HF 2847

Introduction - 94th Legislature (2025 - 2026)

Posted on 04/01/2025 12:39 p.m.

A bill for an act
relating to transportation; providing for a clean transportation standard; establishing
statewide goals and annual standards; authorizing fees; providing certain civil
enforcement authority; establishing penalties; directing implementation; authorizing
rulemaking; providing for data practices; requiring a report; appropriating money;
amending Minnesota Statutes 2024, section 13.721, subdivision 1, by adding a
subdivision; proposing coding for new law as Minnesota Statutes, chapter 174B.

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

Section 1.

Minnesota Statutes 2024, section 13.721, subdivision 1, is amended to read:

Subdivision 1.

Scope.

The sections referred to in deleted text begin subdivisions 2 to 7 deleted text end new text begin this section new text end are
codified outside this chapter. Those sections classify transportation data as other than public,
place restrictions on access to government data, or involve data sharing.

Sec. 2.

Minnesota Statutes 2024, section 13.721, is amended by adding a subdivision to
read:

new text begin Subd. 8. new text end

new text begin Clean transportation standard program. new text end

new text begin Certain data on the clean
transportation standard program are governed by section 174B.15.
new text end

Sec. 3.

new text begin [174B.02] DEFINITIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Scope. new text end

new text begin For purposes of this chapter, the following terms have the meanings
given.
new text end

new text begin Subd. 2. new text end

new text begin Applicable standard. new text end

new text begin "Applicable standard" means the clean transportation
standard that applies for a given year.
new text end

new text begin Subd. 3. new text end

new text begin Carbon dioxide equivalent. new text end

new text begin "Carbon dioxide equivalent" means the number
of metric tons of carbon dioxide emissions that have the same global warming potential as
one metric ton of another greenhouse gas.
new text end

new text begin Subd. 4. new text end

new text begin Carbon intensity. new text end

new text begin "Carbon intensity" means the quantity of all life cycle
greenhouse gas emissions throughout the fuel pathway associated with use of a unit of a
specific transportation fuel, expressed in grams of carbon dioxide equivalent per megajoule
of energy in the transportation fuel, as calculated by the relevant GREET model.
new text end

new text begin Subd. 5. new text end

new text begin Carbon intensity score. new text end

new text begin "Carbon intensity score" means the carbon intensity
specifically calculated for a fuel provider using an identified transportation fuel.
new text end

new text begin Subd. 6. new text end

new text begin Clean fuel. new text end

new text begin "Clean fuel" means a transportation fuel that has a carbon intensity
level below the applicable standard.
new text end

new text begin Subd. 7. new text end

new text begin Clean transportation standard. new text end

new text begin "Clean transportation standard" means the
goal and standards on reduction of carbon intensity established under this chapter.
new text end

new text begin Subd. 8. new text end

new text begin Commissioner. new text end

new text begin "Commissioner" means the commissioner of transportation.
new text end

new text begin Subd. 9. new text end

new text begin Continuous living cover cropping systems. new text end

new text begin "Continuous living cover cropping
systems" means agricultural systems characterized by living plants above ground and living
roots in the soil throughout the entire year, including but not limited to:
new text end

new text begin (1) perennial crops, including forage and pasture;
new text end

new text begin (2) winter annual cash cover crops such as winter camelina and pennycress; and
new text end

new text begin (3) agroforestry practices.
new text end

new text begin Subd. 10. new text end

new text begin Credit. new text end

new text begin (a) "Credit" means a unit of measure of the degree to which the carbon
intensity in a volume of a fuel provider's transportation fuel is lower than the carbon intensity
embodied in the applicable standard for that volume. Credit includes a credit premium, as
provided in section 174B.15, subdivision 3.
new text end

new text begin (b) One credit is equal to one metric ton of carbon dioxide equivalent.
new text end

new text begin Subd. 11. new text end

new text begin Credit generator. new text end

new text begin "Credit generator" means an entity that produces or imports
a transportation fuel for use in Minnesota whose carbon intensity generates credits.
new text end

new text begin Subd. 12. new text end

new text begin Deficit. new text end

new text begin (a) "Deficit" means a unit of measure of the degree to which the carbon
intensity in a volume of a fuel provider's transportation fuel is greater than the carbon
intensity embodied in the applicable standard for that volume.
new text end

new text begin (b) One deficit is equal to one metric ton of carbon dioxide equivalent.
new text end

new text begin Subd. 13. new text end

new text begin Deficit generator. new text end

new text begin "Deficit generator" means a fuel provider who first produces
and imports a transportation fuel for use in Minnesota whose carbon intensity generates
deficits.
new text end

new text begin Subd. 14. new text end

new text begin Department. new text end

new text begin "Department" means the Department of Transportation.
new text end

new text begin Subd. 15. new text end

new text begin Fuel pathway. new text end

new text begin "Fuel pathway" means all stages of production and use for a
specific transportation fuel, including but not limited to feedstock production, extraction,
processing, refining, transportation, storage, distribution, and combustion or use by an end
user.
new text end

new text begin Subd. 16. new text end

new text begin Fuel provider. new text end

new text begin "Fuel provider" means an entity that supplies a transportation
fuel for use in Minnesota.
new text end

new text begin Subd. 17. new text end

new text begin Global warming potential. new text end

new text begin "Global warming potential" means a quantitative
measure of a greenhouse gas emission's potential to contribute to global warming over a
100-year period, expressed in terms of the equivalent carbon dioxide emissions that would
be required to produce the same 100-year warming effect, as reported in the Sixth Assessment
Report on Climate Change of the Intergovernmental Panel on Climate Change.
new text end

new text begin Subd. 18. new text end

new text begin Greenhouse gas. new text end

new text begin "Greenhouse gas" means carbon dioxide, methane, nitrous
oxide, hydrofluorocarbons, perfluorocarbons, or sulfur hexafluoride.
new text end

new text begin Subd. 19. new text end

new text begin Program. new text end

new text begin "Program" means the clean transportation standard and the
accompanying requirements under this chapter, including but not limited to policies,
procedures, and associated rules.
new text end

new text begin Subd. 20. new text end

new text begin Relevant GREET model. new text end

new text begin "Relevant GREET model" means the most recent
version of the GREET model as determined by the commissioner under this chapter.
new text end

new text begin Subd. 21. new text end

new text begin Soil-healthy farming practices. new text end

new text begin "Soil-healthy farming practices" means
farming practices that increase the quantity of organic carbon in soil, including but not
limited to reduced tillage, conservation tillage, cover cropping, perennial cropping,
inter-seeding, organic production, manure management, roller-crimping, managed rotational
grazing, precision agriculture, crop rotations, and changes in grazing management.
new text end

new text begin Subd. 22. new text end

new text begin Technology provider. new text end

new text begin "Technology provider" means a manufacturer of an
end-use consumer technology involved in supplying clean fuels.
new text end

new text begin Subd. 23. new text end

new text begin Transportation fuel. new text end

new text begin (a) "Transportation fuel" means electricity or a liquid
or gaseous fuel that is blended, sold, supplied, offered for sale, or used in Minnesota to
propel: a motor vehicle, as defined in section 169.011, subdivision 42; an aircraft, as defined
in section 360.013, subdivision 37; a light rail transit or commuter rail vehicle; an
off-highway vehicle, as defined in section 84.771; a snowmobile, as defined in section
84.81, subdivision 3; a train or locomotive; special mobile equipment, as defined in section
168.002, subdivision 31; a watercraft; or other conveyance commonly recognized as a
vehicle.
new text end

new text begin (b) Transportation fuel includes but is not limited to electricity used as fuel in a motor
vehicle, gasoline, diesel, ethanol, biodiesel, biomethane, aviation gasoline, hydrogen, jet
fuel, renewable diesel, natural gas, renewable natural gas, propane, and renewable propane.
new text end

Sec. 4.

new text begin [174B.10] CLEAN TRANSPORTATION STANDARD.
new text end

new text begin Subdivision 1. new text end

new text begin Clean transportation fuel goal. new text end

new text begin It is the goal of the state to reduce the
aggregate carbon intensity of transportation fuel supplied to Minnesota to net zero life cycle
greenhouse gas emissions on and after 2050.
new text end

new text begin Subd. 2. new text end

new text begin Annual standards schedule. new text end

new text begin (a) The commissioner must establish an annual
standards schedule that:
new text end

new text begin (1) sets a standard in each year for the aggregate carbon intensity for transportation fuel
in Minnesota, which must not include exempt fuel under section 174B.15, subdivision 7;
and
new text end

new text begin (2) specifies decreases in the aggregate carbon intensity by at least:
new text end

new text begin (i) 25 percent below the baseline level under paragraph (b), measured at ten years after
the year of enactment of this section; and
new text end

new text begin (ii) 75 percent below the baseline level under paragraph (b), measured at 20 years after
the year of enactment of this section.
new text end

new text begin (b) The commissioner must evaluate available scientific data and calculations to calculate
a baseline level that identifies the aggregate carbon intensity of transportation fuel supplied
to Minnesota for calendar year 2018, excluding the components of transportation fuel from
ethanol, biodiesel, or other biofuel.
new text end

new text begin (c) In establishing or revising the annual standards schedule, the commissioner must:
new text end

new text begin (1) consider the cost of compliance with the clean transportation standard;
new text end

new text begin (2) consider the technologies available to fuel providers and technology providers to
achieve the standard;
new text end

new text begin (3) evaluate the impact of the standard on achieving the state greenhouse gas emissions
reduction goal under section 216H.02, subdivision 1, paragraph (a); and
new text end

new text begin (4) consult with the Public Utilities Commission and the commissioners of agriculture,
commerce, health, natural resources, and the Pollution Control Agency.
new text end

new text begin Subd. 3. new text end

new text begin Program development; objectives. new text end

new text begin In implementing the requirements under
the program, the commissioner must endeavor to foster a fuel-neutral clean fuels portfolio
in the state that:
new text end

new text begin (1) creates broad rural and urban economic development;
new text end

new text begin (2) provides benefits for communities, consumers, clean fuel providers, technology
providers, and feedstock suppliers;
new text end

new text begin (3) increases energy security by expanding the supply of domestically produced fuels;
new text end

new text begin (4) supports equitable transportation electrification powered primarily with low-carbon
and carbon-free electricity that benefits all communities;
new text end

new text begin (5) improves air quality and public health, targeting communities that bear a
disproportionate health burden from pollution from transportation fuels;
new text end

new text begin (6) supports state solid waste recycling goals by facilitating credit generation from
renewable natural gas produced from organic waste;
new text end

new text begin (7) aims to support, through credit generation or other financial means, the adoption of
agricultural practices that benefit soil health and water quality while contributing to lower
life cycle greenhouse gas emissions from clean fuel feedstocks;
new text end

new text begin (8) maximizes benefits to the environment and natural resources, develops safeguards
and incentives to protect natural lands, and enhances environmental integrity, including
biodiversity;
new text end

new text begin (9) is the result of extensive outreach efforts to stakeholders and communities that bear
a disproportionate health burden from pollution from transportation or from the production
and transportation of transportation fuels;
new text end

new text begin (10) aims to avoid contributing to further consolidation in the livestock industry; and
new text end

new text begin (11) aims to maintain and enhance organized labor employment in the transportation
fuel sector.
new text end

new text begin Subd. 4. new text end

new text begin Fuel pathway and carbon intensity determination. new text end

new text begin (a) The commissioner
must establish a process to determine the carbon intensity of transportation fuels and allow
each fuel producer to apply for and be assigned a fuel pathway and carbon intensity score
based on unique production practices. Fuel pathways must be determined using the relevant
GREET model. The fuel pathway determination process must:
new text end

new text begin (1) be consistent for all fuel types;
new text end

new text begin (2) be based on science and engineering;
new text end

new text begin (3) reflect differences in vehicle fuel efficiency and drivetrains;
new text end

new text begin (4) account for any on-site additional energy use by a carbon capture technology
employed in the fuel production process, including but not limited to generation, distillation,
and compression;
new text end

new text begin (5) be based on state-specific and production facility-specific data; and
new text end

new text begin (6) include a nonzero emissions factor reflecting indirect land use change for
cropland-derived fuels, not less than the emissions factor derived from the relevant GREET
model.
new text end

new text begin (b) The commissioner must:
new text end

new text begin (1) determine appropriate fuel pathways; and
new text end

new text begin (2) coordinate with third-party entities or other states to review and approve pathways.
new text end

new text begin Subd. 5. new text end

new text begin GREET model. new text end

new text begin The commissioner must provide for the Argonne National
Laboratory's GREET model to be adapted to Minnesota for use in the program and must
arrange updates to the model as appropriate.
new text end

new text begin Subd. 6. new text end

new text begin Periodic review. new text end

new text begin No less frequently than every five years, the commissioner
must conduct a periodic review of clean transportation standard implementation and evaluate
progress toward program goals. The review must include evaluation of potential adjustments
to credit prices under section 174B.15, subdivision 6, to minimize any impacts to consumers
caused by increased retail fuel prices.
new text end

new text begin Subd. 7. new text end

new text begin Rulemaking. new text end

new text begin (a) To the extent practicable, the commissioner must adopt rules
to implement the clean transportation standard program. Rules adopted under this section
are exempt from the time limit under section 14.125. The commissioner may revise the
rules as necessary, including as part of the periodic review process under subdivision 6.
new text end

new text begin (b) When developing proposed rules under this chapter, the commissioner must consult
with:
new text end

new text begin (1) the Public Utilities Commission and the commissioners of agriculture, commerce,
health, natural resources, and the Pollution Control Agency; and
new text end

new text begin (2) an advisory committee as provided under section 14.101, subdivision 2, composed
of equitable representatives from agriculture; transportation fuel providers; consumers;
rural, urban, and Tribal communities; environmental organizations; environmental justice
organizations; technology providers; automotive manufacturers; the forestry sector; utilities;
and electric vehicle charging companies.
new text end

new text begin (c) The commissioner must commence rulemaking no later than 45 days after the date
of enactment of this section.
new text end

new text begin Subd. 8. new text end

new text begin Application; implementation. new text end

new text begin The requirements of the clean transportation
standard program apply to credit and deficit generators beginning as specified in the rules
adopted under subdivision 7. The commissioner must provide a notification of the
commencement date to the chairs and ranking minority members of the legislative committees
with jurisdiction over transportation, agriculture, commerce, energy, and environment
finance and policy.
new text end

Sec. 5.

new text begin [174B.15] CREDITS AND DEFICITS; PROGRAM MARKET.
new text end

new text begin Subdivision 1. new text end

new text begin Compliance. new text end

new text begin A deficit generator must comply with the annual standards
schedule for the aggregate carbon intensity of transportation fuel, as established under
section 174B.10, subdivision 2, by:
new text end

new text begin (1) producing or importing transportation fuels whose carbon intensity is at or below
the level of the applicable standard;
new text end

new text begin (2) purchasing sufficient credits to offset any aggregate deficits resulting from the carbon
intensity of the deficit generator's transportation fuels exceeding the applicable standard;
or
new text end

new text begin (3) performing a combination of clauses (1) and (2).
new text end

new text begin Subd. 2. new text end

new text begin Credit generation. new text end

new text begin A credit may be generated when transportation fuel is
produced, imported, or provided for use in Minnesota and the carbon intensity of the fuel
is less than the applicable standard. The commissioner must ensure that a particular unit of
fuel may generate credits only once.
new text end

new text begin Subd. 3. new text end

new text begin Credits; program market; credit calculation. new text end

new text begin (a) The commissioner must:
new text end

new text begin (1) establish and regulate the operation of a program market to trade transportation fuel
credits and deficits, which may include:
new text end

new text begin (i) a market mechanism that allows credits to be traded or banked for future use;
new text end

new text begin (ii) transaction fees associated with the credit market;
new text end

new text begin (iii) procedures to verify the validity of credits and deficits generated by a fuel provider
under this section; and
new text end

new text begin (iv) a process to assign credits as an offset under an order to meet the applicable standard,
as provided under section 174B.25, subdivision 1;
new text end

new text begin (2) prohibit generation of credits from:
new text end

new text begin (i) carbon capture and storage that:
new text end

new text begin (A) lacks permanence certification from a recognized saline aquifer or other permanent
sequestration technique; or
new text end

new text begin (B) is performed for enhanced oil recovery or storage in depleted oil and gas wells;
new text end

new text begin (ii) the production of biofuels from feedstock grown on croplands with fewer than five
consecutive years of cropping history; and
new text end

new text begin (iii) renewable natural gas produced from any new or expanded agricultural livestock
production facility or manure digesters;
new text end

new text begin (3) provide for an additional credit premium of five percent for cropland-derived biofuels
produced on acreage that utilizes soil-healthy farming practices and fertilizer best
management practices; and
new text end

new text begin (4) provide for an additional credit premium of ten percent for cropland-derived biofuels
produced on acreage that utilizes continuous living cover cropping systems.
new text end

new text begin (b) The commissioner must establish methods to verify credit premiums under paragraph
(a), clauses (3) and (4), including but not limited to satellite and aerial verification, and must
require verification to occur annually. Verification reporting must rely on aggregate data.
Data collected for the verification are nonpublic data, as defined in section 13.02, subdivision
9.
new text end

new text begin Subd. 4. new text end

new text begin Carbon intensity score; biofuels. new text end

new text begin (a) In consultation with the commissioner
of agriculture, the commissioner must use the relevant GREET model to develop a statewide
average direct carbon intensity value for cropland-derived biofuel feedstocks that is used
as a component to determine the carbon intensity of biofuel production.
new text end

new text begin (b) In consultation with the commissioners of agriculture and the Pollution Control
Agency, the commissioner must develop procedures to allow a biofuel producer to calculate
a unique carbon intensity score for biofuel feedstocks from cropland-derived biofuels using
the relevant GREET model and other models, taking into account impacts on farm-related
emissions and sequestration of greenhouse gases. The unique carbon intensity score under
this paragraph may be used as an alternative to the state-specific average described under
paragraph (a).
new text end

new text begin (c) The procedures developed under paragraph (b) must include a methodology for
calculating, monitoring, and annual third-party auditing and verification of on-farm practices.
On-farm practices include but are not limited to reduced tillage, no-till, reduced on-farm
fuel use, reduced use of fertilizers and other inputs, use of low-carbon-intensity fertilizer,
use of cover crops, use of continuous living cover cropping systems, application of biochar,
soil-healthy farming practices, and other relevant practices that can impact the carbon
intensity of biofuel feedstock.
new text end

new text begin (d) In consultation with the commissioner of natural resources, the commissioner must
develop procedures to allow a biofuel producer to develop a unique carbon intensity score
for biofuel feedstocks from:
new text end

new text begin (1) wood and wood waste that reflects the potential to either enhance or degrade forest
carbon sinks; or
new text end

new text begin (2) climate-smart forestry practices to enhance forest carbon sinks.
new text end

new text begin (e) The procedures developed under paragraph (d) must include a methodology for
calculating, monitoring, and annual third-party auditing and verification of climate-smart
forestry practices.
new text end

new text begin (f) Data collected on a biofuel producer under paragraphs (b), (c), and (d) are nonpublic
data, as defined in section 13.02, subdivision 9.
new text end

new text begin (g) A biofuel producer that elects to utilize a unique carbon intensity score under
paragraph (b) is prohibited from claiming the credit premiums under subdivision 3, paragraph
(a), clause (3).
new text end

new text begin Subd. 5. new text end

new text begin Credits; residential electric vehicle charging; transportation
electrification. new text end

new text begin (a) For purposes of this subdivision, "credit revenue" means money or other
financial consideration obtained in exchange for credits through the program market.
new text end

new text begin (b) The commissioner must develop procedures to allow for generation of credits for
electric vehicle charging that occurs in residences and must provide guidance on the
expenditure of credit revenue.
new text end

new text begin (c) Credit revenue generated from residential electric vehicle charging must be expended
to promote equitable statewide transportation electrification, including but not limited to:
new text end

new text begin (1) electric vehicle purchase incentives;
new text end

new text begin (2) electric vehicle charging equipment and infrastructure; and
new text end

new text begin (3) other transportation electrification initiatives.
new text end

new text begin (d) At least 60 percent of the credit revenue generated from residential electric vehicle
charging must be spent to support transportation electrification for the primary benefit of
rural areas and environmental justice areas, as defined in section 116.065.
new text end

new text begin (e) Nothing in this chapter precludes the commissioner from adopting rules that allow
the generation of credits associated with electric or alternative transportation fuels or
infrastructure that existed prior to the effective date of this act or the start date of program
requirements.
new text end

new text begin Subd. 6. new text end

new text begin Consumers. new text end

new text begin The commissioner must allow for adjustments to the program
market in response to either:
new text end

new text begin (1) demonstrated evidence that credit prices are impacting retail fuel prices; or
new text end

new text begin (2) the need to maintain a sufficient credit price to spur further innovation in the clean
fuels market.
new text end

new text begin Subd. 7. new text end

new text begin Exemptions; exempt fuel credits. new text end

new text begin (a) A fuel provider is exempt from the
annual standards schedule under section 174B.10, subdivision 2, and generating deficits
under the program for any fuel used in aviation, train locomotives, marine use, and military
use.
new text end

new text begin (b) A fuel provider may voluntarily elect to enter an exempt fuel into the program and
be able to generate credits for the exempt fuel in the manner provided under this section.
This authorization applies whether or not the fuel provider is otherwise subject to the
requirements of this chapter.
new text end

Sec. 6.

new text begin [174B.20] PROGRAM FEES.
new text end

new text begin Subdivision 1. new text end

new text begin Establishment and procedures. new text end

new text begin (a) As provided in this section, credit
and deficit generators subject to the clean transportation standard program must pay a
program fee.
new text end

new text begin (b) The commissioner must identify credit and deficit generators and must establish a
process for credit and deficit generator registration in the program, credit and deficit generator
reporting, annual determination of the program fee and specific amounts charged, a payment
schedule, and public comment and response.
new text end

new text begin Subd. 2. new text end

new text begin Clean transportation standard account. new text end

new text begin (a) A clean transportation standard
program account is created in the special revenue fund. The account consists of all money
received from fees and penalties under this chapter and any other money donated, allotted,
transferred, or otherwise provided to the account.
new text end

new text begin (b) Money appropriated to the commissioner from the account must be used to develop
and implement the program.
new text end

new text begin Subd. 3. new text end

new text begin Program budget; fee limitation. new text end

new text begin (a) The commissioner must annually develop
a program budget that includes:
new text end

new text begin (1) specification of total expenditures;
new text end

new text begin (2) a review of expenditure categories and administrative costs;
new text end

new text begin (3) an analysis of the workload and capacity to administer the program;
new text end

new text begin (4) a listing of credit and deficit generators, including any anticipated changes to the
listing;
new text end

new text begin (5) a calculation of the program fee in conformance with the limitations under paragraph
(b) and the requirements under this section; and
new text end

new text begin (6) an analysis of the program fee allocation under subdivision 4.
new text end

new text begin (b) The total expenditures specified in the program budget must match and not exceed
the total projected costs to the department for program implementation in that fiscal year,
including all costs associated with administering the program. The commissioner must set
the program fee in each fiscal year so that total revenue from the fee does not exceed the
total expenditures specified in the budget. This fee is exempt from section 16A.1283.
new text end

new text begin Subd. 4. new text end

new text begin Fee allocation. new text end

new text begin (a) For each fiscal year, the commissioner must set the program
fee so that:
new text end

new text begin (1) an amount equal to 95 percent of the program budget expenditures is paid by deficit
generators, allocated as provided in paragraph (b); and
new text end

new text begin (2) an amount equal to five percent of the program budget expenditures is paid as follows:
new text end

new text begin (i) for initial program development and the first year of program implementation, the
amount is distributed equally among all credit generators; and
new text end

new text begin (ii) for subsequent years, the amount is distributed equally among all credit and deficit
generators.
new text end

new text begin (b) The commissioner must allocate the amount paid under paragraph (a), clause (1),
based on the number of deficits generated by a deficit generator, so that:
new text end

new text begin (1) the highest 30 percent of deficit generators pay 70 percent of the amount;
new text end

new text begin (2) the second highest 30 percent of deficit generators pay 20 percent;
new text end

new text begin (3) the third highest 30 percent of deficit generators pay ten percent; and
new text end

new text begin (4) the lowest ten percent of deficit generators are exempt from paying an amount.
new text end

new text begin (c) The payments required under paragraph (b), clauses (1) to (3), are distributed equally
among the appropriate deficit generators.
new text end

new text begin (d) The commissioner must identify deficits and deficit generators that are subject to a
program fee for each year based on registration or compliance reports for the previous year.
new text end

new text begin Subd. 5. new text end

new text begin Public notice and comment. new text end

new text begin At least 60 days before imposing the program
fee each year, the commissioner must publish the program budget and the information
required under subdivision 3 on the department's website. The commissioner must:
new text end

new text begin (1) provide for a public comment period of at least 30 days;
new text end

new text begin (2) evaluate public comments;
new text end

new text begin (3) provide appropriate responses as necessary; and
new text end

new text begin (4) consider warranted revisions to the program budget and program fee.
new text end

Sec. 7.

new text begin [174B.25] REGULATION AND COMPLIANCE.
new text end

new text begin Subdivision 1. new text end

new text begin General regulatory powers. new text end

new text begin (a) In consultation with the commissioners
of agriculture, commerce, and the Pollution Control Agency, the commissioner must establish
policies and procedures that govern requirements and enforcement of the clean transportation
standard.
new text end

new text begin (b) The commissioner may:
new text end

new text begin (1) establish conditions, standards, limitations, or other requirements as necessary to
ensure compliance with the program while encouraging voluntary program participation;
new text end

new text begin (2) perform audits, compliance reviews, and investigations of credit and deficit generators
and other program participants;
new text end

new text begin (3) issue an order (i) requiring compliance or corrective action to meet the applicable
standard, or (ii) requiring a violation under the program to be corrected; and
new text end

new text begin (4) issue a civil penalty as provided in this section.
new text end

new text begin (c) A corrective order issued by the commissioner may require any identified violations
to be corrected within 30 calendar days of the date the order is received.
new text end

new text begin Subd. 2. new text end

new text begin Fuel provider reports. new text end

new text begin (a) In consultation with the Public Utilities Commission
and the commissioners of agriculture, commerce, and the Pollution Control Agency, the
commissioner must develop a process for credit and deficit generators to annually report
compliance with the applicable standard to the commissioner.
new text end

new text begin (b) A credit or deficit generator must report in the manner specified by the commissioner.
new text end

new text begin Subd. 3. new text end

new text begin Civil penalty; amount. new text end

new text begin (a) After completion of an inspection, compliance
review, or other investigation, the commissioner may issue a civil penalty to an entity that
is subject to the requirements under this chapter or an associated rule and has committed
an identified violation.
new text end

new text begin (b) The commissioner may determine a penalty amount of up to $....... and must determine
the amount based on:
new text end

new text begin (1) the willfulness of the violation;
new text end

new text begin (2) the gravity of the violation, including its effect on program compliance and credit
or deficit values;
new text end

new text begin (3) the history of past violations;
new text end

new text begin (4) the number of violations;
new text end

new text begin (5) the economic benefit gained by the entity by allowing or committing the violation;
and
new text end

new text begin (6) other factors specifically identified by the commissioner.
new text end

new text begin (c) For a subsequent violation, the commissioner must determine a penalty amount based
on the factors in paragraph (b) and the:
new text end

new text begin (1) similarity of the last violation and the violation to be penalized;
new text end

new text begin (2) time elapsed since the last violation;
new text end

new text begin (3) number of previous violations; and
new text end

new text begin (4) response of the violator to the last violation identified.
new text end

new text begin (d) The recipient of a civil penalty under this subdivision must notify the commissioner
within 30 days in writing if the recipient intends to contest the civil penalty. If within 30
days after receiving the civil penalty the recipient fails to notify the commissioner of intent
to contest the penalty, the civil penalty is not subject to further review.
new text end

new text begin (e) Civil penalties assessed under this subdivision may be appealed as a contested case
under chapter 14. The commissioner may recover civil penalties in a civil action.
new text end

new text begin Subd. 4. new text end

new text begin Civil penalty; information. new text end

new text begin When issuing a civil penalty under subdivision 3,
the commissioner must provide to the recipient:
new text end

new text begin (1) a concise statement of the facts alleged to constitute a violation;
new text end

new text begin (2) a citation or reference to the specific requirements alleged to have been violated,
including any appropriate section of a statute, rule, applicable standard, variance, order,
stipulation agreement, or term or condition of a permit or license;
new text end

new text begin (3) a statement of the penalty amount imposed and the factors upon which the amount
is based; and
new text end

new text begin (4) a summary of the process to contest the penalty.
new text end

Sec. 8.

new text begin [174B.30] LEGISLATIVE REPORT.
new text end

new text begin (a) By February 1 two years after the effective date of rules adopted under section
174B.10, subdivision 7, and by every other February 1 thereafter, the commissioner must
submit a report on the program to the chairs and ranking minority members of the legislative
committees with jurisdiction over transportation, agriculture, commerce, energy, and
environment finance and policy.
new text end

new text begin (b) At a minimum, the report must include:
new text end

new text begin (1) an overview of the program and program implementation;
new text end

new text begin (2) an evaluation of program compliance by fuel providers, including a review of any
issuance of corrective orders and civil penalties;
new text end

new text begin (3) a review of the program market under section 174B.15;
new text end

new text begin (4) a summary of the results of third-party auditing and verification of on-farm practices
and agroforestry practices under section 174B.15, subdivision 4;
new text end

new text begin (5) a review of the current and recent annual program budgets and program fees under
section 174B.20, including a summary of public comment and actions taken in response;
new text end

new text begin (6) a review of the fiscal impacts of the clean transportation standard; and
new text end

new text begin (7) recommended legislative and rulemaking changes, if any.
new text end

new text begin (c) A report submitted under this section must include information on the results of any
review conducted under section 174B.10, subdivision 6, in the previous 12 months.
new text end

new text begin (d) The commissioner must publish information about the program on the department's
website.
new text end

Sec. 9. new text begin CLEAN TRANSPORTATION STANDARD; INITIAL FEE.
new text end

new text begin (a) The commissioner of transportation must establish and impose an initial fee for the
clean transportation standard program under Minnesota Statutes, chapter 174B. Subject to
the requirements in this section, the initial fee must be calculated and imposed in the same
manner as provided for the program fee under Minnesota Statutes, section 174B.20. The
initial fee must be imposed in each year in which the commissioner projects initial program
development and implementation costs but the clean transportation standard program has
not otherwise commenced in effect. A fee under this section is exempt from Minnesota
Statutes, section 16A.1283.
new text end

new text begin (b) The initial fee must match and must not exceed (1) the total projected costs to the
Department of Transportation for initial program development and implementation in a
fiscal year, minus (2) any amount appropriated in law for purposes of the clean transportation
standard program.
new text end

new text begin (c) For purposes of this section, initial program development and implementation costs
include but are not limited to administrative and rulemaking costs.
new text end

Sec. 10. new text begin APPROPRIATION; CLEAN TRANSPORTATION STANDARD
IMPLEMENTATION.
new text end

new text begin $....... in fiscal year 2026 is appropriated from the clean transportation standard account
in the special revenue fund to the commissioner of transportation to implement the clean
transportation standard program under Minnesota Statutes, chapter 174B. This is a onetime
appropriation and is available until June 30, 2029.
new text end