Purpose

Clarify how municipalities report construction and development-related fees to the state and establish a standardized method to set building permit fees based on a cost-per-square-foot valuation.

Main Provisions

• Annual reporting threshold and requirements
  • Each municipality must annually report by June 30 to the department in a format prescribed by the department.
  • The report covers all construction and development-related fees charged to developers, builders, and subcontractors.
  • A reporting trigger exists if the cumulative fees collected exceed a specified threshold (the bill text lists 5000 and 7000 in the reporting year; historical context notes a $10,000 threshold for 2009–2013).
  • The report must include:
  • The number and valuation of units for which fees were paid.
  • The amounts for various fees, including building permit fees, plan review fees, administrative fees, engineering fees, infrastructure fees, and other related fees.
  • The expenses tied to the municipal activities for which fees were collected.
  • If a municipality fails to report, remedies described in section 326B.082 apply.
• Establishment of a cost-per-square-foot valuation for fees
  • The commissioner shall establish a cost per square foot valuation for new one-family and two-family townhouses and accessory utility buildings.
  • This valuation is to be used for setting building permit fees by municipalities.

Changes to Existing Law

• Adds a new subdivision (Subd.5) to Minnesota Statutes 2024 section 326B.153 (Valuation):
  • Purpose: provide a standardized cost-per-square-foot valuation to determine building permit fees charged by municipalities.

Implications

• For municipalities
  • Requires regular, detailed reporting of construction-related fees and associated costs.
  • Introduces or clarifies a monetary threshold that determines when reports are required.
  • Ties building permit fee setting to a state-defined cost-per-square-foot valuation, potentially affecting permit costs charged to property owners and developers.
• For the state
  • Enables central collection and review of municipal fee data.
  • Establishes a standardized methodology (cost per square foot) to influence how building permit fees are calculated across municipalities.

Significant Changes to Existing Law (Summary)

• Expands or modifies reporting duties under 326B.145 by adding a threshold-based annual reporting requirement and specifying report contents.
• Adds Subd.5 (Valuation) to 326B.153 to create a state-defined cost-per-square-foot valuation for setting municipal building permit fees.

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Relevant Terms - annual report - construction and development-related fees - developers - builders - subcontractors - cumulative fees threshold (5000/7000; historical note: 10000 for 2009–2013) - reporting by June 30 - format prescribed by the department - building permit fees - plan review fees - administrative fees - engineering fees - infrastructure fees - other construction and development-related fees - expenses of municipal activities - remedies (326B.082) - commissioner of labor and industry - cost per square foot valuation - new one-family and two-family townhouse - accessory utility buildings - setting fees by municipalities