Minnesota 2025-2026 Regular Session

Minnesota House Bill HF3179 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	1.1 A bill for an act
2	2	1.2 relating to energy; requiring certain buildings to meet energy performance
3	3	1.3 standards; requiring reports; appropriating money; proposing coding for new law
4	4	1.4 in Minnesota Statutes, chapter 216C.
5	5	1.5BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
6	6	1.6 Section 1. [216C.332] BUILDING ENERGY PERFORMANCE STANDARDS.
7	7	1.7 Subdivision 1.Definitions.(a) For the purposes of this section, the following terms have
8	8	1.8the meanings given.
9	9	1.9 (b) "Building type" means a category of buildings similar in design, function, and energy
10	10	1.10use.
11	11	1.11 (c) "Covered building" has the meaning given to "covered property" in section 216C.331,
12	12	1.12subdivision 1.
13	13	1.13 (d) "Energy" has the meaning given in section 216C.331, subdivision 1.
14	14	1.14 (e) "Energy Star Portfolio Manager" has the meaning given in section 216C.331,
15	15	1.15subdivision 1.
16	16	1.16 (f) "Energy use intensity" or "EUI" has the meaning given in section 216C.331,
17	17	1.17subdivision 1.
18	18	1.18 (g) "Final performance standard" means the numeric value of a performance metric that
19	19	1.19covered buildings must meet by 2045.
20	20	1.20 (h) "Financial distress" means that a covered building:
21	21	1Section 1.
22	22	REVISOR RSI/DG 25-0495004/03/25
23	23	State of Minnesota
24	24	This Document can be made available
25	25	in alternative formats upon request
26	26	HOUSE OF REPRESENTATIVES
27	27	H. F. No. 3179
28	28	NINETY-FOURTH SESSION
29	29	Authored by Jones, Kraft and Long04/10/2025
30	30	The bill was read for the first time and referred to the Committee on Energy Finance and Policy 2.1 (1) is the subject of a qualified tax lien sale or public auction due to property tax
31	31	2.2arrearages;
32	32	2.3 (2) is controlled by a court-appointed receiver based on financial problems;
33	33	2.4 (3) is owned by a financial institution through default by the borrower;
34	34	2.5 (4) has been acquired by deed in lieu of foreclosure; or
35	35	2.6 (5) has a senior mortgage that is subject to a notice of default.
36	36	2.7 (i) "Greenhouse gas emissions" means emissions of carbon dioxide, methane, nitrous
37	37	2.8oxide, hydrofluorocarbons, perfluorocarbons, and sulfur hexafluoride resulting from energy
38	38	2.9used at a building site.
39	39	2.10 (j) "Interim performance metric" means the numeric value of a performance metric that
40	40	2.11covered properties must meet every five years until 2045.
41	41	2.12 (k) "Multifamily affordable housing" means a covered building that:
42	42	2.13 (1) contains five or more dwelling units;
43	43	2.14 (2) meets the eligibility standards established by the commissioner under section
44	44	2.15216B.2403, subdivision 5, paragraph (e), for multifamily buildings to participate in energy
45	45	2.16conservation programs provided to low-income households; and
46	46	2.17 (3) receives or received government financing or financial assistance at the county, state,
47	47	2.18or federal level.
48	48	2.19 (l) "Owner" means an individual or entity that possesses the title to a covered building
49	49	2.20or an agent that the individual or entity has authorized to act on behalf of the individual or
50	50	2.21entity.
51	51	2.22 (m) "Total floor area" has the meaning given in section 216C.331, subdivision 1.
52	52	2.23 Subd. 2.Establishment.The commissioner must establish and maintain a building
53	53	2.24energy performance standards program. The purpose of the program is to reduce:
54	54	2.25 (1) the amount of energy used to (i) heat and cool buildings, and (ii) provide other energy
55	55	2.26services; and
56	56	2.27 (2) greenhouse gas emissions from covered buildings by 90 percent from a 2005 baseline
57	57	2.28by 2045.
58	58	2.29 Subd. 3.Classification of covered buildings.For the purposes of this section, a covered
59	59	2.30building is classified as follows:
60	60	2Section 1.
61	61	REVISOR RSI/DG 25-0495004/03/25 Total floor area (square feet)Ownership3.1Class
62	62	100,000 or moreCity, state, county, school district,
63	63	3.3 metropolitan council
64	64	3.21
65	65	50,000 to 99,999City, state, county, school district,
66	66	3.5 metropolitan council
67	67	3.42
68	68	100,000 or morePrivate3.63
69	69	50,000 or morePrivate3.74
70	70	3.8 Subd. 4.Final EUI standards; establishment.(a) No later than January 1, 2026, the
71	71	3.9commissioner must establish final EUI standards for all covered buildings. The commissioner
72	72	3.10must establish final EUI standards at a level at which, if the EUI standards are met by all
73	73	3.11covered buildings, the aggregated greenhouse gas emissions from all covered buildings is
74	74	3.12reduced by 90 percent by 2045 from a 2005 baseline.
75	75	3.13 (b) When establishing final EUI standards, the commissioner may utilize the building
76	76	3.14types used in the Energy Star Portfolio Manager benchmarking tool or other building types.
77	77	3.15 (c) Class 1 covered buildings must meet the final EUI standard no later than 2042. Class
78	78	3.162 covered buildings must meet the final EUI standard no later than 2043. Class 3 covered
79	79	3.17buildings must meet the final EUI standard no later than 2044. Class 4 covered buildings
80	80	3.18must meet the final EUI standard no later than 2045.
81	81	3.19 (d) The final EUI standard established for a covered property containing more than a
82	82	3.20single building type must be calculated on a pro rata basis based on the square footage of
83	83	3.21each building type.
84	84	3.22 Subd. 5.Interim EUI standards; establishment.The commissioner must establish
85	85	3.23interim EUI standards that each covered building must meet every five years, beginning in
86	86	3.242028 for class 1 covered buildings and continuing until 2045 for class 4 covered buildings.
87	87	3.25The interim EUI standards must be calculated on a straight-line trajectory with respect to
88	88	3.26the final EUI standards so that covered buildings meeting the interim EUI standards
89	89	3.27demonstrate steady progress toward the final EUI standards in equal increments. Each owner
90	90	3.28must submit a report to the commissioner, on a form prescribed by the commissioner,
91	91	3.29demonstrating the covered building's progress toward meeting the interim EUI standards.
92	92	3.30 Subd. 6.EUI standards; extensions; exemptions; adjustments.(a) An owner may
93	93	3.31request the commissioner to issue the owner an extension, exemption, or adjustment to an
94	94	3.32interim or final EUI standard for a covered building. The commissioner may approve the
95	95	3.33request if the commissioner determines that:
96	96	3.34 (1) the covered building is experiencing financial distress or is likely to experience
97	97	3.35financial distress within the next 12 months;
98	98	3Section 1.
99	99	REVISOR RSI/DG 25-0495004/03/25 4.1 (2) the covered building:
100	100	4.2 (i) has been less than 50 percent occupied;
101	101	4.3 (ii) does not have a certificate of occupancy or a temporary certificate of occupancy;
102	102	4.4 (iii) was issued a demolition permit that remains current; or
103	103	4.5 (iv) received no energy services for at least 30 days; or
104	104	4.6 (3) meeting the EUI standard is not in the public interest.
105	105	4.7 (b) If an owner submits a request under this subdivision less than one year before the
106	106	4.8deadline for the applicable EUI standard, the owner may be subject to a penalty of up to
107	107	4.9$1,000, as determined by the commissioner.
108	108	4.10 (c) An owner of multifamily affordable housing is exempt from the requirements of this
109	109	4.11section until the owner refinances the building after the effective date of this act, at which
110	110	4.12point the multifamily affordable housing is subject to the next sequential EUI standard that
111	111	4.13covered buildings are required to meet under subdivision 4 or 5, as applicable.
112	112	4.14 (d) An owner is exempt from the requirements of this section with respect to a covered
113	113	4.15building that the commissioner determines is subject to an EUI or other energy-related
114	114	4.16standard required by the state or a political subdivision that is more stringent than an EUI
115	115	4.17standard established under this section.
116	116	4.18 (e) An owner must provide information requested by the commissioner in order to
117	117	4.19evaluate a request made under this subdivision. The commissioner must treat information
118	118	4.20an owner provides under this subdivision as not public data under chapter 13.
119	119	4.21 Subd. 7.Interface with utility conservation programs.Nothing in this section limits
120	120	4.22the ability of a public utility or municipal utility to offer programs to covered buildings, or
121	121	4.23to claim energy savings resulting from the offered programs, through the utility's energy
122	122	4.24conservation and optimization plans approved by the commissioner under section 216B.2403
123	123	4.25or 216B.241.
124	124	4.26 Subd. 8.Public buildings; portfolio option.An owner of multiple class 1 or class 2
125	125	4.27buildings may, after receiving the commissioner's approval, elect to meet an applicable EUI
126	126	4.28standard by reducing energy use in one or more of the owner's class 1 or class 2 buildings
127	127	4.29by an amount that is equal to or greater than the energy use that would have been reduced
128	128	4.30had each of the owner's class 1 and class 2 buildings met the applicable EUI standard.
129	129	4Section 1.
130	130	REVISOR RSI/DG 25-0495004/03/25 5.1 Subd. 9.Building Performance Advisory Committee.(a) No later than August 15,
131	131	5.22025, the commissioner must establish and make appointments to a Building Performance
132	132	5.3Advisory Committee consisting of representatives from the following entities and professions:
133	133	5.4 (1) the commissioner, or the commissioner's designee, as a nonvoting member;
134	134	5.5 (2) a public or municipal utility providing natural gas service to Minnesota retail
135	135	5.6customers;
136	136	5.7 (3) a public or municipal utility providing electricity service to Minnesota retail
137	137	5.8customers;
138	138	5.9 (4) an entity that provides energy efficiency measures to covered buildings;
139	139	5.10 (5) an entity that provides renewable energy facilities to covered buildings;
140	140	5.11 (6) a professional who designs covered buildings;
141	141	5.12 (7) an engineer experienced in operating energy systems in covered buildings;
142	142	5.13 (8) a manager of operations for covered buildings;
143	143	5.14 (9) a labor union representative of workers who operate or service covered buildings;
144	144	5.15 (10) an owner of a covered building containing residences for families;
145	145	5.16 (11) an owner of a covered building providing affordable housing for families;
146	146	5.17 (12) a tenant of multifamily affordable housing;
147	147	5.18 (13) a nonprofit organization that addresses climate change, decarbonization, or green
148	148	5.19building issues;
149	149	5.20 (14) a nonprofit organization that addresses environmental justice issues;
150	150	5.21 (15) an expert on sustainable buildings from the University of Minnesota's Center for
151	151	5.22Sustainable Building Research; and
152	152	5.23 (16) a local government unit.
153	153	5.24 (b) The Building Performance Advisory Committee must:
154	154	5.25 (1) advise the commissioner on implementing and operating this section;
155	155	5.26 (2) recommend interim and final EUI standards for different building types; and
156	156	5.27 (3) recommend procedures for exemptions, extensions, and adjustments the commissioner
157	157	5.28may grant under subdivision 6.
158	158	5Section 1.
159	159	REVISOR RSI/DG 25-0495004/03/25 6.1 (c) The advisory committee must elect a chair by majority vote at the advisory
160	160	6.2committee's initial meeting. The advisory committee must meet quarterly. Additional
161	161	6.3meetings may be held at the call of the chair. The department must serve as staff to the
162	162	6.4advisory committee.
163	163	6.5 (d) Advisory committee members other than state employees are governed by section
164	164	6.615.059.
165	165	6.7 Subd. 10.Penalties.(a) An owner whose covered building fails to meet an interim or
166	166	6.8final EUI standard by the date required, and who has not received a valid extension,
167	167	6.9exemption, or adjustment from the commissioner under subdivision 6, must make a
168	168	6.10compliance payment to the commissioner under this subdivision.
169	169	6.11 (b) Except as provided in paragraph (c), an owner whose covered building fails to meet
170	170	6.12an EUI standard must pay to the commissioner a penalty, as determined by the commissioner,
171	171	6.13of up to $....... for each 1,000 British thermal units consumed by the covered building that
172	172	6.14exceed the EUI standard. The maximum penalty imposed under this paragraph or paragraph
173	173	6.15(c) must increase over time at the same rate as that of the estimate of the social cost of
174	174	6.16carbon dioxide emissions most recently adopted by the commission under section 216B.2422,
175	175	6.17subdivision 3.
176	176	6.18 (c) An owner may, with the commissioner's approval, elect to be excused from paying
177	177	6.19a penalty imposed under paragraph (b). An owner who makes the election under this
178	178	6.20paragraph and fails to meet the next scheduled EUI standard for the same covered building
179	179	6.21must pay to the commissioner an amount equal to ... percent of the earlier penalty imposed
180	180	6.22on the covered building, in addition to a payment for failing to meet the subsequent EUI
181	181	6.23standard.
182	182	6.24 (d) A compliance payment must be made under this subdivision each year or portion of
183	183	6.25a year during which a covered building fails to meet an EUI standard.
184	184	6.26 (e) When determining the amount of a compliance payment under this subdivision, the
185	185	6.27commissioner must consider:
186	186	6.28 (1) the magnitude of the amount by which the covered building's performance exceeds
187	187	6.29the level of the applicable EUI standard;
188	188	6.30 (2) the length of time over which the covered building has failed to meet the applicable
189	189	6.31EUI standard;
190	190	6.32 (3) the assessed value of the covered building; and
191	191	6.33 (4) the total number of EUI standards the covered building has failed to meet over time.
192	192	6Section 1.
193	193	REVISOR RSI/DG 25-0495004/03/25 7.1 Subd. 11.Technical and financial assistance hub.The department must contract with
194	194	7.2a nonprofit organization with extensive experience implementing energy efficiency programs
195	195	7.3in buildings to operate a building performance technical and financial assistance hub. The
196	196	7.4hub must assist owners to comply with this section by:
197	197	7.5 (1) offering technical assistance directly to owners regarding energy-saving reduction
198	198	7.6measures and strategies;
199	199	7.7 (2) connecting owners with other sources of technical assistance, including other covered
200	200	7.8building owners who have successfully reduced energy use; and
201	201	7.9 (3) making owners aware of sources of financial assistance, including tax credits, that
202	202	7.10are offered by utilities or available through programs administered by local, state, and federal
203	203	7.11government entities to support implementing energy-saving measures.
204	204	7.12 Subd. 12.Program implementation.The commissioner may contract with an
205	205	7.13independent third party to implement any or all of the commissioner's duties required under
206	206	7.14this section. The commissioner must assist owners to access the technical and financial
207	207	7.15assistance hub established under subdivision 11 and the building energy performance
208	208	7.16improvement grant program established under subdivision 14 to reduce energy use from
209	209	7.17the owners' covered properties through outreach and training. The commissioner must begin
210	210	7.18informing owners of this section's requirements in 2025 as part of outreach activities required
211	211	7.19under the energy benchmarking program under section 216C.331.
212	212	7.20 Subd. 13.Account established.(a) A building energy performance standards program
213	213	7.21account is established in the special revenue account in the state treasury. The commissioner
214	214	7.22must credit to the account appropriations and transfers made to the account and penalties
215	215	7.23collected under this section. Earnings, including interest, dividends, and any other earnings
216	216	7.24arising from assets of the account, must be credited to the account. Money remaining in the
217	217	7.25account at the end of a fiscal year does not cancel to the general fund but remains in the
218	218	7.26account. The commissioner must manage the account.
219	219	7.27 (b) Money in the account that is not collected from penalties is appropriated to the
220	220	7.28commissioner and must be used only to reimburse the reasonable expenses incurred by the
221	221	7.29department to administer the building energy performance standards program under this
222	222	7.30section.
223	223	7.31 (c) Money in the account collected from penalties under subdivision 10 is appropriated
224	224	7.32to the commissioner and must only be used to award building energy performance
225	225	7.33improvement grants under subdivision 14.
226	226	7Section 1.
227	227	REVISOR RSI/DG 25-0495004/03/25 8.1 Subd. 14.Building energy performance improvement grants.(a) A building energy
228	228	8.2performance improvement grant program is established in the department to provide financial
229	229	8.3assistance to eligible applicants to make improvements that reduce energy use in order to
230	230	8.4achieve the EUI standards established under this section.
231	231	8.5 (b) An application for a grant under this section must be made to the commissioner on
232	232	8.6a form developed by the commissioner. The application must be accompanied by
233	233	8.7documentation, as required by the commissioner:
234	234	8.8 (1) that the applicant is the owner of a covered building or the owner's agent;
235	235	8.9 (2) that the applicant has had an energy assessment, conducted of the covered building
236	236	8.10within the previous 24 months by a qualified person as determined by the commissioner,
237	237	8.11indicating the opportunities to reduce the covered building's energy use;
238	238	8.12 (3) indicating the total energy and greenhouse gas emission savings expected from the
239	239	8.13proposed improvements; and
240	240	8.14 (4) indicating the total cost to purchase and install the improvements.
241	241	8.15 (c) The commissioner must develop administrative procedures governing the application
242	242	8.16and grant award processes.
243	243	8.17 (d) The commissioner may, in consultation with the Building Performance Advisory
244	244	8.18Committee, establish preferences for applicants seeking grants for certain building types or
245	245	8.19energy-reduction measures.
246	246	8.20 (e) When awarding grants under this subdivision, the commissioner must give priority
247	247	8.21to applications that propose to:
248	248	8.22 (1) reduce energy use in multifamily affordable housing; or
249	249	8.23 (2) achieve reductions in energy use greater than or sooner than is required by the
250	250	8.24applicable EUI standard.
251	251	8.25 (f) Fifty percent of a grant awarded under this subdivision must be paid to an applicant
252	252	8.26prior to the commencement of work. The balance of a grant awarded under this subdivision
253	253	8.27must be paid when the work supported by the grant is completed.
254	254	8.28 (g) The commissioner must modify program requirements under this section when
255	255	8.29necessary to align with comparable federal programs administered by the department under
256	256	8.30the federal Inflation Reduction Act of 2022, Public Law 117-189.
257	257	8.31 EFFECTIVE DATE.This section is effective the day following final enactment.
258	258	8Section 1.
259	259	REVISOR RSI/DG 25-0495004/03/25 9.1 Sec. 2. APPROPRIATION.
260	260	9.2 $....... in fiscal year 2026 is appropriated from the general fund to the commissioner of
261	261	9.3commerce to administer and enforce the building energy performance standards program
262	262	9.4under Minnesota Statutes, section 216C.332. Of this amount:
263	263	9.5 (1) up to $....... may be used to award grants to applicants under the building energy
264	264	9.6performance improvement grant program established under Minnesota Statutes, section
265	265	9.7216C.332, subdivision 14; and
266	266	9.8 (2) up to $....... may be used to fund the technical and financial assistance hub established
267	267	9.9under Minnesota Statutes, section 216C.332, subdivision 11.
268	268	9Sec. 2.
269	269	REVISOR RSI/DG 25-0495004/03/25