HF 3925

2nd Engrossment - 84th Legislature (2005 - 2006) Posted on 12/15/2009 12:00am

A bill for an act
relating to local government; modifying municipal boundary adjustment
provisions; establishing the municipal boundary adjustment task force;
authorizing use of remaining committee funds; amending Minnesota Statutes
2004, sections 414.01, subdivision 1a; 414.02, by adding a subdivision; 414.031,
subdivision 4, by adding a subdivision; 414.0325, subdivision 1, by adding a
subdivision; 414.033, subdivisions 2, 12; 414.036; 414.061, subdivision 5;
proposing coding for new law in Minnesota Statutes, chapter 414.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1. new text begin MUNICIPAL BOUNDARY ADJUSTMENT ADVISORY TASK
FORCE ESTABLISHED.
new text end

new text begin Subdivision 1. new text end

new text begin Membership. new text end

new text begin An advisory task force on municipal boundary
adjustments is established to study and make recommendations on what, if any, changes
should be made to the law governing municipal boundary adjustments. The task force
shall develop recommendations regarding best practices annexation training for city and
township officials to better communicate and jointly plan potential annexations. The task
force is comprised of the following members:
new text end

new text begin (1) two state senators, one from the majority caucus and one from the minority
caucus, appointed by at least two-thirds vote of the senate committee with jurisdiction
over local government issues;
new text end

new text begin (2) two state representatives, one from the majority caucus and one from the
minority caucus, appointed by at least two-thirds vote of the house of representatives
committee with jurisdiction over local government issues;
new text end

new text begin (3) three representatives of city interests, appointed by the League of Minnesota
Cities in consultation with the Association of Metropolitan Municipalities, the Coalition
of Greater Minnesota Cities, and the Minnesota Association of Small Cities;
new text end

new text begin (4) three representatives of township interests, appointed by the Minnesota
Association of Townships; and
new text end

new text begin (5) one person appointed jointly by the senate majority leader and the speaker of the
house of representatives to serve as chair of the task force, selected based on knowledge
and experience in municipal boundary adjustment issues and who could serve without bias
towards either side of the issue of annexation.
new text end

new text begin All appointing authorities shall provide for balance of geographic areas of the state and
city and town interests.
new text end

new text begin Subd. 2. new text end

new text begin Report by January 2007. new text end

new text begin The task force shall report its recommendations
to the chairs and members of the house of representatives and senate committees with
jurisdiction over municipal boundary adjustments by January 1, 2007. The task force shall
also provide a copy of its recommendations to the Legislative Reference Library.
new text end

new text begin Subd. 3. new text end

new text begin Funds available. new text end

new text begin Any funds remaining in the committee budgets for the
house local government committee or the senate state and local government operations
committee as of the 2006 adjournment of the legislature will be available to pay for the
administrative expenses of the task force, including per diems and expenses of members
and the services of a facilitator from the management analysis division of the Department
of Administration.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 2.

Minnesota Statutes 2004, section 414.01, subdivision 1a, is amended to read:

Subd. 1a.

Legislative findings.

The legislature finds that:

(1) sound urban development and preservation of agricultural land and open spaces
through land use planning is essential to the continued economic growth of this state;

(2) municipal government most efficiently provides governmental services in areas
intensively developed for residential, commercial, industrial, and governmental purposes;
and township government most efficiently provides governmental services in areas used or
developed for agricultural, open space, and rural residential purposes;

(3) the public interest requires that municipalities be formed when there exists or will
likely exist the necessary resources to provide for their economical and efficient operation;

(4) annexation to existing municipalities of unincorporated areas unable to supply
municipal services should be facilitated; and

(5) deleted text begin the consolidation of municipalities should be encouraged. deleted text end new text begin long-range joint
powers planning or other cooperative efforts among counties, cities, and towns should
be encouraged.
new text end

Sec. 3.

Minnesota Statutes 2004, section 414.02, is amended by adding a subdivision
to read:

new text begin Subd. 1a. new text end

new text begin Notice of intent to incorporate. new text end

new text begin At least 30 days before submitting to the
director the petition or resolution under this section, the township must serve the clerk of
each municipality and each township that is contiguous to the township by certified mail a
notice of the township's intent to incorporate.
new text end

Sec. 4.

Minnesota Statutes 2004, section 414.031, is amended by adding a subdivision
to read:

new text begin Subd. 1a. new text end

new text begin Notice of intent to annex. new text end

new text begin At least 30 days before submitting to the
director a petition or resolution under this section, the municipality must serve the
township clerk of the affected township by certified mail a notice of the municipality's
intent to annex property within the township. The notice must clearly identify the
boundaries of the area proposed to be annexed.
new text end

Sec. 5.

Minnesota Statutes 2004, section 414.031, subdivision 4, is amended to read:

Subd. 4.

Relevant factors, order.

(a) In arriving at a decision, the director shall
consider the following new text begin sources and new text end factors:

new text begin (1) recordings and public documents from joint informational meetings under
section 414.0333 relevant to other factors listed in this subdivision;
new text end

deleted text begin (1) deleted text end new text begin (2) new text end present population and number of households, past population and projected
population growth of the new text begin annexing municipality and new text end subject area and adjacent units of
local government;

deleted text begin (2) deleted text end new text begin (3) new text end quantity of land within the subject area and adjacent units of local government;
and natural terrain including recognizable physical features, general topography, major
watersheds, soil conditions and such natural features as rivers, lakes and major bluffs;

deleted text begin (3) deleted text end new text begin (4) new text end degree of contiguity of the boundaries between the annexing municipality
and the subject area;

deleted text begin (4) deleted text end new text begin (5) new text end present pattern of physical development, planning, and intended land
uses in the subject area and the annexing municipality including residential, industrial,
commercial, agricultural and institutional land uses and the impact of the proposed action
on those land uses;

deleted text begin (5) deleted text end new text begin (6) new text end the present transportation network and potential transportation issues,
including proposed highway development;

deleted text begin (6) deleted text end new text begin (7) new text end land use controls and planning presently being utilized in the annexing
municipality and the subject area, including comprehensive plans for development in
the area and plans and policies of the Metropolitan Council, and whether there are
inconsistencies between proposed development and existing land use controls and the
reasons therefore;

deleted text begin (7) deleted text end new text begin (8) new text end existing levels of governmental services being provided in the annexing
municipality and the subject area, including water and sewer service, fire rating and
protection, law enforcement, street improvements and maintenance, administrative
services, and recreational facilities and the impact of the proposed action on the delivery
of said services;

new text begin (9) the implementation of previous annexation agreements and orders;
new text end

deleted text begin (8) deleted text end new text begin (10) new text end existing or potential environmental problems and whether the proposed
action is likely to improve or resolve these problems;

deleted text begin (9) deleted text end new text begin (11) new text end plans and programs by the annexing municipality for providing needed new text begin and
enhanced new text end governmental services to the subject area new text begin in a cost-effective and feasible manner
within a reasonable time from the date of the annexation new text end ;

deleted text begin (10) deleted text end new text begin (12) new text end an analysis of the fiscal impact on the annexing municipality, the subject
area, and adjacent units of local government, including net tax capacity and the present
bonded indebtedness, and the local tax rates of the county, school district, and township;

deleted text begin (11) deleted text end new text begin (13) new text end relationship and effect of the proposed action on affected and adjacent
school districts and communities;

deleted text begin (12) deleted text end new text begin (14) new text end adequacy of town government to deliver services to the subject area;

deleted text begin (13) deleted text end new text begin (15) new text end analysis of whether necessary governmental services can best be provided
through the proposed action or another type of boundary adjustment; and

deleted text begin (14) deleted text end new text begin (16) new text end if only a part of a township is annexed, the ability of the remainder of the
township to continue or the feasibility of it being incorporated separately or being annexed
to another municipality.

(b) Based upon the factors, the director may order the annexation on finding:

(1) that the subject area is now, or is about to become, urban or suburban in character;

(2) that municipal government in the area proposed for annexation is required to
protect the public health, safety, and welfare; or

(3) that the annexation would be in the best interest of the subject area.

(c) If only a part of a township is to be annexed, the director shall consider whether
the remainder of the township can continue to carry on the functions of government
without undue hardship.

(d) The director shall deny the annexation on finding that the increase in revenues for
the annexing municipality bears no reasonable relation to the monetary value of benefits
conferred upon the annexed area.

(e) The director may deny the annexation on finding:

(1) that annexation of all or a part of the property to an adjacent municipality would
better serve the interests of the residents of the property; or

(2) that the remainder of the township would suffer undue hardship.

(f) The director may alter the boundaries of the area to be annexed by increasing or
decreasing the area so as to include only that property which is now or is about to become
urban or suburban in character or to add property of such character abutting the area
proposed for annexation in order to preserve or improve the symmetry of the area, or to
exclude property that may better be served by another unit of government.

(g) The director may also alter the boundaries of the proposed annexation so as to
follow visible, clearly recognizable physical features.

(h) If the director determines that part of the area would be better served by another
municipality or township, the director may initiate and approve annexation by conducting
further hearings and issuing orders pursuant to subdivisions 3 and 4.

(i) In all cases, the director shall set forth the factors which are the basis for the
decision.

Sec. 6.

Minnesota Statutes 2004, section 414.0325, subdivision 1, is amended to read:

Subdivision 1.

Initiating the proceeding.

(a) One or more townships and one or
more municipalities, by joint resolution, may designate an unincorporated area as in
need of orderly annexation. new text begin One or more municipalities, by joint resolution with the
county, may designate an unincorporated area in which there is no organized township
government as in need of orderly annexation.
new text end

(b) The joint resolution will confer jurisdiction on the director over annexations in
the designated area and over the various provisions in said agreement by submission of
said joint resolution to the director.

(c) The resolution shall include a description of the designated area and the reasons
for designation.

(d) Thereafter, an annexation of any part of the designated area may be initiated by:

(1) submitting to the director a resolution of any signatory to the joint resolution; or

(2) the director.

(e) Whenever a state agency, other than the pollution control agency, orders a
municipality to extend a municipal service to an area, the order confers jurisdiction on the
director to consider designation of the area for orderly annexation.

(f) If a joint resolution designates an area as in need of orderly annexation and states
that no alteration of its stated boundaries is appropriate, the director may review and
comment, but may not alter the boundaries.

(g) If a joint resolution designates an area as in need of orderly annexation, provides
for the conditions for its annexation, and states that no consideration by the director is
necessary, the director may review and comment, but shall, within 30 days, order the
annexation in accordance with the terms of the resolution.

Sec. 7.

Minnesota Statutes 2004, section 414.0325, is amended by adding a subdivision
to read:

new text begin Subd. 1b. new text end

new text begin Notice of intent to designate an area. new text end

new text begin At least ten days before the
municipality or township adopts an orderly annexation agreement, a notice of the intent to
include property in an orderly annexation area must be published in a newspaper of general
circulation in both the township and municipality. The notice must clearly identify the
boundaries of the area proposed to be included in the orderly annexation agreement and the
date, time, and place of the public informational meeting to be held as provided in section
414.0333. The cost of providing notice must be equally divided between the municipality
and the township, unless otherwise agreed upon by the municipality and the township.
new text end

Sec. 8.

Minnesota Statutes 2004, section 414.033, subdivision 2, is amended to read:

Subd. 2.

Conditions.

A municipal council may by ordinance declare land annexed
to the municipality and any such land is deemed to be urban or suburban in character
or about to become so if:

(1) the land is owned by the municipality;

(2) the land is completely surrounded by land within the municipal limits;

(3) the land abuts the municipality and the area to be annexed is deleted text begin 60 deleted text end new text begin 120 new text end acres or less,
and the area to be annexed is not presently served by public deleted text begin sewer deleted text end new text begin wastewater new text end facilities
or public deleted text begin sewer deleted text end new text begin wastewater new text end facilities are not otherwise available, and the municipality
receives a petition for annexation from all the property owners of the land new text begin . Except as
provided for by an orderly annexation agreement, the director must not accept a petition
from a property owner for more than one annexation per year of property contiguous to
the parcel previously annexed under this clause new text end ; or

(4) the land has been approved after August 1, 1995, by a preliminary plat or final
plat for subdivision to provide residential lots that average 21,780 square feet or less in
area and the land is located within two miles of the municipal limits.

Sec. 9.

Minnesota Statutes 2004, section 414.033, subdivision 12, is amended to read:

Subd. 12.

Property taxes.

When a municipality annexes land under subdivision 2,
clause (2), (3), or (4), property taxes payable on the annexed land shall continue to be paid
to the affected town or towns for the year in which the annexation becomes effective. If
the annexation becomes effective on or before August 1 of a levy year, the municipality
may levy on the annexed area beginning with that same levy year. If the annexation
becomes effective after August 1 of a levy year, the town may continue to levy on the
annexed area for that levy year, and the municipality may not levy on the annexed area
until the following levy year. deleted text begin In the first year following the year when the municipality
could first levy on the annexed area under this subdivision, and thereafter, property taxes
on the annexed land shall be paid to the municipality. In the first year following the year
the municipality could first levy on the annexed area, the municipality shall make a cash
payment to the affected town or towns in an amount equal to 90 percent of the property
taxes distributed to the town in regard to the annexed area in the last year the property
taxes from the annexed area were payable to the town; in the second year, an amount
equal to 70 percent; in the third year, an amount equal to 50 percent; in the fourth year,
an amount equal to 30 percent; and in the fifth year, an amount equal to ten percent. The
municipality and the affected township may agree to a different payment.
deleted text end

Sec. 10.

new text begin [414.0333] JOINT INFORMATIONAL MEETING.
new text end

new text begin There must be a joint informational meeting of the municipal council of the annexing
municipality and the town board of supervisors of the township containing the land
proposed to be annexed or included in annexation proceedings under section 414.0325 or
414.031. For an annexation under section 414.031, the joint information meeting must be
held after the final mediation meeting or the final meeting held pursuant to section 414.01,
subdivision 16, if any, and before the hearing on the matter is held. If no mediation
meetings are held, the joint informational meeting must be held after the initiating
documents have been filed and before the hearing on the matter. The time, date, and
place of the public informational meeting must be determined jointly by the chair of the
town board of supervisors and the mayor of the annexing municipality. The chair of the
town board of supervisors and the mayor must serve as the cochairs for the informational
meeting. Notice of the time, date, place, and purpose of the informational meeting must be
posted by the town clerk in the township's designated place for posting notices, and by the
municipal clerk in the municipality's designated place for posting notices. A joint notice
shall be published in a newspaper of general circulation within both the municipality and
the township. All notice required by this section must be provided at least ten days before
the date for the public informational meeting. At the public informational meeting, all
persons appearing must have an opportunity to be heard. The municipal council, the town
board of supervisors, and any resident or affected property owner may be represented by
counsel and introduce evidence, including but not limited to expert testimony, into the
record of the informational meeting. The clerk of the township must record minutes
of the proceedings of the informational meeting and the municipal clerk must make an
audio recording of the informational meeting. The township must provide the director
and the municipality with a copy of the printed minutes and the municipality must
provide the director and the township with a copy of the audio recording. The record of
the informational meeting for a proceeding under section 414.031 is admissible in any
proceeding under this chapter and shall be taken into consideration by the director or
the director's designee.
new text end

Sec. 11.

Minnesota Statutes 2004, section 414.036, is amended to read:

414.036 CITY REIMBURSEMENT TO TOWN TO ANNEX TAXABLE
PROPERTY.

new text begin Unless otherwise agreed to by the annexing municipality and the affected town, new text end when
an order new text begin or other approval new text end under deleted text begin section 414.0325 deleted text end new text begin this chapter new text end annexes part of a town to a
municipality, the deleted text begin orderly annexation agreement between the town and municipality may deleted text end new text begin
order or other approval must new text end provide a reimbursement from the municipality to the town
for all or part of the taxable property annexed as part of the order. The reimbursement
shall be completed in substantially equal payments over not less than two nor more
than deleted text begin six deleted text end new text begin eight new text end years from the time of annexation. new text begin The municipality must reimburse the
township for all special assessments assigned by the township to the annexed property,
and any portion of debt incurred by the town prior to the annexation and attributable
to the property to be annexed but for which no special assessments are outstanding, in
substantially equal payments over not less than two or more than eight years.
new text end

Sec. 12.

Minnesota Statutes 2004, section 414.061, subdivision 5, is amended to read:

Subd. 5.

Property owners may initiate.

Property owners may initiate proceedings
for the concurrent detachment of their property from one municipality and its annexation
to an adjacent municipality by a petition signed by all of them that they submit to the
director accompanied by a resolution of the city council of deleted text begin at least one deleted text end new text begin each new text end of the affected
municipalities. The director shall conduct hearings and issue an order pursuant to section
414.09. In arriving at a decision, the director shall consider the factors in section 414.02,
subdivision 3. The director shall order the proposed action on finding that it will be for the
best interests of the municipalities and the property owner. In all cases, the director shall
set forth the factors which are the basis for the decision.

Sec. 13. new text begin EFFECTIVE DATE.
new text end

new text begin Section 8 is effective until July 1, 2007.
new text end