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S 2222Renewable Energy

Health and Safety - Economic and Climate Resilience Act of 2026

Imposes a fee on fossil fuels to fund climate projects and provide cash dividends to residents and businesses.

Introduced
Population
Affected
92
Email Legislator
Introduced Jan 23, 2026Committee Senate Environment & Agriculture

Plain-English Summary

This legislation establishes the "Economic and Climate Resilience Act of 2026." It imposes a fee on fossil fuels imported into or used within Rhode Island, starting at $15 per metric ton of carbon emissions and increasing over time. The revenue generated is deposited into a specific fund. This money is then distributed in three ways: direct cash dividends to residents (weighted to favor lower-income households), dividends to local employers, and funding for climate resilience and renewable energy projects. The program will only take effect if Massachusetts and at least one other regional state enact similar fees.

For younger readers

This bill wants to stop pollution that makes the earth too hot. It puts a price tag on dirty fuels like oil and gas. The money collected from this price tag goes into a big piggy bank. Some of that money is used to build things like solar panels to help the planet. The rest of the money is sent back to families and businesses in Rhode Island as checks to help them pay their bills. It creates a penalty for pollution but gives money back to the people living there.

Who & Where It Applies

Impacted groups
Fossil fuel suppliers and distributorsElectric distribution companiesLow-income householdsEmployers and small businessesEnvironmental advocacy groups
Impacted communities
All

Constitutional & Fiscal Check

Moderate risk

There is a moderate risk regarding the Commerce Clause of the U.S. Constitution, as the bill imposes fees on fuels brought into the state. However, because it applies to all fossil fuels regardless of origin and is triggered by a regional compact, it attempts to mitigate discrimination against interstate commerce. The "trigger" mechanism relies on the legislative actions of other states, which is legally complex but generally permissible. The risk is low to moderate.

Estimated cost
Amount unknown
Estimated revenue
Amount unknown

Bill Analysis

Both viewpoints
For Progressives
  • Implements a progressive dividend structure where the lowest-income residents receive the largest share (50%) of the resident funds, effectively redistributing wealth and providing a safety net against rising energy costs.
  • Mandates that a significant portion of the resilience and renewable energy funding be directed specifically toward low-income neighborhoods and municipalities, addressing environmental justice and equity concerns.
  • Establishes a "polluter pays" system that holds fossil fuel importers accountable for their environmental impact while accelerating the transition to a green economy and reducing greenhouse gas emissions.
  • Relies on market-based mechanisms (carbon pricing) rather than strict regulatory bans or direct government control, which some progressives may view as allowing corporations to pay for the right to continue polluting.
  • The "trigger" clause requiring other states to act first delays immediate climate action, potentially stalling urgent environmental protections due to political gridlock in neighboring states.
  • While dividends are provided, the initial pass-through costs of the carbon fee could temporarily strain working-class families at the gas pump and on utility bills before the rebate checks are distributed.
For Conservatives
  • Includes a "trigger" provision ensuring Rhode Island does not act alone, protecting local businesses from being at a competitive disadvantage compared to neighboring states that might not have such fees.
  • Utilizes a revenue-neutral dividend model that returns 70% of the collected funds directly to the private sector (residents and employers) rather than retaining all funds for government spending.
  • Relies on price signals and market dynamics to influence energy consumption rather than imposing hard caps, bans, or heavy-handed mandates on consumer behavior.
  • Creates a new tax on energy that will likely increase the cost of gasoline, heating oil, and electricity for families and businesses, contributing to inflation and the cost of living.
  • Establishes a wealth redistribution scheme by taking money from general energy users and giving larger payouts to lower-income demographics, functioning as a form of social welfare.
  • Expands government bureaucracy by creating a new oversight board and administrative infrastructure within the Department of Revenue and Office of Energy Resources to monitor and enforce compliance.

Votes

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Full Bill Text

Changes to existing Rhode Island law · 269 additions

SECTION 1. Legislative Findings. The General Assembly finds and declares that:

(1) In order to promote the general welfare of the people of the state, Rhode Island must strengthen its economy and make it more resilient over the long term in order to avoid the economic consequences of climate change, which will require initiatives that encourage the development and use of innovative policies, technologies and practices;

(2) Rhode Island is committed to the principles of the Paris Climate Agreement and to the findings of the latest climate science and acknowledges that immediate actions to reduce greenhouse gas emissions, such as those set forth in this legislation, are essential to protect our community, our environment, and our economy;

(3) The General Assembly in 2014 enacted the Resilient Rhode Island Act, which set goals for reducing "greenhouse gas emissions" in Rhode Island, and established affirmative obligations to meet these statutory goals;

(4) Climate change has a disproportionate impact on low income communities, communities of color and other vulnerable residents of Rhode Island;

(5) Climate change increases risks to public health, including from health impacts from extreme heat events, storms and floods, decreased air quality, and illnesses transmitted from food, water, and disease carriers, as reported by the Rhode Island department of health;

(6) Climate change increases public safety risks and threats to our private property and public infrastructure, including risks associated with storms, floods, and sea level rise, and these risks have been recognized by several branches of the Rhode Island government as warranting specific attention;

(7) Climate change has severe economic consequences, including catastrophic weather events such as Hurricane Sandy or coastal and river flooding that cause widespread damage to communities and businesses and changes to marine ecosystems that cause severe reductions in winter flounder, lobster, and other marine populations, and failing to address these risks will only lead to more severe and persistent impacts upon our local economy;

(8) Rhode Island spends over three billion dollars ($3,000,000,000) annually on fossil fuels whereas carbon pricing mechanisms have been shown to be effective in creating jobs and stimulating the local economy;

(9) Natural gas, gasoline, diesel and heating oil prices can be highly volatile and create uncertainty and risk for Rhode Island's economy. Reducing energy waste and demand for fossil fuels produced out-of-state can stabilize Rhode Island's economy;

(10) In the absence of international or federal action, states cooperating regionally are effective at reducing emissions and spurring renewable energy initiatives, as demonstrated by the success of the Regional Greenhouse Gas Initiative (RGGI), which places a cap on emissions and which has reduced overall emissions and strengthened the economies of participating states.

(11) Carbon pricing is a cost-effective and when used in conjunction with the emissions cap set forth in RGGI, is an efficient market-based means to achieve significant carbon emissions reductions;

(12) The clean energy sector has proven to be one of the fastest growing segments of Rhode Island's economy, currently providing over fifteen thousand (15,000) jobs and growing at a rate much higher than the overall state economy; increased investment will provide even more jobs in addition to a higher quality of life;

(13) Climate change poses substantial risks to Rhode Island's ecology and natural resources, and pursuant to Article 1, § 17 of the Rhode Island Constitution, it is the responsibility of the state to secure the right of the people "to the use and enjoyment of the natural resources of the state with due regard for the preservation of their values;" and

SECTION 2. Legislative intent. It is the intent of the general assembly to:

(1) Establish a separate restricted receipt account called the Rhode Island Economic and Climate Resilience Climate Fund for creating employment and helping workers transition to low carbon industries, improving energy efficiency, advancing adoption of clean energy technology, establishing programs to safeguard low-income residents, and protecting businesses that are high energy users;

(2) Price carbon as an incentive to reduce carbon (greenhouse gas) emissions from use of carbon-based fuels by residents and businesses in Rhode Island;

(3) Provide access to energy efficiency, energy conservation, and renewable energy programs for low-income families and small businesses;

(4) Reduce public health, public safety, economic, and natural resource impairment risks associated with climate change;

(5) Meet or exceed the state emissions goals for 2035 as set by the Resilient Rhode Island Act of 2014; and

(6) Promote regional cooperation to reduce emissions, build renewable energy and energy efficiency programs, and strengthen the economy.

SECTION 3. Title 23 of the General Laws entitled "HEALTH AND SAFETY" is hereby amended by adding thereto the following chapter: 23-82.1-1. Short title. This chapter shall be known and may be cited as the "Economic and Climate Resilience Act of 2026". 23-82.1-2. Definitions. As used in this chapter, the following words and terms shall have the following meanings unless the context shall clearly indicate another or different meaning or intent:

(1) "Carbon dioxide equivalent" ("CO2e") means a unit of measure used to compare the emissions from various greenhouse gases based upon their global warming potential.

(2) "Carbon price" means the fee imposed by this chapter.

(3) "Climate resilience" means the ability of a social, ecological, or socio-ecological system and its components to anticipate, reduce, accommodate, or recover from the effects of a hazardous event or trend in a timely and efficient manner. Such economic and social stability in the face of climate-related disasters can be achieved through preparation, soft and hard infrastructure improvements, emergency warning systems, and recovery resources, as well as through quickly decarbonizing the economy to help lead other jurisdictions to do so, to avoid the worst impacts which come with the accumulation of greenhouse gases in the atmosphere and oceans.

(4) "Commission" means the public utilities commission, set forth in § 39-1-3(a).

(5) "Electricity fuel mix" means the mix of fuels for any one-year period used to create electricity by generators within the control area of ISO-NE.

(6) "Employer" means a person, firm, corporation, partnership, association or public body, whether for-profit or not-for-profit, that is located in Rhode Island and employs Rhode Island residents.

(7) "Economic and climate resilience fund" means the fund established under this chapter.

(8) "Fossil fuel" means coal, oil, natural gas, propane, petroleum product, and biomass that is not carbon neutral over its life cycle. Fossil fuels do not include renewable, carbon neutral biomass or waste vegetable oil biodiesel.

(9) "Implementation date" means January 1 of the year following initial regional carbon fee enactment.

(10) "Independent System Operator-New England" or "ISO-NE" means the regional transmission organization for New England licensed by the federal energy regulatory commission pursuant to the Federal Power Act, 16 U.S.C. ch.12 §§ 791-828(c).

(11) "Initial regional carbon fee enactment" means the enactment of a fee of at least five dollars ($5.00) per metric ton of carbon by the legislatures of at least three (3) states: Rhode Island, Massachusetts, and one or more additional states in the Regional Greenhouse Gas Initiative (RGGI).

(12) "Low-income residential property" means a dwelling unit owned or occupied by a household eligible to receive benefits under the low-income energy assistance program (LIHEAP) as set forth in § 39-1-27.12; in instances where a premises contains multiple dwelling units, the entire premises shall be considered a low-income residential property if fifty percent (50%) or more of the dwelling units are occupied by LIHEAP-eligible households.

(13) "Person" means any individual, partnership, corporation, company, society, or association, whether created for-profit or nonprofit purposes.

(14) "Petroleum product" means all petroleum derivatives, whether in bond or not, which are commonly burned to produce heat, electricity, or motion or which are commonly processed to produce synthetic gas for burning, including propane, gasoline, unleaded gasoline, kerosene, heating oil, diesel fuel, and number 4, number 5 and residual oil for utility and non-utility uses. All aircraft fuels (including kerosene-based jet fuel) used by commercial airplanes in Rhode Island and all aircraft fuels brought into Quonset and Rhode Island T.F. Green International Airports are exempt from the fee. Fuels brought into Rhode Island in airplane fuel tanks are exempt.

(15) "Resident" means a person eighteen (18) years of age or older who is a resident of Rhode Island. All persons registered to vote in Rhode Island or all persons eighteen (18) years of age or older who hold a valid Rhode Island driver's license or photo ID shall be presumptively considered residents for the purposes of this chapter. Persons who do not meet the requirements for presumptive eligibility may establish eligibility by presenting other acceptable documentation.

(16) "Small business property" means the premises, whether owned or leased, of any employer, other than a public body, that is a small business as defined by the United States Small Business Administration (SBA). 23-82.1-3. Carbon pricing.

(a) A fee shall be collected on all non-exempt fossil fuels within the state for purposes of distribution or use within the state, at the rate specified in subsection (b) of this section, in the manner specified in subsections (e) through (l) of this section.

(b) Commencing on the implementation date, a fee shall be charged at a rate of fifteen dollars ($15.00) per metric ton of CO2e that would be released by burning the fuel sold. In each subsequent fiscal year, the rate shall be the rate of the previous fiscal year plus five dollars ($5.00), until it reaches a rate of fifty dollars ($50.00) per ton. After the rate reaches fifty dollars ($50.00) per ton, in each subsequent fiscal year the rate will increase in accordance with inflation, as measured by Rhode Island's cost-of-living-adjustments calculated using the United States Bureau of Labor Statistics Consumer Price Index or, if that index is not available, another index adopted by the director of revenue.

(c) The director of revenue shall calculate and publish the rate in current dollars for each year, by December 1.

(d) In sales where greenhouse gas emissions from the fossil fuels are to be permanently sequestered and not released into the atmosphere, charges on the fossil fuels shall be reduced by the director of revenue in proportion to the amount of CO2e that is to be sequestered. The office of energy resources shall ensure that in such cases, the emissions are actually sequestered and not released into the atmosphere.

(e) The fee shall be collected on all petroleum products at their first point of sale within the state for consumption or distribution within the state.

(f) All suppliers of electricity, including all electric distribution companies operating in the state and all competitive suppliers of electricity to end users, shall pay the fee on behalf of all of their electricity customers on the basis of each kilowatt hour of electricity used by each distribution customer. The per kilowatt hour fee to be paid by the supplier of electricity will be calculated in the following manner:

(1) The fee shall be calculated on an annual basis, based on the electricity fuel mix as defined in § 23-82.1-2.

(2) The CO2e of every kilowatt hour of electricity shall be determined by taking the weighted average of the natural gas, coal, and oil portions of the fuel mix and multiplying each of those portions separately by the amount of CO2e emissions created per kilowatt hour of electricity produced by each such fuel, as those carbon intensity levels are from time to time determined by the United States Energy Information Administration (EIA).

(3) The supplier of electricity shall deduct from the fee calculated by subsections (f)(1) and (f)(2) of this section an amount equal to the amount it paid for the same year on account of regional greenhouse gas initiative (RGGI) clearing auctions; provided, however, that the amount so deducted may be no greater than the total amount of the fee as calculated in subsections (f)(1) and (f)(2) of this section. The electricity supplier shall also deduct from the fee calculated an amount equal to the amount it may have paid for NE-GIS certificates as defined in § 39-26-2.

(g) On April 1 of each year, each supplier of electricity shall file with the commission the result of its proposed calculation for the year beginning the following July 1. The filing will include sufficient supporting data to enable the commission to determine whether the calculation by the supplier of electricity was made fully in accordance with subsection (f) of this section. Upon receipt of the calculation by the supplier of electricity, the commission shall open a docket. The sole purpose of the docket shall be for the commission to determine whether the calculation by the supplier of electricity was made fully in accordance with subsection (f) of this section. If the commission determines that the calculation by the supplier of electricity was made fully in accordance with subsection (f) of this section, the commission shall, no later than May 15 of the same year, issue its order approving the calculation. If the commission determines that the calculation by the supplier of electricity did not fully comply with subsection (f) of this section, the commission shall issue an order stating clearly the errors that were made by the supplier of electricity. In that event, the supplier of electricity shall have twenty-one (21) days to make a compliance filing with the commission, correcting the errors identified in the commission's order.

(h) Any entity which generates more than twenty-five thousand kilowatt hours (25,000 kwh) of electricity for on-site use using any combination of one or more fossil fuels shall be obligated to pay the carbon price, which shall be calculated by multiplying the quantity of each separate fossil fuel combusted to produce electricity by the CO2e emissions of each separate fuel so combusted. Within one year following the date of enactment of this chapter, the director of revenue shall issue rules, pursuant to chapter 35 of title 42, for the regular and efficient calculation, assessment, and collection of these carbon price amounts. Any fee already paid on said fuel pursuant to this section shall be deducted from the fee that would otherwise be due under this subsection.

(i) The local distribution company for natural gas shall pay the fee on behalf of all of its distribution customers. The fee shall be calculated by multiplying the number of cubic feet of natural gas used by each customer by the amount of CO2e released by burning one cubic foot of natural gas, as that value is from time to time determined by the United States Energy Information Administration (EIA).

(j) The office of energy resources shall determine the amount of CO2e released in the form of escaped methane due to the extraction, transport, or distribution of natural gas before the point of consumption in Rhode Island, and shall add an additional charge to the carbon price for all natural gas or natural-gas-based electricity, based on the rate specified in subsection (b) of this section. This fee shall be published no later than December 10 of each year.

(k) In the event that a separate fee on the greenhouse gas content of transportation fuels is established, this fee shall be deducted from the fee imposed by the economic and climate resilience act; provided, however, that the amount so deducted may be no greater than the total amount of the fee as calculated in subsections (f)(1) and (f)(2) of this section.

(l) Government agencies whose primary purpose is to provide public transportation by bus, van, rail, ferry or other means that reduce the amount of driving by private motor vehicles shall be exempt from the fees set forth in this section for the portion of their business that provides public transport.

(m) The fee established by this chapter shall be reduced by the amount of any fee or payment due under any federal law or under this section that sets a carbon price on the same fossil fuels for the same year as described in this chapter; provided, however, that such reduction shall not be in an amount of less than zero. 23-82.1-4. Economic and climate resilience fund.

(a) There is hereby established a restricted receipt account in the general fund to be known as the economic and climate resilience fund. All fees collected under this chapter shall be deposited in the economic and climate resilience fund.

(b) Unexpended balances and any earnings thereon shall not revert to the general fund but shall remain solely in the economic and climate resilience fund. The economic and climate resilience fund shall be used solely to carry out the provisions of this chapter.

(c) Proceeds from the economic and climate resilience fund may only be used for the purposes described in § 23-82.1-5. Proceeds shall be available for the purposes described in § 23- 82.1-5 without appropriation.

(d) An independent economic and climate resilience fund oversight board shall be created, with members chosen by the governor with the advice and consent of the senate, to include nine

(9) members with one member representing each of the following interests: small business, large business, labor, environmental justice, scientific community, low-income, historically marginalized groups, community development organizations, and the transportation sector. Members shall have staggered three (3) year terms. The director of the Rhode Island infrastructure bank and the commissioner of the office of energy resources shall serve as permanent ex officio non-voting members. The board shall elect a chair from its voting membership. The oversight board shall convene quarterly to carry out roles pursuant to the provisions of subsection (d)(1) of this section with the support of the office of energy resources.

(1) The economic and climate resilience fund oversight board and the office of energy resources (OER) shall prepare and deliver an annual report to the house committee on environment and natural resources, the senate committee on environment and agriculture, the house committee on finance, and the senate committee on finance on or before May 1, one year after the commencement of the fee, and annually on or before May 1 thereafter, which will:

(i) Recommend changes to the fee in order to account for greenhouse gas emissions associated with the full lifecycle of all fossil fuels, including emissions prior and subsequent to combustion associated with extraction, transportation, or disposal in order to help the state meet its greenhouse gas reductions targets;

(ii) Recommend changes to the logistics of dividend distribution as currently specified in §§ 23-82.1-5(b) and (c) in order to more fully account for equity in the needs of residents and consumers, especially low-income residents.

(2) In addition to the revenue generated by § 23-82.1-3, the board may:

(i) Accept and administer grants from both public and private sources for the carrying out of any of its functions, which loans or grants shall not be expended for other than the purposes for which provided; and

(ii) Apply for, accept and expend allocations, grants and bequests of funds for the purpose of carrying out the responsibilities of the board. 23-82.1-5. Economic and Climate Resilience Fund Uses.

(a) The Rhode Island infrastructure bank, under the auspices of the economic and climate resilience fund oversight board pursuant to § 23-82.1-4, shall use the funds from the economic and climate resilience fund as follows:

(1) Twenty-eight percent (28%) shall go to support climate resilience, renewable energy, energy efficiency, climate adaptation, and low carbon transition initiatives in Rhode Island:

(i) At least one-third (1/3) of funding from the twenty-eight percent (28%) of the economic and climate resilience fund that shall be distributed to resilience and renewable energy programs shall be distributed to neighborhoods, municipalities, groups of municipalities, or regional agencies representing neighborhoods or municipalities whose median incomes per household are in the lowest third (1/3) of median incomes for all municipalities in the state.

(ii) For purposes of this subsection, to calculate the lowest third (1/3), the median income of each municipality shall be weighted by the number of households in the municipality. When possible, distribution shall prioritize assisting municipalities with existing climate action plans in renewable energy and efficiency projects. A training session for municipal planners relating to implementing resilience and renewable energy programs shall be a prerequisite for the municipalities to receive funds.

(2) Thirty percent (30%) shall be used to provide direct dividends to employers in the state, in the manner specified in subsections (b) and (d) of this section;

(3) Forty percent (40%) shall be used to provide direct dividends to residents in the state, in the manner specified in subsections (b) and (c) of this section;

(4) Up to two percent (2%) shall be used to pay for administrative costs associated with collecting the charges, administering the economic and climate resilience fund, and carrying out other responsibilities assigned to the office of energy resources and department of revenue under this chapter. Any unexpended revenue from this two percent (2%) shall be reallocated to climate resilience and renewable energy programs, pursuant to § 23-82.1-5(a)(1). None of said proceeds shall fund government operations or obligations other than to pay for reasonable administrative costs in connection with the Economic and Climate Resilience Act of 2026 which should not be higher than two percent (2%) of revenue collected. From the period commencing on the effective date of this chapter through the implementation of the regulations necessary for the collection of fees provided for under this chapter, the administrative allocation shall be the actual administrative cost, and the amount of revenue directed to the climate resilience and renewable energy program shall be reduced by the amount above two percent (2%) that is used for administrative costs.

(b) The dividends specified above shall be implemented, at the discretion of the director of revenue, through a refundable credit added to tax returns for residents and employers that file tax returns. For residents and employers without tax filings, dividends shall be granted in the form of direct checks. The director of revenue shall make every reasonable effort to ensure that every resident and employer, regardless of whether or not a particular resident or employer files tax returns or actually owes taxes, including not-for-profit organizations and government entities, receives a dividend. Dividends will be calculated based on the estimated increased total costs of energy in Rhode Island and distributed at the beginning of each year. The first set of dividends shall be distributed before the implementation date based on estimated increased costs for the period of January 1 through December 31 of that year, which may be subject to cost reconciliation based on actual total costs by June 30 of that year.

(c) The resident dividends shall be determined as follows:

(1) Fifty percent (50%) of the funds reserved for residents shall be returned in equal amounts to residents in the state of Rhode Island whose incomes fall in the lowest one-third (1/3) of after-tax incomes. Every resident in this one-third (1/3) shall receive an equal dividend amount. Every resident in this one-third (1/3) who is a head of household with children or dependents under the age of eighteen (18) shall have the dividend increased based on the number of children or dependents under the age of eighteen (18) in residence, with each child adding the value of one equal dividend amount.

(2) Thirty-five percent (35%) of the funds reserved for residents shall be returned in equal amounts to residents in the state of Rhode Island whose incomes fall in the middle one-third (1/3) of after-tax incomes. Every resident in this one-third (1/3) shall receive an equal dividend amount. Every resident in this one-third (1/3) who is a head of household with children or dependents under the age of eighteen (18) shall have the dividend increased based on the number of children or dependents under the age of eighteen (18) in residence, with each child adding the value of one equal dividend amount.

(3) Fifteen percent (15%) of the funds reserved for residents shall be returned in equal amounts to residents in the state of Rhode Island whose incomes fall in the top one-third (1/3) of after-tax incomes. Every resident in this one-third (1/3) shall receive an equal dividend amount. Every resident in this one-third (1/3) who is a head of household with children or dependents under the age of eighteen (18) shall have the dividend increased based on the number of children or dependents under the age of eighteen (18) in residence, with each child adding the value of one equal dividend amount.

(d) The employer dividends shall be determined as follows:

(1) Seventy percent (70%) of the funds reserved for employers shall be distributed to employers in an amount proportional, in terms of full-time equivalent employees, to the employer's share of total employment in the state.

(2) Thirty (30%) of the funds reserved for employers shall be additionally distributed to employers identified by the office of energy resources as energy intensive, trade exposed, or most vulnerable to fuel cost increases, which employers shall include, but not be limited to, the fishing and agriculture industries.

(e) Residents and businesses will be given the option to opt out of receiving all or part of their dividend payment to allow assistance to low-income residents so they do not experience increased energy costs.

(f) The director of revenue shall issue a public report, submitted to the governor, the speaker of the house, and the senate president, by December 31 of each year commencing with 2027, stating the expenditures from the economic and climate resilience fund for the most recently completed fiscal year and plans to distribute the balance remaining in the fund, if any. 23-82.1-6. Promulgation of rules. The department of revenue, office of energy resources, and any other state agency or instrumentality designated by this chapter or by the director of administration to perform functions or duties to effectuate the purposes and functions of this chapter are hereby authorized to adopt, in accordance with the provisions of chapter 35 of title 42, administer, and enforce any rules necessary or convenient to carry out the purposes of this chapter. 23-82.1-7. Implementation. The implementation of the provisions of this chapter shall commence upon initial regional carbon fee enactment.

SECTION 4. This act shall take effect on July 1, 2027.