HB 1310
Department of Legislative Services
Maryland General Assembly
2021 Session
FISCAL AND POLICY NOTE
First Reader
House Bill 1310 (Delegate Rosenberg)
Appropriations and Economic Matters
Clean Energy and Energy Efficiency - Investment in Low-Income Communities
This bill requires the Commission on Environmental Justice and Sustainable Communities
(CEJSC), by December 1, 2021, to develop policies and recommendations to place the
highest priority on overall spending on clean energy and energy efficiency programs,
projects, and investments in the State to benefit “low-income communities,” as defined.
State and local governmental units, in consultation with specified State agencies and
CEJSC must, to the extent practicable, invest or direct specified programmatic resources
in order to achieve the priorities established for low-income communities. Federal funding
appropriated for specified State programs and agencies (most of which relate to energy and
energy efficiency) must also be prioritized to provide funding to low-income communities,
as specified. The bill also establishes several new reporting requirements. The bill takes
effect June 1, 2021.
Fiscal Summary
State Effect: No effect in FY 2021. In FY 2022, general fund expenditures increase by
$168,200 and special fund expenditures increase by $191,800. Future years reflect ongoing
costs. Overall finances for affected programs are unchanged, but the bill redirects spending,
as discussed below. Revenues are not affected.
(in dollars) FY 2022 FY 2023 FY 2024 FY 2025 FY 2026
Revenues $0 $0 $0 $0 $0
GF Expenditure 168,200 150,800 155,300 160,900 166,700
SF Expenditure 191,800 173,100 178,400 184,700 191,300
Net Effect ($359,900) ($323,900) ($333,700) ($345,600) ($357,900)
Note:() = decrease; GF = general funds; FF = federal funds; SF = special funds; - = indeterminate increase; (-) = indeterminate decrease
Local Effect: Local revenues and expenditures may be affected, but any such impact
cannot be reliably estimated at this time.
Small Business Effect: Potential meaningful.
 Analysis
Bill Summary:
Low-income Community
The bill defines a “low-income community” as a population census tract that has a poverty
rate of at least 20% or (1) for a tract not located within a metropolitan area, has a median
family income that does not exceed 80% of the statewide median family income or (2) for
a tract located within a metropolitan area, has a median family income that does not exceed
80% of the greater of the statewide median family income or the metropolitan area median
family income.
Policy Priorities and Recommendations for Prioritizing Spending
By December 1, 2021, CEJSC must develop policies and recommendations to place the
highest priority on overall spending on clean energy and energy efficiency programs,
projects, and investments in the State to benefit low-income communities.
The priority for spending developed by CEJSC under the bill applies in each fiscal year,
starting with fiscal 2023, to spending on clean energy and energy efficiency programs,
projects, and investments in the areas of housing, workforce development, pollution
reduction, low-income energy assistance, energy, transportation, and economic
development. The spending on programs, projects, and investments includes clean energy
and energy efficiency programs that are wholly or partly funded under (1) the Small,
Minority, and Women-Owned Business Account (SMWOBA) within the Department of
Commerce (Commerce); (2) the Clean Energy Workforce Account within the Maryland
Department of Labor (MDL); and (3) the Jane E. Lawton Conservation Loan Program
(JELLP), the Strategic Energy Investment Program, and the Maryland Offshore Wind
Business Development Fund (MOWBDF) within the Maryland Energy Administration
(MEA).
To achieve these priorities, CEJSC must consult with the Maryland Department of the
Environment (MDE), the Public Service Commission (PSC), MEA, other relevant units of
State and local government, and representatives of low-income communities, clean energy
industries and related energy interests, environmental advocates, and the general public.
CEJSC must also conduct public information-gathering sessions throughout the State to
solicit input from low-income communities and the public.
After consulting with the public, CEJSC must work with MDE, PSC, and MEA to
coordinate and develop specific recommendations concerning identification of, and
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providing assistance to, low-income communities (including recommended legislative and
regulatory changes to achieve the bill’s priorities).
CEJSC must review its guidelines and recommendations annually, as specified, and may
recommend modifications based on new data and other information. By October 1, 2022,
and annually thereafter, CEJSC must submit a report of its activities and recommendations
to the Governor and the General Assembly.
State and Local Governments
State and local governmental units, in consultation with CEJSC, MDE, PSC, and MEA,
must, to the extent practicable, invest or direct available and relevant programmatic
resources in a manner designed to achieve the priorities for low-income communities
established under the bill.
Prioritization of the Use of Federal Funding for Specified Projects
Federal funds that are appropriated either in the budget bill or by budget amendment to
agencies and programs that receive funds for the purpose of (1) clean energy and energy
efficiency programs and projects; (2) energy; (3) housing; (4) workforce development;
(5) pollution reduction; (6) low-income energy assistance; (7) transportation; and
(8) economic development must be prioritized in a manner that provides funding to
low-income communities in accordance with the bill. The bill specifies several programs
subject to this provision, including programs administered by MEA, MDE, MDL, the
Department of Human Services (DHS), the Department of Housing and Community
Development (DHCD), the Maryland Department of Transportation (MDOT), and
Commerce, in addition to any other agencies and programs receiving funds for the above
purposes. However, the bill’s requirements regarding the prioritization of federal funding
do not apply to a program or activity to the extent that the requirement conflicts with federal
law or regulations for that program or activity.
Required Annual Report
The Department of Budget and Management (DBM), in coordination with the appropriate
State agencies, must submit an annual report to specified committees of the
General Assembly by December 31, 2021, and annually thereafter. The report must provide
information on the amount of federal funds that are appropriated for (1) clean energy and
energy efficiency programs and projects; (2) energy; (3) housing; (4) workforce
development; (5) pollution reduction; (6) low-income energy assistance; (7) transportation;
and (8) economic development. The report also must provide information on the share of
funds directed to low-income communities pursuant to the bill.
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Current Law:
Commission on Environmental Justice and Sustainable Communities
CEJSC within MDE was established by executive order in 2001 and codified in 2003.
CEJSC is tasked with examining issues of “environmental justice” and sustainable
communities for all Marylanders. To this end, CEJSC reviews and analyzes the
environmental justice implications of current State policy, laws, and regulations; assesses
the adequacy of State and local laws to address the issue of environmental justice and
sustainable communities; coordinates with the Children’s Environmental Health and
Protection Advisory Council on recommendations to further environmental justice and
sustainable communities; develops criteria to assess whether communities may be
experiencing environmental justice issues; and recommends options to the Governor for
addressing issues, concerns, or problems related to environmental justice. “Environmental
justice” means equal protection from environmental and public health hazards for all
people regardless of race, income, culture, and social status.
Strategic Energy Investment Program and Fund
The Strategic Energy Investment Program within MEA 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 the
Strategic Energy Investment Fund (SEIF), which was established by Chapters 127 and 128
of 2008, primarily to contain revenue generated from the sale of carbon dioxide emission
allowances under the Regional Greenhouse Gas Initiative. 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.
Small, Minority, and Women-Owned Businesses Account
State law generally requires that 1.5% of video lottery terminal proceeds at each licensed
video lottery facility be paid into SMWOBA. The account, which was established in 2007,
is a special, nonlapsing fund that is administered by Commerce. The purpose of the account
is to provide investment capital and loans to small, minority, and women-owned businesses
in the State. At least 50% of such activity must be allocated to eligible businesses in the
jurisdictions and communities surrounding a video lottery facility. Chapter 757 of 2019
requires MEA to use SEIF to provide funding for access to capital for small, minority,
women, and veteran-owned businesses in the clean energy industry under SMWOBA,
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subject to specified conditions. This funding is required to be allocated in annual
increments from fiscal 2021 through 2028.
The Employment Advancement Right Now Program and the Clean Energy Workforce
Account
The Maryland Employment Advancement Right Now (EARN) program, administered by
MDL, was established in 2013 to create industry-led partnerships to advance the skills of
the State’s workforce, grow the State’s economy, and increase sustainable employment for
working families. Specifically, the program provides general fund grants on a competitive
basis for industry partnerships, workforce training programs, and job readiness and skills
training.
Chapter 757 requires MEA to use SEIF to invest in pre-apprenticeship, youth
apprenticeship, and registered apprenticeship programs to establish career paths in the
clean energy industry under the EARN program. Subject to specified requirements, starting
in fiscal 2021, $1.5 million must be transferred for grants to pre-apprenticeship jobs
training programs, and $6.5 million must be transferred for grants to youth and registered
apprenticeship jobs training programs until all amounts are spent. Chapter 757 also
established the Clean Energy Workforce Account in the EARN program to receive and
disburse the transfers as grants.
Jane E. Lawton Conservation Loan Program
The stated purpose of JELLP within MEA is to provide financial assistance in the form of
low-interest and zero-interest loans to nonprofit organizations, local jurisdictions, State
agencies, and eligible businesses for projects to (1) promote energy conservation;
(2) reduce consumption of fossil fuels; (3) improve energy efficiency; and (4) enhance
energy-related economic development and stability in the nonprofit, commercial, and
industrial sectors.
Maryland Offshore Wind Business Development Fund
Chapter 3 of 2013 (The Maryland Offshore Wind Energy Act) established MOWBDF
within MEA to (1) provide financial assistance, business development assistance, and
employee training opportunities to emerging businesses in the State to prepare them to
participate in the emerging offshore wind industry and (2) encourage emerging businesses
in the State to participate in the emerging offshore wind industry. In addition to other
sources of revenue, developers of approved offshore wind projects must each deposit
$6.0 million into the fund over about two years. MEA is authorized to use the fund to carry
out the purposes of the fund and for implementation costs.
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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 2.0% per year, based on each electric company’s 2016 sales.
Approved program costs are recovered by electric companies on customer bills.
Energy Assistance
The Office of Home Energy Programs within DHS administers a variety of energy
assistance programs and services for residential customers using local administering
agencies, including local departments of social services, in each county and Baltimore City.
These programs include the Electric Universal Service Program bill payment assistance,
Maryland Energy Assistance Program bill payment assistance (heating source), and gas
and electric arrearage assistance programs. The income eligibility for each of these
programs is 175% of the federal poverty level.
State Expenditures:
Maryland Energy Administration Administrative Costs
SEIF special fund expenditures for MEA increase by $191,754 in fiscal 2022, which
accounts for a 30-day start up delay. This estimate reflects the cost of hiring two full-time
employees, one program manager and one energy specialist to (1) consult and work with
CEJSC as necessary to coordinate and provide assistance to low-income communities;
(2) conduct necessary program review and develop new policies; (3) meet the bill’s
requirements to invest or direct available and relevant programmatic resources in a manner
designed to achieve the priorities identified for low-income communities under the bill;
(4) prioritize federal funding appropriated to affected MEA-administered programs as
required; and (5) collect data for the required annual reporting. It includes salaries, fringe
benefits, one-time start-up costs, and ongoing operating expenses. The information and
assumptions used in calculating the estimate are stated below:
 the bill creates an annual cycle of data collection, program review, and the
development of new policies; and
 MEA administers more than a dozen programs that are either explicitly or likely
affected by the bill, many of which have subprograms or other distinct categories
within them; accordingly, the bill creates new responsibilities for MEA that cannot
be handled with existing staff.
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 Positions 2.0
Salaries and Fringe Benefits $180,264
Operating Expenses 11,490
MEA FY 2022 Administrative Costs $191,754
Future year administrative expenditures reflect salaries with annual increases and
employee turnover and ongoing operating expenses. To the extent SEIF does not have
sufficient funding to cover these costs, general funds may be necessary to cover these costs
in the out-years.
Maryland Department of the Environment Administrative Costs
General fund expenditures for MDE increase by $168,151 in fiscal 2022, which accounts
for a 30-day start up delay. This estimate reflects the cost of hiring two full-time
administrators to handle CEJSC’s expanded duties under the bill, including (1) developing
the required policies, recommendations, and funding priorities regarding spending on clean
energy and energy efficiency programs, projects, and investments; (2) coordinating with
other agencies and entities; (3) conducting information gathering sessions; (4) annually
reviewing the guidelines and recommendations that are developed; and (5) developing and
submitting the required annual report. It includes salaries, fringe benefits, one-time start-up
costs, and ongoing operating expenses. The information and assumptions used in
calculating the estimate are stated below:
 the bill creates an annual cycle of data collection, program review, and the
development of new policies; and
 based on MDE’s experience staffing CEJSC, MDE staff are not able to absorb the
additional workload anticipated as a result of the bill.
Positions 2.0
Salaries and Fringe Benefits $156,661
Operating Expenses 11,490
MDE FY 2022 Administrative Costs $168,151
Future year administrative expenditures reflect salaries with annual increases and
employee turnover and ongoing operating expenses.
Public Service Commission Administrative Costs
PSC advises that, depending on the extent of the consulting required under the bill, existing
resources should be sufficient to implement the bill. To the extent existing resources prove
insufficient, special fund expenditures increase, and special fund revenues increase
correspondingly due to assessments imposed on public service companies.
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Priority Spending to Benefit Low-income Communities and New Rep