement and reporting
60selected from a list of 3 nominees submitted by the speaker of the house of representatives, 1 of
61whom shall be the leader of a community-based banking organization selected from a list of 3
62nominees submitted by the president of the senate, and 1 of whom shall be a representative of
63historically climate-impacted rural or coastal towns or municipalities selected from a list of 3
64nominees submitted by the speaker of the house of representatives. Each of the 8 directors
65appointed by the governor shall serve for a term of 3 years, potentially extendable by another 2
66years with board consent. The executive director of the center shall serve as the chairperson of
67the board and board members shall annually elect a vice-chairperson of the board. Each director
68shall serve without compensation but may be reimbursed for actual and necessary expenses
69reasonably incurred in the performance of their duties, including reimbursement for reasonable
70travel. Any person appointed to fill a vacancy in the office of a member of the board shall be
71appointed in a like manner and shall serve for only the unexpired term of such former member.
72Any director shall be eligible for reappointment. Any director may be removed from his
73appointment by the governor for cause.
74 (f) A majority of directors shall constitute a quorum and the affirmative vote of a
75majority of directors present at a duly called meeting, if a quorum is present, shall be necessary
76for any action to be taken by the board. Any action required or permitted to be taken at a meeting 5 of 15
77of the directors may be taken without a meeting if all of the directors’ consent in writing to such
78action and such written consent is filed with the records of the minutes of the meetings of the
79board. Such consent shall be treated for all purposes as a vote at a meeting. Each director shall
80make full disclosure, under subsection (g), of his or her financial interest, if any, in matters
81before the board by notifying the state ethics commission, in writing, and shall abstain from
82voting on any matter before the board in which he or she has a financial interest, unless
83otherwise permissible under chapter 268A.
84 (g) Chapters 268A and 268B shall apply to all ex-officio directors of the bank. Said
85chapters 268A and 268B shall apply to all other directors, except that the bank may purchase
86from, sell to, borrow from, loan to, contract with or otherwise deal with any person in which any
87director of the bank is in any way interested or involved; provided, however, that such interest or
88involvement is disclosed in advance to the members of the board and recorded in the minutes of
89the board; and provided, further, that no director having such an interest or involvement may
90vote on any matter in which he has a financial interest, unless otherwise permissible under
91chapter 268A. Employment by the commonwealth or service in any agency thereof shall not be
92deemed to be such an interest or involvement.
93 (h) The board shall have the power to appoint and employ an executive director who shall
94be the chief executive, administrator and operational officer of the bank and shall direct and
95supervise the administrative affairs and the general management of the bank. The executive
96director of the bank shall report to and be under the general supervision of the executive director
97of the center. The executive director of the bank shall appoint and the bank shall employ a chief
98financial and accounting officer and may, subject to the general supervision of the board and the
99executive director of the center, employ other employees, consultants, agents, including legal 6 of 15
100counsel and advisors, and shall attend meetings of the board. Officers and employees of the
101center may also serve as officers and employees of the bank. No funds shall be loaned,
102transferred or otherwise dispersed by the bank without the approval of the board and the
103signature of an executive of the bank and in accordance with policies and procedures approved
104by the board.
105 (i) The board shall elect a treasurer and a secretary. The secretary of the board shall keep
106a record of the proceedings of the board and shall be custodian of all books, documents, and
107papers filed by the board and of its minute book and seal. The secretary of the board shall cause
108copies to be made of all minutes and other records and documents of the bank and shall certify
109that such copies are true copies, and all persons dealing with the bank may rely upon such
110certification.
111 (j) All officers and employees of the bank having access to its cash or negotiable
112securities shall give bond to the bank at its expense in such amounts and with such surety as the
113board may prescribe. The persons required to give bond may be included in one or more blanket
114or scheduled bonds.
115 (k) Board members, officers and employees of the bank shall not be liable to the
116commonwealth, to the bank or to any other person as a result of their activities, whether
117ministerial or discretionary, as such board members, employees or officers, except for willful
118dishonesty or intentional violations of law. Neither members of the board nor any person
119executing bonds or policies of insurance shall be liable personally thereon or be subject to any
120personal liability or accountability by reason of the issuance thereof. The board shall purchase 7 of 15
121liability insurance for board members, officers and employees of the bank and may indemnify
122such persons against claims of others.
123 (l) An action of the bank may take effect immediately and need not be published or
124posted unless otherwise provided by law. Meetings of the board shall be subject to section 18-25
125of chapter 30A; but said section 18-25 shall not apply to any meeting of members of the bank
126serving ex officio in the exercise of their duties as officers of the commonwealth so long as no
127matters relating to the official business of the bank are discussed and decided at the meeting. The
128bank shall be subject to all other provisions of said chapter 30A, and records pertaining to the
129administration of the center shall be subject to section 42 of chapter 30 and section 10 of chapter
13066. All monies of the bank shall be considered to be public funds for purposes of chapter 12A.
131The operations of the center shall be subject to chapters 268A and 268B and all other operational
132or administrative standards or requirements to the same extent as the office of state treasurer.
133 (m) Any documentary materials or data whatsoever made or received by a member or
134employee of the bank and consisting of, or to the extent that such materials or data consist of,
135trade secrets or commercial or financial information regarding the operation of any business
136conducted by an applicant for any form of assistance that the center is empowered to render or
137regarding the competitive position of such applicant in a particular field of endeavor, shall not be
138deemed public records of the center and shall not be subject to section 10 of chapter 66. Any
139discussion or consideration of such trade secrets or commercial or financial information may be
140held by the board in executive sessions closed to the public, notwithstanding section 11A1/2 of
141chapter 30A, but the purpose of any such executive session shall be set forth in the official
142minutes of the center and no business that is not directly related to such purpose shall be
143transacted nor shall any vote be taken during such executive session. 8 of 15
144 (n) In furtherance of the public purposes set forth in subsection (d), the bank may expend
145money to: (i) make grants, contracts, loans, equity investments, energy production credits, ensure
146climate mitigation covenants or green covenants, bill credits or rebates or make other forms of
147financial or technical assistance or instruments available to customers; (ii) provide financial or
148debt service obligation assistance; or (iii) take any other action, in such forms, under such terms
149and conditions and under such selection procedures as the bank deems appropriate and otherwise
150in a manner consistent with good business practices; provided that the bank shall endeavor to
151leverage the full range of resources, expertise and participation of other state and federal
152agencies and instrumentalities in the design and implementation of programs conducted pursuant
153to this section.
154 (o) The bank shall have all powers necessary and convenient to carry out and effectuate
155its purposes including, without limiting the generality of the foregoing, the power to:
156 (1) adopt and amend by-laws, regulations and procedures for the governance of its affairs
157and the conduct of its business for the administration and enforcement of this chapter
158notwithstanding chapter 30A;
159 (2) exercise any powers necessary for the commonwealth to be in compliance with
160federal law;
161 (3) maintain offices at places within the commonwealth and conduct meetings of the
162bank in accordance with its by-laws;
163 (4) promote economy and efficiency and leverage federal funding and private sector
164investment; 9 of 15
165 (5) establish criteria and establish procedures for project selection for use in selecting
166qualifying climate and clean energy innovations to receive funds, provided not less than 20% of
167such funds are designated for rural and coastal communities;
168 (6) enter into agreements and transactions with federal, state and municipal agencies and
169other public institutions and private individuals, partnerships, firms, corporations, associations
170and other entities on behalf of the bank;
171 (7) institute and administer separate accounts and funds for the purposes of making
172allocations, grants or loans to qualifying climate and clean energy innovations to receive funds
173pursuant to section 5;
174 (8) sue and be sued in its own name, plead and be impleaded;
175 (9) issue bonds, notes and other evidences of indebtedness as provided in this chapter;
176 (10) lease, assign, sell, exchange, transfer, convey, grant, pledge, or mortgage assets, title
177to which has been acquired in any manner;
178 (11) acquire real and personal property, or any interest in real or personal property, by
179gift, purchase, transfer, foreclosure, lease, or otherwise, including rights or easements; hold, sell,
180assign, lease, encumber, mortgage or otherwise dispose of any real or personal property, or any
181interest therein, or mortgage any interest owned by it or under its control, custody or in its
182possession; release or relinquish any right, title, claim, lien, interest, easement or demand
183however acquired, including any equity or right of redemption in property foreclosed by it; take
184assignments of leases and rentals, proceed with foreclosure actions or take any other actions
185necessary or incidental to the performance of its corporate purposes including, but not limited to, 10 of 15
186making or delegating to a lessee or a licensee to make improvements or alterations to the real
187property of the bank, or any interest thereon or engage in construction on or renovation at such
188property or interest;
189 (12) invest funds held in reserves or sinking funds or funds not required for immediate
190disbursement, in such investments as may be provided in a financing document relating to the
191use of such funds, or, if not so provided, as the board may determine;
192 (13) appear on its own behalf before boards, commissions, departments or other agencies
193of municipal, state or federal government;
194 (14) obtain insurance;
195 (15) apply for and accept subventions, grants, loans, advances and contributions from any
196source of money, property, labor or other things of value, to be held, used and applied for its
197corporate purposes; provided, however, that the center shall not accept funding from any source,
198including any federal agency, if the receipt of said funding would limit the bank's ability to
199promote its public purposes; and provided further, that all such funds shall be placed, in their
200entirety, in the bank;
201 (16) provide and pay for such advisory services and technical assistance as may be
202necessary or desired to carry out the purposes of this chapter;
203 (17) establish and collect such fees and charges as the bank without further appropriation
204shall determine to be reasonable, and receive and apply revenues from fees and charges to the
205purposes of the bank or allotment by the commonwealth or any political subdivision thereof;
206provided, however, that all said revenues shall be placed, in their entirety, in the bank; 11 of 15
207 (18) make loans to any person for the acquisition, construction, alteration or any
208combination thereof, or other financing of a project including, but not limited to, loans to lending
209institutions under terms and conditions requiring the proceeds of such loans to be used by such
210lending institutions for the making of loans to users for qualified projects;
211 (19) disburse, appropriate, grant, loan or allocate funds for the purposes of investing in
212climate and clean energy as directed in this chapter;
213 (20) provide assistance to local entities and authorities, public bodies and private
214corporations for the purposes of maximizing opportunities for expanding climate and clean
215energy innovations, attracting new climate and clean energy entities and advanced technology
216investments, fostering new innovative research and creating new manufacturing and
217development initiatives in the commonwealth;
218 (21) prepare, publish and distribute, with or without charge, as the bank may determine,
219such studies, reports and bulletins and other material as the bank deems appropriate;
220 (22) exercise any other powers of a corporation organized under chapter 156B;
221 (23) engage accountants, architects, attorneys, engineers, planners, real estate experts and
222other consultants as may be necessary in its judgment to carry out the purposes of this section
223and to fix their compensation;
224 (24) take any actions necessary or convenient to the exercise of any power or the
225discharge of any duty provided for by this section; and 12 of 15
226 (25) enter into agreements or other transactions with any person, including without
227limitation any public entity or other governmental instrumentality or agency in connection with
228its powers and duties under this section.
229 Irrespective of the above powers, the bank may not invest in or hold common stock or
230another equity investment in natural gas and utility scale biomass projects.
231 (p) The bank may set up and maintain such separate funds and accounts as are necessary
232to provide and direct funding to qualifying climate and clean energy innovations. Such funds or
233accounts shall be credited with any appropriations authorized by the general court, bond or note
234proceeds, grants, gifts, donations, bequests or other monies received in accordance with the law.
235The bank may make loans from such funds or accounts.
236 (q) The bank may issue and sell bonds or notes of the bank for the purpose of providing
237funds to finance qualifying climate and clean energy innovations. Any bond or note issued under
238this section: (1) shall constitute the corporate obligation of the bank; (2) shall not constitute a
239debt of the commonwealth within the meaning or application of the constitution of the
240commonwealth; and (3) shall be payable solely as to both principal and interest from (i) the
241proceeds of bonds or notes, if any; (ii) investment earnings on the proceeds of bonds or notes; or
242(iii) other funds available to the bank for such purpose.
243 (r) The board shall develop a comprehensive application process by which persons may
244submit plans for climate and energy innovations technologies for review and approval by the
245bank. An approved climate and clean energy innovation technology plan shall be considered a
246qualifying plan. The bank shall enter into funding agreements with the proponents of such 13 of 15
247qualifying plans, which shall detail the terms of a disbursement of funds from the bank for the
248plan and specific terms for the repayment or recoupment of funds.
249 (s) The board shall adopt policies and procedures as necessary to implement this chapter.
250 (t) Within 180 days of enactment, the board shall establish bylaws, policies, and
251procedures governing the operations of the bank not addressed specifically by the legislation.
252 (u) In addition to its purposes as defined in section (d), the bank is directed to create a
253public sustainability benefit policy to fulfill the purpose of the bank as defined by section (d).
254The board shall adopt a written public sustainability benefit policy that includes reporting
255metrics as well as procedures. The board shall file a copy of that policy with the governor, the
256comptroller, the clerks of the house of representatives and senate, and the house and senate
257chairs of the joint committee on telecommunications, utilities and energy, within 30 days after its
258adoption. Whenever a board changes its public sustainability benefit policy, it shall file a copy of
259the new policy with the governor, the comptroller, the clerks of the house of representatives and
260senate, and the house and senate chairs of the joint committee on telecommunications, utilities
261and energy.
262 The public sustainability benefit policy shall include a statement that material, relevant,
263and decision-useful sustainability factors related to the goals of the bank have been or are
264regularly considered by the bank, within the bounds of financial and fiduciary prudence, in
265evaluating investment decisions. Such factors will be derived from industry accepted public
266sustainability benefit guidelines such as the United Nations Sustainable Development Goals and
267the Sustainability Accounting Standards Board (SASB) standards for impact. 14 of 15
268 (v) The books and records of the bank shall be subject to an audit by the state auditor, in
269accordance with generally accepted government auditing standards, as often as the state auditor
270determines is necessary.
271 (w) The bank shall annually report to the governor, the comptroller, the clerks of the
272house of representatives and senate, and the chairs of the joint committee on
273telecommunications, utilities and energy, on the financial condition and performance of the bank
274and provide an analysis of the bank's effect on the State to ensure that it is consistent with the
275bank's purposes set forth in section (b), particularly the bank's effect on the public sustainability
276benefit goals derived from goals of the bank.
277 (x) Funding for the bank in any single fiscal year shall be available, without the need for
278further appropriation, in a total amount of not less than $10,000,000 from: (1) money generated
279by all cap and trade pollution control programs; (2) amounts from alternative compliance
280payments established and administered under 225 CMR 14.00 adopted under chapter 25A
281section 11F; and (3) other funds that the secretary may provide through fees from enforcement of
282market-based compliance mechanisms under chapter 21N, the Climate Protection and Green
283Economy Act. Funds collected under this section shall be deposited into the bank for the purpose
284of carrying out this chapter. Any unexpended funds at the end of the fiscal year shall not revert to
285the General Fund and shall be carried over from year to year and may be expended in subsequent
286years without appropriation.
287 (y) The bank may also accept deposits of government assets and funds from any state
288public institution. The bank may pay interest on deposits of public funds and may offer other
289financial products to the state treasurer and other public institutions. 15 of 15
290 (z) By request of the governor, the state treasurer may also issue and sell up to
291$750,000,000 in bonds within a given fiscal year to capitalize the bank.