HF 3195

5th Engrossment - 85th Legislature (2007 - 2008) Posted on 12/15/2009 12:00am

A bill for an act
relating to environment; establishing the Legislative Greenhouse Gas Advisory
Group; requiring studies and reports to the legislature regarding cap and trade
program for greenhouse gases; appropriating money.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1. new text begin TITLE.
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new text begin This act may be cited as the Green Solutions Act of 2008.
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Sec. 2. new text begin MIDWESTERN GREENHOUSE GAS ACCORD.
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new text begin (a) By January 15, 2009, the commissioner of commerce and the commissioner of
the Pollution Control Agency shall submit a report to the chairs and ranking minority
members of the senate and house of representatives committees with primary jurisdiction
over energy policy, business and economic development policy, environmental policy and
finance, and transportation policy regarding:
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new text begin (1) the status of the development of a model rule establishing a regional cap and
trade program under the Midwestern Greenhouse Gas Accord;
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new text begin (2) implementation mechanisms in the model rule, including required legislation;
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new text begin (3) whether the regional cap and trade program will operate in a time frame that will
allow Minnesota to meet the greenhouse gas reductions goals under Minnesota Statutes,
section 216H.02, subdivision 1;
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new text begin (4) an evaluation of legislation enacted or pending in Congress to implement a
federal cap and trade program and whether implementation of a regional program is
consistent with a federal program;
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new text begin (5) the economic, environmental, and public health impact study under section 3,
subdivision 2; and
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new text begin (6) a potential cap and trade revenue study under section 3, subdivision 3.
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new text begin If a model rule in accord with the state's emissions reduction goals is not yet ready for
adoption under the Midwestern Greenhouse Gas Accord, or is unlikely to be adopted, the
report must identify options for Minnesota to supplement the regional agreement with
state policies, to join another regional cap and trade program, or to implement a cap and
trade program in Minnesota alone.
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new text begin (b) The Legislative Greenhouse Gas Accord Advisory Group is composed of six
members of the legislature, appointed as follows:
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new text begin (1) three members of the senate appointed by the Subcommittee on Committees of
the Committee on Rules and Administration, including one member of the minority; and
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new text begin (2) three members of the house of representatives appointed by the speaker of the
house of representatives, including one member of the minority party.
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new text begin The legislative advisory group serves in an advisory capacity to the governor's Midwestern
Greenhouse Gas Accord stakeholder group, and must receive regular briefings from
that group, in addition to participating and offering advice in meetings where regional
negotiations take place with respect to the accord or to any other energy issue being
analyzed by an entity created by the Midwestern Governors Association at its November
2007 Energy Summit. The appointing authorities under this paragraph must complete
their appointments by June 1, 2008. The advisory group expires when the Midwestern
Greenhouse Gas Accord stakeholder group is dissolved.
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new text begin (c) Any cap and trade agreements entered into under the Midwestern Greenhouse Gas
Accord are not effective in Minnesota until approved by a law enacted by the legislature.
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Sec. 3. new text begin ECONOMIC, ENVIRONMENTAL, AND PUBLIC HEALTH IMPACT
AND POTENTIAL REVENUES STUDIES.
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new text begin Subdivision 1. new text end

new text begin Submission of studies. new text end

new text begin By January 15, 2009, the commissioner
of commerce and the commissioner of the Pollution Control Agency shall submit to
the chairs and ranking minority members of the senate and house of representatives
committees with primary jurisdiction over business and economic development, energy,
and environmental policy and finance the two studies, prepared by expert consultants,
described in this section.
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new text begin Subd. 2. new text end

new text begin Economic, environmental, and public health impact study. new text end

new text begin The
commissioner of commerce shall arrange with the Midwestern Governors Association for
a study to be conducted by expert consultants that analyzes the economic, environmental,
and public health costs and benefits to Minnesota of a cap and trade program. The study
must consider the impact of a cap and trade program on individual industrial sectors
subject to the program and on the state economy and consumers, and how expenditures of
any auction revenues on the measures identified in subdivision 4 can reduce the economic
costs and increase the economic, environmental, and public health benefits. The study
must also include:
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new text begin (1) an estimate of allowance prices and rates of investment by entities subject to a
cap and trade program in infrastructure and equipment to reduce emissions of greenhouse
gases over time;
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new text begin (2) estimates of the impact of the program on energy costs, the impact of energy
cost changes on businesses and households, and recommendations on how to avoid
regressive impacts;
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new text begin (3) an analysis of options to mitigate adverse competitive impacts on state businesses
and methods to reduce disruptive impacts on workers, businesses, and consumers;
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new text begin (4) an analysis of various mechanisms for protecting jobs in energy intensive
industries subject to competition from outside the Midwestern Greenhouse Gas Accord
region, including mining, pulp and paper, petroleum refining, steel, and chemicals, and an
analysis of possible mechanisms to account for the greenhouse gas emissions associated
with the production and transportation of imported goods;
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new text begin (5) an analysis of the energy cost impacts on homes and businesses, job growth, new
business development, energy balance of trade, and environmental and public health
co-benefits;
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new text begin (6) an analysis of various mechanisms to provide for equity to communities at risk
of disproportionate economic or environmental impacts; and
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new text begin (7) an analysis of the effect of adopting a cap and trade program on the level of
foreign and domestic investment in Minnesota.
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new text begin The study must consider the data and policy recommendations developed through the
Minnesota Climate Change Advisory Group as well as the growing literature related to
reducing greenhouse gas emissions.
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new text begin Subd. 3. new text end

new text begin Potential cap and trade revenue study. new text end

new text begin The commissioner of commerce
shall arrange with the Midwestern Governors Association for a study to be conducted by
expert consultants on potential revenues to the state from a cap and trade program and how
revenues could be spent to mitigate economic disparities resulting from implementation of
a cap and trade program. The study must include:
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new text begin (1) projections of likely revenues if greenhouse gas emission allowances are
auctioned;
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new text begin (2) a detailed estimate of the degree to which different levels of expenditures of
auction proceeds on the options listed under subdivision 4, clauses (1) through (7), would:
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new text begin (i) reduce greenhouse gas emissions;
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new text begin (ii) reduce economic costs to industry and households;
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new text begin (iii) yield jobs and other economic benefits by stimulating economic activity,
promoting the growth of new businesses, reducing the amount of money exported from
the state to purchase fossil fuels, and other means;
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new text begin (iv) result in environmental and public health co-benefits by reducing pollutants
other than greenhouse gases, improving habitat, or other means; and
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new text begin (v) otherwise meet the goals identified in subdivision 5;
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new text begin (3) a discussion of the potential for allowances allocated by a cap and trade program
to lead to unfair economic advantage or windfall profits rather than be used to reduce
consumer prices; and
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new text begin (4) options for criteria that decision makers can use to determine how to allocate
expenditures among the spending options listed under subdivision 4, balancing the goals
set forth in subdivision 5.
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new text begin Subd. 4. new text end

new text begin Expenditures to be studied. new text end

new text begin The studies required under subdivisions 2
and 3 must consider the impacts of the following types of expenditures:
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new text begin (1) direct per capita rebates to Minnesotans;
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new text begin (2) grants and incentives to consumers to invest in energy efficiency and utilize
renewable energy sources or in other technologies, products, or practices that help
Minnesotans reduce energy costs, energy consumption, and greenhouse gas emissions,
including incentives for telecommuting;
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new text begin (3) financial assistance to businesses that install technologies that reduce greenhouse
gas emissions, targeting energy-intensive industries facing competitors not subject to
comparable regulation, including, but not limited to, mining, pulp and paper, refining,
chemicals, and steel;
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new text begin (4) investments in public infrastructure that reduce greenhouse gas emissions;
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new text begin (5) investments in worker training and retraining programs;
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new text begin (6) incentives for terrestrial and geologic carbon sequestration; and
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new text begin (7) at least one scenario in which a majority of expenditures is directed to uses
under clauses (1) and (2).
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new text begin Subd. 5. new text end

new text begin Study criteria. new text end

new text begin The study required under subdivision 2 must determine the
extent to which expenditures on the measures identified in subdivision 4 assist Minnesota
in its transition to a low greenhouse gas-emitting economy and increase the economic
gains and reduce the dislocating impacts of the transition. Specifically, the study must
assess the extent to which expenditures meet the following goals:
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new text begin (1) produce cost-effective emission reductions;
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new text begin (2) increase sustainable economic development, job creation, and job growth;
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new text begin (3) reduce greenhouse gas emissions in sectors that do not participate in a cap and
trade program;
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new text begin (4) reduce disruptive economic impacts of the transition on workers, businesses,
and consumers;
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new text begin (5) equitably distribute the costs and benefits among state residents, communities,
and economic sectors;
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new text begin (6) assist low-income and other consumers to reduce the costs associated with
greenhouse gas emissions; and
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new text begin (7) protect and enhance public health, environmental quality, wildlife habitat, and
the state's natural resources.
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Sec. 4. new text begin GOVERNANCE STUDY.
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new text begin The commissioner of commerce shall request the Board of Regents of the University
of Minnesota to prepare a study to be submitted by January 15, 2009, to the chairs and
ranking minority members of the senate and house of representatives committees with
primary jurisdiction over business and economic development, energy, and environmental
policy and finance on governance options for determining expenditures of potential
revenue to the state resulting from a cap and trade program. The study must examine:
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new text begin (1) the role of the legislature, citizens, technical experts, and state agencies in
decisions on allocating funds; and
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new text begin (2) innovative decision-making structures and processes, including the
Legislative-Citizen Commission on Minnesota Resources, and other examples in
Minnesota and other states and countries that may offer useful models.
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Sec. 5. new text begin APPROPRIATION.
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new text begin Of the amounts appropriated from the special revenue fund in the second year
to the commissioner of commerce under Laws 2007, chapter 57, article 2, section 3,
subdivision 6, clause (7), up to $500,000 is for the economic impact and potential revenue
studies under section 3, and the governance study under section 4. The commissioner
shall provide funding from this appropriation through a contract with the Midwestern
Governors Association for grants to technical experts to complete the studies required
under section 3. The commissioner shall transfer up to $75,000 to the University of
Minnesota for the study required under section 4.
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