HB 803
Department of Legislative Services
Maryland General Assembly
2021 Session
FISCAL AND POLICY NOTE
First Reader
House Bill 803 (Delegate Solomon)
Appropriations
Facilitating University Transformations by Unifying Reductions in Emissions
(FUTURE) Act
This bill requires each public four-year institution to be carbon neutral for “Scope 1 direct
emissions” and “Scope 2 indirect emissions” by January 1, 2025, and for “Scope 3 induced
emissions” by January 1, 2035. Carbon neutrality can be met through reduced carbon
emissions or carbon offsets. Except under specified conditions, an institution that uses
carbon offsets must meet specified requirements related to the percentage of projects that
are achieved in Maryland, the Chesapeake Bay watershed, or through an environmental
justice offset project. Each carbon offset must be verified, as specified. Each institution
must have specified staff to implement the bill and dedicated to sustainability by specified
dates. By December 1 annually, each public four-year institution must report on the
progress the institution has made toward meeting the requirements of the bill, as specified.
The bill takes effect July 1, 2021.
Fiscal Summary
State Effect: As early as FY 2022, public four-year higher education expenditures
increase to begin projects to reduce carbon emissions. Beginning in FY 2025, public
four-year higher education expenditures increase, likely by hundreds of thousands of
dollars annually, to purchase carbon offsets that meet the bill’s requirements. Expenditures
likely increase as the percentage of projects that are required to meet specified requirements
increase, with requirements fully phased in by FY 2055. Other costs are possible. As
explained below, overall costs cannot be reliably estimated. Revenues are not directly
affected, although institutions may increase or establish student sustainability fees to cover
a portion of the cost.
Local Effect: None.
Small Business Effect: Minimal, as explained below.
 Analysis
Bill Summary: The bill applies to public senior (four-year) institutions i.e., constituent
institutions of the University System of Maryland (USM) and the University of Maryland
Center for Environmental Science (UMCES), Morgan State University (MSU), and
St. Mary’s College of Maryland (SMCM).
“Scope 1 direct emissions” means emissions physically produced at a public four-year
institution campus, including specified emissions. “Scope 2 indirect emissions” means
indirect emissions resulting from activities affiliated with the institution that take place at
a site that is not owned or controlled by the institution, including specified emissions.
“Scope 3 induced emissions” means emissions produced by sources that are central to an
institution’s operations and activities and are not owned or controlled by the institution,
including those specified.
Methods for achieving carbon neutrality include increasing an institution’s energy
efficiency, transitioning the institution’s vehicles to electric vehicles, a commitment to
net-zero building emissions from the institution, transitioning the institution to renewable
energy, and carbon offsets.
As shown in Exhibit 1, for an institution that uses carbon offsets for achieving carbon
neutrality under the bill, a specified percentage of offsets must be achieved in Maryland,
in the Chesapeake Bay watershed, or through an environmental justice offset project. In
addition, by 2035, 10% of each carbon offset project must be designed to benefit a
community that scores a 0.51 or higher on the Maryland Environmental Justice Screen
Tool.
Exhibit 1
Percentage of Offset Projects That Must Be Achieved in Maryland, the Chesapeake
Bay Watershed, or through an Environmental Justice Offset Project by Years
Years Percentage
2025 through 2034 5%
2035 through 2044 25%
2045 through 2054 50%
2055 and thereafter 75%
Source: Department of Legislative Services
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An environmental justice offset project must be located within the United States. For
in-State projects, it must directly benefit a community that scores a 0.51 or higher on the
Maryland Environmental Justice Screen Tool. For out-of-state projects, it must directly
benefit a community that scores in the 50th percentile or higher on the U.S. Environmental
Justice Screening and Mapping Tool. Further, an environmental justice project must also
(1) be developed in partnership with local organization located or primarily working in the
community in which the project will occur; (2) follow best practices; and (3) meet the
requirement of the bill.
An institution may use offsets that do not meet the specified requirements if (1) the public
institution, in consultation with the Department of General Services (DGS), determines
that the institution cannot reasonably meet the requirements of the bill and (2) the public
institution’s student government association appoints students who will work with the
individual responsible for making energy and offset purchase decisions for the institution
to review and approve the carbon offsets the institution will use in lieu of carbon offsets
that meet the specified requirements.
Each carbon offset use to meet the requirements of the bill must be verified by one of
several specified methods.
By August 1, 2021, each institution must designate an existing faculty or staff member to
implement and monitor the institution’s implementation of the bill. The individual must
report directly to the institution’s president or equivalent.
By January 1, 2023, each institution must have at least one position dedicated to
sustainability. Each dedicated sustainability staff member and, if applicable, sustainability
office, must report directly to the institution’s president or equivalent.
Institutions must share relevant resources, best practices, and methodologies with
one another. Each sustainability office or sustainability staff members must meet quarterly
to share best practices and report on the progress made toward meeting the bill’s
requirements.
Current Law: Public four-year institutions are not required to be carbon neutral. For those
institutions who choose to be carbon neutral, there are no requirements to meet that status.
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
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(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. In October 2019, the Maryland Department of the
Environment released a draft plan to reach the 2030 reduction requirement.
The Maryland Green Building Council
The Maryland Green Building Council (MGBC), which is staffed by DGS, is charged with:
 evaluating current high-performance building technologies;
 recommending the most cost-effective green building technologies that the State
might consider requiring in the construction of State facilities;
 providing recommendations concerning how to expand green building in the State;
developing a list of building types for which green building technologies should not
be applied; and
 establishing a process for receiving public input.
Energy Efficiency and Conservation – High-performance Buildings
Chapter 124 of 2008 requires most new or renovated State buildings to be constructed as
high-performance buildings, subject to waiver processes established by the Department of
Budget and Management (DBM) and DGS. Chapter 124 defines a “high-performance
building” as one that (1) meets or exceeds the Leadership in Energy and Environmental
Design criteria for a silver rating or (2) achieves a comparable numeric rating according to
a nationally recognized, accepted, and appropriate standard approved by DBM and DGS.
Based on action approved by MGBC, DGS, and DBM, a “high performance building” also
includes one that (1) earns a two Green Globes rating or better under the Green Building
Initiative’s Green Globes rating system or (2) complies with MGBC’s supplement to the
International Green Construction Code enacted in November 2014.
Only new or renovated State buildings that are at least 7,500 square feet and are built or
renovated entirely with State funds are subject to the high-performance requirement.
Additionally, building renovations must include the replacement of heating, ventilation,
air conditioning, electrical, and plumbing systems and must retain the building shell.
Unoccupied buildings are exempt from the high-performance mandate, including
warehouses, garages, maintenance facilities, transmitter buildings, and pumping stations.
Maryland Building Performance Standards
The Maryland Department of Labor (MDL) is required to adopt, as Maryland Building
Performance Standards, the most recent version of the International Building Code (IBC),
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including the 2018 International Energy Conservation Code (IECC), along with applicable
modifications authorized in Title 12 of the Public Safety Article. Within 18 months of the
release of each new version of IBC, MDL is required to review the new version, consider
modifications, and adopt specified modifications related to energy conservation and
efficiency. MDL is prohibited from adopting any modification that is more stringent than
IBC, except that an energy conservation requirement may be more stringent than IECC.
MDL and local governments may also adopt by regulation the International Green
Construction Code.
Energy Efficiency and Conservation – State Building Energy Efficiency Executive Order
In June 2019, Governor Lawrence J. Hogan, Jr., issued an executive order establishing a
new energy savings goal for State government. Specifically, DGS, in cooperation with the
Maryland Energy Administration (MEA), must manage a “Maryland Leads by Example”
energy savings initiative that will oversee reducing, by 2029, the energy use of State-owned
buildings by 10% compared to a 2018 baseline. Chapter 289 of 2020 codified the
Governor’s executive order, including the goal for reducing energy use in State-owned
buildings by 10%.
EmPOWER Maryland
In 2008, the General Assembly passed the EmPOWER Maryland Energy Efficiency Act,
which set target reductions of 15% in per capita electricity consumption and peak demand,
respectively, by 2015 from a 2007 baseline. Legislation in 2017 extended the program
through its 2018 to 2020 and 2021 to 2023 program cycles and established a new annual
energy savings goal of 2% per year, based on each electric company’s 2016 sales.
Approved program costs are recovered by electric companies on customer bills.
Zero-emission Vehicles
Several State programs aim to encourage the purchase of electric vehicles in the State. For
example, subject to available funding, a person who purchased a qualified plug-in electric
vehicle or a qualified fuel cell electric vehicle prior to July 1, 2020, may claim a credit
against the vehicle excise tax. In addition, MEA administers the Electric Vehicle
Recharging Equipment Rebate Program, which provides rebates to individuals, businesses,
and to State and local governments. The rebate is equal to 40% of the cost of property that
is located in the State and used for recharging vehicles propelled by electricity, subject to
specified maximum values. MEA may also reimburse a person for the reasonable costs of
installing the qualifying equipment.
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State Vehicle Fleet
DGS purchases vehicles for the State based on standards developed by DBM and approved
by the Board of Public Works. DBM administers the State vehicle fleet. The standards
developed by DBM must, as far as practicable and feasible, be based on the lowest possible
life-cycle cost of the vehicle.
Regional Greenhouse Gas Initiative and the Strategic Energy Investment Fund
Maryland participates in the multistate Regional Greenhouse Gas Initiative (RGGI) in
order to reduce carbon dioxide (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.
Chapters 127 and 128 of 2008 established the Strategic Energy Investment Fund 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 Expenditures: The bill requires USM institutions, MSU, and SMCM to achieve
carbon neutrality for Scope 1 and 2 emissions by January 1, 2025 (fiscal 2025) and for
Scope 3 emissions by January 1, 2035 (fiscal 2035). As discussed below, it is assumed that
institutions use a combination of carbon emissions reduction activities and the purchasing
of carbon offsets that meet the bill’s requirements. Costs largely depend on the costs of
carbon offsets, including those that meet the specified requirements. The overall costs
cannot be reliably estimated; however, many institutions have estimated significant costs,
with costs definitely increasing by fiscal 2025, likely by hundreds of thousands of dollars
annually. As discussed below, other costs, including for personnel, are also possible. Costs
may begin as early as fiscal 2022.
Carbon Emissions Reduction Activities
As early as fiscal 2022, public four-year expenditures increase to begin projects to reduce
carbon emissions. Any such projects will reduce the amount of carbon offsets that will need
to be purchased beginning in fiscal 2025. According to the bill, methods for achieving
carbon neutrality include increasing an institution’s energy efficiency, transitioning the
institution’s vehicles to electric vehicles, a commitment to net-zero building emissions
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from the institution, transitioning the institution to renewable energy, and carbon offsets.
Some of these costs will be one-time expenditures, while others will be ongoing costs.
Some of the projects undertaken to reduce carbon emissions may result in future year and
long-term savings, such as the purchase of electric vehicles. The projects chosen will
depend on the institution, and costs cannot be reliably estimated.
Carbon Offsets
Beginning in fiscal 2025 (January 1, 2025) public four-year expenditures increase to
purchase carbon offsets that meet the requirements of the bill to achieve carbon neutrality
for Scope 1 and 2 emissions. Beginning in fiscal 2035 (January 1, 2035), public four-year
expenditures increase further to achieve carbon neutrality for Scope 3 emissions. In
addition, the percentage of carbon offsets that must be achieved in Maryland, in the
Chesapeake Bay watershed, or through an environmental justice offset project increases
from 2025 through 2055. Further, by 2035, 10% of each carbon offset project must be
designed to benefit a community that scores a 0.51 or higher on the Maryland
Environmental Justice Screen Tool.
According to Second Nature, a nonprofit organization focused on campus carbon
neutrality, the price of carbon offsets can vary widely, from less than $1 to greater than $50
per ton. The price depends on the type of carbon offset project, the carbon standard under
which it was developed, the location of the offset, the co-benefits associated with the
project, and the vintage year. Salisbury University advises that the costs for carbon offsets
range from $7 to $25. Gold Standard for the Global Goals, one of the verification methods
listed in the bill, lists global offsets at $10 to $47 per ton. The cost of carbon offsets that
meet the requirements of the bill are unknown. It is also unknown if the cost of carbon
offsets will increase or decrease in future years.
Costs are also dependent on the carbon emissions of each institution. According to
Second Nature, carbon emissions by public four-year institutions in Maryland ranged from
zero (UMCES), with the next lowest of approximately 8,600 to a high of 240,000 tons;
however, the source of this information is unclear, the most recent year of data varies by
institution, and information is not available for all institutions (only for those that
participate in one of Second Nature’s commitments or programs).
Under one set of assumptions, prior to any emission reduction activities or projects, the
Department of Legislative Services (DLS) estimates annual costs to be from $129,000 to
$3.6 million per institution, with annual costs in the hundreds of thousands of dollars per
institution likely. This estimate is based on the Second Nature information on carbon
emissions by institution and an estimated carbon offset cost of $15, the cost for the majority
of Gold Standard for the Global Goals offsets as of February 2021.
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University of Maryland, Baltimore Campus estimates an annualized incremental cost
increase of $3.3 million to achieve Scope 1 and 2 carbon neutrality and an additional
$394,300 annually to achieve Scope 3 carbon neutrality. University of Maryland
Baltimore County advises that costs to achieve carbon neutrality within the bill’s timeline
of 2035 total $15.2 million, with annual costs thereafter of $950,000. University of
Maryland Gl