HF 3195

4th Engrossment - 85th Legislature (2007 - 2008) Posted on 12/15/2009 12:00am

A bill for an act
relating to environment; establishing an intent to participate in a cap and trade
program for greenhouse gas emissions; requiring studies; appropriating money;
proposing coding for new law in Minnesota Statutes, chapter 216H.

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

Section 1.

new text begin [216H.10] 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 [216H.11] CAP AND TRADE PROGRAM.
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new text begin It is the intent of the legislature that Minnesota participate in the midwest regional
cap and trade program to help achieve the greenhouse gas emissions reductions goals
established in section 216H.02, subdivision 1.
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Sec. 3.

new text begin [216H.12] MIDWESTERN GREENHOUSE GAS ACCORD.
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new text begin (a) By January 15, 2009, the commissioner of commerce 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, environmental policy, and
transportation policy describing the status of the development of a model rule establishing
a regional cap and trade program under the Midwestern Greenhouse Gas Accord. The
report must address the degree to which any model rule being developed under the
Midwestern Greenhouse Gas Accord will operate in a time frame that will allow Minnesota
to meet its greenhouse gas emissions-reduction goals under section 216H.02, subdivision
1. If a model rule in accord with the state's emissions-reduction goals is not yet ready for
adoption, 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 senate and house of representatives, in accordance with the rules of their
respective bodies, must appoint a bipartisan team of six legislators, two representatives
from the non-energy-related business community, and three representatives from
organized labor to serve in an advisory role to the governor's Midwestern Greenhouse Gas
Accord stakeholder group. The legislators and business and labor representatives must
receive regular briefings from the stakeholder group and have an opportunity to participate
as observers in meetings of the regional negotiations and may offer advice 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.
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new text begin (c) Any cap and trade agreements entered into are not effective in Minnesota until
approved by the legislature.
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Sec. 4.

new text begin [216H.13] POST-IMPLEMENTATION COST STUDY.
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new text begin Beginning one year after the initial implementation of a statewide cap and trade
program, and each year thereafter, the Department of Commerce shall submit a study
to the chairs and ranking minority members of the senate and house of representatives
committees with primary jurisdiction over energy policy and environmental policy that
estimates the annual economic cost and benefit to Minnesota consumers and businesses
resulting from the implementation of the cap and trade program.
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Sec. 5.

new text begin STUDIES.
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new text begin Subdivision 1. new text end

new text begin Governance study. new text end

new text begin The University of Minnesota shall issue a
request for proposals for a study that describes and analyzes several options regarding
how decisions on expenditures of revenues captured by any cap and trade program may be
made. The study must examine:
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new text begin (1) the role that the legislature, citizens, technical experts, and state agencies may
play in decision making; and
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new text begin (2) innovative decision-making structures and processes, including the
Legislative-Citizens Commission on Minnesota Resources, and other examples in
Minnesota and other states and countries that may offer useful models to consider.
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new text begin The report must be submitted to the chairs and ranking minority members of the senate
and house of representatives committees with primary jurisdiction over energy policy and
environmental policy by January 15, 2009.
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new text begin Subd. 2. new text end

new text begin Economic and emissions study. new text end

new text begin (a) The commissioner of commerce shall
conduct a study of the economic, environmental, and public health costs and benefits of a
cap and trade program. The study must consider the impact of the 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 3 can reduce the economic costs and increase the economic, environmental,
and public health benefits.
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new text begin (b) The study must include:
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new text begin (1) estimates of the costs to entities covered by the cap to buy allowances or reduce
greenhouse gas emissions;
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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) projections of likely revenues if allowances are auctioned;
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new text begin (4) a detailed estimate of the degree to which different levels of expenditures of
auction proceeds on the options listed under subdivision 3, clauses (1) to (6), 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 leaving the state
to purchase fossil fuels, or 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 4;
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new text begin (5) discussion of the potential for any allowances allocated under the program to
result in windfall profits rather than be used to reduce consumer prices;
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new text begin (6) analysis of ways to avoid putting Minnesota industries subject to the cap and
trade program at a competitive disadvantage with competitors not subject to comparable
regulation;
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new text begin (7) options for criteria that decision makers can use to determine how to allocate
expenditures among the spending options listed under subdivision 3, balancing the goals
set forth in subdivision 4;
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new text begin (8) analysis of various mechanisms for protecting jobs in energy-intensive industries
subject to competition from outside the Midwestern Greenhouse Gas Accord region,
including steel, cement, paper, pulp, aluminum, and chemicals, including 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 (9) 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 (10) analysis of the effect of adopting a cap and trade program on the level of
foreign investment in Minnesota.
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new text begin (c) 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 (d) By January 15, 2009, the study must be submitted to the chairs and ranking
minority members of the senate and house of representatives committees with primary
jurisdiction over energy policy and environmental policy.
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new text begin Subd. 3. new text end

new text begin Expenditures to be studied. new text end

new text begin The study required under subdivision 2 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
reduce energy costs, energy consumption, and greenhouse gas emissions, including
telecommuting tax credits;
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new text begin (3) financial assistance to businesses that install technologies that reduce their
facilities' greenhouse gas emissions, targeting energy-intensive industries facing
competitors not subject to comparable regulation including, but not limited to, steel, pulp,
paper, cement, chemicals, and aluminum;
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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 carbon sequestration on forest land and farmland; and
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new text begin (7) a scenario in which a majority of expenditures is directed to uses under clauses
(1) and (2).
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new text begin Subd. 4. 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 3 assist Minnesota's
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 discuss
the extent to which expenditures meet the following goals:
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new text begin (1) produce cost-effective emissions 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 the 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 their 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. 6. 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 for renewable energy research under Laws 2007, chapter
57, article 2, section 3, subdivision 6, clause (7), up to $500,000 is appropriated to the
commissioner for the purposes of completing the studies under section 5, subdivisions 1
and 2. A portion of this appropriation may be transferred to the Board of Regents of the
University of Minnesota.
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Sec. 7. new text begin EFFECTIVE DATE.
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new text begin Sections 1 to 6 are effective the day following final enactment.
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