ICEE HOT Act of 2024

Section 124(a) of the Energy Policy Act of 2005 (42 U.S.C. 15821(a)) is amended—

(1) by redesignating paragraphs (1) through (5) as paragraphs (8), (9), (15), (17), and (18), respectively;

(2) by inserting before paragraph (8) (as so redesignated) the following:

The term contractor means any individual or business entity that is licensed under applicable State or local laws to install, service, maintain, or repair eligible building electrification products, including general contractors, electricians, HVAC specialists, and plumbers engaged in the installation and servicing of energy-efficient appliances.

The term disadvantaged business means a contractor, distributor, or original equipment manufacturer that is a small business participating in the minority small business and capital ownership development program of the Small Business Administration pursuant to section 8(a) of the Small Business Act (15 U.S.C. 637(a)) (commonly known as the 8(a) program).

The term disadvantaged individual means—

(A) a Black American, Hispanic American, Native American, Asian Pacific American, any other minority, or any other individual found to be disadvantaged by the Small Business Administration pursuant to section 8(a) of the Small Business Act (15 U.S.C. 637(a)); and

(B) a woman.

The term distributor means any individual or business entity to which an eligible building electrification product is delivered or sold for purposes of distribution in commerce.

The term electric residential cold climate heat pump means a heat pump that—

(A) is certified under the Energy Star program;

(B) is optimized for peak heating and part-load cooling performance; and

(C) meets—

(i) the cold climate air source heat pump specifications of the Northeast Energy Efficiency Partnerships; or

(ii) the criteria for cold climate heat pumps under the Energy Star program.

The term electric residential heat pump water heater means an electric heat pump water heater for residential use that is certified under the Energy Star program.

The term eligible building electrification product means any of the following United States-made products or their critical components:

(A) An electric residential heat pump water heater.

(B) An electric residential air source heat pump.

(C) An electric residential central geothermal heat pump.

(D) An electric residential cold climate heat pump.

(E) An induction or noninduction electric smooth stove, flat cooktop, range, or oven.

(F) An electric heat pump clothes dryer that—

(i) is certified under the Energy Star program; or

(ii) meets a more stringent standard, as determined by the Secretary, if the Secretary determines a more stringent standard is appropriate.

(G) A smart panel or a panel that is part of an electric load or service center upgrade.

(H) Any product described in subparagraphs (A) through (G) installed in a commercial or multifamily building, subject to the condition that the product meets applicable performance standards, as determined by the Secretary.

(I) Any other electric product, as determined by the Secretary.

(3) by inserting after paragraph (9) (as so redesignated) the following:

The term industrial heat pump means a high-capacity heat pump that—

(A) is capable of providing thermal energy at temperatures above 65 degrees Celsius or 150 degrees Fahrenheit, suitable for industrial processes, including manufacturing processing, drying, distillation, pasteurization, and steam production;

(B) incorporates technology that—

(i) enables waste heat recovery or energy reuse, if feasible, and conversion to useful thermal output; and

(ii) adheres to specifications established by the Secretary to ensure thermal efficiency and reduce carbon emissions; and

(C) meets recognized performance and efficiency standards for industrial applications, as defined by the American Society of Heating, Refrigerating, and Air-Conditioning Engineers, or equivalent industry standards as specified by the Secretary.

The term midstream rebate means a rebate provided by a State to a distributor or contractor under a State program described in subsection (b)(1)(A)(ii).

The term original equipment manufacturer means an entity that manufactures eligible building electrification products.

The term residential air source heat pump means a heat pump or central air conditioner (as defined in section 321(21) of the Energy Policy and Conservation Act (42 U.S.C. 6291(21))) that—

(A) notwithstanding subparagraph (E) of that section, is a heating and cooling unit and includes both ducted and ductless configurations; and

(B) is certified under the Energy Star program.

The term residential central geothermal heat pump means equipment designed for residential use that—

(A) uses the ground or groundwater as a thermal energy source to provide heating and cooling; and

(B) is certified under the Energy Star program or meets efficiency and performance standards established by the Secretary.

(4) by inserting after paragraph (15) (as so redesignated) the following:

The term smart panel means an electrical power distribution panel with an integrated communications and energy management system capable of—

(A) interoperability with electric utility distribution networks; and

(B) monitoring and controlling individual circuits to ensure that the total load on the electrical service does not exceed a programmed set-point.

(5) in paragraph (18) (as so redesignated), by striking (b)(1) and inserting (b)(1)(A); and

(6) by adding at the end the following:

The term United States-made, with respect to an eligible building electrification product, means that the total cost of components of the eligible building electrification product that are mined, produced, or manufactured, as applicable, in the United States, as determined by the Secretary, is not less than 55 percent of the total cost of all of the components of the eligible building electrification product, unless a waiver is made in accordance with subparagraph (B).

The Secretary may waive the requirement under subparagraph (A) where the term United States-made is used in this subtitle if the Secretary finds that—

(I) applying the requirement would be inconsistent with the public interest;

(II) 1 or more components of the eligible building electrification product are not produced in the United States in sufficient and reasonably available quantities or of a satisfactory quality; or

(III) the inclusion of 1 or more components of the eligible building electrification product produced in the United States will increase the cost of the building electrification product by more than 25 percent.

Before issuing a waiver under clause (i), the Secretary shall—

(I) make publicly available in an easily accessible location on a website designated by the Office of Management and Budget and on the website of the Department of Energy a detailed written explanation for the proposed determination to issue the waiver; and

(II) provide a period of not less than 15 days for public comment on the proposed waiver.

The term upstream rebate means a rebate provided by a State to a distributor or original equipment manufacturer under a State program described in subsection (b)(1)(A)(ii).

Section 124 of the Energy Policy Act of 2005 (42 U.S.C. 15821) is amended—

(1) in subsection (b)—

(A) by redesignating paragraphs (1) through (3) as subparagraphs (A) through (C), respectively, and indenting appropriately;

(B) in the matter preceding subparagraph (A) (as so redesignated), by striking A State and inserting the following:

A State

(C) in subparagraph (A) (as so redesignated)—

(i) by striking program to provide and inserting the following: “program—

(i) to provide

(ii) in clause (i) (as so designated), by adding or at the end after the semicolon; and

(iii) by adding at the end the following:

(ii) to provide midstream rebates and upstream rebates to contractors, distributors, and original equipment manufacturers, as applicable, for 30 percent of the cost of manufacturing, distributing, installing, or servicing an eligible building electrification product or product component or an industrial heat pump;

(iii) ; and

(D) by adding at the end the following:

The purpose of the rebates described in paragraph (1)(A)(ii) are—

(A) to resolve barriers that limit the efficient production, distribution, and deployment of eligible building electrification products and industrial heat pumps, including—

(i) by increasing the production and availability of residential and industrial-grade critical components, such as reversing valves, variable speed compressors, or other parts necessary for proper functionality in both heating and cooling modes; and

(ii) addressing other factors, such as market challenges, product technical requirements, and environmental and equity goals, with respect to those barriers, as determined by the Secretary, through the public stakeholder process described in subsection (g); and

(B) in the case of contractors installing eligible building electrification products and industrial heat pumps—

(i) encourages the installation of appropriately sized heat pumps or other electrification products to encourage the adoption of right-sized and energy-efficient technologies; and

(ii) supports the passing through of rebates to end users, to the extent practicable.

(2) in subsection (c)(1), by striking subsection (f) and inserting subsection (h);

(3) in subsection (d)—

(A) by striking The allocation and inserting the following:

The allocation

(A) ; and

(B) by adding at the end the following:

Of the amount used by a State to carry out a State program described in subsection (b)(1)(A)(ii), to the extent practicable for specific technologies, as determined by the Secretary, not less than 40 percent shall be used to provide midstream rebates and upstream rebates—

(A) to disadvantaged businesses; or

(B) to contractors, distributors, or original equipment manufacturers 40 percent of the employees of which are disadvantaged individuals.

(4) in subsection (e)—

(A) by redesignating paragraphs (1) through (3) as subparagraphs (A), (C), and (D), respectively, and indenting appropriately;

(B) in the matter preceding subparagraph (A) (as so redesignated), by striking Rebates in the first sentence and all that follows through The amount in the second sentence and inserting the following:

Rebates may be provided to—

(A) residential consumers that meet the requirements of the applicable State program described in subsection (b)(1)(A); and

(B) contractors, distributors, and original equipment manufacturers of eligible building electrification products and industrial heat pumps that meet the requirements of the State program described in clause (ii) of that subsection.

The amount

(C) in paragraph (2) (as so designated)—

(i) in the matter preceding subparagraph (A) (as so redesignated)—

(I) by inserting under a State program described in subsection (b)(1)(A)(i) after rebate; and

(II) by striking consideration— and inserting consideration, as applicable—; and

(ii) by inserting after subparagraph (A) (as so redesignated) the following:

(B) the amount of any Federal or State tax incentive available for the manufacturing, distribution, or installation of eligible building electrification products and industrial heat pumps, including tax credits or rebates offered under—

(i) section 25C, 45L, or 48C of the Internal Revenue Code of 1986;

(ii) a HOMES rebate program (as defined in section 50121(d) of Public Law 117–169 (commonly known as the Inflation Reduction Act of 2022) (42 U.S.C. 18795(d))); or

(iii) a high-efficiency electric home rebate program (as defined in section 50122(d) of that Act (42 U.S.C. 18795a(d)));

(ii) ; and

(D) by adding at the end the following:

Under a State program described in subsection (b)(1)(A)(ii), a State energy office shall provide an additional incentive of 10 percent of the midstream or upstream rebate value to contractors, distributors, and original equipment manufacturers, as applicable, that operate under a collective bargaining agreement negotiated by a labor organization (as defined in section 2 of the National Labor Relations Act (29 U.S.C. 152)) in accordance with the requirements of section 9 of the National Labor Relations Act (29 U.S.C. 159).

Under a State program described in subsection (b)(1)(A)(ii), a State energy office shall provide additional rebates of not more than 10 percent of the cost of manufacturing, distributing, installing, or servicing an eligible building electrification product that exceeds baseline standards under the Energy Star program or other efficiency benchmarks approved by the Secretary.

Under a State program described in subsection (b)(1)(A)(ii), a State energy office shall provide additional rebates of not more than 10 percent of the cost of manufacturing, distributing, installing, or servicing an industrial heat pump based on system capacity, energy savings, emissions reduction, and heat recovery functions that exceed baseline standards for industrial energy efficiency, as determined by the State energy office.

(5) by redesignating subsection (f) as subsection (h);

(6) by inserting after subsection (e) the following:

Under a State program described in subsection (b)(1)(A)(ii), as a condition of receipt of a midstream rebate or upstream rebate, a contractor, distributor, or original equipment manufacturer shall pass through not less than 85 percent of the value of the midstream rebate or upstream rebate, as applicable, to the next entity in the supply chain or the end consumer in the form of a reduced price for the purchase of an eligible building electrification product or an industrial heat pump.

After carrying out subparagraph (A), a contractor, distributor, or original equipment manufacturer may retain not more than 15 percent of the remainder of the applicable midstream rebate or upstream rebate.

The Secretary, in consultation with the Secretary of the Treasury, shall issue guidelines to simplify participation in a State program described in subsection (b)(1)(A)(ii) and any other Federal or State rebate or tax credit program relating to energy efficiency upgrades, building electrification products, and industrial heat pumps—

(i) to ensure that eligible entities can receive all applicable rebates and tax credits; and

(ii) to minimize administrative hurdles by providing clear guidance on incentive stacking and documentation requirements consistent with Federal and State building electrification product and industrial heat pump standards.

If a rebate is claimed by an eligible entity under a State program described in subsection (b)(1)(A)(ii), any other Federal rebate for which the entity would be eligible relating to energy efficiency upgrades, building electrification products, or industrial heat pumps, as applicable, shall automatically apply.

An entity that receives a midstream rebate or upstream rebate for an eligible building electrification product or industrial heat pump under a State program described in subsection (b)(1)(A)(ii) is encouraged to coordinate with Federal and State agencies, utilities, nonprofit organizations, and other entities carrying out other relevant Federal or State rebate programs.

An entity that receives a midstream rebate or upstream rebate under a State program described in subsection (b)(1)(A)(ii) for an eligible building electrification product may not receive—

(A) an upstream rebate or midstream rebate, respectively, for the same eligible building electrification product; or

(B) a second midstream rebate or upstream rebate, respectively, for the same eligible building electrification product.

A midstream rebate or upstream rebate under a State program described in subsection (b)(1)(A)(ii) shall not be considered to be gross income of the recipient of the rebate for purposes of the Internal Revenue Code of 1986.

The Secretary shall establish a process to solicit input from public stakeholders in establishing parameters for a State program described in subsection (b)(1)(A)(ii).

The Secretary shall solicit input under the process established under paragraph (1) on the following issues:

(A) Meeting the purposes described in subsection (b)(2).

(B) Boosting production and availability of residential and industrial heat pumps.

(C) Parameters for rebate structure and eligibility requirements.

(D) Technical standards, especially for industrial heat pumps and new residential heat pump technology not covered under the Energy Star program.

(E) Any other relevant issue, as determined by the Secretary.

(6) ; and

(7) in subsection (h) (as so redesignated)—

(A) by striking There are and inserting the following:

There are

(A) ; and

(B) by adding at the end the following:

There is authorized to be appropriated to the Secretary, to provide allocations under subsection (c) only to States that have established a State program described in subsection (b)(1)(A)(ii), $10,000,000,000 for the period of fiscal years 2025 through 2032.