1.1 A bill for an act
1.2 relating to energy; establishing a geothermal heat exchange system rebate program;
1.3 appropriating money; proposing coding for new law in Minnesota Statutes, chapter
1.4 216C.
1.5BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.6 Section 1. [216C.49] GEOTHERMAL HEAT EXCHANGE SYSTEM REBATE
1.7PROGRAM.
1.8 Subdivision 1.Definitions.(a) For the purposes of this section, the following terms have
1.9the meanings given.
1.10 (b) "Eligible applicant" means a person, business, nonprofit, government entity, federally
1.11recognized Tribe in Minnesota, or religious institution that provides evidence to the
1.12commissioner's satisfaction demonstrating the applicant has received or has applied for a
1.13geothermal heat exchange system rebate available from the United States Department of
1.14Treasury under the Inflation Reduction Act of 2022, Public Law 117-189, for a commercial
1.15or multifamily building located in Minnesota.
1.16 (c) "Geothermal heat exchange system" means a heating or cooling exchange device
1.17composed of a mechanism that collects or rejects heat from or to the underground.
1.18 Subd. 2.Establishment.A geothermal heat exchange system rebate program is
1.19established in the department to provide financial assistance to eligible applicants that install
1.20geothermal heat exchange technology in the applicant's building.
1Section 1.
REVISOR RSI/LJ 25-0250202/19/25
State of Minnesota
This Document can be made available
in alternative formats upon request
HOUSE OF REPRESENTATIVES
H. F. No. 2498
NINETY-FOURTH SESSION
Authored by Hemmingsen-Jaeger, Kraft, Hollins, Jones, Acomb and others03/17/2025
The bill was read for the first time and referred to the Committee on Energy Finance and Policy 2.1 Subd. 3.Application.(a) An application for a rebate under this section must be made
2.2to the commissioner on a form developed by the commissioner. The application must be
2.3accompanied by documentation, as required by the commissioner, demonstrating:
2.4 (1) the applicant is an eligible applicant;
2.5 (2) the applicant owns the Minnesota building in which the geothermal heat exchange
2.6system is to be installed;
2.7 (3) an energy audit of the building in which the geothermal heat exchange system is to
2.8be installed was conducted by a person with a building analyst technician certification issued
2.9by the Building Performance Institute, Inc., or an equivalent certification, as determined by
2.10the commissioner, within the 18 months preceding the application date;
2.11 (4) the applicant installed a geothermal heat exchange system with the capacity
2.12recommended by the auditor or contractor, and the heat pump was installed by a contractor
2.13with sufficient training and experience in installing heat pumps, as determined by the
2.14commissioner; and
2.15 (5) the total cost to install the geothermal heat exchange system in the applicant's building
2.16and the associated geothermal loop installed and located outside of the building.
2.17 (b) The commissioner must develop administrative procedures governing the application
2.18and rebate award processes.
2.19 (c) The commissioner may modify program requirements under this section when
2.20necessary to align with comparable federal programs administered by the department under
2.21the Inflation Reduction Act of 2022, Public Law 117-189.
2.22 Subd. 4.Rebate amount.A rebate awarded under this section must not exceed the lesser
2.23of:
2.24 (1) 15 percent of geothermal heat exchange system costs, not to exceed $100,000 for a
2.25single project; or
2.26 (2) the total cost to purchase and install the heat exchange system in an eligible applicant's
2.27building, net of financial support received for the system from other federal, state, or utility
2.28programs.
2.29 Subd. 5.Prioritization.When evaluating applications under this section, the
2.30commissioner must give priority to applications for multifamily housing or commercial
2.31buildings that:
2.32 (1) are owned by a nonprofit or government entity; and
2Section 1.
REVISOR RSI/LJ 25-0250202/19/25 3.1 (2) meet the definition of low-income rental property under section 273.128.
3.2 Subd. 6.Account established.(a) A geothermal heat exchange system rebate account
3.3is established as a separate account in the special revenue fund in the state treasury. The
3.4commissioner must credit appropriations and transfers to the account. Earnings, including
3.5interest, dividends, and any other earnings arising from assets of the account, must be
3.6credited to the account. Money remaining in the account at the end of a fiscal year does not
3.7cancel and remains in the account until expended. The commissioner must manage the
3.8account.
3.9 (b) Money in the account is appropriated to the commissioner to award rebates under
3.10this section and to reimburse the reasonable costs incurred by the department to administer
3.11this section. Money remaining in the account on January 1, 2033, cancels to the renewable
3.12development account.
3.13 Sec. 2. APPROPRIATIONS.
3.14 (a) Notwithstanding Minnesota Statutes, section 116C.779, subdivision 1, paragraph (j),
3.15$....... in fiscal year 2026 is appropriated from the renewable development account under
3.16Minnesota Statutes, section 116C.779, subdivision 1, to the commissioner of commerce for
3.17the geothermal heat exchange system rebate program under Minnesota Statutes, section
3.18216C.49. A rebate awarded with money appropriated under this paragraph must be awarded
3.19only to projects that are located within the electric service area of the public utility subject
3.20to Minnesota Statutes, section 116C.779.
3.21 (b) $....... in fiscal year 2026 is appropriated from the general fund to the commissioner
3.22of commerce for the geothermal heat exchange system rebate program under Minnesota
3.23Statutes, section 216C.49. A rebate awarded with money appropriated under this paragraph
3.24must be awarded only to projects that are located outside the electric service area of the
3.25public utility subject to Minnesota Statutes, section 116C.779.
3Sec. 2.
REVISOR RSI/LJ 25-0250202/19/25