Large fossil fuel businesses would pay Minnesota climate-related costs

The Minnesota Pollution Control Agency would charge covered fossil fuel businesses a share of climate-related costs, without needing to prove fault. Coverage would include fuel extractors, oil refiners, and their successors responsible for more than one billion metric tons of emissions from use of their fuels, measured as carbon dioxide equivalents. Businesses must have enough connection to Minnesota to meet U.S. constitutional requirements. Charges would reflect their share of covered emissions and the state auditor's cost assessment. Related businesses treated as one group would each owe the group's full charge. Ownership stakes of at least 10 percent in another business would add a matching share of that business's emissions. Businesses could choose nine annual payments: 20 percent first, then 10 percent each year. Interest and inflation adjustments could apply. They could request a hearing before an administrative law judge. Missed payments, business closure, or major asset sales could make the remaining balance due sooner. A buyer agreeing to take over payments could preserve installments after a sale. Refiners could receive adjustments for oil already counted in another covered business's charge. Covered emissions would run from January 1, 1995, through December 31, 2026. Charges would be issued within six months after rules are adopted. Full payment or the first installment would be due within six months after a charge is issued.

The Minnesota Pollution Control Agency would use a dedicated account to pay for projects that prepare for or respond to climate change and reasonable program expenses. State, local, and Tribal government projects could qualify to help people and natural areas prepare for, avoid, or repair climate change impacts. Projects must be recommended in a government plan. Account money could also cover project operation, maintenance, and reasonable costs of running the program. At least 40 percent of all account spending must fund projects benefiting communities eligible for the state's energy transition grants or designated as environmental justice areas. Construction contracts must pay the wage rates required for public construction work. Spending must be designed to support local jobs and improve job quality.

The state auditor would assess climate-related costs, and the Minnesota Pollution Control Agency would report on payments and funded projects. The auditor would consult the Pollution Control Agency and send assessments to legislative committees. Agency reports would go to those committees and the governor. The assessment would cover past and projected costs to Minnesota and its residents, including costs of preparing for climate change. Agency reports would cover payments, spending, project progress, and the spending share directly benefiting communities covered by the program's priority rules. The proposal would provide general fund money for agency and auditor work in fiscal year 2027, but both dollar amounts are blank. The agency would have one full-time program position and could add staff as needed. The first assessment would be due within two years of the section's effective date, with updates at least every four years. Agency reports would be due on or before December 31, 2030, and each even-numbered year afterward.