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2012 Legislative Session General Overview

2012 is expected to be a sprint, a sharp contrast to the protracted marathon session in 2011 that lasted well into summer and included a partial state shutdown. There are several factors that are likely to make this session brief:
  • 2012 is a major election year, with re-drawn election districts reflecting the latest census data. Legislators will be motivated to get their work done and get back into their districts.
  • For the first time in several years The state budget has a surplus, not a deficit. The next budget forecast is due out on February 29th, but all indications point to a budget surplus for the rest of the biennium. 
  • GOP majorities in both bodies are focused on limiting the session duration and costs associated with the session. 
  • The major issues, jobs bill, capital improvements bill, and stadium issue are unlikely to force an overtime session. 

BATC Adopts 2012 Legislative Agenda

The BATC Public Policy Committee has been reviewing and prioritizing legislative issues throughout the late summer and fall, as well as coordinating those efforts with our federation partners at CMBA, RAB, and BAM. The Public Policy Committee moved the following three legislative priorities which were subsequently adopted by the BATC Executive Board of Directors as BATC’s 2012 Legislative Priorities.

I. Fire Sprinkler Mandate Prohibition in Single Family Homes – This bill would prohibit the inclusion of a fire sprinkler mandate in the Minnesota Building Code. 

Last session a bill to prohibit fire sprinkler mandates received strong bi-partisan support by the legislature, only to be vetoed by Governor Dayton in the days immediately following the session’s adjournment. In his veto message, Dayton cited a preference for this issue to be resolved within the administrative process to update the building code, and also expressed concerns about fire fighter safety in new construction. The building code adoption process is currently underway and could provide greater clarity on this issue from the code process, but it is likely that this issue will emerge at some point in the legislative session. 

As we argued last session, current requirements in the building code for hard-wired, interconnected smoke alarms have proved to be effective protection for Minnesota homeowners. The incremental gain of protection with fire sprinklers comes at a steep cost that outweighs the benefit gained. 

II. Fees & Land Use –  This initiative attempts to balance the regulatory structure for homebuilders and land developers by protecting the up-front investment made in preparing an application for consideration, by prohibiting terms and conditions outside of MN law in development contracts, and by measuring fees and park fees to reflect market values and a direct connection to the need created by new development. 

Building on the momentum from the 2011session, where BATC’s land use bill advanced to the Senate floor, we are gearing up for a continuance of the discussion over the bill. The importance of a balanced and fair land use approval process is more important now than ever. Of the 25-36% of the final price point of a home attributable to regulation, the vast majority happens during the development process.  

  • Moratoria Reform: Our builder-developer members spend considerable time and resources to bring a project from concept phase to the point of a completed application before a local government. Our bill seeks to protect those applications from the effects of land use moratoria, which halts development. This protection does not affect the projects approval, but as a basic fairness matter, it does allow for existing, completed applications to proceed forward for an up or down vote. 
  • Development Agreements:  Most developments use some type of development contract that spells out project timing, escrow requirements, fees and infrastructure matters. Both parties benefit from a measure of project-specificity as well as flexibility afforded by development contracts. However, reliance on development contracts has also produced many incidents of unfair requirements for fees and other improvements which are not related to the project, or not authorized by statute or law. BATC’s development contract initiative attempts to limit these instances by prohibiting terms and conditions in a development contract that are not authorized by law. 
  • Park Fees:  As land values have plummeted over the past five years, the law says that park fees should be plummeting commensurately. That hasn’t been the case in many jurisdictions, leaving major implications for fairness and affordability. Currently, the law states that park fees must be established based on the average fair market value of unplatted land. BATC supports legislative changes which ensure that the park fee paid by homeowners is fair and in-line with the overall cost of building the home. 

III. Common Interest Communities – This initiative will attempt to bring fairness in the legal process for homeowners and homebuilders in Common Interest Communities legal disputes. The goal of any construction dispute should be resolution in a timely and cost effective manner. 

Several BATC builders have reported a spike in lawsuits initiated by Homeowner Associations/Common Interest Communities. These lawsuits have become complex and unnecessarily expensive, which doesn’t benefit homeowners or builders. Additionally, many of the lawsuits carry common characteristics in the way they come about, which is a worrisome trend, given the existing industry challenges and potential for major market ramifications as builders are swayed from building CIC projects. 

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