HB 66
Department of Legislative Services
Maryland General Assembly
2021 Session
FISCAL AND POLICY NOTE
First Reader - Revised
House Bill 66 (Delegates Brooks and Barve)
Economic Matters
Electric Generation - Transition From Fossil Fuels - Carbon Dioxide Emissions
Rate and Transition Plan and Fund (Maryland Coal Community Transition Act
of 2021)
This bill establishes a limit for carbon dioxide (CO2) emissions for electric generating units
in the State that primarily burn coal; the limit is phased-in for specified units. Relatedly,
the bill establishes the Fossil Fuel Community Transition Fund (FFCTF) in the Maryland
Department of Labor (MDL) to provide grants to support (1) displaced workers;
(2) impacted communities; and (3) displaced worker assistance programs. The bill also
establishes a related advisory council, staffed by MDL, subject to specified requirements
and procedures, including the development of a Statewide Fossil Fuel Reduction Plan.
From fiscal 2022 through 2024, $13.3 million must be transferred from the Strategic
Energy Investment Fund (SEIF) to FFCTF. The bill takes effect June 1, 2021.
Fiscal Summary
State Effect: Likely no material effect in FY 2021. General fund expenditures for MDL
increase by $479,400 in FY 2022 and by similar amounts thereafter, as discussed below.
Special fund revenues for FFCTF increase by $13.3 million annually from FY 2022
through 2024. Special fund expenditures for FFCTF increase beginning in FY 2022 as
funds are used for authorized purposes. Overall special fund expenditures for SEIF are not
affected, but diverting funds to FFCTF decreases revenues available for other SEIF-funded
programs.
Local Effect: Potential significant decrease in local property tax revenues beginning in
FY 2022 for affected counties, partially offset by grants, as discussed below. This bill may
impose a mandate on a unit of local government.
Small Business Effect: Potential meaningful.
 Analysis
Bill Summary:
Carbon Dioxide Limit – Coal Power Plants
A CO2 emissions limit of 180 pounds per million British thermal units (BTU) applies to
each generating unit in the State that primarily burns coal as fuel. For particular generating
units, the requirement is phased in from June 1, 2021, to March 1, 2030, as specified:
 on and after June 1, 2021, Chalk Point Units 1 and 2 (Prince George’s County);
 on and after October 1, 2024, Morgantown Units 1 and 2 (Charles County);
 on and after December 31, 2025, Brandon Shores Units 1 and 2 and H.A. Wagner
Unit 3 (Anne Arundel County); and
 on and after March 1, 2030, Warrior Run Unit 1 (Allegany County).
Fossil Fuel Community Transition Fund
FFCTF is established in MDL as a special, nonlapsing fund. MDL must establish policies
and procedures for the administration of FFCTF, which consists of revenue distributed
from SEIF ($13.3 million annually from fiscal 2022 through 2024), money appropriated in
the State budget, and any other money from any other source. The purpose of FFCTF is to
provide grants to support:
 displaced workers, as defined, who are transitioning from employment with a fossil
fuel electric generating unit;
 communities that are impacted by the permanent retirement of a fossil fuel electric
generating unit; and
 programs that assist displaced workers transitioning from employment with a fossil
fuel electric generating unit, a coal mine, or the transportation supply chain of a
fossil fuel electric generating unit or a coal mine.
To that end, FFCTF may be used only for awarding grants consistent with the purposes of
the fund and must be allocated as specified. Broadly, 50% must be allocated for displaced
workers and related purposes, 30% for specified clean energy and energy efficiency
projects in affected counties, and 20% directly to affected counties to offset tax revenue
lost from electric generating unit closures in the three years following such closures.
Individuals responsible for projects that receive a grant must meet specified union-related
requirements in their hiring practices.
HB 66/ Page 2
The bill establishes related ongoing reporting requirements for MDL and owners of
affected electric generating units.
Fossil Fuel Transition Advisory Council and Statewide Fossil Fuel Transition Plan
The Fossil Fuel Transition Advisory Council is established, consisting of specified
members, and staffed by MDL. Council members may not receive compensation as
members but are entitled to reimbursement for travel expenses. The council must meet at
least twice each year to review MDL’s proposals for grant awards from FFCTF and make
recommendations to MDL concerning any proposed grant award. MDL must consider the
council’s recommendations when making decisions about awarding grants from FFCTF.
The council must develop (1) a standard statewide organizing neutrality agreement that can
be used by employers who receive funds from FFCTF and the employees who want to
enter into a collective bargaining agreement and (2) a statewide fossil fuel transition plan.
At a minimum, the statewide fossil fuel transition plan must meet several specified
requirements; for example, the plan must:
 identify or estimate, to the extent practicable, the timing and location of facility
closures and job layoffs in fossil fuel industries affecting at least 50 workers at a
single site of employment and their impact on affected workers and businesses;
 address how the State can most effectively respond to the above economic
dislocations; and
 identify programs and projects that will advance economic development
opportunities in communities historically overburdened by pollution from fossil
fuels.
The council must submit a draft plan to the General Assembly by December 31, 2021; a
final plan is due by December 31, 2022.
Current Law:
Greenhouse Gas Emissions Reduction Act
The Greenhouse Gas Emissions Reduction Act, originally enacted in 2009 and made
permanent and expanded in 2016, was enacted in light of Maryland’s particular
vulnerability to the impacts of climate change. Under the Act, the State was required to
develop plans, adopt regulations, and implement programs to reduce greenhouse gas
(GHG) emissions by 25% from 2006 levels by 2020 and must further reduce
GHG emissions by 40% from 2006 levels by 2030; the 2030 reduction requirement
terminates December 31, 2023.
HB 66/ Page 3
Regional Greenhouse Gas Initiative
Maryland participates in the multistate Regional Greenhouse Gas Initiative (RGGI) in
order to reduce CO2 emissions from the power sector. Each participating state limits
CO2 emissions from electric power plants, issues CO2 allowances, and establishes
participation in CO2 allowance auctions. A single CO2 allowance represents a limited
authorization to emit one ton of CO2.
Strategic Energy Investment Fund
Chapters 127 and 128 of 2008 established SEIF primarily to contain revenue generated
from the sale of CO2 emission allowances under RGGI. The allocation of revenue has been
altered several times in budget reconciliation legislation. The current allocation requires
(1) at least 50% for energy assistance; (2) at least 20% for energy efficiency and
conservation (at least one-half for low- and moderate-income programs); (3) at least 20%
for renewable and clean energy, energy-related education and outreach, resiliency, and
climate change programs; and (4) up to 10%, but no more than $5.0 million for
administrative expenses.
State Fiscal Effect: Special fund revenues for FFCTF increase by $13.3 million annually
in fiscal 2022 through 2024 from SEIF transfers; the transfer in fiscal 2022 is discretionary,
while the fiscal 2023 and 2024 transfers are mandatory. Special fund expenditures for
FFCTC increase in total by $39.9 million as available funding is awarded, although the
timing of such expenditures is unknown.
The bill specifies that FFCTF funds may be used only for awarding grants consistent with
the purposes of the fund. In the absence of clear authorization to use FFCTC for
administrative expenses, this analysis assumes that general funds are used. To the extent
that FFCTF can be used for MDL’s administrative expenses, general fund expenditures for
MDL decrease and less programmatic funding for FFCTF is available.
Therefore, general fund expenditures increase by $479,404 in fiscal 2022, which accounts
for a 30-day start-up delay. This estimate reflects the cost of hiring three grant program
managers and two registered apprenticeship managers to implement the bill’s ongoing
grant programs. It includes salaries, fringe benefits, one-time start-up costs, and ongoing
operating expenses. MDL indicates that nine existing staff will also be required to assist
with implementation of the bill on a part-time basis. This estimate does not include any
allocation of costs associated with that assistance.
HB 66/ Page 4
 Positions 5.0
Salaries and Fringe Benefits $450,679
Operating Expenses 28,725
Total FY 2022 MDL Expenditures $479,404
Future year expenditures reflect salaries with annual increases and employee turnover and
ongoing operating expenses.
Strategic Energy Investment Fund
Overall SEIF expenditures are not affected; however, funding available for existing SEIF
programs is reduced by $39.9 million from fiscal 2022 through 2024. Holding Maryland
Energy Administration administrative expenses constant and allocating the funds across
the remaining standard distribution, approximately $22.2 million less is available for
energy assistance, $8.9 million less is available for energy efficiency and conservation, and
$8.9 million less is available for renewable and clean energy initiatives over those
three fiscal years. Some of that funding would have gone to other State agencies – special
fund revenues and expenditures for those agencies decrease accordingly.
Local Fiscal Effect: To the extent that the bill’s cap on carbon emissions from affected
electric generating units results in the closure of these facilities, there is a significant
decrease in annual property tax revenues for affected counties. The distinction of whether
or not the bill causes the closure of the facilities is important, since coal generation has
been decreasing over time and many plants are aging out of their useful operating lifespans:
some or all of the coal generating units listed in the bill may close due to circumstances
unrelated to the bill.
The loss in property tax revenues – whether caused directly by the bill or not – is partially
offset by grants provided to the affected counties from FFCTF; however, there is
significantly less funding available (about $8.0 million in total for direct aid) than the
counties collect on an annual basis from property taxes from the affected electric generating
units. Additionally, funding from FFCTF for payments to affected counties is only
available for up to three years following the permanent retirement of an electric generating
unit.
For context only, the Brandon Shores Units 1 and 2 and H.A. Wagner Unit 3 in
Anne Arundel County generate approximately $5.7 million in local tax revenues annually.
Chalk Point in Prince George’s County accounts for about $4.4 million in local tax revenues,
although that is for the entire facility (only Units 1 and 2 are coal). The county did not provide
an estimate of revenues associated with just Units 1 and 2. Charles County has likewise
advised in the past that the Morgantown Plant generates approximately $8.5 million in local
revenues annually.
HB 66/ Page 5
It is uncertain how the SEIF transfers affect specific program allocations funded by SEIF;
however, the transfers may reduce funding available to some local governments under
existing or future financial assistance programs.
Small Business Effect: Similar to the effect on local governments, the redirection of SEIF
revenues and expenditures may reduce funding for existing or future financial assistance
programs funded through the affected SEIF accounts that are available to small businesses
or that fund projects supported by small businesses. However, new funding opportunities
may be available for some small businesses from FFCTF. The directly affected power
plants themselves are not small businesses.
Additional Comments: According to the U.S. Energy Information Administration, coal
emits about 215 to 230 pounds of CO2 per million BTU, depending on the type of coal.
Additional Information
Prior Introductions: None.
Designated Cross File: SB 148 (Senators West and Feldman) - Finance and Education,
Health, and Environmental Affairs.
Information Source(s): Maryland Department of Labor; Maryland Energy
Administration; Public Service Commission; Office of People’s Counsel; Comptroller’s
Office; Anne Arundel, Charles, Montgomery, and Prince George’s counties; Maryland
Association of Counties; U.S. Energy Information Administration; Department of
Legislative Services
Fiscal Note History: First Reader - January 28, 2021
rh/lgc Revised - Clarification - January 31, 2021
Revised - Updated Information - January 31, 2021
Analysis by: Stephen M. Ross Direct Inquiries to:
(410) 946-5510
(301) 970-5510
HB 66/ Page 6


Statutes affected:
Text - First - Electric Generation - Transition From Fossil Fuels - Carbon Dioxide Emissions Rate and Transition Plan and Fund (Maryland Coal Community Transition Act of 2021): 11-1401 Labor and Employment, 11-1402 Labor and Employment, 51-4012 Labor and Employment, 47-1011 Labor and Employment, 11-1403 Labor and Employment, 11-1404 Labor and Employment, 11-1405 Labor and Employment, 21-257 Labor and Employment, 2-022 State Government