Trial Engrossment of Amendment A03817 to Senate Bill 0119 P.N. 0125, Regular Session 2021-2022

A03817

THE GENERAL ASSEMBLY OF PENNSYLVANIA

SENATE BILL

No.

119

Session of

2021

INTRODUCED BY PITTMAN, YAW, ARGALL, LANGERHOLC, STEFANO,

BARTOLOTTA, MARTIN, PHILLIPS-HILL, GORDNER, J. WARD,

SCAVELLO, MENSCH, HUTCHINSON, REGAN, BROOKS, K. WARD, DUSH

AND MASTRIANO, JANUARY 29, 2021

REFERRED TO ENVIRONMENTAL RESOURCES AND ENERGY, JANUARY 29, 2021

AN ACT

Authorizing the Department of Environmental Protection to

conduct a public comment process on and submit to the General

Assembly a measure or action intended to abate, control or

limit carbon dioxide emissions by imposing a revenue-

generating tax or fee on carbon dioxide emissions; and making

an appropriation.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1. Short title.

This act shall be known and may be cited as the Pennsylvania

Carbon Dioxide Cap and Trade Authorization Act.

Section 2. Declaration of policy.

The General Assembly finds and declares as follows:

(1) As a matter of Pennsylvania law, no statutory or

constitutional authority currently exists that authorizes a

State agency to regulate or impose a tax on carbon dioxide

emissions. Therefore, it is the responsibility of the General

Assembly, working together with the Department of

Environmental Protection, the Environmental Quality Board,

the Pennsylvania Public Utility Commission and other

important stakeholders, to determine whether and how to

regulate or impose a tax on carbon dioxide emissions.

(2) The General Assembly recognizes that no statute,

including the act of January 8, 1960 (1959 P.L.2119, No.787),

known as the Air Pollution Control Act, the act of February

17, 1972 (P.L.64, No.20), known as the Uniform Interstate Air

Pollution Agreements Act, the act of July 9, 2008 (P.L.935,

No.70), known as the Pennsylvania Climate Change Act or the

Pennsylvania Constitution, authorizes the Governor, the

Environmental Quality Board, the Department of Environmental

Protection or any other agency or official to adopt

regulations, implement a policy or take any other action to

authorize the Commonwealth to join or participate in a State

or regional greenhouse gas cap-and-trade program or establish

a greenhouse gas cap-and-trade program.

(3) Affordable, reliable and resilient sources of

electric power generated in Pennsylvania are vital to the

health, safety and welfare of this Commonwealth's residents

and to the prosperity of its economy.

(4) The premature deactivation or retirement of coal-

fired and coal refuse electric generation units in

Pennsylvania as a direct result of State action will result

in significant direct economic hardship to the communities in

which they operate and will adversely affect this

Commonwealth's economy, environment and electric reliability

and the general health, safety and welfare of its residents,

businesses and industries.

(5) Given that Pennsylvania is one of the top net

exporters of electricity and the third largest coal-producing

A03817 - 2 -

state in the nation, abating, controlling or limiting carbon

dioxide emissions will have a significant, profound and long-

lasting impact on this Commonwealth's economy and require its

consumers to import electricity generated by out-of-State

fossil fuel plants, canceling out any emission reductions.

(6) In addition to the impact on coal-fired and coal

refuse electric generating facilities, as well as natural

gas-fired electric generation facilities that would have to

absorb a carbon tax, abating, controlling or limiting carbon

dioxide emissions in Pennsylvania will have a significant

negative economic impact on this Commonwealth's industrial,

manufacturing and transportation sectors.

Section 3 2. Definitions.

The following words and phrases when used in this act shall

have the meanings given to them in this section unless the

context clearly indicates otherwise:

"Department." The Department of Environmental Protection of

the Commonwealth.

"RGGI." The Regional Greenhouse Gas Initiative, which is a

multistate compact that establishes or calls for the compacting

states to establish a regional, multistate cap on the amount of

greenhouse gases released by electric generation plants.

"Standing committee." The Environmental Resources and Energy

Committee of the Senate and the Environmental Resources and

Energy Committee of the House of Representatives.

Section 4 3. Regulation of greenhouse gas emissions.

(a) Prohibition.--Except for a measure that is required by

Federal law or approved by the Independent Regulatory Review

Commission as a final-form regulation, the department may not

adopt a measure or take any other action that is designed to

A03817 - 3 -

abate, control or limit carbon dioxide emissions, including an

action to join or participate in a State or regional greenhouse

gas cap-and-trade program, including the RGGI, nor may the

department establish a greenhouse gas cap-and-trade program,

unless the General Assembly specifically authorizes such a

measure or action by statute that is enacted on or after the

effective date of this section.

(b) Submission to General Assembly.--If the department

proposes a measure of action under subsection (a), the

department shall submit the proposed measure or other proposed

action to the General Assembly as provided under section 5 4.

Section 5 4. Process for submission to General Assembly.

(a) Duties of department.--Prior to submitting a proposed

measure or other proposed action to the General Assembly under

section 4(b) 3(b), the department shall do the following:

(1) Submit to the Legislative Reference Bureau for

publication in the Pennsylvania Bulletin the proposed measure

or other proposed action that is in the form of draft

legislation. The publication shall set a public comment

period of no less than 180 days.

(2) During the public comment period, the department

shall conduct a minimum of four public hearings, conducted in

accordance with 65 Pa.C.S. Ch. 7 (relating to open meetings),

on the proposed measure or other proposed action and shall

conduct the hearings in geographically dispersed locations in

this Commonwealth, including locations in which regulated

sources of carbon dioxide emissions would be directly

economically affected by the proposal.

(3) Following the public comment period, the department

shall compile a report that will be submitted to both

A03817 - 4 -

standing committees. The report shall include the following

information:

(i) A list of all individual facilities, by county,

that would be subject to the proposed measure or other

proposed action, along with:

(A) the amount of carbon dioxide emitted by each

of the facilities;

(B) the estimated cost that each of the

facilities would incur to comply with the proposed

measure or other proposed action;

other proposed action would have on the price of

electricity ($/MWh net) that each of the facilities

generates;

(D) a list of the facilities that, under the

proposed measure or other proposed action, would be

unlikely to continue to operate;

(E) for the other electric generation

facilities, an assessment of the extent to which they

would be likely to operate after the proposed measure

or other proposed action had been fully implemented;

(F) an assessment of the decrease of electricity

that would be exported from Pennsylvania after the

proposed measure or other proposed action had been

fully implemented; and

(G) an assessment of the contribution to

resilience and diversity in the Pennsylvania electric

generation fleet from each of the affected facilities

and the impacts upon the resilience and diversity in

the event that any or all of the facilities are

A03817 - 5 -

forced to close.

(ii) A summary of the impacts on all industries

whose public testimony or comments were received by the

department during the public comment period.

(iii) An estimate of the net carbon dioxide emission

reductions that the proposed measure or other proposed

action would engender within the PJM Interconnection

region, taking into account the electricity generation in

neighboring states where there is not a regulation or tax

on carbon dioxide emissions.

(iv) A summary and justification of any provisions

in the proposed measure or other proposed action that

would address leakage.

(v) A description of the economic and fiscal impacts

that would result from the proposed measure or other

proposed action, including the following impacts:

(A) Direct and indirect costs to the

Commonwealth and its political subdivisions and the

private sector.

(B) The impact of any action or measure upon the

wholesale and retail price of electricity, both

directly and indirectly, broken down by classes of

electricity consumers, including, but not limited to,

residential, commercial, industrial and

transportation.

services, productivity or competition.

(D) The nature of the reports, forms or other

paperwork that would be required for implementation

and administration of the action or measure and the

A03817 - 6 -

estimated cost for individuals, businesses and

organizations in the public and private sectors to

prepare them.

(E) The nature and estimated cost of legal,

consulting or accounting services that the public or

private sector would be required or likely to incur

for implementation and administration of the action

or measure.

(F) The impact that it would have on the public

interest to exempt individuals, employers or

facilities from compliance or require the

individuals, employers or facilities to comply with

less stringent standards when it would be lawful,

desirable and feasible.

(vi) Whether a less costly or less intrusive

alternative method of achieving the goal of the proposed

measure or other proposed action has been considered for

an employer or facility that would otherwise be subject

to the proposed measure or proposed action.

(b) Legislation.--Once the public comment period has

concluded and the department has submitted the report to the

standing committees, the department shall submit the measure in

legislative form to the standing committees and request that a

member of the standing committees introduce the legislation.

This action shall constitute submitting the measure or action to

the General Assembly. If the legislation is introduced, the

legislation shall follow the standard legislative process and

may be considered by a standing committee if the legislation is

referred to the standing committee.

Section 5. Funding for energy sustainability and investment

A03817 - 7 -

projects.

(a) Appropriation of Federal funds.--For fiscal year 2022-

2023, $750,000,000 from the COVID-19 Response Restricted Account

is appropriated for transfer to the Commonwealth Financing

Authority and is allocated as follows:

(1) The sum of $375,000,000 is allocated for the purpose

of research, development, construction or site development of

carbon dioxide and methane reduction technologies for

electric generation and manufacturing, including, but not

limited to, micro-grid nuclear power plants, carbon capture

utilization and sequestration, development of hydrogen fuel

projects, securing Federal funds for a regional hydrogen hub

and battery storage. At least $37,500,000 of this allocation

shall be used for methane abatement projects from plugging

abandoned natural gas wells.

(2) The sum of $187,500,000 is allocated for the purpose

of sewer and water infrastructure and storm water mitigation

projects, including riparian planting for carbon dioxide

reduction, stream buffering and streambank restoration.

(3) The sum of $187,500,000 is allocated for the purpose

of assisting workers and communities impacted by electric

generation or manufacturing plant closures, including, but

not limited to, apprenticeship and training projects,

extensions of unemployment compensation benefits and

investments in projects to redevelop the closed plant sites.

(b) Applicability of prevailing wages.--A capital project

that directly or indirectly receives money appropriated under

this section shall be subject to the act of August 15, 1961

(P.L.987, No.442), known as the Pennsylvania Prevailing Wage

Act.

A03817 - 8 -

section shall not lapse.

(d) Applicability.--The provisions of section 111-C(g) of

the act of April 9, 1929 (P.L.343, No.176), known as The Fiscal

Code, shall not apply to the amount appropriated under this

section.

Section 6. Effective date.

This act shall take effect immediately.

A03817 - 9 -