1.1                          A bill for an act 
  1.2             relating to construction; giving the state building 
  1.3             official final authority for interpreting the State 
  1.4             Building Code and prescribing its enforcement; 
  1.5             requiring municipalities to submit annual reports on 
  1.6             construction-related fees; regulating 
  1.7             construction-related fees; prohibiting municipalities 
  1.8             from requiring waivers of rights as a condition for 
  1.9             issuance of a construction-related permit; providing 
  1.10            for affordable housing; appropriating money; amending 
  1.11            Minnesota Statutes 2000, sections 16B.61, subdivision 
  1.12            1; 16B.62, subdivision 1; 16B.63, by adding a 
  1.13            subdivision; 326.90, subdivision 1; 462.353, 
  1.14            subdivision 4; 462.358, subdivision 2b; 473.255, 
  1.15            subdivisions 1, 2; proposing coding for new law in 
  1.16            Minnesota Statutes, chapters 16B; 462; 473. 
  1.17  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.18     Section 1.  Minnesota Statutes 2000, section 16B.61, 
  1.19  subdivision 1, is amended to read: 
  1.20     Subdivision 1.  [ADOPTION OF CODE.] Subject to sections 
  1.21  16B.59 to 16B.75, the commissioner shall by rule establish a 
  1.22  code of standards for the construction, reconstruction, 
  1.23  alteration, and repair of buildings, governing matters of 
  1.24  structural materials, design and construction, fire protection, 
  1.25  health, sanitation, and safety, including design and 
  1.26  construction standards regarding heat loss control, 
  1.27  illumination, and climate control.  The code must conform 
  1.28  insofar as practicable to model building codes generally 
  1.29  accepted and in use throughout the United States, including a 
  1.30  code for building conservation.  In the preparation of the code, 
  1.31  consideration must be given to the existing statewide specialty 
  2.1   codes presently in use in the state.  Model codes with necessary 
  2.2   modifications and statewide specialty codes may be adopted by 
  2.3   reference.  The code must be based on the application of 
  2.4   scientific principles, approved tests, and professional 
  2.5   judgment.  To the extent possible, the code must be adopted in 
  2.6   terms of desired results instead of the means of achieving those 
  2.7   results, avoiding wherever possible the incorporation of 
  2.8   specifications of particular methods or materials.  To that end 
  2.9   the code must encourage the use of new methods and new 
  2.10  materials.  Except as otherwise provided in sections 16B.59 to 
  2.11  16B.75, the commissioner shall administer and enforce the 
  2.12  provisions of those sections. 
  2.13     The commissioner shall develop rules addressing the plan 
  2.14  review fee assessed to similar buildings without significant 
  2.15  modifications including provisions for use of building systems 
  2.16  as specified in the industrial/modular program specified in 
  2.17  section 16B.75.  Additional plan review fees associated with 
  2.18  similar plans must be based on costs commensurate with the 
  2.19  direct and indirect costs of the service. 
  2.20     Sec. 2.  Minnesota Statutes 2000, section 16B.62, 
  2.21  subdivision 1, is amended to read: 
  2.22     Subdivision 1.  [MUNICIPAL ENFORCEMENT.] The State Building 
  2.23  Code applies statewide and supersedes the building code of any 
  2.24  municipality.  A municipality must not by ordinance or through 
  2.25  development agreement require building code provisions 
  2.26  regulating components or systems of any residential structure 
  2.27  that are more restrictive than any provision of the State 
  2.28  Building Code.  The State Building Code does not apply to 
  2.29  agricultural buildings except with respect to state inspections 
  2.30  required or rulemaking authorized by sections 103F.141, 216C.19, 
  2.31  subdivision 8, and 326.244.  All municipalities shall adopt and 
  2.32  enforce the State Building Code with respect to new construction 
  2.33  within their respective jurisdictions.  
  2.34     If a city has adopted or is enforcing the State Building 
  2.35  Code on June 3, 1977, or determines by ordinance after that date 
  2.36  to undertake enforcement, it shall enforce the code within the 
  3.1   city.  A city may by ordinance extend the enforcement of the 
  3.2   code to contiguous unincorporated territory not more than two 
  3.3   miles distant from its corporate limits in any direction.  Where 
  3.4   two or more noncontiguous cities which have elected to enforce 
  3.5   the code have boundaries less than four miles apart, each is 
  3.6   authorized to enforce the code on its side of a line equidistant 
  3.7   between them.  Once enforcement authority is extended 
  3.8   extraterritorially by ordinance, the authority may continue to 
  3.9   be exercised in the designated territory even though another 
  3.10  city less than four miles distant later elects to enforce the 
  3.11  code.  After the extension, the city may enforce the code in the 
  3.12  designated area to the same extent as if the property were 
  3.13  situated within its corporate limits.  
  3.14     A city which, on June 3, 1977, had not adopted the code may 
  3.15  not commence enforcement of the code within or outside of its 
  3.16  jurisdiction until it has provided written notice to the 
  3.17  commissioner, the county auditor, and the town clerk of each 
  3.18  town in which it intends to enforce the code.  A public hearing 
  3.19  on the proposed enforcement must be held not less than 30 days 
  3.20  after the notice has been provided.  Enforcement of the code by 
  3.21  the city outside of its jurisdiction commences on the first day 
  3.22  of January in the year following the notice and hearing.  
  3.23     Municipalities may provide for the issuance of permits, 
  3.24  inspection, and enforcement within their jurisdictions by means 
  3.25  which are convenient, and lawful, including by means of 
  3.26  contracts with other municipalities pursuant to section 471.59, 
  3.27  and with qualified individuals.  The other municipalities or 
  3.28  qualified individuals may be reimbursed by retention or 
  3.29  remission of some or all of the building permit fee collected or 
  3.30  by other means.  In areas of the state where inspection and 
  3.31  enforcement is unavailable from qualified employees of 
  3.32  municipalities, the commissioner shall train and designate 
  3.33  individuals available to carry out inspection and enforcement on 
  3.34  a fee basis.  Nothing in this section prohibits a municipality 
  3.35  from adopting ordinances relating to zoning, subdivision, or 
  3.36  planning unless the ordinance conflicts with a provision of the 
  4.1   State Building Code.  
  4.2      Sec. 3.  Minnesota Statutes 2000, section 16B.63, is 
  4.3   amended by adding a subdivision to read: 
  4.4      Subd. 5.  [INTERPRETATIVE AUTHORITY.] To achieve uniform 
  4.5   and consistent application of the State Building Code, the state 
  4.6   building official has final interpretative authority applicable 
  4.7   to all codes adopted as part of the State Building Code except 
  4.8   for the plumbing code and the electrical code.  A final 
  4.9   interpretative committee composed of seven members, consisting 
  4.10  of five certified building officials and two construction 
  4.11  industry representatives, shall review requests for final 
  4.12  interpretations relating to that field.  The state building 
  4.13  official must establish procedures for membership of the 
  4.14  interpretative committees.  The appropriate committee shall 
  4.15  review the request and make a recommendation to the state 
  4.16  building official for the final interpretation within 30 days of 
  4.17  the request.  The state building official must issue an 
  4.18  interpretation within ten business days from the recommendation 
  4.19  from the review committee.  A final interpretation may be 
  4.20  appealed within 30 days of its issuance to the commissioner 
  4.21  under section 16B.67.  The final interpretation must be 
  4.22  published within ten business days of its issuance and made 
  4.23  available to the public.  Final interpretations must be 
  4.24  considered for adoption as part of the State Building Code. 
  4.25     Sec. 4.  [16B.685] [ANNUAL REPORT.] 
  4.26     Beginning with the first report filed by April 1, 2003, 
  4.27  each municipality shall annually report by April 1 to the 
  4.28  department, in a format prescribed by the department, all 
  4.29  construction and development-related fees collected by the 
  4.30  municipality from developers, builders, and subcontractors.  The 
  4.31  report must include: 
  4.32     (1) the number and valuation of units for which fees were 
  4.33  paid; 
  4.34     (2) the amount of building permit fees, plan review fees, 
  4.35  administrative fees, engineering fees, infrastructure fees, and 
  4.36  other construction and development-related fees; and 
  5.1      (3) the expenses associated with the municipal activities 
  5.2   for which fees were collected. 
  5.3      Sec. 5.  Minnesota Statutes 2000, section 326.90, 
  5.4   subdivision 1, is amended to read: 
  5.5      Subdivision 1.  [LOCAL LICENSE PROHIBITED.] Except as 
  5.6   provided in sections 326.991 and 326.90, subdivision 2, and 
  5.7   326.991, a political subdivision may not require a person 
  5.8   licensed under sections 326.83 to 326.991 to also be licensed or 
  5.9   pay a registration or other fee related to licensure under any 
  5.10  ordinance, law, rule, or regulation of the political 
  5.11  subdivision.  This section does not prohibit charges for 
  5.12  building permits or other charges not directly related to 
  5.13  licensure. 
  5.14     Sec. 6.  Minnesota Statutes 2000, section 462.353, 
  5.15  subdivision 4, is amended to read: 
  5.16     Subd. 4.  [FEES.] A municipality may prescribe fees 
  5.17  sufficient to defray the costs incurred by it in reviewing, 
  5.18  investigating, and administering an application for an amendment 
  5.19  to an official control established pursuant to sections 462.351 
  5.20  to 462.364 or an application for a permit or other approval 
  5.21  required under an official control established pursuant to those 
  5.22  sections.  Fees as prescribed shall must be by ordinance and 
  5.23  must be fair, reasonable, and proportionate to the actual cost 
  5.24  of the service for which the fee is imposed.  A municipality 
  5.25  shall adopt management and accounting procedures to ensure that 
  5.26  fees are maintained and used only for the purpose for which they 
  5.27  are collected. 
  5.28     If a dispute arises over a specific fee imposed by a 
  5.29  municipality related to a specific application, the amount of 
  5.30  the fee must be deposited and held in escrow, and the person 
  5.31  aggrieved by the fee may appeal under section 462.361.  An 
  5.32  approved application may proceed as if the fee had been paid, 
  5.33  pending a decision on the appeal.  
  5.34     Sec. 7.  [462.3531] [WAIVER OF RIGHTS; PROHIBITION.] 
  5.35     A local government unit must not require a contractor, 
  5.36  builder, or developer of property to waive a right possessed by 
  6.1   the contractor, builder, or developer as a condition of 
  6.2   receiving any approval for the development or construction of a 
  6.3   property. 
  6.4      Sec. 8.  Minnesota Statutes 2000, section 462.358, 
  6.5   subdivision 2b, is amended to read: 
  6.6      Subd. 2b.  [DEDICATION.] The regulations may require that a 
  6.7   reasonable portion of any proposed subdivision be dedicated to 
  6.8   the public or preserved for public use as streets, roads, 
  6.9   sewers, electric, gas, and water facilities, storm water 
  6.10  drainage and holding areas or ponds and similar utilities and 
  6.11  improvements.  
  6.12     The regulations may require that any proposed subdivision 
  6.13  include a certain percentage of units that are affordable across 
  6.14  a range of incomes.  
  6.15     In addition, the regulations may require that a reasonable 
  6.16  portion of any proposed subdivision be dedicated to the public 
  6.17  or preserved for conservation purposes or for public use as 
  6.18  parks, recreational facilities as defined and outlined in 
  6.19  section 471.191, playgrounds, trails, wetlands, or open space; 
  6.20  provided that (a) the municipality may choose to accept an 
  6.21  equivalent amount in cash from the applicant for part or all of 
  6.22  the portion required to be dedicated to such public uses or 
  6.23  purposes based on the fair market value of the land no later 
  6.24  than at the time of final approval, (b) any cash payments 
  6.25  received shall be placed in a special fund by the municipality 
  6.26  used only for the purposes for which the money was obtained, (c) 
  6.27  in establishing the reasonable portion to be dedicated, the 
  6.28  regulations may consider the open space, park, recreational, or 
  6.29  common areas and facilities which the applicant proposes to 
  6.30  reserve for the subdivision, and (d) the municipality reasonably 
  6.31  determines that it will need to acquire that portion of land for 
  6.32  the purposes stated in this paragraph as a result of approval of 
  6.33  the subdivision. 
  6.34     Sec. 9.  [462.3851] [COLLAR COUNTY; AFFORDABLE HOUSING.] 
  6.35     Municipalities in collar counties must adopt regulations by 
  6.36  January 1, 2002, that, at a minimum, comply with the 
  7.1   affordability and other requirements of section 473.2542.  For 
  7.2   the purpose of this subdivision, a "collar county" is a county 
  7.3   that is contiguous to a county within the metropolitan area as 
  7.4   defined in section 473.121, subdivision 2.  
  7.5      Sec. 10.  [473.2541] [DEFINITIONS.] 
  7.6      Subdivision 1.  [SCOPE.] For the purpose of sections 
  7.7   473.2541 and 473.2542, the terms defined in this section have 
  7.8   the meanings given them. 
  7.9      Subd. 2.  [AFFORDABLE RENTAL HOUSING.] "Affordable rental 
  7.10  housing" means rental housing units having a monthly rent of no 
  7.11  more than 30 percent of a specified area median income divided 
  7.12  by 12.  
  7.13     Subd. 3.  [AFFORDABLE HOMES.] "Affordable homes" means 
  7.14  single-family homes having a monthly mortgage payment of 
  7.15  principal and interest of no more than the amount determined by 
  7.16  30 percent of a specified area median income divided by 12.  
  7.17     Subd. 4.  [DEVELOPMENT.] "Development" means a new 
  7.18  construction or reconstruction development of single-family or 
  7.19  multiple-family residences containing a total of 20 or more 
  7.20  units located in the metropolitan area on a single parcel of 
  7.21  land. 
  7.22     Subd. 5.  [MUNICIPALITY.] "Municipality" means a statutory 
  7.23  or home rule charter city or town in the metropolitan area. 
  7.24     Subd. 6.  [PUBLIC SUBSIDY.] "Public subsidy" means local, 
  7.25  state, or federal funds provided to a specifically identified 
  7.26  project to assist in financing the construction of the 
  7.27  development.  
  7.28     Sec. 11.  [473.2542] [AFFORDABLE HOUSING.] 
  7.29     Subdivision 1.  [REQUIRING AFFORDABLE HOUSING.] A 
  7.30  development in a municipality must contain on the same parcel of 
  7.31  land at least 20 percent affordable rental housing or affordable 
  7.32  homes as provided in this section.  The affordable housing must 
  7.33  blend architecturally with the remainder of the development.  
  7.34     Subd. 2.  [PRIVATE DEVELOPMENT.] For a development without 
  7.35  public subsidy, affordable housing or affordable rental housing 
  7.36  and affordable homes shall be determined using 80 percent of the 
  8.1   area median income.  
  8.2      Subd. 3.  [PUBLIC SUBSIDY.] For a development of rental 
  8.3   housing receiving a public subsidy, ten percent of the units 
  8.4   must be determined affordable at 30 percent of area median 
  8.5   income, and ten percent must be determined affordable using 50 
  8.6   percent of area median income.  For home ownership units, 
  8.7   affordability is determined using 60 percent of area median 
  8.8   income.  
  8.9      Subd. 4.  [DENSITY BONUS.] A development containing at 
  8.10  least the minimum number of affordable units must receive a 
  8.11  density bonus of at least 30 percent more units to be built than 
  8.12  would otherwise be permitted. 
  8.13     Subd. 5.  [EXCEPTION.] A development complies with the 
  8.14  affordability requirement of this section even if that 
  8.15  development does not contain the requisite affordable rental 
  8.16  housing or affordable homes, if land adjacent to the development 
  8.17  is given by the developer to a local housing authority or 
  8.18  nonprofit developer and the requisite affordable units are 
  8.19  constructed on that land. 
  8.20     Subd. 6.  [REGULATORY FLEXIBILITY.] A municipality may 
  8.21  assist a development in being affordable by providing:  
  8.22     (1) reduced setback and parking requirements; 
  8.23     (2) decreased road width; 
  8.24     (3) flexibility in site development standards or zoning 
  8.25  code requirements; 
  8.26     (4) waiver of permit or impact fees; 
  8.27     (5) fast-track permitting; or 
  8.28     (6) any other regulatory incentive that would result in 
  8.29  identifiable cost avoidance or reductions and that contributes 
  8.30  significantly to the economic feasibility of affordable housing. 
  8.31     Subd. 7.  [RIGHT OF FIRST REFUSAL.] The local housing 
  8.32  authority has the first option to purchase the affordable units 
  8.33  in a development at fair market value, followed in order of 
  8.34  preference by the county housing and redevelopment authority and 
  8.35  nonprofit organizations.  This subdivision does not apply to 
  8.36  developments using federal tax credits.  
  9.1      Subd. 8.  [RENTAL LONG-TERM AFFORDABILITY.] Affordable 
  9.2   rental housing units must remain at affordable rents for at 
  9.3   least the first 30 years after initial occupancy of the unit.  
  9.4      Subd. 9.  [HOMEOWNER SALES RESTRICTION.] For the first ten 
  9.5   years after buying a home, all profits on resale go to the 
  9.6   metropolitan council for deposit in the inclusionary housing 
  9.7   account.  After the first ten years of ownership, profits are 
  9.8   split between the owner and the metropolitan council for deposit 
  9.9   in the inclusionary housing account.  
  9.10     Sec. 12.  Minnesota Statutes 2000, section 473.255, 
  9.11  subdivision 1, is amended to read: 
  9.12     Subdivision 1.  [DEFINITIONS.] (a) "Inclusionary housing 
  9.13  development" means a new construction development, including 
  9.14  owner-occupied or rental housing, or a combination of both, with 
  9.15  a variety of prices and designs which serve families with a 
  9.16  range of incomes and housing needs complying with the 
  9.17  affordability requirements of section 473.2542. 
  9.18     (b) "Municipality" means a statutory or home rule charter 
  9.19  city or town participating in the local housing incentives 
  9.20  program under section 473.254. 
  9.21     Sec. 13.  Minnesota Statutes 2000, section 473.255, 
  9.22  subdivision 2, is amended to read: 
  9.23     Subd. 2.  [APPLICATION CRITERIA.] The metropolitan council 
  9.24  must give preference to economically viable proposals to the 
  9.25  degree that they:  (1) use innovative building techniques or 
  9.26  materials to lower construction costs while maintaining high 
  9.27  quality construction and livability; (2) are located in 
  9.28  communities that have demonstrated a willingness to waive local 
  9.29  restrictions which otherwise would increase costs of 
  9.30  construction; and (3) include units affordable to households 
  9.31  with incomes at or below 80 percent of area median income meet 
  9.32  the affordability and other requirements of section 473.2542. 
  9.33     Priority shall be given to proposals where at least 15 
  9.34  percent of the owner-occupied units are affordable to households 
  9.35  at or below 60 percent of the area annual median income and at 
  9.36  least ten percent of the rental units are affordable to 
 10.1   households at or below 30 percent of area annual median income. 
 10.2      An inclusionary housing development may include resale 
 10.3   limitations on its affordable units.  The limitations may 
 10.4   include a minimum ownership period before a purchaser may profit 
 10.5   on the sale of an affordable unit. 
 10.6      Cost savings from regulatory incentives must be reflected 
 10.7   in the sale of all residences in an inclusionary development. 
 10.8      Sec. 14.  [APPROPRIATIONS; INCLUSIONARY HOUSING ACCOUNT.] 
 10.9      $....... is appropriated from the general fund to the 
 10.10  metropolitan council for deposit in the inclusionary housing 
 10.11  account in the metropolitan livable communities fund for the 
 10.12  purposes of that account.  The appropriation does not cancel and 
 10.13  is available until expended.