PETITION OF:

Barry R. Finegold

Steven C. Panagiotakos

James B. Eldridge

Thomas A. Golden, Jr.

William G. Greene, Jr.

James R. Miceli

Kevin J. Murphy

David M. Nangle

Douglas W. Petersen

William N. Brownsberger

John W. Scibak

James M. Murphy

Mark C. Montigny

Peter V. Kocot

Barbara A. L'Italien

William Lantigua

Anthony J. Verga

Bradford Hill

Charles A. Murphy

Edward M. Augustus, Jr.

Geoffrey D. Hall

Susan C. Tucker

Robert P. Spellane

Robert A. Havern

Christine E. Canavan

John D. Keenan

Jennifer M. Callahan

James E. Timilty

SECTION 1. To provide for programs that encourage economic investment in the Commonwealth, the sums set forth in this act for the several purposes and subject to the conditions specified in this act and are hereby made available subject to the provisions of law regulating the disbursement of public funds and approval thereof. Hydrogen and fuel cell Legislation to strengthen Massachusetts’ competitiveness in the hydrogen and fuel cell industry resulted in expanded employment, increased private investment, greater federal funding, accelerated commercial sales, and increased public education and awareness. Social benefits include reduced dependence on foreign sources of energy, a cleaner environment, and an expanded manufacturing sector.

SECTION 2. Massachusetts shall establish a research and development matching grant program to help companies in the Commonwealth to accelerate the commercialization of hydrogen and fuel cell technologies. Specific objectives include: (1) providing direct financing and business assistance to companies located in the Commonwealth; (2) building research capabilities within universities and forge closer ties to industry; (3) promoting early adoption of commercial and near-commercial technologies; (4) increasing public visibility and education associated with hydrogen and fuel cell solutions; and (5) attracting greater amounts of federal funding to Massachusetts.

(a) Companies and organizations (“Requesting Organizations”) must be located in Massachusetts to be eligible for funding. Requesting organizations may request funding for three purposes: (1) cost share requirements for federal research and development grants; (2) industry sponsored research at Massachusetts universities and colleges; and (3) demonstrations of near-commercial technologies. Requesting organizations must demonstrate how projects will lead to commercial success and create benefits to the Commonwealth.

(b) All three grant categories are subject to requesting organization contributions, with the specific contribution level depending on the type of funding requested. For federal research and development grants, the Commonwealth will provide a portion of the federally required cost share percentage, up to 50%. For other grant requests, the Commonwealth shall provide up to 50% of project costs. The maximum grant under any circumstance shall be no greater than 50% of the applicable project cost, and no grant provided by the Commonwealth shall be more than $500,000 per project, with no requesting organization receiving more than $1 million in any one year under this specific program.

(c) The research and development grant matching program shall be designed and administered by the Renewable Energy Trust of the Massachusetts Technology Collaborative (the “Trust”). The Trust shall design and implement a simple application process with explicit award criteria and rapid decision making. The program shall be available to requesting organizations on an open solicitation basis, allowing requesting organizations to submit proposals throughout the year.

(d) The MTC shall assign a budget of $10 million over five years for this program.

SECTION 3. The Commonwealth should support the future activities identified in the June 2006 Report of the DG Collaborative to reduce the barriers to the adoption of fuel cells as part of distributed generation systems. In this regard, the Massachusetts Hydrogen Coalition, Inc., or its assigns, should join the DG Collaborative (or its successor) and take an active role in the policy-making process on behalf of its members.

SECTION 4. The Massachusetts department of revenue shall offer a fuel cell and hydrogen Investment Tax Credit, offering a tax credit to businesses and individuals that invest in eligible fuel cell and hydrogen systems. Eligible fuel cell or hydrogen systems’ include, but are not limited to the following applications: all stationary, portable, assured or back-up power applications; fuel cells for forklifts and other mobile industrial electric-powered equipment, off-road vehicles and airport ground support equipment; auxiliary power units, remote power generators, and hydrogen production systems.

(a) Beginning on or after July 1, 2007, Massachusetts’ based individuals and organizations may claim the fuel cell and hydrogen Investment Tax Credit, including individuals, partners in a partnership (including members of an LLC that is treated as a partnership for federal income tax purposes), shareholders of S corporations, and beneficiaries of estates and trusts.

(b) The credit applies to eligible equipment expenditures made on or after July 1, 2007, and is claimed for the tax year in which the equipment is placed in use.

(c) This law allows a credit for the purchase and installation of eligible equipment. The credit is 30% of the eligible equipment expenditures made on or after July 1, 2007, for the purchase and installation of the eligible equipment. However, the credit cannot exceed $1,000 per kilowatt for electric generating equipment or its equivalent, for each unit purchased. The equipment must be installed and used in Massachusetts and must be placed in service on or after July 1, 2007.

(d) To qualify for the credit, the rated capacity of the electric generating systems must be 0.25 kilowatts (250 watts) or more, but not more than one hundred kilowatts (100,000 watts), or its equivalent.

(e) This credit is not refundable. If the amount of credit exceeds your tax for the year, you may carry over the excess to the following five years.

(f) Qualified expenditures include expenditures incurred on or after July 1, 2007, for materials, labor costs properly allocated to assembly and installation, engineering services, designs and plans directly related to the construction or installation of the eligible equipment.

(g) This credit provision will expire in 2015 and will be available to businesses and individuals in addition to any federal tax credits that may apply.

SECTION 5. The Massachusetts Department of Revenue shall extend the job creation incentive payment currently available for life science companies to hydrogen and fuel cell companies that create manufacturing jobs in Massachusetts.

(a) Companies must create at least ten jobs during the calendar year to receive tax credits.

(b) The incentive payment will be equal to 50% of state withholding tax (i.e., salaries times 5.3% times 50%.)