1.1 	A bill for an act
1.2 	relating to environment; establishing principles of a cap and trade program for 
1.3 	greenhouse gas emissions; requiring studies; appropriating money;proposing 
1.4 	coding for new law in Minnesota Statutes, chapter 216H.
1.5 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.6 	Section 1. [216H.10] TITLE.
1.7 	This act may be cited as the Green Solutions Act of 2008.

1.8 	Sec. 2. [216H.12] MIDWESTERN GREENHOUSE GAS ACCORD.
1.9 	(a) By February 15, 2009, the commissioner of commerce and the commissioner 
1.10 	of the Pollution Control Agency shall submit a report to the chairs and ranking minority 
1.11 	members of the senate and house of representatives committees with primary jurisdiction 
1.12 	over energy policy, business and economic development policy, environmental policy, and 
1.13 	transportation policy regarding:
1.14 	(1) the status of the development of a model rule establishing a regional cap and 
1.15 	trade program under the Midwestern Greenhouse Gas Accord;
1.16 	(2) implementation mechanisms in the model rule, including required legislation;
1.17 	(3) whether the regional cap and trade program will operate in a time frame that will 
1.18 	allow Minnesota to meet the greenhouse gas reductions goals under section 216H.02, 
1.19 	subdivision 1; 
1.20 	(4) an evaluation of legislation enacted or pending in congress to implement a 
1.21 	federal cap and trade program and whether implementation of a regional program is 
1.22 	consistent with a federal program; and
1.23 	(5) an economic impact study under paragraph (d).
2.1 	If a model rule in accord with the state's emissions-reduction goals is not yet ready for 
2.2 	adoption, or is unlikely to be adopted, the report must identify options for Minnesota to 
2.3 	supplement the regional agreement with state policies, to join another regional cap and 
2.4 	trade program, or to implement a cap and trade program in Minnesota alone.
2.5 	(b) The Legislative Greenhouse Gas Accord Advisory Group is composed of six 
2.6 	members of the legislature, appointed as follows:
2.7 	(1) two members of the majority party in the senate, appointed by the majority 
2.8 	leader, and one member of the minority party, appointed by the minority leader; and 
2.9 	(2) two members of the majority party in the house of representatives, appointed by 
2.10 	the speaker of the house of representatives, and one member of the minority party in the 
2.11 	house of representatives, appointed by the minority leader.
2.12 	The legislative advisory group serves in an advisory capacity to the governor's Midwestern 
2.13 	Greenhouse Gas Accord stakeholder group, and may request regular briefings from 
2.14 	that group, in addition to participating and offering advice in meetings where regional 
2.15 	negotiations take place. The appointing authorities under this paragraph must complete 
2.16 	their appointments by June 1, 2008. The advisory group expires when the governor 
2.17 	dissolves the Midwestern Greenhouse Gas Accord stakeholder group.
2.18 	(c) Any cap and trade agreements entered into are not effective in Minnesota until 
2.19 	enacted into law.
2.20 	(d) The report shall include an analysis of the economic impacts of the costs and 
2.21 	benefits, including environmental and public health benefits, of the proposed model 
2.22 	regional cap and trade rule. The analysis shall consider the impact of the model cap 
2.23 	and trade rule on individual industrial sectors subject to the model rule and on the state 
2.24 	economy and consumers. The analysis must also include:
2.25 	(1) an estimate of allowance prices and rates of investment by facilities subject 
2.26 	to the cap and trade program in infrastructure and equipment to reduce emissions of 
2.27 	greenhouse gases over time;
2.28 	(2) an estimate of increases in energy prices for fuels that produce greenhouse gas 
2.29 	emissions, the impact of price increases on businesses and family income, and the degree 
2.30 	of regressivity of the price increases and how to avoid regressive impacts;
2.31 	(3) an analysis of options to mitigate adverse competitive impacts on state businesses 
2.32 	and methods to reduce disruptive impacts on workers, businesses, and consumers;
2.33 	(4) an analysis of various mechanisms for protecting jobs in energy intensive 
2.34 	industries subject to competition from outside the Midwestern Greenhouse Gas Accord 
2.35 	region, including mining, cement, pulp and paper, refining, and chemicals;
3.1 	(5) an analysis of the energy cost savings to homes and businesses, job growth, new 
3.2 	business development, energy balance of trade, and environmental and public health 
3.3 	co-benefits; and 
3.4 	(6) an analysis of various mechanisms to provide for equity to communities at risk 
3.5 	of disproportionate economic or environmental impacts.
3.6 	The analysis shall consider the data and policy recommendations developed through the 
3.7 	Minnesota Climate Change Advisory Group as well as the growing literature related to 
3.8 	reducing greenhouse gas emissions.
3.9 	(e) For purposes of conducting the economic impact study under this section, 
3.10 	the commissioner of commerce may assess up to $....... under section 216B.62, which 
3.11 	is appropriated to the commissioner for a contribution to the Midwestern Governors 
3.12 	Association to obtain the Minnesota-specific economic impacts analysis of the model rule 
3.13 	developed under the Midwestern Greenhouse Gas Accord. The assessment is not subject 
3.14 	to the cap on assessments provided by section 216B.62 or any other law.

3.15 	Sec. 3. POTENTIAL CAP AND TRADE REVENUE STUDY.
3.16 		Subdivision 1.Report. By February 1, 2009, the commissioner of commerce shall 
3.17 	submit a report to the chairs and ranking minority members of the senate and house 
3.18 	of representatives committees with primary jurisdiction over business and economic 
3.19 	development, energy, and environmental policy on potential revenues to the state from a 
3.20 	cap and trade program and how revenues could be spent to mitigate economic disparities 
3.21 	resulting from implementation of a cap and trade program. The report must include:
3.22 	(1) projections of likely revenues if greenhouse gas emission allowances are 
3.23 	auctioned;
3.24 	(2) a detailed estimate of the degree to which different levels of expenditures of 
3.25 	auction proceeds on the options listed under subdivision 3, clauses (1) to (6), would:
3.26 	(i) reduce greenhouse gas emissions;
3.27 	(ii) reduce economic costs to industry and households;
3.28 	(iii) yield jobs and other economic benefits by stimulating economic activity, 
3.29 	promoting the growth of new businesses, reducing how much money leaves the state to 
3.30 	buy fossil fuels, and other means;
3.31 	(iv) result in environmental and public health co-benefits by reducing pollutants 
3.32 	other than greenhouse gases, improving habitat, or other means; and
3.33 	(v) otherwise meet the goals identified in subdivision 4;
3.34 	(3) a discussion of the potential for allowances allocated by the program to lead to 
3.35 	unfair economic advantage rather than be used to reduce consumer prices; and
4.1 	(4) an evaluation of governance options under subdivision 2.
4.2 		Subd. 2.Governance. The report required under subdivision 1 shall describe and 
4.3 	analyze options on how decisions would be made on expenditures of possible revenues 
4.4 	to the state under a cap and trade program. The commissioner may contract with the 
4.5 	University of Minnesota or other state public institutions of higher learning or may issue a 
4.6 	request for proposals for the study. The report must examine:
4.7 	(1) the role of the legislature, citizens, technical experts, and state agencies in 
4.8 	decisions on allocating funds; and
4.9 	(2) innovative decision-making structures and processes, including the 
4.10 	Legislative-Citizens Commission on Minnesota Resources, and other examples in 
4.11 	Minnesota and other states and countries that may offer useful models to consider.
4.12 		Subd. 3.Expenditures to be studied. The report required under subdivision 1 shall 
4.13 	consider the impacts of the following types of expenditures:
4.14 	(1) direct per capita rebates to Minnesotans;
4.15 	(2) grants and incentives to consumers to invest in energy efficiency and utilize 
4.16 	renewable energy sources or in other technologies, products, or practices that help 
4.17 	Minnesotans reduce energy costs, energy consumption, and greenhouse gas emissions;
4.18 	(3) financial assistance to businesses that install technologies that reduce greenhouse 
4.19 	gas emissions, targeting energy-intensive industries facing competitors not subject to 
4.20 	comparable regulation, including, but not limited to, mining, pulp and paper, cement, 
4.21 	refining, and chemicals;
4.22 	(4) investments in public infrastructure that reduce greenhouse gas emissions;
4.23 	(5) investments in worker training and retraining programs; and
4.24 	(6) incentives for terrestrial and geologic carbon sequestration.
4.25 		Subd. 4.Study criteria. The report required under subdivision 1 shall determine the 
4.26 	extent to which expenditures on the measures identified in subdivision 3 assist Minnesota 
4.27 	in its transition to a low greenhouse gas-emitting economy and increase the economic 
4.28 	gains and reduce the dislocating impacts of the transition. Specifically, the report shall 
4.29 	assess the extent to which expenditures meet the following goals:
4.30 	(1) produce cost-effective emission reductions;
4.31 	(2) increase sustainable economic development, job creation, and job growth;
4.32 	(3) reduce greenhouse gas emissions in sectors that do not participate in the cap 
4.33 	and trade program;
4.34 	(4) reduce disruptive economic impacts of the transition on workers, businesses, 
4.35 	and consumers;
5.1 	(5) equitably distribute the costs and benefits among state residents, communities, 
5.2 	and economic sectors;
5.3 	(6) assist low-income and other consumers to reduce the costs associated with 
5.4 	greenhouse gas emissions; and
5.5 	(7) protect and enhance public health, environmental quality, wildlife habitat, and 
5.6 	the state's natural resources.
5.7 		Subd. 5.Assessment; appropriation. The commissioner of commerce may 
5.8 	assess up to $....... under section 216B.62, which is appropriated to the commissioner 
5.9 	for purposes of implementing this section. The assessment is not subject to the cap on 
5.10 	assessments provided by section 216B.62 or any other law. The commissioner may 
5.11 	contribute funds from the assessment to the Midwestern Governors Association for 
5.12 	implementation of this section.

5.13 	Sec. 4. EFFECTIVE DATE.
 5.14 	Sections 1 to 3 are effective the day following final enactment.