SF 2818

6th Engrossment - 85th Legislature (2007 - 2008) Posted on 12/15/2009 12:00am

A bill for an act
relating to environment; requiring a report on and legislative input in
development of a cap and trade program for greenhouse gas emissions; requiring
studies; 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 February 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
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; and
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new text begin (5) an economic impact study under paragraph (d).
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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, 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) two members of the majority party in the house of representatives, appointed by
the speaker of the house of representatives, and one member of the minority party in the
house of representatives, appointed by the minority leader.
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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 may request regular briefings from
that group, in addition to participating and offering advice in meetings where regional
negotiations take place. The appointing authorities under this paragraph must complete
their appointments by June 1, 2008. The advisory group expires when the governor
dissolves the Midwestern Greenhouse Gas Accord stakeholder group.
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new text begin (c) Any cap and trade agreements entered into are not effective in Minnesota until
enacted into law.
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new text begin (d) The report shall include an economic impact study by expert consultants that
analyzes the economic impacts of the costs and benefits, including environmental and
public health benefits, of the proposed model regional cap and trade rule. The study shall
consider the impact of the model cap and trade rule on individual industrial sectors subject
to the model rule and on the state economy and consumers. The study must also include:
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new text begin (1) an estimate of allowance prices and rates of investment by facilities subject
to the cap and trade program in infrastructure and equipment to reduce emissions of
greenhouse gases over time;
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new text begin (2) an estimate of increases in energy prices for fuels that produce greenhouse gas
emissions, the impact of price increases on businesses and family income, and the degree
of regressivity of the price increases and 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, cement, pulp and paper, refining, and chemicals;
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new text begin (5) an analysis of the energy cost savings to homes and businesses, job growth, new
business development, energy balance of trade, and environmental and public health
co-benefits; and
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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.
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new text begin The analysis shall 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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Sec. 3.

new text begin POTENTIAL CAP AND TRADE REVENUE STUDY.
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new text begin Subdivision 1. new text end

new text begin Study. new text end

new text begin By February 15, 2009, the commissioner of commerce and
the commissioner of the Pollution Control Agency shall submit a study prepared by
expert consultants 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 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 2, 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 how much money leaves the state to
buy 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 3;
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new text begin (3) a discussion of the potential for allowances allocated by the program to lead to
unfair economic advantage rather than be used to reduce consumer prices; and
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new text begin (4) an evaluation of governance options for revenue distribution under section 4.
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new text begin Subd. 2. new text end

new text begin Expenditures to be studied. new text end

new text begin The study required under subdivision 1 shall
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;
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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, cement,
refining, and chemicals;
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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; and
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new text begin (6) incentives for terrestrial and geologic carbon sequestration.
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new text begin Subd. 3. new text end

new text begin Study criteria. new text end

new text begin The study required under subdivision 1 shall determine the
extent to which expenditures on the measures identified in subdivision 2 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 shall
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 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 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 February 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 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 to consider.
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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 study under section 2, the revenue
study under section 3, and the governance study under section 4. The commissioner shall
contribute funds from this appropriation to the Midwestern Governors Association for
completion of the studies required under sections 2 and 3. The commissioner shall transfer
up to $75,000 to the University of Minnesota for the study under section 4.
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Sec. 6. new text begin EFFECTIVE DATE.
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new text begin Sections 1 to 5 are effective the day following final enactment.
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