1.1                          A bill for an act 
  1.2             relating to commerce; requiring more detail in reports 
  1.3             from municipalities on building code enforcement; 
  1.4             providing a property tax reduction for structures 
  1.5             contaminated by mold; requiring written contracts for 
  1.6             contractor licensee services; establishing a statutory 
  1.7             cure process for home warranty claims; requiring 
  1.8             prelicensing education of residential building 
  1.9             contractors; making changes in continuing education; 
  1.10            providing homebuyers with access to information about 
  1.11            avoidance of moisture and other problems; permitting 
  1.12            successful home warranty claimants to recover attorney 
  1.13            fees and expenses; amending Minnesota Statutes 2002, 
  1.14            sections 16B.65, subdivision 7; 273.123, by adding a 
  1.15            subdivision; 326.87, subdivision 1; 326.89, 
  1.16            subdivision 2; 326.96; 327A.05; Minnesota Statutes 
  1.17            2003 Supplement, section 16B.685; proposing coding for 
  1.18            new law in Minnesota Statutes, chapters 325E; 326. 
  1.19  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.20     Section 1.  [CITATION.] 
  1.21     This act may be cited as the Homeowners' Protection Act. 
  1.22     Sec. 2.  Minnesota Statutes 2002, section 16B.65, 
  1.23  subdivision 7, is amended to read: 
  1.24     Subd. 7.  [CONTINUING EDUCATION.] (a) Subject to sections 
  1.25  16B.59 to 16B.75, the commissioner may by rule establish or 
  1.26  approve continuing education programs for municipal building 
  1.27  officials dealing with matters of building code administration, 
  1.28  inspection, and enforcement.  
  1.29     Each person certified as a building official for the state 
  1.30  must satisfactorily complete applicable educational programs 
  1.31  established or approved by the commissioner every three calendar 
  1.32  years to retain certification. 
  2.1      Each person certified as a building official must submit in 
  2.2   writing to the commissioner an application for renewal of 
  2.3   certification within 60 days of the last day of the third 
  2.4   calendar year following the last certificate issued.  Each 
  2.5   application for renewal must be accompanied by proof of 
  2.6   satisfactory completion of minimum continuing education 
  2.7   requirements and the certification renewal fee established by 
  2.8   the commissioner.  
  2.9      (b) The commissioner may by rule establish or approve 
  2.10  continuing education programs for persons engaged in plan review 
  2.11  and inspection to determine compliance with state construction 
  2.12  codes. 
  2.13     (c) A municipality must pay for the attendance of a 
  2.14  municipal employee at continuing education classes authorized by 
  2.15  this subdivision.  For the purposes of this paragraph, 
  2.16  "municipal employee" means an employee who performs plan review 
  2.17  or inspection to determine compliance with state construction 
  2.18  codes. 
  2.19     Sec. 3.  Minnesota Statutes 2003 Supplement, section 
  2.20  16B.685, is amended to read: 
  2.21     16B.685 [ANNUAL REPORT.] 
  2.22     Beginning with the first report filed by June 30, 2003, 
  2.23  each municipality shall annually report by June 30 to the 
  2.24  department, in a format prescribed by the department, all 
  2.25  construction and development-related fees collected by the 
  2.26  municipality from developers, builders, and subcontractors if 
  2.27  the cumulative fees collected exceeded $5,000 in the reporting 
  2.28  year.  The report must include: 
  2.29     (1) the number and valuation of units for which fees were 
  2.30  paid; 
  2.31     (2) the amount of building permit fees, plan review fees, 
  2.32  administrative fees, engineering fees, infrastructure fees, and 
  2.33  other construction and development-related fees; and 
  2.34     (3) the expenses associated with the municipal activities 
  2.35  for which fees were collected; and 
  2.36     (4) the total number of permits issued, total number of 
  3.1   inspections performed, and the total number of hours of staff 
  3.2   time and total expenditures associated with administration of 
  3.3   permitting and inspection services. 
  3.4      Sec. 4.  Minnesota Statutes 2002, section 273.123, is 
  3.5   amended by adding a subdivision to read: 
  3.6      Subd. 8.  [HOMESTEAD PROPERTY DAMAGED BY MOLD.] (a) The 
  3.7   owner of homestead property not qualifying for an adjustment in 
  3.8   valuation under subdivisions 1 to 5 must receive a reduction in 
  3.9   the amount of taxes payable on the property if all of the 
  3.10  following conditions are met: 
  3.11     (1) the owner of the property makes written application to 
  3.12  the county assessor for tax treatment under this subdivision; 
  3.13     (2) the county assessor determines that the homestead 
  3.14  dwelling is uninhabitable because all or part of it has been 
  3.15  contaminated by mold; and 
  3.16     (3) the owner of the property makes written application to 
  3.17  the county board. 
  3.18     (b) If all of the conditions in paragraph (a) are met, the 
  3.19  county board must grant a reduction in the amount of property 
  3.20  tax payable on the homestead dwelling.  The reduction must be 
  3.21  made for taxes payable in the year that the assessor determines 
  3.22  that the requirements in paragraph (a), clause (2), have been 
  3.23  met and in the following year. 
  3.24     (c) The reduction in the amount of tax payable must be 
  3.25  calculated based upon the number of months that the homestead is 
  3.26  uninhabitable.  The amount of net tax due from the taxpayer 
  3.27  shall be multiplied by a fraction, the numerator of which is the 
  3.28  number of months the dwelling was occupied by that taxpayer, and 
  3.29  the denominator of which is 12.  For purposes of this 
  3.30  subdivision, if a homestead dwelling is occupied or used for a 
  3.31  fraction of a month, it is considered a month.  "Net tax" is 
  3.32  defined as the amount of tax after the subtraction of all of the 
  3.33  state paid property tax credits.  If the reduction is granted 
  3.34  after all property taxes due for the year have been paid, the 
  3.35  amount of the reduction must be refunded to the taxpayer by the 
  3.36  county treasurer as soon as practical.  
  4.1      (d) Any reductions or refunds under this subdivision are 
  4.2   not subject to approval by the commissioner of revenue. 
  4.3      (e) A denial of a reduction or refund under this 
  4.4   subdivision by the county board may be appealed to the tax 
  4.5   court.  If the county board takes no action on the application 
  4.6   within 60 days after its receipt, it is considered a denial. 
  4.7      (f) A local taxing jurisdiction that contains property that 
  4.8   has received a reduction under this subdivision may levy in the 
  4.9   following year the amount of tax proceeds lost to the local 
  4.10  taxing jurisdiction as a result of the reductions granted 
  4.11  pursuant to this subdivision.  A levy under this paragraph is 
  4.12  not subject to any state determined levy limit. 
  4.13     <b>[EFFECTIVE DATE.]</b> This section is effective for property 
  4.14  taxes payable in 2004 and thereafter. 
  4.15     Sec. 5.  [325E.60] [WRITTEN CONTRACT REQUIRED.] 
  4.16     (a) For the purposes of this section: 
  4.17     (1) "contractor" has the meaning given to "residential 
  4.18  building contractor" and "residential remodeler" in section 
  4.19  326.83, subdivisions 15 and 16; and 
  4.20     (2) "licensee" has the meaning given it in section 326.83, 
  4.21  subdivision 7. 
  4.22     (b) Contracts between a contractor and a customer for the 
  4.23  performance of a licensee's services must be reduced to writing 
  4.24  and must contain the following: 
  4.25     (1) a summary of the work to be performed; 
  4.26     (2) a description of materials to be used or a list of 
  4.27  standard features included; and 
  4.28     (3) the total contract price, or a description of the basis 
  4.29  on which the price will be calculated. 
  4.30     The licensee shall provide at no cost to the customer a 
  4.31  copy of all written contracts between the licensee and its 
  4.32  customer, including, but not limited to, proposals, quotations, 
  4.33  change orders, and purchase orders at the time the document is 
  4.34  executed. 
  4.35     Sec. 6.  Minnesota Statutes 2002, section 326.87, 
  4.36  subdivision 1, is amended to read: 
  5.1      Subdivision 1.  [STANDARDS.] The commissioner, in 
  5.2   consultation with the council, may adopt standards for 
  5.3   continuing education requirements and course approval.  The 
  5.4   standards must include requirements for continuing education in 
  5.5   the implementation of energy codes applicable to buildings and 
  5.6   other building codes designed to conserve energy.  Except for 
  5.7   the course content, the standards must be consistent with the 
  5.8   standards established for real estate agents and other 
  5.9   professions licensed by the Department of Commerce.  At a 
  5.10  minimum, the content of one hour of any required continuing 
  5.11  education must contain information on lead abatement rules and 
  5.12  safe lead abatement procedures. (a) The commissioner must adopt 
  5.13  standards for continuing education requirements and approval.  
  5.14  The standards must include instruction in the following subject 
  5.15  areas: 
  5.16     (1) safety and security, including but not limited to lead 
  5.17  abatement and lead-safe cleanup rules and procedures; 
  5.18     (2) liability and contracts; 
  5.19     (3) building code; 
  5.20     (4) customer service; 
  5.21     (5) general project management; and 
  5.22     (6) business practices. 
  5.23     (b) The commissioner must develop additional standards to 
  5.24  address changes in building codes and in laws relating to 
  5.25  residential construction and remodeling.  The commissioner must 
  5.26  consult with a private organization to assess the need for 
  5.27  additional course requirements.  The commissioner shall 
  5.28  publicize any additional standards not later than August 1 of 
  5.29  each calendar year. 
  5.30     Sec. 7.  [326.871] [PRELICENSURE EDUCATION.] 
  5.31     Subdivision 1.  [REQUIREMENT.] A qualifying person must 
  5.32  complete 30 hours of prelicensure education under this section 
  5.33  prior to applying to take the written examination under section 
  5.34  326.89. 
  5.35     Subd. 2.  [CURRICULUM.] (a) The commissioner must contract 
  5.36  with a private organization to develop the residential building 
  6.1   contractor and remodeler prelicensure curriculum.  
  6.2      (b) The curriculum must include the following subject areas:
  6.3      (1) building codes; 
  6.4      (2) fundamental construction techniques; 
  6.5      (3) state and federal statutes; 
  6.6      (4) state rules and federal regulations; and 
  6.7      (5) business practices. 
  6.8      (c) The curriculum is subject to the approval of the 
  6.9   commissioner. 
  6.10     (d) Entities that offer this curriculum must provide a 
  6.11  certificate of completion to enrollees who successfully complete 
  6.12  this curriculum. 
  6.13     Sec. 8.  Minnesota Statutes 2002, section 326.89, 
  6.14  subdivision 2, is amended to read: 
  6.15     Subd. 2.  [CONTENTS.] The application must include the 
  6.16  following information regarding the applicant: 
  6.17     (1) Minnesota workers' compensation insurance certificate; 
  6.18     (2) employment insurance account number; 
  6.19     (3) certificate of liability insurance; 
  6.20     (4) type of license requested; 
  6.21     (5) name and address of the applicant: 
  6.22     (i) name and address of the applicant's qualifying person, 
  6.23  if other than applicant; and 
  6.24     (ii) if the applicant is a sole proprietorship, the name 
  6.25  and address of the sole proprietor; if the applicant is a 
  6.26  partnership, the name and address of each partner; if the 
  6.27  applicant is a limited liability company, the name and address 
  6.28  of each governor and manager; if the applicant is a corporation, 
  6.29  the name and address of each of the corporate officers, 
  6.30  directors, and all shareholders holding more than ten percent of 
  6.31  the outstanding stock in the corporation; 
  6.32     (6) whether the applicant, any employee, or qualifying 
  6.33  person has ever been licensed in this or any other state and has 
  6.34  had a professional or vocational license refused, suspended, or 
  6.35  revoked, or has been the subject of any administrative action; 
  6.36     (7) whether the applicant, qualifying person, or any of the 
  7.1   applicant's corporate or partnership directors, limited 
  7.2   liability company governors, officers, limited or general 
  7.3   partners, managers, all shareholders holding more than ten 
  7.4   percent of the share of the corporation that have been issued, 
  7.5   or all members holding more than ten percent of the voting power 
  7.6   of the membership interests that have been issued, has been 
  7.7   convicted of a crime that either related directly to the 
  7.8   business for which the license is sought or involved fraud, 
  7.9   misrepresentation, or misuse of funds; has suffered a judgment 
  7.10  in a civil action involving fraud, misrepresentation, 
  7.11  negligence, or breach of contract, or conversion within the ten 
  7.12  years prior to the submission of the application; or has had any 
  7.13  government license or permit suspended or revoked as a result of 
  7.14  an action brought by a federal, state, or local governmental 
  7.15  unit or agency in this or any other state; 
  7.16     (8) the applicant's and qualifying person's business 
  7.17  history for the past five years and whether the applicant, any 
  7.18  employee, or qualifying person has ever filed for bankruptcy or 
  7.19  protection from creditors or has any unsatisfied judgments 
  7.20  against the applicant, employee, or qualifying person; 
  7.21     (9) where the applicant is a firm, partnership, sole 
  7.22  proprietorship, limited liability company, corporation, or 
  7.23  association, whether there has been a sale or transfer of the 
  7.24  business or other change in ownership, control, or name in the 
  7.25  last five years and the details thereof, and the names and 
  7.26  addresses of all prior, predecessor, subsidiary, affiliated, 
  7.27  parent, or related entities, and whether each such entity, or 
  7.28  its owners, officers, directors, members or shareholders holding 
  7.29  more than ten percent of the stock, or an employee has ever 
  7.30  taken or been subject to an action that is subject to clause 
  7.31  (6), (7), or (8) in the last ten years; and 
  7.32     (10) whether the qualifying person is the qualifying person 
  7.33  for more than one licensee; and 
  7.34     (11) whether the qualifying person has completed the 
  7.35  prelicensure curriculum required under section 326.871, and, if 
  7.36  so, a copy of the certificate of completion of that curriculum. 
  8.1      For purposes of this subdivision, "applicant" includes 
  8.2   employees who exercise management or policy control over the 
  8.3   residential contracting and remodeling activities in the state 
  8.4   of Minnesota, including affiliates, partners, directors, 
  8.5   governors, officers, limited or general partners, managers, all 
  8.6   shareholders holding more than ten percent of the shares that 
  8.7   have been issued, a shareholder holding more than ten percent of 
  8.8   the voting power of the shares that have been issued, or all 
  8.9   members holding more than ten percent of the membership 
  8.10  interests that have been issued or more than ten percent of the 
  8.11  voting power of the membership interests that have been issued. 
  8.12     The commissioner may require further information as the 
  8.13  commissioner deems appropriate to administer the provisions and 
  8.14  further the purposes of this chapter.  
  8.15     Sec. 9.  Minnesota Statutes 2002, section 326.96, is 
  8.16  amended to read: 
  8.17     326.96 [PUBLIC EDUCATION.] 
  8.18     Subdivision 1.  [LICENSING.] The commissioner may develop 
  8.19  materials and programs to educate the public concerning 
  8.20  licensing requirements and methods for reporting unlicensed 
  8.21  contracting activity. 
  8.22     Subd. 2.  [HOMEOWNER'S GUIDE.] (a) The commissioner must 
  8.23  develop a guide for homeowners and make it available in 
  8.24  electronic form to real estate brokers and salespersons, 
  8.25  residential building contractors and remodelers, and the general 
  8.26  public.  The guide must include information on: 
  8.27     (1) moisture problems in residential buildings; 
  8.28     (2) the homeowner's warranty required under chapter 327A 
  8.29  and time limits for taking actions or making claims under 
  8.30  chapter 327A; 
  8.31     (3) disclosures regarding the history and condition of 
  8.32  property that are required to be made to prospective purchasers 
  8.33  by sellers and real estate brokers and salespersons; 
  8.34     (4) prepurchase inspection of residential property by home 
  8.35  inspectors, local government employees, and other persons or 
  8.36  entities; and 
  9.1      (5) other sources of information for homeowners and 
  9.2   prospective homeowners, including the commissioner's Web site. 
  9.3      (b) The guide must include pages at the front for 
  9.4   homeowners to record information about their home and its 
  9.5   maintenance history, maintenance instructions received from the 
  9.6   builder or relating to appliances and ventilation equipment, and 
  9.7   homeowners and appliance warranties and owners' guides. 
  9.8      (c) The commissioner must, in the homeowner's guide and 
  9.9   other reasonably appropriate ways, encourage homeowners and 
  9.10  prospective homeowners to transfer possession of the homeowner's 
  9.11  guide, including information added to it by previous homeowners, 
  9.12  at the time of transfer of ownership.  The commissioner must 
  9.13  encourage real estate brokers and salespersons to facilitate 
  9.14  those transfers. 
  9.15     Sec. 10.  Minnesota Statutes 2002, section 327A.05, is 
  9.16  amended to read: 
  9.17     327A.05 [REMEDIES.] 
  9.18     Subdivision 1.  [NEW HOME WARRANTIES.] Upon breach of any 
  9.19  warranty imposed by section 327A.02, subdivision 1, the vendee 
  9.20  shall have a cause of action against the vendor for damages 
  9.21  arising out of the breach, or for specific performance.  The 
  9.22  vendee may also be awarded the vendee's costs, disbursements, 
  9.23  and reasonable attorney fees, if the vendee is the prevailing 
  9.24  party and the vendor refused to perform the vendor's obligations 
  9.25  under the warranty without a good faith basis for the refusal.  
  9.26  Damages shall be limited to: 
  9.27     (a) the amount necessary to remedy the defect or breach; or 
  9.28     (b) the difference between the value of the dwelling 
  9.29  without the defect and the value of the dwelling with the defect.
  9.30     Subd. 2.  [HOME IMPROVEMENT WARRANTY.] Upon breach of any 
  9.31  warranty imposed by section 327A.02, subdivision 3, the owner 
  9.32  shall have a cause of action against the home improvement 
  9.33  contractor for damages arising out of the breach, or for 
  9.34  specific performance.  Damages shall be limited to the amount 
  9.35  necessary to remedy the defect or breach.  The owner may also be 
  9.36  awarded the owner's costs, disbursements, and reasonable 
 10.1   attorney fees, if the owner is the prevailing party and the 
 10.2   vendor refused to perform the vendor's obligations under the 
 10.3   warranty without a good faith basis for the refusal. 
 10.4      Subd. 3.  [STATUTORY CURE.] (a) Before commencing or 
 10.5   continuing a cause of action under this section, the vendee or 
 10.6   owner shall give written notice by certified mail, return 
 10.7   receipt requested, to the vendor or home improvement contractor 
 10.8   specifying in reasonable detail the alleged defect that may form 
 10.9   a basis for a cause of action if not corrected.  In the case of 
 10.10  a notice involving more than one unit in a multiunit dwelling 
 10.11  where alleged defects are substantially similar in multiple 
 10.12  dwelling units, the notice complies with this paragraph if it 
 10.13  provides a reasonably detailed description of the alleged 
 10.14  defects in a fair and representative sample of the affected 
 10.15  units.  
 10.16     (b) A vendor or home improvement contractor has ten days to 
 10.17  make a good-faith response to a notice received under paragraph 
 10.18  (a).  The response must be made by certified mail, return 
 10.19  receipt requested.  The response may include a request to 
 10.20  inspect the property or a denial of the alleged defects.  If the 
 10.21  alleged defects are denied, the vendee or owner may commence a 
 10.22  cause of action under this section.  
 10.23     (c) If inspection is requested in the response, the vendor 
 10.24  or home improvement contractor shall inspect the dwelling within 
 10.25  20 days after the vendor's or home improvement contractor's 
 10.26  request to improve the property to determine the nature and 
 10.27  cause of the alleged defects and the nature and extent of any 
 10.28  repairs and replacements necessary to remedy the alleged 
 10.29  defects.  Upon request, the vendee or owner shall ensure that 
 10.30  the dwelling is made available for inspection within a 
 10.31  reasonable period of time.  The vendor or home improvement 
 10.32  contractor shall provide reasonable notice to the vendee or 
 10.33  owner before conducting the inspection.  The inspection shall be 
 10.34  conducted at a reasonable time.  The vendor or home improvement 
 10.35  contractor may use reasonable measures, including testing, to 
 10.36  determine the nature and cause of the alleged defects and the 
 11.1   nature and extent of any repairs or replacements necessary to 
 11.2   remedy the alleged defects.  If the vendor or home improvement 
 11.3   contractor conducts testing pursuant to this paragraph, the 
 11.4   vendor or home improvement contractor shall restore the unit to 
 11.5   its condition before the testing. 
 11.6      (d) Within 20 days after the inspection under paragraph (c) 
 11.7   is conducted, the vendor or home improvement contractor shall 
 11.8   send to the vendee or owner by certified mail, return receipt 
 11.9   requested, a good-faith, written response to the vendee or 
 11.10  owner's notice based on the results of the inspection.  The 
 11.11  response may include an offer to repair or replace any alleged 
 11.12  defects, to have the alleged defects repaired or replaced at the 
 11.13  expense of the vendor or home improvement contractor, or to 
 11.14  provide monetary compensation to the vendee or owner.  The offer 
 11.15  shall describe in reasonable detail all repairs or replacements 
 11.16  that the vendor or home improvement contractor is offering to 
 11.17  make or provide to the dwelling and a reasonable estimate of the 
 11.18  date by which the repairs or replacements will be made or 
 11.19  monetary compensation will be provided.  
 11.20     (e) Within 20 days after receipt of the offer made pursuant 
 11.21  to paragraph (d), the vendee or owner shall give a good-faith, 
 11.22  written response to the offer.  The response must be made by 
 11.23  certified mail, return receipt requested.  If the offer is 
 11.24  rejected, the response must include the basis for the vendee or 
 11.25  owner's rejection of the offer and may include a counteroffer.  
 11.26  Within ten days after receipt of the response of the vendee or 
 11.27  owner, the vendor or home improvement contractor may make a best 
 11.28  and final offer to the vendee in writing by certified mail, 
 11.29  return receipt requested.  After receipt of that offer, the 
 11.30  vendee or owner may commence or continue an action under this 
 11.31  section.  
 11.32     (f) The applicable statute of limitations, within which a 
 11.33  vendee or owner must bring a claim or action under this chapter 
 11.34  or any other law relating to the vendee or owner's home, is 
 11.35  suspended from the time of commencement of procedures under this 
 11.36  subdivision until the best and final offer made pursuant to 
 12.1   paragraph (d) has been rejected. 
 12.2      (g) If the vendor or home improvement contractor does not 
 12.3   comply with the requirements of this subdivision, the vendee or 
 12.4   owner may commence or continue an action under this section.  If 
 12.5   a vendee or owner commences an action under this section without 
 12.6   complying with this section, upon motion, the court shall stay 
 12.7   the proceeding until the vendee or owner has complied with the 
 12.8   requirements of this subdivision.