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Infrastructure & Climate Legislation: What’s in the Two Largest Legislative Packages Passed this Legislative Session?

August 18, 2022 | Massachusetts High Technology Council

In the mad dash to the close of the 2022 legislative session, the Legislature couldn’t get sweeping economic development legislation over the finish line. While the fate of that $4.5 billion legislation remains uncertain—and the Council continues to advocate for both chambers to return to finalize certain elements of it—the Legislature was able to come to consensus on two other massive bills to advance for the Governor’s signature: a meaty transportation infrastructure bond bill and a major climate and energy bill.

There is notable overlap between the two spending packages—for instance, both either set incentives or dedicate funds for electric vehicle (EV) infrastructure. While some proposals in the infrastructure bill are uncontroversial and seek to address much-needed investment in surface transportation, regional rail, and transit improvements, the final form of the climate and energy bill is a product of thorny compromise. The climate legislation reflects an imperfect mix of positives, such as investments to help Massachusetts lead on offshore wind development, and policy that risks causing more harm than benefits—like the provision that will allow up to ten municipalities to ban natural gas hook-ups in new developments.

Infrastructure & Climate Legislation

In the mad dash to the close of the 2022 legislative session, the Legislature couldn’t get sweeping economic development legislation over the finish line. While the fate of that $4.5 billion legislation remains uncertain—and the Council continues to advocate for both chambers to return to finalize certain elements of it—the Legislature was able to come to consensus on two other massive bills to advance for the Governor’s signature: a meaty transportation infrastructure bond bill and a major climate and energy bill.

Infrastructure & Climate Legislation

In the mad dash to the close of the 2022 legislative session, the Legislature couldn’t get sweeping economic development legislation over the finish line. While the fate of that $4.5 billion legislation remains uncertain—and the Council continues to advocate for both chambers to return to finalize certain elements of it—the Legislature was able to come to consensus on two other massive bills to advance for the Governor’s signature: a meaty transportation infrastructure bond bill and a major climate and energy bill.

A Closer Look at the Transportation Bond Bill

On August 10, Governor Baker signed an $11.4 billion transportation bill, An Act relative to Massachusetts’s transportation resources and climate, finalizing investment plans for hundreds of projects to improve roads, bridges, rail, and environmental infrastructure across the state. The legislation contains the first allocation of the federal Bipartisan Infrastructure Law (BIL), which was enacted into law in November 2021 and is projected to make $9.5 billion available to the Commonwealth over the next five years (not including additional funds through successful applications for competitive grants).

The significant investments in transportation investments reflect the generational resources made available to the Commonwealth through large federal spending packages. The funding through BIL, along with American Rescue Plan Act (ARPA) funds and other federal funds, complement historic state tax collections from a booming economy in Massachusetts over the last year-and-a-half that have given Massachusetts lawmakers more money than ever for spending priorities.

Notable provisions meant to leverage federal BIL funds include $2.8 billion for projects on federal highways—which is $1.8 billion more than normal Federal Highway formula funding—and an additional $3.5 billion set aside for projects funded with discretionary federal grants.

The legislation also represents a significant infusion of resources for public transit and rail, including $1.4 billion for sustainable transit system modernization and rail investments, $400 million for the MBTA to address safety issues determined by the Federal Transit Administration’s inspections in April 2022, and $275 million for the East-West passenger rail project, which supporters consider a critical piece of a state-wide economic development strategy to improve movement of people from Western MA to Eastern MA.

Other notable investments in the bond bill include:
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$1.3 billion for non-federally aided roads and bridges

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A combined $225 million for development and implementation of programs that expand EV charging infrastructure and incentives for e-bikes, public transit use, and less high-emission vehicle use

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$114 million in funds through the Airport Improvement Program to improve safety and efficiency at Boston Logan International Airport and Worcester Regional Airport

Unpacking the Climate & Energy Bill

The passage of An Act driving clean energy and offshore wind marks the second time in two years that lawmakers and Governor Baker enacted sweeping climate and energy-focused legislation. The central motivation behind the 2022 climate bill, which the Governor signed into law on August 11, is facilitating Massachusetts’ transition to clean energy sources and meeting net zero emissions goals by 2050.

Packed into the bill is a medley of proposals to grow Massachusetts’ offshore wind industry, including a 10-year program to offer refundable job credits and authorize tax incentives to certified offshore wind companies worth up to $35 million annually. The Massachusetts Offshore Wind Industry Investment Program is a big addition to the Massachusetts Clean Energy Center (CEC), the state’s clean energy-focused economic development agency established in 2009. The law endows the Offshore Wind Industry Investment Program with the authority to approve and administer offshore wind companies operating in Massachusetts.

An important related addition to the law, enacted through an amendment by Governor Baker, changes legislative language governing the so-called “price cap” on offshore wind procurements, eliminating the price ceiling if three or more bids are submitted. The Legislature went along with the Governor’s recommendation to jettison the cap if there are no more than two competitive bids following lengthy debate on how the price cap potentially distorts the market for wind development through price controls.

The Good

The final legislation excluded a previous House proposal that would have levied a surcharge on electricity customers’ bills to fund renewable energy sources and the offshore wind investment fund. Massachusetts already has among the highest electricity costs in the nation, which hurts both Massachusetts consumers and our business competitiveness. The surcharge would have exacerbated the already high cost of doing business in the Commonwealth.

The Bad

The legislation also includes a section that allows up to 10 municipalities to ban natural gas in new developments. The proposal produces questionable tradeoffs which, in the balance of things, could well do more harm than good. The ban on gas hookups in new construction risks contributing to the region’s housing affordability challenges as another addition to costly regulations and exclusionary zoning provisions which drive up the cost of building new units.

The section does set some guardrails in excluding lab space and requiring that participating municipalities meet state-ordered housing affordability thresholds. The law also requires that the towns/cities implementing the pilot gather data on building costs, number of permits issued, and other measures to assess outcomes of the pilot.

The bottom line: Before any expansion of the pilot beyond the ten communities, there must be significantly more assessment of impact to confirm the banning of natural gas hookups won’t worsen our housing affordability crisis. The question remains how (and who) will be making those political decisions in future gubernatorial administrations and legislatures.