A municipality as defined in section 16B.60, subdivision 3, or a town may not charge a permit fee that exceeds $15 or 5 percent of the cost of the improvement, installation, or replacement, whichever is greater, for the improvement, installation, or replacement of a residential fixture or appliance that:

1. (1) does not require modification to electric or gas service;
2. (2) has a total cost of $500 or less, excluding the cost of the fixture or appliance; and
3. (3) is improved, installed, or replaced by the home owner or a licensed contractor.