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             requiring prelicensing education of residential 
  1.5             building contractors; making changes in continuing 
  1.6             education; providing homebuyers with access to 
  1.7             information about avoidance of moisture and other 
  1.8             problems; permitting successful home warranty 
  1.9             claimants to recover attorney fees and expenses; 
  1.10            regulating actions for a breach of the statutory home 
  1.11            warranty requirements; amending Minnesota Statutes 
  1.12            2002, sections 326.87, subdivision 1; 326.89, 
  1.13            subdivision 2; 326.96; 327A.05; Minnesota Statutes 
  1.14            2003 Supplement, section 16B.685; proposing coding for 
  1.15            new in Minnesota Statutes, chapter 326. 
  1.16  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.17     Section 1.  [CITATION.] 
  1.18     This act may be cited as the Homeowners' Protection Act. 
  1.19     Sec. 2.  Minnesota Statutes 2003 Supplement, section 
  1.20  16B.685, is amended to read: 
  1.21     16B.685 [ANNUAL REPORT; RESPONSE TO SURPLUS FEES.] 
  1.22     (a) Beginning with the first report filed by June 30, 2003, 
  1.23  each municipality shall annually report by June 30 to the 
  1.24  department, in a format prescribed by the department, all 
  1.25  construction and development-related fees collected by the 
  1.26  municipality from developers, builders, and subcontractors if 
  1.27  the cumulative fees collected exceeded $5,000 in the reporting 
  1.28  year.  The report must include: 
  1.29     (1) the number and valuation of units for which fees were 
  1.30  paid; 
  2.1      (2) the amount of building permit fees, plan review fees, 
  2.2   administrative fees, engineering fees, infrastructure fees, and 
  2.3   other construction and development-related fees; and 
  2.4      (3) the expenses associated with the municipal activities 
  2.5   for which fees were collected; 
  2.6      (4) staff time devoted to building code enforcement, 
  2.7   including for the categories of residential, commercial, 
  2.8   mechanical, and plumbing inspections: 
  2.9      (i) the average number of permits, inspections, and 
  2.10  reinspections; and 
  2.11     (ii) the number of hours devoted to plan reviews and 
  2.12  building code administration; and 
  2.13     (5) for each employee who worked on building code 
  2.14  enforcement, the total amount of time available for that purpose 
  2.15  during the year. 
  2.16     (b) If a municipality's fees collected in a calendar year 
  2.17  exceed its expenses related to the municipal activities for 
  2.18  which those fees were collected, the municipality must include 
  2.19  in the report required under paragraph (a) either: 
  2.20     (1) a description of the municipality's plan to reduce 
  2.21  future fee revenue, so as to eliminate any future surplus; 
  2.22     (2) a description of the municipality's plan to increase 
  2.23  the quantity or quality of its activities for which the fees are 
  2.24  collected, so as to eliminate future surplus; or 
  2.25     (3) an explanation of why the municipality reasonably does 
  2.26  not expect the surplus experienced in that calendar year to be 
  2.27  repeated in future years. 
  2.28     Sec. 3.  Minnesota Statutes 2002, section 326.87, 
  2.29  subdivision 1, is amended to read: 
  2.30     Subdivision 1.  [STANDARDS.] The commissioner, in 
  2.31  consultation with the council, may adopt standards for 
  2.32  continuing education requirements and course approval.  The 
  2.33  standards must include requirements for continuing education in 
  2.34  the implementation of energy codes applicable to buildings and 
  2.35  other building codes designed to conserve energy.  Except for 
  2.36  the course content, the standards must be consistent with the 
  3.1   standards established for real estate agents and other 
  3.2   professions licensed by the Department of Commerce.  At a 
  3.3   minimum, the content of one hour of any required continuing 
  3.4   education must contain information on lead abatement rules and 
  3.5   safe lead abatement procedures. (a) The commissioner must adopt 
  3.6   standards for continuing education requirements and approval.  
  3.7   The standards must consist of instruction in only the following 
  3.8   subject areas: 
  3.9      (1) safety and security, including but not limited to lead 
  3.10  abatement and lead-safe cleanup rules and procedures; 
  3.11     (2) liability and contracts; 
  3.12     (3) building code; 
  3.13     (4) customer service; and 
  3.14     (5) general project management. 
  3.15     (b) The commissioner must develop additional standards to 
  3.16  address changes in building codes and in laws relating to 
  3.17  residential construction and remodeling.  The commissioner must 
  3.18  consult with a private organization to assess the need for 
  3.19  additional course requirements.  The commissioner shall 
  3.20  publicize any additional standards not later than August 1 of 
  3.21  each calendar year. 
  3.22     Sec. 4.  [326.871] [PRELICENSURE EDUCATION.] 
  3.23     Subdivision 1.  [REQUIREMENT.] A qualifying person must 
  3.24  complete 30 hours of prelicensure education under this section 
  3.25  prior to applying to take the written examination under section 
  3.26  326.89. 
  3.27     Subd. 2.  [CURRICULUM.] (a) The commissioner must contract 
  3.28  with a private organization to develop the residential building 
  3.29  contractor and remodeler prelicensure curriculum.  
  3.30     (b) The curriculum must consist of only the following 
  3.31  subject areas: 
  3.32     (1) building codes; 
  3.33     (2) fundamental construction techniques; 
  3.34     (3) state and federal statutes; 
  3.35     (4) state rules and federal regulations; and 
  3.36     (5) business practices. 
  4.1      (c) The curriculum is subject to the approval of the 
  4.2   commissioner. 
  4.3      (d) Entities that offer this curriculum must provide a 
  4.4   certificate of completion to enrollees who successfully complete 
  4.5   this curriculum. 
  4.6      Sec. 5.  Minnesota Statutes 2002, section 326.89, 
  4.7   subdivision 2, is amended to read: 
  4.8      Subd. 2.  [CONTENTS.] The application must include the 
  4.9   following information regarding the applicant: 
  4.10     (1) Minnesota workers' compensation insurance certificate; 
  4.11     (2) employment insurance account number; 
  4.12     (3) certificate of liability insurance; 
  4.13     (4) type of license requested; 
  4.14     (5) name and address of the applicant: 
  4.15     (i) name and address of the applicant's qualifying person, 
  4.16  if other than applicant; and 
  4.17     (ii) if the applicant is a sole proprietorship, the name 
  4.18  and address of the sole proprietor; if the applicant is a 
  4.19  partnership, the name and address of each partner; if the 
  4.20  applicant is a limited liability company, the name and address 
  4.21  of each governor and manager; if the applicant is a corporation, 
  4.22  the name and address of each of the corporate officers, 
  4.23  directors, and all shareholders holding more than ten percent of 
  4.24  the outstanding stock in the corporation; 
  4.25     (6) whether the applicant, any employee, or qualifying 
  4.26  person has ever been licensed in this or any other state and has 
  4.27  had a professional or vocational license refused, suspended, or 
  4.28  revoked, or has been the subject of any administrative action; 
  4.29     (7) whether the applicant, qualifying person, or any of the 
  4.30  applicant's corporate or partnership directors, limited 
  4.31  liability company governors, officers, limited or general 
  4.32  partners, managers, all shareholders holding more than ten 
  4.33  percent of the share of the corporation that have been issued, 
  4.34  or all members holding more than ten percent of the voting power 
  4.35  of the membership interests that have been issued, has been 
  4.36  convicted of a crime that either related directly to the 
  5.1   business for which the license is sought or involved fraud, 
  5.2   misrepresentation, or misuse of funds; has suffered a judgment 
  5.3   in a civil action involving fraud, misrepresentation, 
  5.4   negligence, or breach of contract, or conversion within the ten 
  5.5   years prior to the submission of the application; or has had any 
  5.6   government license or permit suspended or revoked as a result of 
  5.7   an action brought by a federal, state, or local governmental 
  5.8   unit or agency in this or any other state; 
  5.9      (8) the applicant's and qualifying person's business 
  5.10  history for the past five years and whether the applicant, any 
  5.11  employee, or qualifying person has ever filed for bankruptcy or 
  5.12  protection from creditors or has any unsatisfied judgments 
  5.13  against the applicant, employee, or qualifying person; 
  5.14     (9) where the applicant is a firm, partnership, sole 
  5.15  proprietorship, limited liability company, corporation, or 
  5.16  association, whether there has been a sale or transfer of the 
  5.17  business or other change in ownership, control, or name in the 
  5.18  last five years and the details thereof, and the names and 
  5.19  addresses of all prior, predecessor, subsidiary, affiliated, 
  5.20  parent, or related entities, and whether each such entity, or 
  5.21  its owners, officers, directors, members or shareholders holding 
  5.22  more than ten percent of the stock, or an employee has ever 
  5.23  taken or been subject to an action that is subject to clause 
  5.24  (6), (7), or (8) in the last ten years; and 
  5.25     (10) whether the qualifying person is the qualifying person 
  5.26  for more than one licensee; and 
  5.27     (11) whether the qualifying person has completed the 
  5.28  prelicensure curriculum required under section 326.871, and, if 
  5.29  so, a copy of the certificate of completion of that curriculum. 
  5.30     For purposes of this subdivision, "applicant" includes 
  5.31  employees who exercise management or policy control over the 
  5.32  residential contracting and remodeling activities in the state 
  5.33  of Minnesota, including affiliates, partners, directors, 
  5.34  governors, officers, limited or general partners, managers, all 
  5.35  shareholders holding more than ten percent of the shares that 
  5.36  have been issued, a shareholder holding more than ten percent of 
  6.1   the voting power of the shares that have been issued, or all 
  6.2   members holding more than ten percent of the membership 
  6.3   interests that have been issued or more than ten percent of the 
  6.4   voting power of the membership interests that have been issued. 
  6.5      The commissioner may require further information as the 
  6.6   commissioner deems appropriate to administer the provisions and 
  6.7   further the purposes of this chapter.  
  6.8      Sec. 6.  Minnesota Statutes 2002, section 326.96, is 
  6.9   amended to read: 
  6.10     326.96 [PUBLIC EDUCATION.] 
  6.11     Subdivision 1.  [LICENSING.] The commissioner may develop 
  6.12  materials and programs to educate the public concerning 
  6.13  licensing requirements and methods for reporting unlicensed 
  6.14  contracting activity. 
  6.15     Subd. 2.  [HOMEOWNER'S GUIDE.] (a) The commissioner must 
  6.16  develop a guide for owners and prospective owners of newly 
  6.17  constructed homes and make it available in electronic form to 
  6.18  real estate brokers and salespersons, residential building 
  6.19  contractors and remodelers, and the general public.  The guide 
  6.20  must include information on: 
  6.21     (1) moisture problems in residential buildings; 
  6.22     (2) the homeowner's warranty required under chapter 327A; 
  6.23     (3) disclosures regarding the property that are required to 
  6.24  be made to prospective purchasers by sellers and real estate 
  6.25  brokers and salespersons; 
  6.26     (4) prepurchase inspection of residential property by home 
  6.27  inspectors, local government employees, and other persons or 
  6.28  entities; and 
  6.29     (5) other sources of information for homeowners and 
  6.30  prospective homeowners, including the commissioner's Web site. 
  6.31     (b) The guide must include pages at the front for 
  6.32  homeowners to record information about their home and its 
  6.33  maintenance history, maintenance instructions received from the 
  6.34  builder or relating to appliances and ventilation equipment, and 
  6.35  homeowners and appliance warranties and owners guides. 
  6.36     (c) The commissioner must, in the homeowner's guide and 
  7.1   other reasonably appropriate ways, encourage homeowners and 
  7.2   prospective homeowners to transfer possession of the homeowner's 
  7.3   guide, including information added to it by previous homeowners, 
  7.4   at the time of transfer of ownership.  The commissioner must 
  7.5   encourage real estate brokers and salespersons to facilitate 
  7.6   those transfers. 
  7.7      Subd. 3.  [WEB PAGE ON HOME INSPECTION.] (a) The 
  7.8   commissioner must create and maintain a Web page providing 
  7.9   information and advice on: 
  7.10     (1) the benefits to a prospective home buyer of having the 
  7.11  home inspected by a qualified home inspector prior to making a 
  7.12  final commitment to buy the home; and 
  7.13     (2) how to select and make best use of a home inspector. 
  7.14     (b) The Web page must state that there is no state 
  7.15  certification or licensing program for home inspectors and that 
  7.16  any person can engage in that business, regardless of whether 
  7.17  the person has experience or knowledge that qualifies the person 
  7.18  to do home inspecting. 
  7.19     (c) The Web page may provide links to recognized 
  7.20  associations of home inspectors and other sources of information 
  7.21  on home inspections, but must not provide links to particular 
  7.22  home inspectors. 
  7.23     Sec. 7.  Minnesota Statutes 2002, section 327A.05, is 
  7.24  amended to read: 
  7.25     327A.05 [REMEDIES.] 
  7.26     Subdivision 1.  [NEW HOME WARRANTIES.] Upon breach of any 
  7.27  warranty imposed by section 327A.02, subdivision 1, the vendee 
  7.28  shall have a cause of action against the vendor for damages 
  7.29  arising out of the breach, or for specific performance.  The 
  7.30  vendee must also be awarded the vendee's costs, disbursements, 
  7.31  and reasonable attorney fees, if the vendee is the prevailing 
  7.32  party and the vendor refused to perform the vendor's obligations 
  7.33  under the warranty without a good faith basis for the refusal.  
  7.34  Damages shall be limited to: 
  7.35     (a) the amount necessary to remedy the defect or breach; or 
  7.36     (b) the difference between the value of the dwelling 
  8.1   without the defect and the value of the dwelling with the defect.
  8.2      Subd. 2.  [HOME IMPROVEMENT WARRANTY.] Upon breach of any 
  8.3   warranty imposed by section 327A.02, subdivision 3, the owner 
  8.4   shall have a cause of action against the home improvement 
  8.5   contractor for damages arising out of the breach, or for 
  8.6   specific performance.  Damages shall be limited to the amount 
  8.7   necessary to remedy the defect or breach.  The owner must also 
  8.8   be awarded the owner's costs, disbursements, and reasonable 
  8.9   attorney fees, if the owner is the prevailing party and the 
  8.10  vendor refused to perform the vendor's obligations under the 
  8.11  warranty without a good faith basis for the refusal. 
  8.12     Subd. 3.  [COMMUNICATION REQUIRED REGARDING CLAIM.] (a) 
  8.13  Prior to commencing an action under this chapter, the vendee 
  8.14  must contact the vendor in writing by certified mail, return 
  8.15  receipt requested, specifying in reasonable detail the basis of 
  8.16  the cause of action. 
  8.17     (b) Following receipt of the notice described in paragraph 
  8.18  (a), the vendor must within 10 days make a written request to 
  8.19  the vendee to inspect the dwelling.  The vendee must ensure that 
  8.20  the dwelling is made available for inspection no later than 30 
  8.21  days after the vendee receives the written request from the 
  8.22  vendor for an inspection, and the vendor must inspect the 
  8.23  dwelling on the agreed upon date. 
  8.24     (c) Within 60 days after the inspection, the vendor must 
  8.25  send a good faith written response to the vendee by certified 
  8.26  mail, return receipt requested.  The response must contain the 
  8.27  results of the vendor's inspection, and where applicable, an 
  8.28  estimate of repair or replacement costs and an offer by the 
  8.29  vendor to pay all or part of that amount or to perform the 
  8.30  repairs or replacement at no cost to the vendee or at a cost 
  8.31  specified in the response. 
  8.32     (d) The vendee may accept, reject, or counter-offer in 
  8.33  writing by certified mail, return receipt requested, within 30 
  8.34  days of receipt of the good faith response by the vendor.  The 
  8.35  vendee may commence an action under this chapter following the 
  8.36  response from the vendor if the vendee does not accept the 
  9.1   offer, if any, from the vendor. 
  9.2      (e) If the vendor does not comply with paragraphs (b) and 
  9.3   (c), the vendee may commence an action and may notify the 
  9.4   commissioner of the vendor's noncompliance. 
  9.5      (f) The commissioner of commerce must suspend the license, 
  9.6   issued under chapter 326, of a residential building contractor 
  9.7   or remodeler that refuses to comply with paragraph (b) or (c) 
  9.8   after being directed to do so by the commissioner.