Bill Summary – FastDemocracy

HB 395
                      Department of Legislative Services
                              Maryland General Assembly
                                    2020 Session
                           FISCAL AND POLICY NOTE
                              Third Reader - Revised
House Bill 395                  (Delegates Krimm and Stein)
Economic Matters                                                                   Finance
      Maryland Strategic Energy Investment Fund - Regional Greenhouse Gas
         Initiative - Use of Proceeds for Maryland Healthy Soils Program
This bill requires that – of the 20% of proceeds received by the Strategic Energy Investment
Fund (SEIF) from the sale of allowances under the Regional Greenhouse Gas Initiative
(RGGI) that are credited to a renewable and clean energy programs account – $500,000 of
those proceeds must be allocated to the Maryland Healthy Soils Program within the
Maryland Department of Agriculture (MDA). The bill terminates September 30, 2025.
                                    Fiscal Summary
State Effect: Overall SEIF finances are not affected. The bill shifts $500,000, on an annual
basis, of SEIF special fund revenues and expenditures to the Maryland Healthy Soils
Program in MDA, until the bill terminates at the end of September 2025. This bill
establishes a mandated appropriation beginning in FY 2023.
Local Effect: Local governments may be negatively affected by decreased funding for
existing or future financial assistance programs supported by the SEIF renewable and clean
energy programs account in the absence of the bill.
Small Business Effect: Potential meaningful.
                                         Analysis
Current Law/Background:
Strategic Energy Investment Fund
The Strategic Energy Investment Program has the stated purpose of decreasing energy
demand and increasing energy supply to promote affordable, reliable, and clean energy to
fuel Maryland’s future prosperity. The program is supported by SEIF, which receives,
among other funding, proceeds from the auction of carbon allowances to power plants and
other market participants under RGGI. SEIF may be used to, among other things, invest in
the promotion, development, and implementation of climate change programs directly
related to reducing or mitigating the effects of climate change.
The proceeds received by SEIF from the auction of carbon allowances under RGGI are
subject to statutory allocations, including a requirement that at least 20% of the proceeds
be credited to a renewable and clean energy programs account for (1) renewable and clean
energy programs and initiatives; (2) energy-related public education and outreach; and
(3) climate change and resiliency programs.
For more information on SEIF funding, please see the Department of Legislative Services’
analysis (p. 18) of the Governor’s proposed fiscal 2021 operating budget for the
Maryland Energy Administration (MEA).
Maryland Healthy Soils Program
Chapter 373 of 2017 established the Maryland Healthy Soils Program to (1) improve the
health, yield, and profitability of the soils of the State; (2) increase biological activity and
carbon sequestration in the soils of the State by promoting practices based on emerging
soil science, including planting mixed cover crops, adopting no-till or low-till farming
practices, and rotation grazing; and (3) promote widespread use of healthy soils practices
among farmers in the State. To carry out the purposes of the program, Chapter 373 requires
MDA to (1) provide incentives, including research, education, technical assistance, and,
subject to available funding, financial assistance, to farmers to implement farm
management practices that contribute to healthy soils and (2) determine whether the
program may be implemented in a manner to enhance other State and federal programs that
provide financial assistance to farmers.
MDA indicates there are currently no State funds allocated to the program.
State Fiscal Effect: While the bill shifts $500,000, on an annual basis (until the bill
terminates), of SEIF special fund revenues and expenditures under the renewable and clean
energy programs account to MDA for the Maryland Healthy Soils Program, the bill is not
expected to affect overall SEIF finances.
MEA and the Maryland Department of the Environment (MDE) are allocated the largest
amounts of funding from the SEIF renewable and clean energy programs account under
the Governor’s proposed fiscal 2021 budget ($6.8 million and $2.6 million, respectively,
consisting of a combination of fiscal 2021 auction revenues and use of fund balance).
Shifting of funding from those agencies could limit funding available to (1) assist in the
HB 395/ Page 2
deployment of clean energy technologies under MEA programs and/or (2) conduct climate
change related programmatic activities of MDE.
Local Fiscal Effect: It is uncertain how the shift in SEIF special fund revenues and
expenditures will affect existing programs funded with SEIF special funds under the
renewable and clean energy programs account; however, the shift may reduce funding
available to local governments under existing or future financial assistance programs
funded through the SEIF renewable and clean energy programs account in the absence of
the bill.
Small Business Effect: Small business farmers may benefit from financial assistance
made available under the Maryland Healthy Soils Program as a result of the bill. Similar
to the effect on local governments, however, the shift in SEIF special fund revenues and
expenditures may reduce funding for existing or future financial assistance programs
funded through the SEIF renewable and clean energy programs account that are available
to small businesses or that fund projects supported by small businesses.
                               Additional Information
Prior Introductions: None.
Designated Cross File: None.
Information Source(s): Maryland Department of Agriculture; Maryland Department of
the Environment; Maryland Energy Administration; Department of Legislative Services
Fiscal Note History:     First Reader - February 18, 2020
rh/lgc                   Third Reader - March 17, 2020
                                Revised - Amendment(s) - March 17, 2020
Analysis by: Scott D. Kennedy                        Direct Inquiries to:
                                                     (410) 946-5510
                                                     (301) 970-5510
HB 395/ Page 3
Statutes affected: 
Text - First - Maryland Strategic Energy Investment Fund - Regional Greenhouse Gas Initiative - Use of Proceeds for Maryland Healthy Soils Program: 2-1002 State Government, 2-1002 State Government
Text - Third - Maryland Strategic Energy Investment Fund - Regional Greenhouse Gas Initiative - Use of Proceeds for Maryland Healthy Soils Program: 2-1002 State Government, 2-1002 State Government