1.1 A bill for an act
1.2 relating to energy; requiring certain buildings to meet energy performance
1.3 standards; requiring reports; appropriating money; proposing coding for new law
1.4 in Minnesota Statutes, chapter 216C.
1.5BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.6 Section 1. [216C.332] BUILDING ENERGY PERFORMANCE STANDARDS.
1.7 Subdivision 1.Definitions.(a) For the purposes of this section, the following terms have
1.8the meanings given.
1.9 (b) "Building type" means a category of buildings similar in design, function, and energy
1.10use.
1.11 (c) "Covered building" has the meaning given to "covered property" in section 216C.331,
1.12subdivision 1.
1.13 (d) "Energy" has the meaning given in section 216C.331, subdivision 1.
1.14 (e) "Energy Star Portfolio Manager" has the meaning given in section 216C.331,
1.15subdivision 1.
1.16 (f) "Energy use intensity" or "EUI" has the meaning given in section 216C.331,
1.17subdivision 1.
1.18 (g) "Final performance standard" means the numeric value of a performance metric that
1.19covered buildings must meet by 2045.
1.20 (h) "Financial distress" means that a covered building:
1Section 1.
REVISOR RSI/DG 25-0495004/03/25
State of Minnesota
This Document can be made available
in alternative formats upon request
HOUSE OF REPRESENTATIVES
H. F. No. 3179
NINETY-FOURTH SESSION
Authored by Jones, Kraft and Long04/10/2025
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
2.2arrearages;
2.3 (2) is controlled by a court-appointed receiver based on financial problems;
2.4 (3) is owned by a financial institution through default by the borrower;
2.5 (4) has been acquired by deed in lieu of foreclosure; or
2.6 (5) has a senior mortgage that is subject to a notice of default.
2.7 (i) "Greenhouse gas emissions" means emissions of carbon dioxide, methane, nitrous
2.8oxide, hydrofluorocarbons, perfluorocarbons, and sulfur hexafluoride resulting from energy
2.9used at a building site.
2.10 (j) "Interim performance metric" means the numeric value of a performance metric that
2.11covered properties must meet every five years until 2045.
2.12 (k) "Multifamily affordable housing" means a covered building that:
2.13 (1) contains five or more dwelling units;
2.14 (2) meets the eligibility standards established by the commissioner under section
2.15216B.2403, subdivision 5, paragraph (e), for multifamily buildings to participate in energy
2.16conservation programs provided to low-income households; and
2.17 (3) receives or received government financing or financial assistance at the county, state,
2.18or federal level.
2.19 (l) "Owner" means an individual or entity that possesses the title to a covered building
2.20or an agent that the individual or entity has authorized to act on behalf of the individual or
2.21entity.
2.22 (m) "Total floor area" has the meaning given in section 216C.331, subdivision 1.
2.23 Subd. 2.Establishment.The commissioner must establish and maintain a building
2.24energy performance standards program. The purpose of the program is to reduce:
2.25 (1) the amount of energy used to (i) heat and cool buildings, and (ii) provide other energy
2.26services; and
2.27 (2) greenhouse gas emissions from covered buildings by 90 percent from a 2005 baseline
2.28by 2045.
2.29 Subd. 3.Classification of covered buildings.For the purposes of this section, a covered
2.30building is classified as follows:
2Section 1.
REVISOR RSI/DG 25-0495004/03/25 Total floor area (square feet)Ownership3.1Class
100,000 or moreCity, state, county, school district,
3.3 metropolitan council
3.21
50,000 to 99,999City, state, county, school district,
3.5 metropolitan council
3.42
100,000 or morePrivate3.63
50,000 or morePrivate3.74
3.8 Subd. 4.Final EUI standards; establishment.(a) No later than January 1, 2026, the
3.9commissioner must establish final EUI standards for all covered buildings. The commissioner
3.10must establish final EUI standards at a level at which, if the EUI standards are met by all
3.11covered buildings, the aggregated greenhouse gas emissions from all covered buildings is
3.12reduced by 90 percent by 2045 from a 2005 baseline.
3.13 (b) When establishing final EUI standards, the commissioner may utilize the building
3.14types used in the Energy Star Portfolio Manager benchmarking tool or other building types.
3.15 (c) Class 1 covered buildings must meet the final EUI standard no later than 2042. Class
3.162 covered buildings must meet the final EUI standard no later than 2043. Class 3 covered
3.17buildings must meet the final EUI standard no later than 2044. Class 4 covered buildings
3.18must meet the final EUI standard no later than 2045.
3.19 (d) The final EUI standard established for a covered property containing more than a
3.20single building type must be calculated on a pro rata basis based on the square footage of
3.21each building type.
3.22 Subd. 5.Interim EUI standards; establishment.The commissioner must establish
3.23interim EUI standards that each covered building must meet every five years, beginning in
3.242028 for class 1 covered buildings and continuing until 2045 for class 4 covered buildings.
3.25The interim EUI standards must be calculated on a straight-line trajectory with respect to
3.26the final EUI standards so that covered buildings meeting the interim EUI standards
3.27demonstrate steady progress toward the final EUI standards in equal increments. Each owner
3.28must submit a report to the commissioner, on a form prescribed by the commissioner,
3.29demonstrating the covered building's progress toward meeting the interim EUI standards.
3.30 Subd. 6.EUI standards; extensions; exemptions; adjustments.(a) An owner may
3.31request the commissioner to issue the owner an extension, exemption, or adjustment to an
3.32interim or final EUI standard for a covered building. The commissioner may approve the
3.33request if the commissioner determines that:
3.34 (1) the covered building is experiencing financial distress or is likely to experience
3.35financial distress within the next 12 months;
3Section 1.
REVISOR RSI/DG 25-0495004/03/25 4.1 (2) the covered building:
4.2 (i) has been less than 50 percent occupied;
4.3 (ii) does not have a certificate of occupancy or a temporary certificate of occupancy;
4.4 (iii) was issued a demolition permit that remains current; or
4.5 (iv) received no energy services for at least 30 days; or
4.6 (3) meeting the EUI standard is not in the public interest.
4.7 (b) If an owner submits a request under this subdivision less than one year before the
4.8deadline for the applicable EUI standard, the owner may be subject to a penalty of up to
4.9$1,000, as determined by the commissioner.
4.10 (c) An owner of multifamily affordable housing is exempt from the requirements of this
4.11section until the owner refinances the building after the effective date of this act, at which
4.12point the multifamily affordable housing is subject to the next sequential EUI standard that
4.13covered buildings are required to meet under subdivision 4 or 5, as applicable.
4.14 (d) An owner is exempt from the requirements of this section with respect to a covered
4.15building that the commissioner determines is subject to an EUI or other energy-related
4.16standard required by the state or a political subdivision that is more stringent than an EUI
4.17standard established under this section.
4.18 (e) An owner must provide information requested by the commissioner in order to
4.19evaluate a request made under this subdivision. The commissioner must treat information
4.20an owner provides under this subdivision as not public data under chapter 13.
4.21 Subd. 7.Interface with utility conservation programs.Nothing in this section limits
4.22the ability of a public utility or municipal utility to offer programs to covered buildings, or
4.23to claim energy savings resulting from the offered programs, through the utility's energy
4.24conservation and optimization plans approved by the commissioner under section 216B.2403
4.25or 216B.241.
4.26 Subd. 8.Public buildings; portfolio option.An owner of multiple class 1 or class 2
4.27buildings may, after receiving the commissioner's approval, elect to meet an applicable EUI
4.28standard by reducing energy use in one or more of the owner's class 1 or class 2 buildings
4.29by an amount that is equal to or greater than the energy use that would have been reduced
4.30had each of the owner's class 1 and class 2 buildings met the applicable EUI standard.
4Section 1.
REVISOR RSI/DG 25-0495004/03/25 5.1 Subd. 9.Building Performance Advisory Committee.(a) No later than August 15,
5.22025, the commissioner must establish and make appointments to a Building Performance
5.3Advisory Committee consisting of representatives from the following entities and professions:
5.4 (1) the commissioner, or the commissioner's designee, as a nonvoting member;
5.5 (2) a public or municipal utility providing natural gas service to Minnesota retail
5.6customers;
5.7 (3) a public or municipal utility providing electricity service to Minnesota retail
5.8customers;
5.9 (4) an entity that provides energy efficiency measures to covered buildings;
5.10 (5) an entity that provides renewable energy facilities to covered buildings;
5.11 (6) a professional who designs covered buildings;
5.12 (7) an engineer experienced in operating energy systems in covered buildings;
5.13 (8) a manager of operations for covered buildings;
5.14 (9) a labor union representative of workers who operate or service covered buildings;
5.15 (10) an owner of a covered building containing residences for families;
5.16 (11) an owner of a covered building providing affordable housing for families;
5.17 (12) a tenant of multifamily affordable housing;
5.18 (13) a nonprofit organization that addresses climate change, decarbonization, or green
5.19building issues;
5.20 (14) a nonprofit organization that addresses environmental justice issues;
5.21 (15) an expert on sustainable buildings from the University of Minnesota's Center for
5.22Sustainable Building Research; and
5.23 (16) a local government unit.
5.24 (b) The Building Performance Advisory Committee must:
5.25 (1) advise the commissioner on implementing and operating this section;
5.26 (2) recommend interim and final EUI standards for different building types; and
5.27 (3) recommend procedures for exemptions, extensions, and adjustments the commissioner
5.28may grant under subdivision 6.
5Section 1.
REVISOR RSI/DG 25-0495004/03/25 6.1 (c) The advisory committee must elect a chair by majority vote at the advisory
6.2committee's initial meeting. The advisory committee must meet quarterly. Additional
6.3meetings may be held at the call of the chair. The department must serve as staff to the
6.4advisory committee.
6.5 (d) Advisory committee members other than state employees are governed by section
6.615.059.
6.7 Subd. 10.Penalties.(a) An owner whose covered building fails to meet an interim or
6.8final EUI standard by the date required, and who has not received a valid extension,
6.9exemption, or adjustment from the commissioner under subdivision 6, must make a
6.10compliance payment to the commissioner under this subdivision.
6.11 (b) Except as provided in paragraph (c), an owner whose covered building fails to meet
6.12an EUI standard must pay to the commissioner a penalty, as determined by the commissioner,
6.13of up to $....... for each 1,000 British thermal units consumed by the covered building that
6.14exceed the EUI standard. The maximum penalty imposed under this paragraph or paragraph
6.15(c) must increase over time at the same rate as that of the estimate of the social cost of
6.16carbon dioxide emissions most recently adopted by the commission under section 216B.2422,
6.17subdivision 3.
6.18 (c) An owner may, with the commissioner's approval, elect to be excused from paying
6.19a penalty imposed under paragraph (b). An owner who makes the election under this
6.20paragraph and fails to meet the next scheduled EUI standard for the same covered building
6.21must pay to the commissioner an amount equal to ... percent of the earlier penalty imposed
6.22on the covered building, in addition to a payment for failing to meet the subsequent EUI
6.23standard.
6.24 (d) A compliance payment must be made under this subdivision each year or portion of
6.25a year during which a covered building fails to meet an EUI standard.
6.26 (e) When determining the amount of a compliance payment under this subdivision, the
6.27commissioner must consider:
6.28 (1) the magnitude of the amount by which the covered building's performance exceeds
6.29the level of the applicable EUI standard;
6.30 (2) the length of time over which the covered building has failed to meet the applicable
6.31EUI standard;
6.32 (3) the assessed value of the covered building; and
6.33 (4) the total number of EUI standards the covered building has failed to meet over time.
6Section 1.
REVISOR RSI/DG 25-0495004/03/25 7.1 Subd. 11.Technical and financial assistance hub.The department must contract with
7.2a nonprofit organization with extensive experience implementing energy efficiency programs
7.3in buildings to operate a building performance technical and financial assistance hub. The
7.4hub must assist owners to comply with this section by:
7.5 (1) offering technical assistance directly to owners regarding energy-saving reduction
7.6measures and strategies;
7.7 (2) connecting owners with other sources of technical assistance, including other covered
7.8building owners who have successfully reduced energy use; and
7.9 (3) making owners aware of sources of financial assistance, including tax credits, that
7.10are offered by utilities or available through programs administered by local, state, and federal
7.11government entities to support implementing energy-saving measures.
7.12 Subd. 12.Program implementation.The commissioner may contract with an
7.13independent third party to implement any or all of the commissioner's duties required under
7.14this section. The commissioner must assist owners to access the technical and financial
7.15assistance hub established under subdivision 11 and the building energy performance
7.16improvement grant program established under subdivision 14 to reduce energy use from
7.17the owners' covered properties through outreach and training. The commissioner must begin
7.18informing owners of this section's requirements in 2025 as part of outreach activities required
7.19under the energy benchmarking program under section 216C.331.
7.20 Subd. 13.Account established.(a) A building energy performance standards program
7.21account is established in the special revenue account in the state treasury. The commissioner
7.22must credit to the account appropriations and transfers made to the account and penalties
7.23collected under this section. Earnings, including interest, dividends, and any other earnings
7.24arising from assets of the account, must be credited to the account. Money remaining in the
7.25account at the end of a fiscal year does not cancel to the general fund but remains in the
7.26account. The commissioner must manage the account.
7.27 (b) Money in the account that is not collected from penalties is appropriated to the
7.28commissioner and must be used only to reimburse the reasonable expenses incurred by the
7.29department to administer the building energy performance standards program under this
7.30section.
7.31 (c) Money in the account collected from penalties under subdivision 10 is appropriated
7.32to the commissioner and must only be used to award building energy performance
7.33improvement grants under subdivision 14.
7Section 1.
REVISOR RSI/DG 25-0495004/03/25 8.1 Subd. 14.Building energy performance improvement grants.(a) A building energy
8.2performance improvement grant program is established in the department to provide financial
8.3assistance to eligible applicants to make improvements that reduce energy use in order to
8.4achieve the EUI standards established under this section.
8.5 (b) An application for a grant under this section must be made to the commissioner on
8.6a form developed by the commissioner. The application must be accompanied by
8.7documentation, as required by the commissioner:
8.8 (1) that the applicant is the owner of a covered building or the owner's agent;
8.9 (2) that the applicant has had an energy assessment, conducted of the covered building
8.10within the previous 24 months by a qualified person as determined by the commissioner,
8.11indicating the opportunities to reduce the covered building's energy use;
8.12 (3) indicating the total energy and greenhouse gas emission savings expected from the
8.13proposed improvements; and
8.14 (4) indicating the total cost to purchase and install the improvements.
8.15 (c) The commissioner must develop administrative procedures governing the application
8.16and grant award processes.
8.17 (d) The commissioner may, in consultation with the Building Performance Advisory
8.18Committee, establish preferences for applicants seeking grants for certain building types or
8.19energy-reduction measures.
8.20 (e) When awarding grants under this subdivision, the commissioner must give priority
8.21to applications that propose to:
8.22 (1) reduce energy use in multifamily affordable housing; or
8.23 (2) achieve reductions in energy use greater than or sooner than is required by the
8.24applicable EUI standard.
8.25 (f) Fifty percent of a grant awarded under this subdivision must be paid to an applicant
8.26prior to the commencement of work. The balance of a grant awarded under this subdivision
8.27must be paid when the work supported by the grant is completed.
8.28 (g) The commissioner must modify program requirements under this section when
8.29necessary to align with comparable federal programs administered by the department under
8.30the federal Inflation Reduction Act of 2022, Public Law 117-189.
8.31 EFFECTIVE DATE.This section is effective the day following final enactment.
8Section 1.
REVISOR RSI/DG 25-0495004/03/25 9.1 Sec. 2. APPROPRIATION.
9.2 $....... in fiscal year 2026 is appropriated from the general fund to the commissioner of
9.3commerce to administer and enforce the building energy performance standards program
9.4under Minnesota Statutes, section 216C.332. Of this amount:
9.5 (1) up to $....... may be used to award grants to applicants under the building energy
9.6performance improvement grant program established under Minnesota Statutes, section
9.7216C.332, subdivision 14; and
9.8 (2) up to $....... may be used to fund the technical and financial assistance hub established
9.9under Minnesota Statutes, section 216C.332, subdivision 11.
9Sec. 2.
REVISOR RSI/DG 25-0495004/03/25