Memorandum

Groups/Interpretations (State Bldg. Code)/adoption of fee schedule

I. MN Rule part 1300.0160 Subp. 2 states, Fees established by the municipality must be by ordinance and must be fair, reasonable, and proportionate to the actual cost of the service for which the fee is imposed. The code now requires that building permit fee schedules be adopted by ordinance. The intent was to mirror the language from M.S. 462.353, Subd. 4 where fees for "official controls" must be adopted by ordinance.

II. M.S. 462.353, Subd. 4 states in part, A municipality may prescribe fees sufficient to defray the costs incurred by it in reviewing, investigating, and administering an application for an amendment to an official control established pursuant to sections 462.351 to 462.364 or an application for a permit or other approval required under an official control established pursuant to those sections. Fees as prescribed must be by ordinance and must be fair, reasonable, and proportionate to the actual cost of the service for which the fee is imposed. A municipality shall adopt management and accounting procedures to ensure that fees are maintained and used only for the purpose for which they are collected. The underlined text was included during the 2001 legislative session as part of the division's housekeeping bill, HF 1310. The remaining language existed and requires that all fees for administering "official controls" be by ordinance. With the adoption of newly adopted chapter 1300, the division included this same language into the building code.

III. M.S. 462.352, Subd. 15 states, "Official controls" or "controls" means ordinances and regulations which control the physical development of a city, county or town or any part thereof or any detail thereof and implement the general objectives of the comprehensive plan. Official controls may include ordinances establishing zoning, subdivision controls, site plan regulations, sanitary codes, building codes and official maps. "Building codes" has always been included in this section as an "official control". However, there are differing legal opinions over whether "building codes" in this context is actually speaking to the Minnesota State Building Code.

IV. Some may ask, can we adopt our fees by resolution? Is there a difference between an ordinance and resolution? There are significant differences between an ordinance and resolution. To put it simply, when an ordinance is required, a resolution will not suffice. The League of Minnesota Cities does an excellent job describing the differences between ordinances and resolutions in their Handbook for Minnesota Cities and a treatise called Ordinances, Resolutions and Motions. The handbook can be accessed on line at www.lmnc.org/library/handtoc.cfm .

V. Although there are varying opinions regarding whether M.S. 462.353, Sub. 4 applies to the state building code, the fact remains that section 1300.0160, Subp. 2 of the state building code requires building permit fees to be adopted by ordinance.