1.1 .................... moves to amend H. F. No. 3195 as follows:
1.2Delete everything after the enacting clause and insert:
1.3 "Section 1.
[216H.10] TITLE.
1.4 This act may be cited as the Green Solutions Act of 2008.
1.5 Sec. 2.
[216H.11] CAP AND TRADE PROGRAM.
1.6 Subdivision 1. Intent. It is the intent of the legislature that Minnesota participate in
1.7the midwest regional cap and trade program to help achieve the greenhouse gas emissions
1.8reductions goals established in section 216H.02, subdivision 1.
1.9 Subd. 2. Principles. The legislature recognizes that the atmosphere and climate are
1.10common assets, and damage to them by greenhouse gas emissions are costs now borne by
1.11the public. Capping greenhouse gas emissions places a market value on emissions, and
1.12that market value should accrue to the public. It is the intent of the legislature that any
1.13cap and trade program:
1.14 (1) should cover as many emitting sectors as is administratively feasible, but exclude
1.15sectors from which emissions cannot be reliably quantified;
1.16 (2) should auction allowances to the extent economically feasible and direct all
1.17proceeds from any auction toward the public benefit;
1.18 (3) should allow auctions to be phased in if necessary to protect consumers and
1.19industries from sudden price increases, provided that protections are in place to ensure
1.20that windfall profits do not accrue to entities allocated allowances during the transition;
1.21 (4) should ensure that the emission reductions necessary to meet the cap come from
1.22the capped sectors themselves rather than from sectors outside the cap;
1.23 (5) should not increase the emissions cap by allowing the issuance of allowances
1.24beyond the limits specified in section 216H.02; and
1.25 (6) should provide for equity to communities at risk of disproportionate economic
1.26and environmental impacts.
2.1 Sec. 3.
[216H.12] MIDWESTERN GREENHOUSE GAS ACCORD.
2.2 (a) By December 1, 2008, the commissioner of commerce and the commissioner
2.3of the Pollution Control Agency shall submit a report to the chairs and ranking minority
2.4members of the senate and house of representatives committees with primary jurisdiction
2.5over energy policy, environmental policy, and transportation policy describing the status
2.6of the development of a model rule establishing a regional cap and trade program under
2.7the Midwestern Greenhouse Gas Accord. The report must address the degree to which any
2.8model rule being developed under the Midwestern Greenhouse Gas Accord incorporates
2.9the principles set forth in section 216H.11, and will operate in a time frame that will allow
2.10Minnesota to meet its greenhouse gas emissions reduction goals under section 216H.02,
2.11subdivision 1. If a model rule incorporating those principles and in accord with the state's
2.12emissions-reduction goals is not yet ready for adoption, or is unlikely to be adopted, the
2.13report must identify options for Minnesota to supplement the regional agreement with
2.14state policies, to join another regional cap and trade program, or to implement a cap and
2.15trade program in Minnesota alone.
2.16 (b) The senate and house, in accordance with the rules of their respective bodies,
2.17must appoint a bipartisan team of six legislators to serve in an advisory role to the
2.18governor's midwestern greenhouse gas accord stakeholder group. The legislators must
2.19receive regular briefings from the stakeholder group and have an opportunity to participate
2.20as observers in meetings of the regional negotiations and may offer advice.
2.21 (c) Any cap and trade agreements entered into are not effective in Minnesota until
2.22enacted into law.
2.23 Sec. 4.
[216H.13] STUDIES.
2.24 Subdivision 1. Governance study. The University of Minnesota shall issue a
2.25request for proposals for a study that describes and analyzes several options regarding
2.26how decisions on expenditures of revenues captured by any cap and trade program may be
2.27made. The study must examine:
2.28 (1) the role that the legislature, citizens, technical experts, and state agencies may
2.29play in decision making; and
2.30 (2) innovative decision-making structures and processes, including the
2.31Legislative-Citizens Commission on Minnesota Resources, and other examples in
2.32Minnesota and other states and countries that may offer useful models to consider.
2.33The report must be submitted to the University of Minnesota by January 1, 2009.
2.34 Subd. 2. Economic and emissions study. The commissioner of commerce shall
2.35conduct a study of the economic, environmental, and public health costs and benefits of a
3.1cap and trade program incorporating the principles established in section 216H.11. The
3.2study shall consider the impact of the cap and trade program on individual industrial
3.3sectors subject to the program and on the state economy and consumers, and how
3.4expenditures of any auction revenues on the measures identified in subdivision 3, can
3.5reduce the economic costs and increase the economic, environmental and public health
3.6benefits. The study must include:
3.7 (1) estimates of the costs to entities covered by the cap to buy allowances or reduce
3.8greenhouse gas emissions;
3.9 (2) estimates of the impact of the program on energy costs, the impact of energy
3.10cost changes on businesses and households, and recommendations on how to avoid
3.11regressive impacts;
3.12 (3) projections of likely revenues if allowances are auctioned;
3.13 (4) a detailed estimate of the degree to which different levels of expenditures of
3.14auction proceeds on the options listed under subdivision 3, clauses (1) to (6), would:
3.15 (i) reduce greenhouse gas emissions;
3.16 (ii) reduce economic costs to industry and households;
3.17 (iii) yield jobs and other economic benefits by stimulating economic activity,
3.18promoting the growth of new businesses, reducing the amount of money leaving the state
3.19to purchase fossil fuels, or other means;
3.20 (iv) result in environmental and public health co-benefits by reducing pollutants
3.21other than greenhouse gases, improving habitat, or other means; and
3.22 (v) otherwise meet the goals identified in subdivision 4;
3.23 (5) discussion of the potential for any allowances allocated under the program to
3.24result in windfall profits rather than be used to reduce consumer prices;
3.25 (6) analysis of ways to avoid putting Minnesota industries subject to the cap and
3.26trade program at a competitive disadvantage with competitors not subject to comparable
3.27regulation;
3.28 (7) options for criteria that decision makers can use to determine how to allocate
3.29expenditures among the spending options listed under subdivision 3, balancing the goals
3.30set forth in subdivision 4;
3.31 (8) analysis of various mechanisms for protecting job loss in energy intensive
3.32industries subject to competition from outside the Midwestern Greenhouse Gas Accord
3.33region, including steel, cement, paper, pulp, aluminum, and chemicals, including an
3.34analysis of possible mechanisms to account for the greenhouse gas emissions associated
3.35with the production and transportation of imported goods; and
4.1 (9) analysis of various mechanisms to provide for equity to communities at risk of
4.2disproportionate economic or environmental impacts.
4.3 The study shall consider the data and policy recommendations developed through
4.4the Minnesota Climate Change Advisory Group as well as the growing literature related
4.5to reducing greenhouse gas emissions. By January 1, 2009, the study must be submitted
4.6to the chairs and ranking minority members of the senate and house of representatives
4.7committees with primary jurisdiction over energy policy and environmental policy.
4.8 Subd. 3. Expenditures to be studied. The study required under subdivision 2 shall
4.9consider the impacts of the following types of expenditures:
4.10 (1) direct per capita rebates to Minnesotans;
4.11 (2) grants and incentives to consumers to invest in energy efficiency and utilize
4.12renewable energy sources, or in other technologies, products or practices that reduce
4.13energy costs, energy consumption, and greenhouse gas emissions;
4.14 (3) financial assistance to businesses that install technologies that reduce their
4.15facilities' greenhouse gas emissions, targeting energy-intensive industries facing
4.16competitors not subject to comparable regulation including, but not limited to, steel, pulp,
4.17paper, cement, chemicals, and aluminum;
4.18 (4) investments in public infrastructure that reduce greenhouse gas emissions;
4.19 (5) investments in worker training and retraining programs; and
4.20 (6) incentives for carbon sequestration on forest land and farmland.
4.21A majority of expenditures from the fund must be directed to uses under clauses (1)
4.22and (2).
4.23 Subd. 4. Study criteria. The study required under subdivision 2 shall determine the
4.24extent to which expenditures on the measures identified in subdivision 3 assist Minnesota's
4.25transition to a low greenhouse gas-emitting economy and increase the economic gains
4.26and reduce the dislocating impacts of the transition. Specifically, the study shall discuss
4.27the extent to which expenditures meet the following goals:
4.28 (1) produce cost-effective emission reductions;
4.29 (2) increase sustainable economic development, job creation and job growth;
4.30 (3) reduce greenhouse gas emission reductions in sectors that do not participate in
4.31the cap and trade program;
4.32 (4) reduce disruptive economic impacts of the transition on workers, businesses,
4.33and consumers;
4.34 (5) equitably distribute the costs and benefits among state residents, communities,
4.35and economic sectors;
5.1 (6) assist low-income and other consumers to reduce their costs associated with
5.2greenhouse gas emissions; and
5.3 (7) protect and enhance public health, environmental quality, wildlife habitat, and
5.4the state's natural resources.
5.5 Sec. 5.
APPROPRIATION.
5.6 (a) $....... is appropriated from the general fund for the purposes of completing the
5.7study under Minnesota Statutes, section 216H.14, subdivision 1.
5.8 (b) $....... is appropriated from the general fund for the purposes of completing the
5.9study under Minnesota Statutes, section 216H.14, subdivision 2.
5.10 Sec. 6.
EFFECTIVE DATE.
5.11 Sections 1 to 5 are effective the day following final enactment."
5.12Delete the title and insert:
5.14relating to environment; establishing principals of a cap and trade program for
5.15greenhouse gas emissions; requiring studies; appropriating money from the
5.16general fund;proposing coding for new law in Minnesota Statutes, chapter
5.17216H."