News From The Capitol – Senate Denies Walz DLI Appointment

The Minnesota Senate refused to approve Governor Walz’s cabinet appointment to the Department of Labor and Industry.  The rejection of  Commissioner Leppink from the Department of Labor and Industry fell along party line.  Senate Majority Leader Paul Gazelka has accused Commissioner Leppink of being hostile to businesses through over regulation during the COVID-19 pandemic.  There is speculation that the Senate Republicans who are in the majority will continue to deny the approval of agency heads until the Governor gives up his executive powers on the pandemic.

2020-08-13T11:07:31-05:00

Covid-19 Updates Effecting MN Contractors

Navigating through the Coronavirus has become a daunting process and CAM is here to help you understand how this may affect your business with the building permits process.

First, please ensure that you are following the Center for Disease Controls (CDC) precautionary measures when keeping your business open and your employees safe.  You can find these measures here.  It will give you the best instructions on steps to prevent the illness, what to do if you or an employee becomes sick and what you can do to keep your community safe.

To date, Governor Walz has not outlined an executive order for handling the Coronavirus with the construction industry.  It is important when considering a project where your employees will be working in close proximity that you follow guidelines outlined by the CDC including keeping everyone at least 6 feet away from each other and having hand sanitizer for employees at the worksite. Governor Walz has also extended unemployment benefits for employees affected by the Cornonavirus.  You can find more information here.  There is no guarantee that an employee will be able to draw unemployment benefits.   It is recommended that your business start making plans on how an employee who contracts the virus will be paid.  PLEASE SEE FURTHER COMMUNICATION FROM GOVERNOR WALZ BELOW.

You will find a press release below from the Department of Labor and Industry on obtaining permits and inspections.  The League of Minnesota Cities has also proffered guidelines for cities on how to maintain essential services. You will find a link to the League’s suggestions in the communication below. Please note that these are only suggestions, municipalities are allowed to make their own guidelines. Housing First has also been compiling a list of cities and how they are providing timely permits and inspections  You can find a list of the cities and what they are doing here.

With all of this said, it is important to maintain normal business as usual as possible by following the recommendation of the CDC.

Please contact Lisa Frenette at frenettela@gmail.com for further questions.

Help for contractors with obtaining municipal construction inspections

March 18, 2020

The department is communicating with the construction industry and cities, counties and building officials about the need to provide timely construction inspections.

If one of your members encounters a problem obtaining a municipal inspection, we first recommend trying to resolve it with the designated building official or other municipal administrator responsible for providing services. If the building official or municipality  cannot be reached, a staff member from our Enforcement Unit is available for assistance and consultation.

Contact us

Resources

 

Scott McLellan
State Building Official
Construction Codes and Licensing Division
Minnesota Department of Labor and Industry

 

March 18, 2020

Below is an update on the COVID-19 pandemic as it pertains to Minnesota as of 7:15 PM on 3/18/2020.

By the numbers

Updates from the Governor

Governor Tim Walz held a media briefing today to provide an update on Minnesota’s response to COVID-19. He announced that businesses will have a one month interest and penalty-free grace period on the deadline to file sales taxes, which will help alleviate financial strain businesses are facing from COVID-19.

The announcement follows reports that COVID-19 cases rose by 17 from yesterday, to 77 confirmed cases in 16 counties. Overall, the age range of cases is 17 to 71 years, with a median age of 50.

He also highlighted three executive orders he’s signed in recent days, which will:

  • Protect residents and staff in Veterans Homes by restricting all visitors and non-essential personnel except for end of life care.
  • Exempt emergency relief efforts from certain regulations that restrict their ability to provide assistance, including limits on weight and hours of service. The Order allows for the efficient movement of essential supplies, including food, medial supplies and household items.
  • Provide paid leave for all state employees who are unable to work because of COVID-19.

Clarification on Business Closures 

As a reminder, on Monday Governor Walz signed Executive Order 20-04 to order the temporary closure of Minnesota restaurants and bars to dine-in customers. He also ordered the temporary closure of other places of public accommodation and amusement, including theaters, museums, fitness centers, and community clubs. Today, he issued a clarification which extends the order to apply to salons, barbershops, and other similar establishments.

“As we move quickly to respond to the COVID-19 pandemic, we are constantly learning and adjusting to feedback from health experts, business owners, and workers,” said Governor Walz. “The best way to slow the spread of COVID-19 is to implement social distancing, and this executive order provides clarification on how we can better implement these community mitigation strategies.”

Grand Princess Update 

Finally, Governor Walz today announced that 32 Minnesotans who had been quarantined after leaving the Grand Princess cruise ship have now returned home.

Up-to-date guidance from the Minnesota Department of Health on recommended community mitigation strategies can be found here.

Everyone can work to reduce the spread of COVID-19.

  • Stay home when you are sick.
  • Wash your hands thoroughly with soap and water.
  • Cover your cough.
  • Events of any size should only be continued if they can be carried out with adherence to guidelines for protecting vulnerable populations, hand hygiene, and social distancing. When feasible, organizers could modify events to be virtual.

Resources

Coverage

2020-03-23T15:34:02-05:00

CAM Initiated Legislation – Update 3/4/20

HF 2696/SF 2660 (Mahoney/Howe) – Insurance proceeds checks prompt signature
At this point, we are stalled. The large banks are opposed due to Fannie and Freddie requirements. I am continuing to talk with them about avenues we can take to ensure more prompt payments. I spoke with the insurance companies. They agree that the payments should be made promptly but won’t advocate for or against the issue.

Several bills have popped up this session that are of interest to CAM

HF 2389/SF 2339 (Sundin/Howe) -Contractor Recovery Fund – this bill has three components

a) Use the CRF for a consumer awareness campaign highlighting the importance of hiring licensed builders
b) Use the CRF to development and implementation of continuing education related to financial management of licensed residential contractors
c) Use the CRF for a research project for code administration, builder licensure and subcontractor registration.

CAM should always resist allowing the CRF for anything but what it has been designated for which is assisting homeowners who have hired bad licensed contractors. I think we could get behind this bill if the amount of money that DOLI could use was specified. As of now, it is open funding.

HF 2467/SF 2421 (Sundin/Rarick) – Contractor Recovery Fund
Another bad solar installer actor has left home owners without the product they paid for. This bill would allow these homeowners to recoup their losses through the CRF. The issue at stake is the solar installers are not licensed and they haven’t paid into the CRF. CAM has spoken with the authors of the legislation opposing raiding the CRF. Solar installers should become licensed and pay into the CRF before any funds are taken to assist the homeowners.

Tracy was set to testify again this bill but the hearing was canceled. Thanks Tracy!

The following are bills I am monitoring for CAM. CAM and BAM are closely following them to see how they affect members. They were developed by BATC to address the rising costs of housing through permits. As of now, none of them have House companions.

SF 3793 – Building permit fees must be based on a cost per square foot (support)

SF 3795 – Expands municipalities annual reporting of costs associated with conducting inspections. (support)

SF 3796 – Prohibits a city from designating a building official or inspector unless it is specifically designated in a municipal ordinance (not support; unless I hear otherwise, I don’t think it is necessary to go agains the building officials since we have been developing a relationship with them.)

HF 3785/SF 3791 (Fisher/Koran) – excludes residential homes from following window safety fall requirements. (monitor) No children have fallen out of windows in the past few years but some years ago we had children falling out of windows either injuring or killing themselves. Has any one had issues with the requirements with the window fall prevention regulations when you install new windows?

2020-03-12T11:59:12-05:00

New “Deductible” Law Affects Contractors Who Perform Storm Repairs

What changed?

  • State law  prohibits contractors from offering to pay homeowners’ insurance deductibles or offering anything of value as encouragement to enter into a contract to repair damage covered by an insurance claim.
  • A new law (effective since Aug. 1, 2018) requires that contractors include a written notification about the law in their “initial estimate.” The “initial estimate” also includes price agreeable contracts.
  • The new law also requires insurance companies to provide a similar written notification to homeowners in their initial correspondence about a claim.

Why the change?

  • Many contractors who have complied with the law that prohibits paying deductibles have lost business to contractors who illegally offer to pay deductibles or offer rebates or upgrades that are barred.
  • Homeowners are unclear about this law and some still expect their contractor to help with insurance deductible costs. This new law provides contractors with solid information to show that this practice is simply illegal.

What do I need to do?

  • If your company does not perform insurance repair to homes, you do not need to do anything as this law does not affect your business.
  • If you do perform insurance repair work, you will need to update your contracts to include a written notification of the law that prohibits covering deductibles.
  • The notification can be included in the contract document or provided to the customer as a separate document.

What should the notification say?

The law does not provide specific language to be included, but we suggest the following:

State law (Minn. Stat. § 325E.66) prohibits contractors from offering to pay a customer’s insurance deductible or offering anything of value as an inducement to enter into a contract for home repairs that are to be paid for as a part of an insurance claim. Contractors who make such an offer are subject to public enforcement action by the Minnesota Department of Labor and Industry, including fines of up to $10,000 per violation.

 Where can I ask questions?

Contact us at 651-284-5069 or dli.contractor@state.mn.us.

2020-02-07T10:04:08-06:00

Big Legislative Win For CAM And Minnesota Contractors!

The Contractors Association of Minnesota chalked upon another win at the legislature this past session! Given the divided government and the truly acrimonious session between the Legislative and the Executive Branch this year CAM was able to pass a small but significant piece of legislation.  The legislation requires insurance companies as well as contractors to clearly explain in writing that an insurance deductible can not be paid as part of a contract with a homeowner.  You may recall that some years ago, the Insurance Federation of Minnesota passed a law prohibiting this practice.  With the spate of yearly storm occurrences, there has been an increase in this practice by insurance adjusters as well as contractors that encourage or offer to have the deductible paid by the contractor.  This is illegal and can result in an enforcement action against the contractor by the Department of Labor and Industry.


All written estimates by the insurance industry and contractors must note this.  It is suggested that your written estimates have the following statement on every estimate.  It is also suggested that you point this out to all of your customers when negotiating a contract.


State law (Minn. Stat. § 325E.66) prohibits contractors from offering to pay a customer’s insurance deductible or offering anything of value as an inducement to enter into a contract for home repairs that are to be paid for as a part of an insurance claim.  Contractors who make such an offer are subject to public enforcement action by the Minnesota Department of Labor and Industry including fines of up to $10,000 per violation.


Please contact Lisa Frenette at frenettela@gmail.com if you have further questions or any concerns.

2020-01-09T19:09:14-06:00

CAM Legislative Update 2018

Contractors Association of Minnesota Policy and Regulatory Update

HF 2696 (Rep. Tim Mahoney – D) and SF 2660 (Senator Jeff Howe – R)

This bill requires mortgage banks and lenders (banks) to sign a check over to homeowners within a timely period after work required to repair a storm occurrence has been completed.

Banks, on occasion, are a signatory on an insurance proceed for a storm occurrence. The issue is they will hold on to the proceed check, sometimes up to six months, before signing it over to the homeowner. This puts the homeowner and the contractor repairing the storm occurrence in a bad position. In most cases, the homeowner doesn’t have funds available to pay for damages and costs to repair their home and the contractor cannot float the money while waiting to be paid for a job that has been performed.

As expected, the banks have several problems with the bill. CAM will be sitting down with to start discussing how this issue can best be resolved in the near future.

You can follow a link to the bill by clicking the HF 2696 above.

HF 1596 (Rep. Nick Zerwas and SF 1349 (Senator Mark Johnson – R)

Tim Johnson, partner at Smith, Jadin and Johnson, and CAM met with Senator Mark Johnson last week to discuss legislation that would effectively take away the ability for a homeowner to receive interest on an appraisal award when an insurance company makes a bad faith offer on property that has been damaged due to a storm occurrence.

While this is not directly related to important issues that CAM works on, it is important to CAM’s clients. It simply slows done the process for homeowners who may have an insurance adjuster lowball a claim to get their home repaired when it has been damaged.

The number of claims going to appraisal has trickled due to a 2017 Minnesota Supreme Court decision allowing interest a claim if the insurance companies were found to have made a low offer to homeowners on a storm occurrence. CAM wants the best results for the homeowners to get relief by means of having their home repaired.

CAM will continue to monitor this since it is important for contractor to assist homeowners in repairing their damaged homes.

You can follow a link to the bill by clicking HF 1596 above.

Insurance Companies Denying Claims where the Building Code is not Enforced.

CAM met with the Association of Minnesota Building Officials (AMBO) to discuss resolving the problem of insurance companies denying claims where the Minnesota Statewide Building Code is not enforced.

CAM and AMBO will be meeting with DOLI and the Department of Commerce on April 11th to learn what can be done to stop the insurance companies from denying claims in areas of Minnesota where there is no official statewide building code enforcement.

Important Reminder!

It’s illegal for contractors to pay homeowners’ insurance deductibles

Spring has sprung and due to the severe winter weather it looks as though exterior contractors will have a busy spring and summer. This is great news for the industry but contractors should be aware of a new state law requiring contractors to disclose on the contract that they are NOT ALLOWED to offer and/or pay for a homeowner’s insurance deductible.

CAM advocated for this legation last year citing contractors who have complied with the law that prohibits paying deductibles have lost business to contractors who illegally offer to pay deductibles or offer rebates or upgrades. Homeowners are unclear about this law and some still expect their contractor to help with insurance deductible costs. This new law provides contractors with solid information to show that this practice is illegal.

In short, state law prohibits contractors from offering to pay homeowners’ insurance deductibles or offering anything of value as encouragement to enter into a contract to repair damage covered by an insurance claim. A newer law (effective since Aug. 1, 2018) requires that contractors include a written notification about the law in their “initial estimate.” The “initial estimate” also includes price agreeable contracts. Insurance companies are required to provide a similar written notice to homeowners in their initial correspondence about a claim.

If your company performs insurance repair work, you will need to update your contracts to include a written notification about the law that prohibits paying deductibles. To stay on the safe side, CAM encourages contractors to update their all of their Icontracts to include this notification.

The law does not require specific language on a contract , but one example is:

State law (Minn. Stat. § 325E.66) prohibits contractors from offering to pay a customer’s insurance deductible or offering anything of value as an inducement to enter into a contract for home repairs that are to be paid for as a part of an insurance claim. Contractors who make such an offer are subject to public enforcement action by the Minnesota Department of Labor and Industry, including fines of up to $10,000 per violation. Contact DOLI at 651-284-5069 or dli.contractor@state.mn.us. if you have further questions.

2020-01-09T19:12:36-06:00

Construction Codes and Licensing Division

New law affects contractors who perform storm repairs

What changed?

  • State law  prohibits contractors from offering to pay homeowners’ insurance deductibles or offering anything of value as encouragement to enter into a contract to repair damage covered by an insurance claim.
  • A new law (effective since Aug. 1, 2018) requires that contractors include a written notification about the law in their “initial estimate.” The “initial estimate” also includes price agreeable contracts.
  • The new law also requires insurance companies to provide a similar written notification to homeowners in their initial correspondence about a claim.

Why the change?

  • Many contractors who have complied with the law that prohibits paying deductibles have lost business to contractors who illegally offer to pay deductibles or offer rebates or upgrades that are barred.
  • Homeowners are unclear about this law and some still expect their contractor to help with insurance deductible costs. This new law provides contractors with solid information to show that this practice is simply illegal.

What do I need to do?

  • If your company does not perform insurance repair to homes, you do not need to do anything as this law does not affect your business.
  • If you do perform insurance repair work, you will need to update your contracts to include a written notification of the law that prohibits covering deductibles.
  • The notification can be included in the contract document or provided to the customer as a separate document.

What should the notification say?

The law does not provide specific language to be included, but we suggest the following:

State law (Minn. Stat. § 325E.66) prohibits contractors from offering to pay a customer’s insurance deductible or offering anything of value as an inducement to enter into a contract for home repairs that are to be paid for as a part of an insurance claim. Contractors who make such an offer are subject to public enforcement action by the Minnesota Department of Labor and Industry, including fines of up to $10,000 per violation.

 Where can I ask questions?

Contact us at 651-284-5069 or dli.contractor@state.mn.us.

2020-01-09T19:13:54-06:00

Legislative Update – 2017

Legislative Update 2017

In a more unusual twist of events than the past six years, the final days of the 2017 Legislative session and special session between Governor Dayton and the Legislature took another strange turn. Unable to balance the budget by the constitutional deadline, Governor Dayton and the Legislature came to a global agreement on spending bills half an hour before adjourning sine die with the caveat that all would come back in the morning to start passing the spending bills…by 7 am the next day.

As special session began it became clear that seven of the eleven bills would not be brokered, reviewed, and sent to each body for passage off the floor by 7 am the next day. Consequently, the special session lasted three more days. The result was each side crying foul. Governor Dayton decried “poison pill” language was snuck into the State Government Finance bill shutting down the Department of Revenue and sending pink slips to all 1,300 employees if the Tax bill wasn’t signed into law. In what can only be described about as turnabout is fair play, the Governor turned around and line item vetoed all appropriations for the House of Representatives and the Senate effectively shutting down the legislature. Again, the threat of pink slips to state employees.Hence, the impending constitutional crisis. Does the Governor have the authority to funding to the legislature? Each side has drawn its proverbial sword and to Court they are a headed.

For the past few years, the Contractors Association of MN (CAM) has been moving legislation that would hold insurance companies more accountable to homeowners and contractors during an occurrence related event. This year, the Association was hopeful that Republicans (who are typically business friendly) would assist in advancing the CAM agenda. Rep. Tama Theis (R – St. Cloud), who owns a contracting business in the St. Cloud area, authored the legislation with several other legislators willing to move the legislation through the process. Unfortunately, once again, we were stalled by Commerce Committee Chairs in the House and the Senate (Republicans to boot) who wouldn’t hear our legislation because the insurance companies opposed it. We were, however, able to pique curiosity in the House Commerce Committee when Rep. Greg Davids (R – Preston) offered an amendment to a related bill that would have required insurance adjusters to have better Minnesota code education. The amendment was eventually withdrawn but as previously noted, legislators took note. CAM will be meeting with these and other legislators during the interim to continue educating them on the difficulties of properly repairing a home that has had a storm occurrence related event.

CAM was able to kill a significant piece of legislation that would have allowed insurance companies to continue winnowing away at contractors duty to help a customer in an occurrence related event. This bill was introduced on a Monday and heard Wednesday of the same week. The issue was brought forward by the insurance industry to clarify a MN Supreme Court decision – Wilcox vs State Farm Fire and Casualty. The crux of the issue was whether an insurance provider could depreciate labor costs when arriving at the Actual Cash Value of an insurance claim. The insurance industry subsequently introduced a bill that would allow them to file a form with the Commerce Department to depreciate labor costs. Surprisingly, the Commerce Department was not willing to accept the bill and strongly opposed it.

CAM had strong objections to the meat of the legislation allowing for labor expense depreciation applicable when determining the value of a damaged property in insurance policies. The insurance industry reiterated the intent of the legislation was not to take away benefits from policyholders, but simply to follow the Wilcox decision. Nevertheless, CAM began building consensus objection to the bill; however, the bill moved through the Senate Commerce committee with an amendment to the “good faith statute” that would have allowed for

the depreciation costs of goods, material, labor and services necessary to replace, repair, or rebuild damaged property.

The success came when CAM spoke with Rep. Tama Theis and the House Commerce committee members along with other interested parties to stop this legislation from moving any further.

CAM fully expects a continued assault on the industry due to the influence of the insurance companies up at the Capitol. It is important as a member of the industry to make sure that you contract your legislator when a call to action comes across your email. Also, we had a successful CAM Day on the Hill. Please stay tuned next legislative session for the Day on the Hill. Legislators need to hear first hand from their constituents!

2020-01-09T19:13:37-06:00

Legislative Update 2016

The Minnesota Legislature adjourned in May after an extremely abbreviated session. This year’s legislative agenda focused on taxes, bonding and a supplemental budget. All of the bills were passed with bipartisan support; however, Governor Dayton ending up pocket vetoing both the tax bill and the bonding bill. A pocket veto essentially means he refused to sign the legislation so it “died on his desk.” The tax bill was meant to provide relief to business owners, veterans and students with college loans among.. The bonding bill was one of the most significant ever for transportation and water infrastructure – think Flint, Michigan.

The MNAES has growing support for legislation they introduced during the 2015 – 2016 legislative session. The bill required insurance companies to offer:

  • supplement insurance options to a policy;
  • require insurance companies to discuss a claim with a contractor;
  • require an insurance adjuster (with an insurance company) to have continuing education on Minnesota construction codes; and
  • would have allowed for certain findings e.g., Commerce Department findings to be admitted as evidence in a court case.

The MNAES was able to obtain signatures in both the House and the Senate to introduce the bill. While it didn’t receive a hearing in either body, it received substantial positive feedback and an informational meeting with legislators, staff, the MNAES and the insurance federation.

Several bills adverse to the industry were also introduced. The MNAES lobbied legislators on the detriments of these pieces of legislation and none of them received a hearing.

  • Contractors would have been required to pay attorney’s fees if they lost a court case on the home warranty statute (MN Statutes 327A);
  • Insurance policy limits would have been established for building code requirements; and
  • Clarifying in law that a public adjuster could not negotiate claims if the public

adjuster was in anyway affiliated with a business that performs loss on repairs or storm damage.

The MNAES has been working to build relationships with the Departments of Commerce and Labor and Industry (DOLI). This last month a meeting commenced with Commerce and DOLI to discuss several issues that have made it difficult for contractors to perform a high quality job for their customer. Issues discussed including insurance companies requiring:

  • Unreacted to receive operating and profit;
  • A guidance memo on code requirements the insurance industry must pay on a claim;
  • Insurance company policy endorsements; and
  • Insurance companies directing consumers to preferred contractors.

The Departments will be working on a guidance memo for required building codes for storm repair damage. If you would like to submit codes you feel should be part of the guidance memo to assist a customer in getting their home repaired, please send them to Lisa Frenette at frenettela@gmail.com

Commerce was very interested that insurance companies have been changing policy endorsements. They have assigned insurance investigators to go over policies to look for other unfair changes in policy endorsements.

The MNAES will be scheduling in early September to continue working on these issues. Please contact Lisa Frenette if you have questions or comments at frenettela@gmail.com.

2020-01-09T19:13:18-06:00
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