SF 4886

Introduction - 94th Legislature (2025 - 2026)

Posted on 03/27/2026 09:17 a.m.

A bill for an act
relating to environment; creating greenhouse gas pollution cost-recovery program;
establishing account; requiring reports; appropriating money; proposing coding
for new law in Minnesota Statutes, chapter 116.

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 is known as the "Greenhouse Gas Pollution Superfund Act."
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Sec. 2.

new text begin [116.393] DEFINITIONS.
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new text begin (a) For purposes of sections 116.393 to 116.3937, the terms used have the meanings
given in this section and section 116.391.
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new text begin (b) "Account" means the greenhouse gas pollution account under section 116.3937.
new text end

new text begin (c) "Climate change adaptation project" means a project of the state, a local government
unit, or a Tribal government that is designed to respond to, avoid, moderate, repair, or adapt
to impacts caused by climate change and to assist human and natural communities,
households, and businesses in preparing for future climate-change-driven impacts.
new text end

new text begin (d) "Coal" means bituminous coal, anthracite coal, and lignite.
new text end

new text begin (e) "Controlled group" means two or more entities treated as a single employer under
section 52(a) or (b) or section 414(m) or (o) of the Internal Revenue Code. In applying
section 52(a) or (b), section 1563 of the Internal Revenue Code is applied without regard
to section 52(b)(2)(C).
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new text begin (f) "Cost-recovery demand" means a charge assessed against a responsible party for
cost-recovery payments to the account.
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new text begin (g) "Covered greenhouse gas emissions" means the total quantity of greenhouse gases
released into the atmosphere during the covered period, expressed in metric tons of carbon
dioxide equivalent, resulting from the use of fossil fuels extracted or refined by an entity.
new text end

new text begin (h) "Covered period" means the period beginning January 1, 1995, and ending December
31, 2026.
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new text begin (i) "Crude oil" means oil or petroleum of any kind and in any form, including bitumen,
oil sands, heavy oil, conventional and unconventional oil, shale oil, natural gas liquids,
condensates, and related fossil fuels.
new text end

new text begin (j) "Disadvantaged community" means:
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new text begin (1) an eligible community under the community energy transition grant program in
section 116J.55; or
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new text begin (2) an environmental justice area as defined in section 115A.03, subdivision 10b.
new text end

new text begin (k) "Entity" means an individual, trustee, agent, partnership, association, corporation,
company, municipality, political subdivision, or other legal organization, including a foreign
nation, that holds or held an ownership interest in a fossil fuel business during the covered
period.
new text end

new text begin (l) "Fossil fuel" means coal, petroleum products, and fuel gases.
new text end

new text begin (m) "Fossil fuel business" means a business engaged in extracting fossil fuels or refining
petroleum products.
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new text begin (n) "Fuel gas" means methane, natural gas, liquefied natural gas, manufactured fuel gas,
and any other gas that is used as fuel and emits one or more greenhouse gases when
combusted.
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new text begin (o) "Greenhouse gas" means carbon dioxide, methane, nitrous oxide, hydrofluorocarbons,
perfluorocarbons, and sulfur hexafluoride from anthropogenic sources in the state.
new text end

new text begin (p) "Notice of cost-recovery demand" means the written communication from the
commissioner informing a responsible party of the amount of the cost-recovery demand
payable to the account.
new text end

new text begin (q) "Petroleum product" means a product refined or rerefined from synthetic or crude
oil or oil extracted from other sources, including natural gas liquids.
new text end

new text begin (r) "Program" means the greenhouse gas pollution cost-recovery program under section
116.3935.
new text end

new text begin (s) "Public plan" means a hazard mitigation plan, climate action plan, energy action
plan, or adaptation plan for the state, a local government unit, or a Tribal government,
including:
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new text begin (1) a plan supported by the resilient community assistance program under section 116.391
or the local climate action grant program of the Pollution Control Agency; and
new text end

new text begin (2) approved climate mitigation and adaptation planning in a comprehensive plan under
section 473.859, subdivision 7.
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new text begin (t) "Responsible party" means an entity or a successor in interest to an entity that, during
any part of the covered period, was engaged in the trade or business of extracting fossil
fuels or refining crude oil and that is determined by the commissioner to be responsible for
more than one billion metric tons of covered greenhouse gas emissions during the covered
period. Responsible party does not include a person who lacks sufficient connection with
the state to satisfy the nexus requirements of the United States Constitution.
new text end

Sec. 3.

new text begin [116.3935] GREENHOUSE GAS POLLUTION COST-RECOVERY
PROGRAM.
new text end

new text begin Subdivision 1. new text end

new text begin Program established; duties. new text end

new text begin (a) A greenhouse gas pollution
cost-recovery program is established to secure cost-recovery payments from responsible
parties and to disburse money from the account according to section 116.3937, subdivision
1.
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new text begin (b) The commissioner must:
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new text begin (1) determine proportional liability according to subdivision 2;
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new text begin (2) impose cost-recovery demands on responsible parties;
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new text begin (3) accept and collect payment for cost-recovery demands; and
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new text begin (4) disburse money from the account to pay for climate change adaptation projects
according to rules adopted under subdivision 7.
new text end

new text begin Subd. 2. new text end

new text begin Liability established. new text end

new text begin (a) A responsible party is strictly liable for a share of
the costs to the state and its residents that have resulted from covered greenhouse gas
emissions.
new text end

new text begin (b) For purposes of this section, entities in a controlled group are a single entity for
purposes of identifying responsible parties. All entities in a controlled group are jointly and
severally liable for paying any cost-recovery demand owed by any entity in the controlled
group.
new text end

new text begin (c) With respect to each responsible party, the cost-recovery demand is equal to an
amount that bears the same ratio to the cost to the state and its residents, as calculated by
the state auditor according to section 116.3937, subdivision 2, from covered greenhouse
gas emissions during the covered period as the responsible party's applicable share of covered
greenhouse gas emissions bears to the aggregate applicable shares of covered greenhouse
gas emissions resulting from the use of fossil fuels extracted or refined during the covered
period.
new text end

new text begin (d) If a responsible party owns a minority interest of ten percent or more in another
entity, the responsible party's applicable share of covered greenhouse gas emissions is
increased by the applicable share of covered greenhouse gas emissions for the entity in
which the responsible party holds a minority interest multiplied by the percentage of the
minority interest held by the responsible party.
new text end

new text begin (e) In determining the amount of greenhouse gas emissions attributable to any entity:
new text end

new text begin (1) an amount equivalent to 942.5 metric tons of carbon dioxide equivalent is considered
released for every 1,000,000 pounds of coal attributable to the entity;
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new text begin (2) an amount equivalent to 432,180 metric tons of carbon dioxide equivalent is
considered released for every 1,000,000 barrels of crude oil attributable to the entity; and
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new text begin (3) an amount equivalent to 53,440 metric tons of carbon dioxide equivalent is considered
released for every 1,000,000 cubic feet of fuel gases attributable to the entity.
new text end

new text begin (f) The commissioner may adjust the cost-recovery demand amount of a responsible
party that refined petroleum products or that is a successor in interest to an entity that refined
petroleum products if the responsible party establishes to the satisfaction of the commissioner
that:
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new text begin (1) a portion of the cost-recovery demand amount was attributable to refining crude oil
extracted by another responsible party; and
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new text begin (2) the crude oil extracted by the other responsible party was accounted for when the
commissioner determined the cost-recovery demand amount for the other responsible party
or a successor in interest to the other responsible party.
new text end

new text begin (g) The commissioner must issue in writing the cost-recovery demands that are required
under this section no later than six months after rules are adopted under subdivision 7.
new text end

new text begin Subd. 3. new text end

new text begin Paying cost-recovery demand; appeal. new text end

new text begin (a) Except as provided in paragraphs
(b) and (d), a responsible party must pay the cost-recovery demand amount in full no later
than six months after the commissioner issues the cost-recovery demand.
new text end

new text begin (b) A responsible party may elect to pay the cost-recovery demand amount in nine annual
installments as follows:
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new text begin (1) the first installment must be paid no later than six months after the commissioner
issues the cost-recovery demand and is equal to 20 percent of the total cost-recovery demand
amount;
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new text begin (2) each subsequent installment must be paid annually, beginning one year after the
initial payment, and must be equal to ten percent of the total cost-recovery demand amount.
The commissioner may charge reasonable interest on each installment payment or a payment
delayed for any other reason and, at the commissioner's discretion, may adjust the amount
of a subsequent installment payment or a payment delayed for any other reason to reflect
increases or decreases in the Consumer Price Index; and
new text end

new text begin (3) if there is any addition to the original amount of the cost-recovery demand for failure
to timely pay an installment required under this subdivision; a liquidation or sale of
substantially all the assets of the responsible party, including in a proceeding under United
States Code, title 11, or a similar case; a cessation of business by the responsible party; or
any similar circumstance, then the unpaid balance of all remaining installments is due on
the date of such event or, in the case of a proceeding under United States Code, title 11, or
a similar case, on the day before the petition is filed. This clause does not apply to the sale
of substantially all of the assets of a responsible party to a buyer if the buyer enters into an
agreement with the commissioner under which the buyer is liable for the remaining
installments due under this subdivision in the same manner as if the buyer was the responsible
party.
new text end

new text begin (c) The commissioner must deposit cost-recovery payments collected under this section
to the greenhouse gas pollution account.
new text end

new text begin (d) A responsible party aggrieved by the issuance of a cost-recovery demand may request
a contested case hearing before an administrative law judge according to chapter 14.
new text end

new text begin Subd. 4. new text end

new text begin Other remedies. new text end

new text begin Nothing in this section supersedes or diminishes any other
remedies available to a person or the state at common law or under statute.
new text end

new text begin Subd. 5. new text end

new text begin Eligible projects. new text end

new text begin To be eligible for money from the account, a climate change
adaptation project must be recommended in a public plan.
new text end

new text begin Subd. 6. new text end

new text begin Labor standards. new text end

new text begin (a) Money in the account must be expended in ways designed
to increase local employment opportunities and improve job quality.
new text end

new text begin (b) All contracts for constructing climate change adaptation projects under this section
must pay the prevailing wage rate, as defined in section 177.42, subdivision 6, and are
subject to sections 177.27, 177.30, 177.32, and 177.41 to 177.45.
new text end

new text begin (c) For purposes of complying with sections 177.30, paragraph (a), clauses (6) and (7),
and 177.41 to 177.435, the political subdivision constructing a climate change adaptation
project is the contracting authority and contracting agency and the project is considered a
public works project.
new text end

new text begin Subd. 7. new text end

new text begin Rulemaking. new text end

new text begin The commissioner must adopt rules that are necessary to
implement this section, including but not limited to:
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new text begin (1) adopting methodologies to determine responsible parties and their share of covered
greenhouse gas emissions;
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new text begin (2) registering entities;
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new text begin (3) issuing notices of cost-recovery demand;
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new text begin (4) accepting payments on cost-recovery demands;
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new text begin (5) identifying public plans;
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new text begin (6) establishing criteria for climate change adaptation projects;
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new text begin (7) establishing criteria for costs qualifying for cost-recovery according to section
116.3937, subdivision 1, paragraph (c); and
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new text begin (8) adopting procedures for ensuring that at least 40 percent of disbursements from the
account are for climate change adaptation projects that benefit disadvantaged communities
according to section 116.3937, subdivision 1, paragraph (d).
new text end

new text begin Subd. 8. new text end

new text begin Staffing. new text end

new text begin One full-time position is created in the Pollution Control Agency for
implementing this section. The commissioner may create additional positions as needed to
implement this section. The positions are a reasonable administrative expense of the program
for purposes of section 116.3937, subdivision 1, paragraph (c).
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Sec. 4.

new text begin [116.3937] GREENHOUSE GAS POLLUTION ACCOUNT.
new text end

new text begin Subdivision 1. new text end

new text begin Account created. new text end

new text begin (a) A greenhouse gas pollution account is created in
the environmental fund to receive payments of cost-recovery demands and to provide
cost-recovery payments under the greenhouse gas pollution cost-recovery program. Money
in the account is appropriated to the commissioner for the greenhouse gas pollution
cost-recovery program.
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new text begin (b) The account consists of:
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new text begin (1) cost-recovery payments under section 116.3935, subdivision 3;
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new text begin (2) money appropriated by the legislature;
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new text begin (3) other money received from any source dedicated for deposit into the account; and
new text end

new text begin (4) any interest earnings or other investment income earned or received on the money
in the account.
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new text begin (c) Money in the account may be used only to pay for:
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new text begin (1) costs of climate change adaptation projects recommended in public plans, including
but not limited to costs of operation, monitoring, and maintenance; and
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new text begin (2) reasonable administrative expenses of the program, including but not limited to costs
of the Pollution Control Agency and the state auditor.
new text end

new text begin (d) At least 40 percent of disbursements from the account must be for climate change
adaptation projects that benefit disadvantaged communities.
new text end

new text begin Subd. 2. new text end

new text begin Establishing costs. new text end

new text begin (a) No later than two years after the effective date of this
section, the state auditor must submit to the legislative committees with jurisdiction over
environment and natural resources an assessment of the costs to the state and its residents
that have resulted from covered greenhouse gas emissions. In preparing the assessment, the
state auditor must consult with the commissioner and may consult with any other person at
the state auditor's discretion to obtain credible data and methodologies to use in making the
assessment and other estimates required by this subdivision.
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new text begin (b) The climate cost assessment under paragraph (a) must include:
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new text begin (1) a summary of the various cost-driving impacts of covered greenhouse gas emissions
on the state, including impacts on public infrastructure, emergency response, public health,
natural resources, biodiversity, agriculture, economic development, flood preparedness and
safety, housing, and any other impact that the state auditor, in consultation with the
commissioner, determines is relevant;
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new text begin (2) a categorized calculation of the costs that have been incurred by the state and that
are projected to be incurred in the future for each of the impacts identified under clause (1);
and
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new text begin (3) a categorized calculation of the costs that have been incurred and are projected to
be incurred in the future by the state and its residents to adapt to the impacts of covered
greenhouse gas emissions.
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new text begin (c) The state auditor must update the climate cost assessment no less frequently than
every four years. The state auditor must submit the updates to the legislative committees
with jurisdiction over environment and natural resources.
new text end

new text begin Subd. 3. new text end

new text begin Reporting. new text end

new text begin (a) On or before December 31, 2030, and each even-numbered year
thereafter, the commissioner must report to the governor and the chairs of the legislative
committees with jurisdiction over environment and natural resources on:
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new text begin (1) the cost-recovery payments received and the money disbursed from the account
during the two preceding fiscal years;
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new text begin (2) the status of climate change adaptation projects funded under the program; and
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new text begin (3) the percentage of disbursements from the account made during the two preceding
fiscal years that funded climate change adaptation projects that directly benefited
disadvantaged communities.
new text end

new text begin (b) The state auditor may conduct fiscal audits of the account and expenditures made
from the account. The periodic audits are a reasonable administrative expense of the program
for purposes of subdivision 1, paragraph (c).
new text end

Sec. 5. new text begin APPROPRIATION; GREENHOUSE GAS POLLUTION COST-RECOVERY
PROGRAM.
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new text begin (a) $....... in fiscal year 2027 is appropriated from the general fund to the commissioner
of the Pollution Control Agency for implementing Minnesota Statutes, sections 116.393 to
116.3937, including costs for staffing; providing administrative, technical, and legal support;
and hiring consultants and experts.
new text end

new text begin (b) $....... in fiscal year 2027 is appropriated from the general fund to the state auditor
for implementing Minnesota Statutes, sections 116.393 to 116.3937, including costs for
staffing; providing administrative, technical, and legal support; and hiring consultants and
experts.
new text end