Businesses, associations strongly oppose Massachusetts HB 1014 & SB 588

The Transportation Association of Massachusetts and other industry associations and businesses strongly oppose House Bill 1014 and Senate Bill
588 – An Act Establishing a Climate Change Superfund. The legislation imposes retroactive liability on fossil fuel companies in an attempt to fund climate change mitigation projects.

The letter was sent to Representative Christine Barber Chair, Joint Committee on Environment and Natural Resources and Senator Rebecca Rausch Chair, Joint Committee on Environment and Natural Resources, on Sept. 25.

A PDF version of the letter is available online.

Dear Chairs Barber, Chair Rausch and members of the Committee,

The undersigned businesses and associations – representing virtually every aspect of the Massachusetts economy – write to express our strong opposition to House Bill 1014 and Senate Bill 588, “An Act establishing a climate change superfund.”

If adopted, this legislation would impose sweeping retroactive liability on fossil-fuel companies in an attempt to fund climate change adaptation projects. The companies subject to the legislation would be assessed payments based on their estimated impact as determined by a climate-cost study assessing the economic repercussions of emissions within the state. It would create a system that levies retroactive fees solely against one segment of the economy – the fossil fuel industry – for activities that were and remain legal, but the impact would be felt by almost every sector of the business community.

Most alarming is the fact that the legislation could significantly increase the costs of living and doing business in Massachusetts to a degree that could devastate the commonwealth’s economy. The U.S. Chamber of Commerce Institute for Legal Reform recently analyzed the proposal and determined that this legislation could significantly raise prices for Massachusetts residents.^[1] The report determined that for every billion dollars in fees assessed under the bill consumers would pay $167 more in transportation costs, $61 more in pass-through costs from business and $41 more in electrical bills, totaling $276 per household. Last session’s version of the legislation proposed a $75 billion fee which would create an average household burden of $20,682 on Massachusetts families at a time when affordability is the primary issue in the state.

A recent study of similar legislation proposed in California conducted by the California Business Roundtable also determined that the climate superfund charges would ultimately be passed along to the consumer though significantly higher prices for gasoline, natural gas, and electricity.^[2] This study concluded that the California proposal would increase the annual household burden on families up to $3,400 with the sharpest impact falling on renters and low-income residents. Gasoline prices would rise by 43 percent and natural gas rates would increase 117 percent for industrial users and 52 percent for households.

The Healey Administration as well as the House and Senate have wisely made the cost of living a central part of policy decisions this and last session. Adopting this legislation would singlehandedly undermine all those efforts. The steep spike in energy costs could cripple industries like manufacturing, trucking, logistics, and construction, among others. Based on analysis done for similar legislation, Massachusetts residents could see double digit (percent) increases in electricity rates, which would make the state even more unaffordable.^[3]

We ask that you please put the consumers first when considering the merits of this proposal and not give this bill a favorable report. House Bill 1014 and Senate Bill 588.

Respectfully,

Brooke Thomson, President and CEO
Associated Industries of Massachusetts

Greg Reibman, President & CEO
Charles River Regional Chamber

Marc Brown, EVP Government Relations and Advocacy
Consumer Energy Alliance

James E. Rooney, President & CEO
Greater Boston Chamber of Commerce

Paul D. Craney, Executive Director
Massachusetts Fiscal Alliance

Christopher Carlozzi, State Director
National Federation of Independent Business

Tamara Small, CEO NAIOP Massachusetts
The Commercial Real Estate Development Association

Karen L. Arpino, Executive Director
NEHPBA

Peter A. Brennan, Executive Director
New England Convenience Store & Energy Marketers Association

Jon B. Hurst, President & CEO
Retailers Association of Massachusetts

Kevin Week, Executive Director
Trucking Association of Massachusetts