1.1    .................... moves to amend H. F. No. 375 as follows:
1.2Delete everything after the enacting clause and insert:

1.3    "Section 1. [216H.001] FINDINGS; CITATION.
1.4    (a) The legislature finds that the state has a vital interest in preventing or mitigating
1.5harms associated with global warming and in reducing Minnesota's greenhouse gas
1.6emissions. The legislature recognizes that substantial reductions in emissions of
1.7greenhouse gases are necessary to avoid dangerous climate changes in the future. The
1.8legislature finds that taking steps to reduce Minnesota's greenhouse gas emissions today
1.9and planning for long-term reductions will reduce the need for more disruptive emission
1.10reductions later, and that to achieve the purposes of this act, all emissions associated
1.11with electricity generated or consumed within the state must be subject to the state's
1.12emissions reduction goals. The legislature further finds that Minnesota's economy will
1.13benefit by showing leadership in the transition away from climate-damaging technologies
1.14and toward renewable power, biofuels, and energy efficiency. The legislature recognizes
1.15that achieving these ends will only occur by close cooperation with other states and may
1.16require the state to enter into binding agreements with other units of government.
1.17    (b) This chapter may be referred to as the Global Warming Mitigation Act of 2007.

1.18    Sec. 2. [216H.01] DEFINITIONS.
1.19    Subdivision 1. Scope. For the purposes of this chapter, the terms defined in this
1.20section have the meanings given them.
1.21    Subd. 2. Allowance. "Allowance" means limited authorization from a state
1.22regulatory agency to emit up to one ton of carbon dioxide or carbon dioxide equivalent
1.23into the atmosphere. This limited authorization does not constitute a property right.
1.24    Subd. 3. Cap and trade system. "Cap and trade system" means a regulatory system
1.25that imposes a limit on the aggregate air pollutant emissions of a group of sources, requires
2.1those subject to the cap to own an allowance for each ton of the air pollutant emitted, and
2.2allows for market-based trading of those allowances.
2.3    Subd. 4. Carbon dioxide equivalent. "Carbon dioxide equivalent" means the
2.4quantity of a given greenhouse gas multiplied by its global warming potential.
2.5    Subd. 5. Global warming potential. "Global warming potential" means a measure
2.6of the radiative efficiency or heat-absorbing ability of a particular gas relative to that of
2.7carbon dioxide after taking into account the decay rate of each gas, that is, the amount
2.8removed from the atmosphere over a given number of years, relative to that of carbon
2.9dioxide.
2.10    Subd. 6. Greenhouse gas emissions source. "Greenhouse gas emissions source"
2.11means any anthropogenic physical unit or process that releases greenhouse gases into
2.12the atmosphere.
2.13    Subd. 7. Greenhouse gases. "Greenhouse gases" include carbon dioxide, methane,
2.14nitrous oxide, hydrofluorocarbons, perfluorocarbons, and sulfur hexafluoride or any other
2.15chemical that is determined by the Pollution Control Agency to contribute comparably to
2.16global climate change and that is emitted by anthropogenic sources.
2.17    Subd. 8. New large energy facility. "New large energy facility" means a large
2.18energy facility as defined in section 216B.2421 that is not in operation as of January
2.191, 2007.
2.20    Subd. 9. Person. "Person" has the meaning given in section 216E.01.
2.21    Subd. 10. Statewide greenhouse gas emissions. "Statewide greenhouse gas
2.22emissions" means the total annual emissions of greenhouse gases within the state and all
2.23emissions of greenhouse gases from the generation of electricity imported from outside the
2.24state and consumed in Minnesota. Emissions associated with transmission and distribution
2.25line losses are included in this definition. Statewide emissions are expressed in tons of
2.26carbon dioxide equivalent. Carbon dioxide that is injected into geological formations to
2.27prevent its release to the atmosphere in compliance with applicable laws, and emissions
2.28associated with the combustion of fuels other than coal, petroleum and natural gas are not
2.29counted as contributing to statewide greenhouse gas emissions.
2.30    Subd. 11. Statewide power sector carbon dioxide emissions. "Statewide power
2.31sector carbon dioxide emissions" means the total annual emissions of carbon dioxide from
2.32the generation of electricity within the state and all emissions of carbon dioxide from the
2.33generation of electricity imported from outside the state and consumed in Minnesota.
2.34Emissions associated with transmission and distribution line losses are included in this
3.1definition. Carbon dioxide that is injected into geological formations to prevent its release
3.2to the atmosphere in compliance with applicable laws, and emissions associated with
3.3the combustion of fuels other than coal, petroleum and natural gas are not counted as
3.4contributing to statewide power sector carbon dioxide emissions.

3.5    Sec. 3. [216H.02] GREENHOUSE GAS EMISSIONS-REDUCTION GOALS.
3.6    It is the state's goal to reduce statewide greenhouse gas emissions to a level at least
3.715 percent below 2005 emission levels by 2015, to a level at least 30 percent below 2005
3.8emission levels by 2025, and to a level at least 80 percent below 2005 emission levels
3.9by 2050.

3.10    Sec. 4. [216H.04] GREENHOUSE GAS EMISSIONS-REDUCTION PLAN.
3.11    Subdivision 1. Plan for achieving reductions. (a) By February 1, 2008, the
3.12commissioners of the Pollution Control Agency and the Department of Commerce
3.13shall submit a plan to the chairs of the senate and house committees with jurisdiction
3.14over energy and environmental policy that contains recommendations on how best to
3.15achieve the statewide greenhouse gas emissions-reduction goals established under section
3.16216H.02. The plan must also identify how best to reduce statewide greenhouse gas
3.17emissions to a level at least 45 percent below 2005 levels by 2025. The plan must identify,
3.18develop, and integrate a full range of greenhouse gas emissions reduction activities across
3.19all economic sectors, regions, and energy uses in the state, and estimate the costs and
3.20benefits of each action. The plan must:
3.21    (1) estimate statewide greenhouse gas emissions for 2005 and make projections of
3.22statewide greenhouse gas emissions for 2015, 2025 and 2050;
3.23    (2) estimate the statewide greenhouse gas emissions reductions anticipated from
3.24implementation of existing state policies;
3.25    (3) include a cap and trade system as described in subdivision 3;
3.26    (4) recommend additional policies to achieve statewide greenhouse gas
3.27emissions-reduction goals;
3.28    (5) include provisions that will ensure that existing policies are evaluated, and that at
3.29least every five years any policy changes needed to achieve the statewide greenhouse gas
3.30emissions-reduction goals are developed and recommended for legislative action; and
3.31    (6) recommend a system to require the reporting of statewide greenhouse gas
3.32emissions, identifying which facilities must report, how emission estimates should be
3.33made, and other reporting requirements that will ensure the collection of emissions
3.34information needed to reliably document statewide greenhouse gas emission levels and
3.35implement the plan.
4.1    (b) In formulating the plan, the commissioners shall consider the broadest possible
4.2set of mechanisms to reduce emissions, including, but not limited to, expanding the
4.3electric sector cap and trade system established under subdivision 3 to include emissions
4.4sources other than electricity generation and greenhouse gases other than carbon dioxide;
4.5scheduling reductions of the emissions cap; imposing greenhouse gas taxes, fines, and
4.6other penalties; adopting emissions-reduction performance standards for sources of
4.7greenhouse gases; establishing financial or other incentives to promote activities that will
4.8reduce greenhouse gases; and enhancing existing policies that have the effect of lowering
4.9greenhouse gas emissions.
4.10    Subd. 2. Planning process. The plan required under subdivision 1 must be
4.11developed through a structured, broadly inclusive stakeholder-based review of potential
4.12policies and initiatives that can be implemented in Minnesota to reduce greenhouse gas
4.13emissions. The stakeholder-based review process must be conducted by a nationally
4.14recognized independent expert entity. The commissioner of commerce shall coordinate
4.15executive branch participation with this stakeholder process.
4.16    Subd. 3. Cap and trade system. (a) The plan must include a cap and trade system
4.17incorporating, at a minimum, statewide power sector carbon dioxide emissions. The
4.18cap and trade plan must:
4.19    (1) set an emissions cap at an initial level to prevent significant increases in statewide
4.20greenhouse gas emissions above current levels, with a schedule for lowering the cap
4.21periodically to help meet the state's emissions reduction targets;
4.22    (2) maximize Minnesota's ability to enter into allowance trading relationships with
4.23other states that have established or are in the process of establishing a cap and trade
4.24system regulating greenhouse gas emissions;
4.25    (3) evaluate whether and to what extent a party subject to the cap should receive
4.26credit for offsetting emissions by implementing projects that reduce greenhouse gas
4.27emissions from sources not subject to the cap or absorb and sequester greenhouse gases
4.28from the atmosphere;
4.29    (4) include methods to ensure that all emissions reductions associated with projects
4.30listed in item (3) are permanent, quantifiable, verifiable, enforceable, and would not have
4.31otherwise occurred;
4.32    (5) be designed to ensure that the proceeds from auctioning allowances are used to
4.33benefit the public, including to help meet the state's emission reduction goals in the most
4.34efficient and least disruptive way;
5.1    (6) estimate likely allowance prices under various scenarios, including the impact
5.2on allowance prices of constructing additional power plants subject to the cap and trade
5.3system;
5.4    (7) recommend ways to minimize any rate impacts on energy consumers;
5.5    (8) suggest procedures to award appropriate credit to entities that have voluntarily
5.6reduced their greenhouse gas emissions prior to implementation of the cap and trade
5.7system;
5.8    (9) ensure to the extent practicable that emissions reductions made in this state do
5.9not cause emissions increases outside the state;
5.10    (10) identify technologies and industries likely to thrive in a carbon-constrained
5.11future;
5.12    (11) maximize economic development in rural areas from the development of
5.13renewable energy sources and proven terrestrial sequestration practices; and
5.14    (12) suggest methods to calculate carbon dioxide emissions associated with
5.15electricity imported from outside the state.
5.16    Subd. 4. Regional activities. It shall be an executive branch responsibility to work
5.17with other states in the Midwest region to develop and implement a regional approach
5.18to reducing greenhouse gas emissions from activities in the region, including consulting
5.19on expanding the cap and trade system described in subdivision 3. The commissioner of
5.20commerce shall coordinate Minnesota's regional activities under this subdivision and
5.21report to the legislative committees in the senate and house with jurisdiction over energy
5.22and environmental policy by February 1 of 2008 and 2009 on the progress made and
5.23recommendations for further action.

5.24    Sec. 5. [216H.05] NO LONG-TERM INCREASE FROM POWER PLANTS.
5.25    Subdivision 1. Long-term increased emissions from power plants prohibited.
5.26    Until the cap and trade system described in section 216H.04, subdivision 3, is fully
5.27implemented, and except as allowed in subdivision 2, no person shall:
5.28    (1) construct within the state a new large energy facility that would contribute to
5.29statewide power sector carbon dioxide emissions;
5.30    (2) import or commit to import from outside the state power from a new large energy
5.31facility that would contribute to statewide power sector carbon dioxide emissions; or
5.32    (3) enter into a new long-term power purchase agreement that would contribute to
5.33statewide power sector carbon dioxide emissions. For purposes of this section, a long-term
5.34power purchase agreement means an agreement to purchase 50 megawatts of capacity or
5.35more for a term exceeding five years. This prohibition does not apply to an agreement in
5.36effect as of January 1, 2007, nor to the renewal of such an agreement.
6.1    Subd. 2. Exception for facilities that offset emissions. (a) The prohibitions in
6.2subdivision 1 do not apply if the project proponent demonstrates to the Public Utilities
6.3Commission's satisfaction that it will offset the new contribution to statewide power sector
6.4carbon dioxide emissions with a carbon dioxide reduction project identified in paragraph
6.5(b) and in compliance with paragraph (c).
6.6    (b) A project proponent may offset the new contribution to statewide power sector
6.7carbon dioxide emissions in either, or a combination of both, of the following ways:
6.8    (1) by reducing an existing facility's contribution to statewide power sector carbon
6.9dioxide emissions in an amount equal to or greater than the proposed new contribution to
6.10statewide power sector carbon dioxide emissions; or
6.11    (2) by purchasing carbon dioxide allowances from a state or group of states that
6.12has a mandatory carbon dioxide cap and trade system in place that produces verifiable
6.13emissions reductions.
6.14    (c) The Public Utilities Commission shall not find that a proposed carbon dioxide
6.15reduction project identified in paragraph (b) acceptably offsets a new contribution
6.16to statewide power sector carbon dioxide emissions unless the proposed offsets are
6.17permanent, quantifiable, verifiable, enforceable, and would not have otherwise occurred.
6.18Emissions that have been offset under this subdivision continue to be subject to the
6.19requirements of the cap and trade system described in section 216H.04, subdivision 3,
6.20when implemented.
6.21    Subd. 3. Enforcement. Whenever the commission or department determines that
6.22any person is violating or about to violate this section, it shall refer the matter to the
6.23attorney general who shall take appropriate legal action. This section may be enforced by
6.24the attorney general on the same basis as a law listed in section 8.31, subdivision 1.

6.25    Sec. 6. [216H.06] GREENHOUSE GAS EMISSIONS CONSIDERATION IN
6.26RESOURCE PLANNING.
6.27    By January 1, 2008, the Public Utilities Commission shall establish an estimate of
6.28the likely range of costs of future carbon dioxide regulation on electricity generation.
6.29The estimate must be used in all electricity generation resource acquisition proceedings.
6.30The estimates, and annual updates, must be made following informal proceedings that
6.31allow interested parties to submit comments.

6.32    Sec. 7. [216H.07] ENFORCEABILITY.
6.33    In addition to any other remedies provided by law, the failure to carry out any
6.34requirement established by or pursuant to this chapter shall be treated as a violation of an
6.35environmental standard and is enforceable under chapter 116B.

7.1    Sec. 8. APPROPRIATION.
7.2    $....... is appropriated from the general fund to the commissioner of the Pollution
7.3Control Agency for the biennium ending June 30, 2009, for the purposes of sections 1 to 8."