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The Transportation and Climate Initiative:Everything You Need to Know, Part III: The Plan for Massachusetts

In Parts I and II of our series delving into the details of the Transportation Climate Initiative, we provided an overview and described the structure of the TCI. In Part III, we will discuss how the plan might look in one TCI jurisdiction, Massachusetts, and how the Commonwealth will prioritize investment of the proceeds from the initiative.

Massachusetts Governor Charlie Baker and his administration have enthusiastically supported the TCI since the initiative was in its earliest stages. In December 2018, when Massachusetts first announced that it would be joining the initiative, Governor Baker noted the importance of reducing transportation emissions as the transportation sector is the largest contributor to carbon emissions in the Commonwealth. Lieutenant Governor Karyn Polito also voiced her support for the initiative, emphasizing the joint goals of the initiative to reduce emissions and ensure equity across demographic groups. Since joining the initiative, Massachusetts has become a leader in advocating for its implementation and for collaboration amongst TCI jurisdictions.

If implemented, according to estimates based on economic modeling conducted by TCI, the initiative would result in anywhere between a 5 to 17 cent-per-gallon increase in the price of gas across the region, creating a source of revenue for TCI member states to re-invest in sustainable transportation infrastructure and policy initiatives. Massachusetts would receive a portion of that revenue on an annual basis, the amount of which would vary but has been roughly estimated at around $500 million per year. Governor Baker has pledged to use all of the funds on new transportation projects starting as soon as 2022. Long-term, the governor has stated that his goal is for the Commonwealth to reach net-zero in greenhouse gas emissions by the year 2050, making Massachusetts only one of four states to set such an ambitious target.

The Baker administration’s plan would allocate half of the revenue to public transit, including projects like electrifying buses and commuter trains, expanding MBTA service to increase ridership, and creating improved biking and pedestrian infrastructure. Governor Baker recently articulated this goal to the legislature in the filing of his $18 billion transportation bond bill, which includes major investments in the MBTA and would specifically earmark half of the money raised through fees from the TCI to the Commonwealth’s public transportation system.

The remainder of the funds would be allocated towards initiatives that would benefit communities that are currently underserved by transportation options and that have been disproportionately burdened by pollution, issues of equity that the Baker administration is focused on remedying through this initiative. According to Massachusetts Energy Secretary Kathleen Theoharides, these initiatives would include things like providing rebates for electric vehicle users and improving broadband access in rural areas to make telecommuting a more accessible option for certain commuters in the Western part of the state.

Reiterating his support for the initiative at a keynote speech at the Transportation and Climate Initiative Business Summit in December, Baker stated, “This gives us the ability to create a framework where the resources that are raised as a result of this initiative go into things that are believed to be tools that can be used to continue to reduce emissions… I believe this will be one of the most important regional initiatives in reducing carbon emissions anywhere in the U.S.” While TCI officials continue to solicit public feedback on the regional draft framework and conduct additional modeling in advance of releasing a final memorandum this spring, it is clear that Massachusetts has taken a firm stance regarding its support of the TCI and is committed to its implementation in the state through concrete policy proposals and legislative initiatives.

In the fourth and final part of this series, we will discuss potential challenges to regional implementation of the TCI and explore the opposition that some jurisdictions have already begun to face.

©1994-2020 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. All Rights Reserved.National Law Review, Volume X, Number 62

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About this Author

Sahir Surmeli Energy & Sustainability Attorney Mintz Levin
Member

Sa is a highly skilled and versatile business counselor who advises companies, boards, entrepreneurs, investment banks and venture and private equity investors, as they build and grow companies. He handles public offerings, 144A and private financings, acquisitions, joint ventures and strategic partnerships. Sa guides public and private companies and investors, primarily in the energy and sustainability, technology, materials science, hospitality, retail and life sciences industries. Known as a problem-solver, Sa executes transactions with creative structures to address new opportunities...

617-348-3013
Member / Chair, Energy & Sustainability Practice
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Tom Burton’s zeal for innovation and passion for energy and sustainability have shaped the clean energy industry. He created one of the nation’s first clean energy legal practices. Clients ranging from investors to entrepreneurs to Fortune 100 companies rely on him for creative and strategic legal solutions, and he has completed hundreds of venture capital and private equity financings, mergers and acquisitions, and IPOs. He guides the industry’s next generation of leaders through active involvement with start-up organizations and accelerators. The Northeast Clean Energy Council recognized his pioneering role in the Northeast with a Decade of Influence award in 2017.

Tom’s global practice focuses on complex corporate finance matters including mergers and acquisitions, venture capital, private equity, and securities transactions. He represents high-growth and emerging businesses, including companies in the energy and clean technology, social media and software industries, as well as life science companies, from start-ups to public companies.

In 2004, Tom founded, and currently chairs, the firm’s Energy & Sustainability Practice, which has completed more than 500 transactions across energy sectors totaling over $8.5 billion since 2006. Serving more than 250 clients, spanning the ecosystem from emerging companies to large corporations, venture capital and private equity funds, investment banks, project developers, and family offices, the firm is recognized nationally as a leading law firm in the space. Tom is ranked byBest Lawyers in America in the Corporate Law section, and he is recognized by The Legal 500 United States as “rising to the fore” in energy technology for Venture Capital and Emerging Companies.

On the corporate and securities side, Tom has served as counsel in the structuring and completion of over 400 venture capital and private equity financings, representing both the funds providing the capital and the emerging growth companies seeking funding. His work in this area has raised billions of dollars. He organizes venture capital funds and represents them in their portfolio investments. Tom is also a key contributor to MintzEdge, an online resource for entrepreneurs that includes useful tools and information for starting and growing a company. In addition, he devotes a portion of his practice to counseling social enterprise companies, impact investors, and nonprofit companies.

Tom routinely counsels businesses on their growth and development, advises their boards of directors on corporate governance matters, and participates in an array of transactions, from private and public offerings to mergers and acquisitions, joint ventures, and technology transfer matters. Tom also has experience in advising investment banks in private placements and underwritten public offerings of equity securities, and in their role as financial advisor in mergers and acquisitions.

He applies his background in corporate finance to counsel energy and clean technology companies through all stages of formation, financing, and exits. His energy and clean technology clients span markets such as solar and wind, smart grid and energy efficiency, energy storage, water technologies, waste treatment, biofuels, electric vehicles, and green buildings.

617-348-3097