Minnesota 2025-2026 Regular Session

Minnesota Senate Bill SF3429 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	25-04950 as introduced04/03/25 REVISOR RSI/DG
23	23	SENATE
24	24	STATE OF MINNESOTA
25	25	S.F. No. 3429NINETY-FOURTH SESSION
26	26	(SENATE AUTHORS: MCEWEN)
27	27	OFFICIAL STATUSD-PGDATE
28	28	Introduction and first reading04/24/2025
29	29	Referred to Energy, Utilities, Environment, and Climate 2.1 (1) is the subject of a qualified tax lien sale or public auction due to property tax
30	30	2.2arrearages;
31	31	2.3 (2) is controlled by a court-appointed receiver based on financial problems;
32	32	2.4 (3) is owned by a financial institution through default by the borrower;
33	33	2.5 (4) has been acquired by deed in lieu of foreclosure; or
34	34	2.6 (5) has a senior mortgage that is subject to a notice of default.
35	35	2.7 (i) "Greenhouse gas emissions" means emissions of carbon dioxide, methane, nitrous
36	36	2.8oxide, hydrofluorocarbons, perfluorocarbons, and sulfur hexafluoride resulting from energy
37	37	2.9used at a building site.
38	38	2.10 (j) "Interim performance metric" means the numeric value of a performance metric that
39	39	2.11covered properties must meet every five years until 2045.
40	40	2.12 (k) "Multifamily affordable housing" means a covered building that:
41	41	2.13 (1) contains five or more dwelling units;
42	42	2.14 (2) meets the eligibility standards established by the commissioner under section
43	43	2.15216B.2403, subdivision 5, paragraph (e), for multifamily buildings to participate in energy
44	44	2.16conservation programs provided to low-income households; and
45	45	2.17 (3) receives or received government financing or financial assistance at the county, state,
46	46	2.18or federal level.
47	47	2.19 (l) "Owner" means an individual or entity that possesses the title to a covered building
48	48	2.20or an agent that the individual or entity has authorized to act on behalf of the individual or
49	49	2.21entity.
50	50	2.22 (m) "Total floor area" has the meaning given in section 216C.331, subdivision 1.
51	51	2.23 Subd. 2.Establishment.The commissioner must establish and maintain a building
52	52	2.24energy performance standards program. The purpose of the program is to reduce:
53	53	2.25 (1) the amount of energy used to (i) heat and cool buildings, and (ii) provide other energy
54	54	2.26services; and
55	55	2.27 (2) greenhouse gas emissions from covered buildings by 90 percent from a 2005 baseline
56	56	2.28by 2045.
57	57	2.29 Subd. 3.Classification of covered buildings.For the purposes of this section, a covered
58	58	2.30building is classified as follows:
59	59	2Section 1.
60	60	25-04950 as introduced04/03/25 REVISOR RSI/DG Total floor area (square feet)Ownership3.1Class
61	61	100,000 or moreCity, state, county, school district,
62	62	3.3 metropolitan council
63	63	3.21
64	64	50,000 to 99,999City, state, county, school district,
65	65	3.5 metropolitan council
66	66	3.42
67	67	100,000 or morePrivate3.63
68	68	50,000 or morePrivate3.74
69	69	3.8 Subd. 4.Final EUI standards; establishment.(a) No later than January 1, 2026, the
70	70	3.9commissioner must establish final EUI standards for all covered buildings. The commissioner
71	71	3.10must establish final EUI standards at a level at which, if the EUI standards are met by all
72	72	3.11covered buildings, the aggregated greenhouse gas emissions from all covered buildings is
73	73	3.12reduced by 90 percent by 2045 from a 2005 baseline.
74	74	3.13 (b) When establishing final EUI standards, the commissioner may utilize the building
75	75	3.14types used in the Energy Star Portfolio Manager benchmarking tool or other building types.
76	76	3.15 (c) Class 1 covered buildings must meet the final EUI standard no later than 2042. Class
77	77	3.162 covered buildings must meet the final EUI standard no later than 2043. Class 3 covered
78	78	3.17buildings must meet the final EUI standard no later than 2044. Class 4 covered buildings
79	79	3.18must meet the final EUI standard no later than 2045.
80	80	3.19 (d) The final EUI standard established for a covered property containing more than a
81	81	3.20single building type must be calculated on a pro rata basis based on the square footage of
82	82	3.21each building type.
83	83	3.22 Subd. 5.Interim EUI standards; establishment.The commissioner must establish
84	84	3.23interim EUI standards that each covered building must meet every five years, beginning in
85	85	3.242028 for class 1 covered buildings and continuing until 2045 for class 4 covered buildings.
86	86	3.25The interim EUI standards must be calculated on a straight-line trajectory with respect to
87	87	3.26the final EUI standards so that covered buildings meeting the interim EUI standards
88	88	3.27demonstrate steady progress toward the final EUI standards in equal increments. Each owner
89	89	3.28must submit a report to the commissioner, on a form prescribed by the commissioner,
90	90	3.29demonstrating the covered building's progress toward meeting the interim EUI standards.
91	91	3.30 Subd. 6.EUI standards; extensions; exemptions; adjustments.(a) An owner may
92	92	3.31request the commissioner to issue the owner an extension, exemption, or adjustment to an
93	93	3.32interim or final EUI standard for a covered building. The commissioner may approve the
94	94	3.33request if the commissioner determines that:
95	95	3.34 (1) the covered building is experiencing financial distress or is likely to experience
96	96	3.35financial distress within the next 12 months;
97	97	3Section 1.
98	98	25-04950 as introduced04/03/25 REVISOR RSI/DG 4.1 (2) the covered building:
99	99	4.2 (i) has been less than 50 percent occupied;
100	100	4.3 (ii) does not have a certificate of occupancy or a temporary certificate of occupancy;
101	101	4.4 (iii) was issued a demolition permit that remains current; or
102	102	4.5 (iv) received no energy services for at least 30 days; or
103	103	4.6 (3) meeting the EUI standard is not in the public interest.
104	104	4.7 (b) If an owner submits a request under this subdivision less than one year before the
105	105	4.8deadline for the applicable EUI standard, the owner may be subject to a penalty of up to
106	106	4.9$1,000, as determined by the commissioner.
107	107	4.10 (c) An owner of multifamily affordable housing is exempt from the requirements of this
108	108	4.11section until the owner refinances the building after the effective date of this act, at which
109	109	4.12point the multifamily affordable housing is subject to the next sequential EUI standard that
110	110	4.13covered buildings are required to meet under subdivision 4 or 5, as applicable.
111	111	4.14 (d) An owner is exempt from the requirements of this section with respect to a covered
112	112	4.15building that the commissioner determines is subject to an EUI or other energy-related
113	113	4.16standard required by the state or a political subdivision that is more stringent than an EUI
114	114	4.17standard established under this section.
115	115	4.18 (e) An owner must provide information requested by the commissioner in order to
116	116	4.19evaluate a request made under this subdivision. The commissioner must treat information
117	117	4.20an owner provides under this subdivision as not public data under chapter 13.
118	118	4.21 Subd. 7.Interface with utility conservation programs.Nothing in this section limits
119	119	4.22the ability of a public utility or municipal utility to offer programs to covered buildings, or
120	120	4.23to claim energy savings resulting from the offered programs, through the utility's energy
121	121	4.24conservation and optimization plans approved by the commissioner under section 216B.2403
122	122	4.25or 216B.241.
123	123	4.26 Subd. 8.Public buildings; portfolio option.An owner of multiple class 1 or class 2
124	124	4.27buildings may, after receiving the commissioner's approval, elect to meet an applicable EUI
125	125	4.28standard by reducing energy use in one or more of the owner's class 1 or class 2 buildings
126	126	4.29by an amount that is equal to or greater than the energy use that would have been reduced
127	127	4.30had each of the owner's class 1 and class 2 buildings met the applicable EUI standard.
128	128	4Section 1.
129	129	25-04950 as introduced04/03/25 REVISOR RSI/DG 5.1 Subd. 9.Building Performance Advisory Committee.(a) No later than August 15,
130	130	5.22025, the commissioner must establish and make appointments to a Building Performance
131	131	5.3Advisory Committee consisting of representatives from the following entities and professions:
132	132	5.4 (1) the commissioner, or the commissioner's designee, as a nonvoting member;
133	133	5.5 (2) a public or municipal utility providing natural gas service to Minnesota retail
134	134	5.6customers;
135	135	5.7 (3) a public or municipal utility providing electricity service to Minnesota retail
136	136	5.8customers;
137	137	5.9 (4) an entity that provides energy efficiency measures to covered buildings;
138	138	5.10 (5) an entity that provides renewable energy facilities to covered buildings;
139	139	5.11 (6) a professional who designs covered buildings;
140	140	5.12 (7) an engineer experienced in operating energy systems in covered buildings;
141	141	5.13 (8) a manager of operations for covered buildings;
142	142	5.14 (9) a labor union representative of workers who operate or service covered buildings;
143	143	5.15 (10) an owner of a covered building containing residences for families;
144	144	5.16 (11) an owner of a covered building providing affordable housing for families;
145	145	5.17 (12) a tenant of multifamily affordable housing;
146	146	5.18 (13) a nonprofit organization that addresses climate change, decarbonization, or green
147	147	5.19building issues;
148	148	5.20 (14) a nonprofit organization that addresses environmental justice issues;
149	149	5.21 (15) an expert on sustainable buildings from the University of Minnesota's Center for
150	150	5.22Sustainable Building Research; and
151	151	5.23 (16) a local government unit.
152	152	5.24 (b) The Building Performance Advisory Committee must:
153	153	5.25 (1) advise the commissioner on implementing and operating this section;
154	154	5.26 (2) recommend interim and final EUI standards for different building types; and
155	155	5.27 (3) recommend procedures for exemptions, extensions, and adjustments the commissioner
156	156	5.28may grant under subdivision 6.
157	157	5Section 1.
158	158	25-04950 as introduced04/03/25 REVISOR RSI/DG 6.1 (c) The advisory committee must elect a chair by majority vote at the advisory
159	159	6.2committee's initial meeting. The advisory committee must meet quarterly. Additional
160	160	6.3meetings may be held at the call of the chair. The department must serve as staff to the
161	161	6.4advisory committee.
162	162	6.5 (d) Advisory committee members other than state employees are governed by section
163	163	6.615.059.
164	164	6.7 Subd. 10.Penalties.(a) An owner whose covered building fails to meet an interim or
165	165	6.8final EUI standard by the date required, and who has not received a valid extension,
166	166	6.9exemption, or adjustment from the commissioner under subdivision 6, must make a
167	167	6.10compliance payment to the commissioner under this subdivision.
168	168	6.11 (b) Except as provided in paragraph (c), an owner whose covered building fails to meet
169	169	6.12an EUI standard must pay to the commissioner a penalty, as determined by the commissioner,
170	170	6.13of up to $....... for each 1,000 British thermal units consumed by the covered building that
171	171	6.14exceed the EUI standard. The maximum penalty imposed under this paragraph or paragraph
172	172	6.15(c) must increase over time at the same rate as that of the estimate of the social cost of
173	173	6.16carbon dioxide emissions most recently adopted by the commission under section 216B.2422,
174	174	6.17subdivision 3.
175	175	6.18 (c) An owner may, with the commissioner's approval, elect to be excused from paying
176	176	6.19a penalty imposed under paragraph (b). An owner who makes the election under this
177	177	6.20paragraph and fails to meet the next scheduled EUI standard for the same covered building
178	178	6.21must pay to the commissioner an amount equal to ... percent of the earlier penalty imposed
179	179	6.22on the covered building, in addition to a payment for failing to meet the subsequent EUI
180	180	6.23standard.
181	181	6.24 (d) A compliance payment must be made under this subdivision each year or portion of
182	182	6.25a year during which a covered building fails to meet an EUI standard.
183	183	6.26 (e) When determining the amount of a compliance payment under this subdivision, the
184	184	6.27commissioner must consider:
185	185	6.28 (1) the magnitude of the amount by which the covered building's performance exceeds
186	186	6.29the level of the applicable EUI standard;
187	187	6.30 (2) the length of time over which the covered building has failed to meet the applicable
188	188	6.31EUI standard;
189	189	6.32 (3) the assessed value of the covered building; and
190	190	6.33 (4) the total number of EUI standards the covered building has failed to meet over time.
191	191	6Section 1.
192	192	25-04950 as introduced04/03/25 REVISOR RSI/DG 7.1 Subd. 11.Technical and financial assistance hub.The department must contract with
193	193	7.2a nonprofit organization with extensive experience implementing energy efficiency programs
194	194	7.3in buildings to operate a building performance technical and financial assistance hub. The
195	195	7.4hub must assist owners to comply with this section by:
196	196	7.5 (1) offering technical assistance directly to owners regarding energy-saving reduction
197	197	7.6measures and strategies;
198	198	7.7 (2) connecting owners with other sources of technical assistance, including other covered
199	199	7.8building owners who have successfully reduced energy use; and
200	200	7.9 (3) making owners aware of sources of financial assistance, including tax credits, that
201	201	7.10are offered by utilities or available through programs administered by local, state, and federal
202	202	7.11government entities to support implementing energy-saving measures.
203	203	7.12 Subd. 12.Program implementation.The commissioner may contract with an
204	204	7.13independent third party to implement any or all of the commissioner's duties required under
205	205	7.14this section. The commissioner must assist owners to access the technical and financial
206	206	7.15assistance hub established under subdivision 11 and the building energy performance
207	207	7.16improvement grant program established under subdivision 14 to reduce energy use from
208	208	7.17the owners' covered properties through outreach and training. The commissioner must begin
209	209	7.18informing owners of this section's requirements in 2025 as part of outreach activities required
210	210	7.19under the energy benchmarking program under section 216C.331.
211	211	7.20 Subd. 13.Account established.(a) A building energy performance standards program
212	212	7.21account is established in the special revenue account in the state treasury. The commissioner
213	213	7.22must credit to the account appropriations and transfers made to the account and penalties
214	214	7.23collected under this section. Earnings, including interest, dividends, and any other earnings
215	215	7.24arising from assets of the account, must be credited to the account. Money remaining in the
216	216	7.25account at the end of a fiscal year does not cancel to the general fund but remains in the
217	217	7.26account. The commissioner must manage the account.
218	218	7.27 (b) Money in the account that is not collected from penalties is appropriated to the
219	219	7.28commissioner and must be used only to reimburse the reasonable expenses incurred by the
220	220	7.29department to administer the building energy performance standards program under this
221	221	7.30section.
222	222	7.31 (c) Money in the account collected from penalties under subdivision 10 is appropriated
223	223	7.32to the commissioner and must only be used to award building energy performance
224	224	7.33improvement grants under subdivision 14.
225	225	7Section 1.
226	226	25-04950 as introduced04/03/25 REVISOR RSI/DG 8.1 Subd. 14.Building energy performance improvement grants.(a) A building energy
227	227	8.2performance improvement grant program is established in the department to provide financial
228	228	8.3assistance to eligible applicants to make improvements that reduce energy use in order to
229	229	8.4achieve the EUI standards established under this section.
230	230	8.5 (b) An application for a grant under this section must be made to the commissioner on
231	231	8.6a form developed by the commissioner. The application must be accompanied by
232	232	8.7documentation, as required by the commissioner:
233	233	8.8 (1) that the applicant is the owner of a covered building or the owner's agent;
234	234	8.9 (2) that the applicant has had an energy assessment, conducted of the covered building
235	235	8.10within the previous 24 months by a qualified person as determined by the commissioner,
236	236	8.11indicating the opportunities to reduce the covered building's energy use;
237	237	8.12 (3) indicating the total energy and greenhouse gas emission savings expected from the
238	238	8.13proposed improvements; and
239	239	8.14 (4) indicating the total cost to purchase and install the improvements.
240	240	8.15 (c) The commissioner must develop administrative procedures governing the application
241	241	8.16and grant award processes.
242	242	8.17 (d) The commissioner may, in consultation with the Building Performance Advisory
243	243	8.18Committee, establish preferences for applicants seeking grants for certain building types or
244	244	8.19energy-reduction measures.
245	245	8.20 (e) When awarding grants under this subdivision, the commissioner must give priority
246	246	8.21to applications that propose to:
247	247	8.22 (1) reduce energy use in multifamily affordable housing; or
248	248	8.23 (2) achieve reductions in energy use greater than or sooner than is required by the
249	249	8.24applicable EUI standard.
250	250	8.25 (f) Fifty percent of a grant awarded under this subdivision must be paid to an applicant
251	251	8.26prior to the commencement of work. The balance of a grant awarded under this subdivision
252	252	8.27must be paid when the work supported by the grant is completed.
253	253	8.28 (g) The commissioner must modify program requirements under this section when
254	254	8.29necessary to align with comparable federal programs administered by the department under
255	255	8.30the federal Inflation Reduction Act of 2022, Public Law 117-189.
256	256	8.31 EFFECTIVE DATE.This section is effective the day following final enactment.
257	257	8Section 1.
258	258	25-04950 as introduced04/03/25 REVISOR RSI/DG 9.1 Sec. 2. APPROPRIATION.
259	259	9.2 $....... in fiscal year 2026 is appropriated from the general fund to the commissioner of
260	260	9.3commerce to administer and enforce the building energy performance standards program
261	261	9.4under Minnesota Statutes, section 216C.332. Of this amount:
262	262	9.5 (1) up to $....... may be used to award grants to applicants under the building energy
263	263	9.6performance improvement grant program established under Minnesota Statutes, section
264	264	9.7216C.332, subdivision 14; and
265	265	9.8 (2) up to $....... may be used to fund the technical and financial assistance hub established
266	266	9.9under Minnesota Statutes, section 216C.332, subdivision 11.
267	267	9Sec. 2.
268	268	25-04950 as introduced04/03/25 REVISOR RSI/DG