Session Week 6: Park Dedication Fee Bill Adds BATC Language
A bill to clarify authority for Minneapolis to collect park dedication fees was passed out of the House Government Operations Committee last week, but not before being amended to include a top BATC priority: improved fair market value language for all park dedication fees. The amendment ties fair market value of land based on tax valuation or other relevant data to the annual fee establishment process undertaken by cities. It also provides a pathway for an applicant to object to the fee rate, which then triggers a negotiated fee between developer and the city, or bases it off an independent appraisal of land in the same or similar land use category. This addresses the problem seen throughout the metro where cities are using dated and inflated land values from the pre-downturn market, leaving park fees far higher than they ought to be.
What does this mean for BATC members? If this amendment passes into law park dedication fees will better reflect actual costs and that park fees will moderate in many cities. The Senate companion currently does not have this language in the bill, but we are working with bill sponsors to ensure that this change makes the final version.
Dayton Tax Plan Clarifies Impact for Builders and Remodelers
Late last week the Governor's office released new information on how his tax plan would affect the construction industry. The following services remain exempt from sales tax for contractors and labor:
-
Construction labor for construction, remodeling or improvement of real property remains exempt. Construction labor includes services such as wiring, welding steel beams, carpentry, laying bricks, cement finishing, pipe installation and plumbing.
-
Repair, installation and replacement of real property such as furnaces, garbage disposals, built-in dishwashers and stove tops, water heaters and softeners, and central air conditioning, or when you work on plumbing or electrical wiring also remains exempt.
Get More Information on Page 9 >>
Watch Item: Bill to Modify Statute of Repose in Construction Disputes to be Heard
A bill to modify the limitations of contribution and indemnity actions for damages based on services or construction to improve real property will be heard in House and Senate committees today. The bill is supported by architect and engineering organizations and has been circulating since the I-35W bridge collapse and ensuing litigation took place and firms were brought into legal action several decades following construction.
This bill would limit that period, known as a statute of repose, to 14 years. The bill affects BATC members in that it attempts to align the statutory ‘window’ for contribution and indemnity claims at 14 years after substantial completion of the project. Currently the statute of repose offers 12 years for new home and remodeling projects. The additional two years would not affect the 10-year warranty or any homeowner actions against the builder. However, in a scenario where a homeowner alleges a defect near year 10 of the warranty and does not initiate a legal action until near year 12 of the statute of repose, an additional two years would allow for contribution and indemnity claims by participating firms in a construction dispute.
Stay tuned for more information on this issue next week.
