1.1                          A bill for an act 
  1.2             relating to the board of government innovation and 
  1.3             cooperation; permitting the apportionment of a local 
  1.4             government unit between two or more contiguous units; 
  1.5             permitting the establishment of interim governing 
  1.6             bodies to act on behalf of new local government units 
  1.7             before the effective date of the combination 
  1.8             establishing the new units; authorizing the pro rata 
  1.9             allocation of board aid to cooperating and combining 
  1.10            units; increasing eligibility for planning aid; 
  1.11            amending Minnesota Statutes 1996, sections 465.81, 
  1.12            subdivisions 1 and 3; 465.82, subdivisions 1, 2, and 
  1.13            by adding a subdivision; 465.84; 465.85; 465.87, 
  1.14            subdivisions 1a, 2, and 3; and 465.88. 
  1.15  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.16     Section 1.  Minnesota Statutes 1996, section 465.81, 
  1.17  subdivision 1, is amended to read: 
  1.18     Subdivision 1.  [SCOPE.] Sections 465.81 to 465.87 
  1.19  establish procedures to be used by counties, cities, or towns 
  1.20  that adopt by resolution an agreement providing a plan to 
  1.21  provide combined services during an initial cooperation period 
  1.22  that may not exceed two years and then: 
  1.23     (1) to merge into a single unit of government over the 
  1.24  succeeding two-year period; or 
  1.25     (2) to agree to apportion the entire area of at least one 
  1.26  local government unit between or among two or more local 
  1.27  government units contiguous to the unit to be apportioned, 
  1.28  resulting in the elimination of at least one local government 
  1.29  unit over the succeeding two years.  
  1.30     Sec. 2.  Minnesota Statutes 1996, section 465.81, 
  2.1   subdivision 3, is amended to read: 
  2.2      Subd. 3.  [COMBINATION REQUIREMENTS.] Counties may combine 
  2.3   with one or more other counties.  Cities may combine with one or 
  2.4   more other cities or with one or more towns.  Towns may combine 
  2.5   with one or more other towns or with one or more cities.  Units 
  2.6   that combine must be contiguous.  A county, through the adoption 
  2.7   of a resolution by all county boards that are affected by the 
  2.8   combination, may apportion its territory between or among two or 
  2.9   more counties contiguous to the county that is to be 
  2.10  apportioned.  A city, through the adoption of a resolution by 
  2.11  all city councils that are affected by the combination, may 
  2.12  apportion its territory between or among two or more cities 
  2.13  contiguous to the city that is to be apportioned.  A township, 
  2.14  through the adoption of a resolution by all town boards or city 
  2.15  councils that are affected by the combination, may apportion its 
  2.16  territory between or among two or more townships or cities 
  2.17  contiguous to the township that is to be apportioned. 
  2.18     Sec. 3.  Minnesota Statutes 1996, section 465.82, 
  2.19  subdivision 1, is amended to read: 
  2.20     Subdivision 1.  [ADOPTION AND STATE AGENCY REVIEW.] Each 
  2.21  governing body that proposes to combine take part in a 
  2.22  combination under sections 465.81 to 465.87 must adopt by 
  2.23  resolution adopt a plan for cooperation and combination.  The 
  2.24  plan must address each item in this section.  The plan must be 
  2.25  specific for any item that will occur within three years and may 
  2.26  be general or set forth alternative proposals for an item that 
  2.27  will occur more than three years in the future.  The plan must 
  2.28  be submitted to the board of government innovation and 
  2.29  cooperation for review and comment.  For a metropolitan area 
  2.30  local government unit, the plan must also be submitted to the 
  2.31  metropolitan council for review and comment.  The council may 
  2.32  point out any resources or technical assistance it may be able 
  2.33  to provide a governing body submitting a plan under this 
  2.34  subdivision.  Significant modifications and specific resolutions 
  2.35  of items must be submitted to the board and council, if 
  2.36  appropriate, for review and comment.  In the official newspaper 
  3.1   of each local government unit proposed for proposing to take 
  3.2   part in the combination, the governing body must shall publish 
  3.3   at least a summary of the adopted plans, each significant 
  3.4   modification and resolution of items, and, if appropriate, the 
  3.5   results of each board and council, if appropriate, review and 
  3.6   comment.  If a territory of a unit is to be apportioned between 
  3.7   or among two or more units contiguous to the unit that is to be 
  3.8   apportioned, the plan must specify the area that will become a 
  3.9   part of each remaining unit. 
  3.10     Sec. 4.  Minnesota Statutes 1996, section 465.82, 
  3.11  subdivision 2, is amended to read: 
  3.12     Subd. 2.  [CONTENTS OF PLAN.] The plan must state:  
  3.13     (1) the specific cooperative activities the units will 
  3.14  engage in during the first two years of the venture; 
  3.15     (2) the steps to be taken to effect the merger of the 
  3.16  governmental units, with completion no later than four years 
  3.17  after the process begins; 
  3.18     (3) the steps by which a single governing body will be 
  3.19  created or, when the entire territory of a unit will be 
  3.20  apportioned between or among two or more units contiguous to the 
  3.21  unit that is to be apportioned, the steps to be taken by the 
  3.22  governing bodies of the remaining units to provide for 
  3.23  representation of the residents of the apportioned unit; 
  3.24     (4) changes in services provided, facilities used, and 
  3.25  administrative operations and staffing required to effect the 
  3.26  preliminary cooperative activities and the final merger, and a 
  3.27  two-, five-, and ten-year projection of expenditures for each 
  3.28  unit if it combined and if it remained separate; 
  3.29     (5) treatment of employees of the merging governmental 
  3.30  units, specifically including provisions for reassigning 
  3.31  employees, dealing with unions exclusive representatives, and 
  3.32  providing financial incentives to encourage early retirements; 
  3.33     (6) financial arrangements for the merger, specifically 
  3.34  including responsibility for debt service on outstanding 
  3.35  obligations of the merging entities units; 
  3.36     (7) one- and two-year impact analysis analyses, prepared by 
  4.1   the granting state agency at the request of the local government 
  4.2   unit, of major state aid revenues received for each unit if it 
  4.3   combined and if it remained separate.  This would also include, 
  4.4   including an impact analysis, prepared by the department of 
  4.5   revenue, of any property tax revenue implications, if any, 
  4.6   associated with tax increment financing districts and fiscal 
  4.7   disparities under chapter 276A or 473F resulting from the 
  4.8   merger; 
  4.9      (8) procedures for a referendum to be held before the 
  4.10  proposed combination to approve combining the local government 
  4.11  units, specifically stating whether a majority of those voting 
  4.12  in each district proposed for combination or a majority of those 
  4.13  voting on the question in the entire area proposed for 
  4.14  combination would be is needed to pass the referendum; and 
  4.15     (9) a time schedule for implementation. 
  4.16     Notwithstanding clause (3) or any other law to the 
  4.17  contrary, all current members of the governing bodies of the 
  4.18  local governmental government units that propose to combine 
  4.19  under sections 465.81 to 465.88 may serve on the initial 
  4.20  governing body of the combined unit until a gradual reduction in 
  4.21  membership is achieved by foregoing election of new members when 
  4.22  terms expire until the number permitted by other law is reached. 
  4.23     Sec. 5.  Minnesota Statutes 1996, section 465.82, is 
  4.24  amended by adding a subdivision to read: 
  4.25     Subd. 2a.  [INTERIM GOVERNING BODY.] The plan for 
  4.26  cooperation and combination adopted in accordance with 
  4.27  subdivision 1 may establish an interim governing body to act on 
  4.28  behalf of the new local government unit before the effective 
  4.29  date of the combination.  If established, the interim governing 
  4.30  body must consist of at least a majority of the elected 
  4.31  officials from each local government unit taking part in the 
  4.32  combination.  If the plan establishes an interim governing body, 
  4.33  the governing body of each unit taking part in the combination 
  4.34  shall appoint its representatives to serve on the interim 
  4.35  governing body.  An interim governing body may not take any 
  4.36  official action on behalf of the new local government unit 
  5.1   before approval of the combination through the referendum 
  5.2   required by section 465.84.  After approval of the combination 
  5.3   through the referendum, and before the effective date of the 
  5.4   combination, an interim governing body may exercise all 
  5.5   statutory authority of the governing body of the new local 
  5.6   government unit, including the authority to enter into contracts 
  5.7   and adopt policies and local ordinances. 
  5.8      Sec. 6.  Minnesota Statutes 1996, section 465.84, is 
  5.9   amended to read: 
  5.10     465.84 [REFERENDUM.] 
  5.11     During the first or second year of cooperation, and after 
  5.12  approval of the plan by the board under section 465.83, a 
  5.13  referendum on the question of combination must be conducted.  
  5.14  The referendum must be on a date called by the governing bodies 
  5.15  of the units that propose to combine.  The referendum must be 
  5.16  conducted according to the Minnesota election law, as defined in 
  5.17  section 200.01.  If the referendum fails, the same question or a 
  5.18  modified question may be submitted the following year.  If the 
  5.19  referendum fails again, the same question may not be submitted.  
  5.20  Referendums shall must be conducted on the same date in all 
  5.21  local government units. 
  5.22     Sec. 7.  Minnesota Statutes 1996, section 465.85, is 
  5.23  amended to read: 
  5.24     465.85 [COUNTY AUDITOR TO PREPARE PLAT.] 
  5.25     Upon the request of two or more local government units that 
  5.26  have adopted a resolution to cooperate and combine, the county 
  5.27  auditor shall prepare a plat.  If the proposed combined local 
  5.28  government unit is, or units are, located in more than one 
  5.29  county, the request must be submitted to the county auditor of 
  5.30  the county that has the greatest land area in the proposed 
  5.31  district.  The plat must show:  
  5.32     (1) the boundaries of each of the present units; 
  5.33     (2) the boundaries of the proposed unit; 
  5.34     (3) the boundaries of proposed election districts, if 
  5.35  requested; and 
  5.36     (4) other information deemed pertinent by the governing 
  6.1   bodies or the county auditor. 
  6.2      Sec. 8.  Minnesota Statutes 1996, section 465.87, 
  6.3   subdivision 1a, is amended to read: 
  6.4      Subd. 1a.  [ADDITIONAL ELIGIBILITY.] A local government 
  6.5   unit is eligible to apply for aid under this section if it has 
  6.6   combined with another unit of government in accordance with any 
  6.7   process within chapter 414 that results in the elimination of at 
  6.8   least one local government unit and a copy of the municipal 
  6.9   board's order or orders combining the two units of government is 
  6.10  forwarded to the board.  If the municipal board issues two or 
  6.11  more orders within 30 days for the annexation of the area of an 
  6.12  entire township by two or more cities contiguous to the 
  6.13  township, the cities subject to the board's order are eligible 
  6.14  to receive pro rata shares, on the basis of their populations, 
  6.15  of the total amount of cooperation and combination aid all 
  6.16  participating units of government would be eligible to receive 
  6.17  under subdivision 2.  If two units of government cooperate in 
  6.18  the orderly annexation of the entire area of a third unit of 
  6.19  government which has a population of at least 8,000 people, the 
  6.20  two units of government are each eligible for the amount of aid 
  6.21  specified in subdivision 2.  
  6.22     Sec. 9.  Minnesota Statutes 1996, section 465.87, 
  6.23  subdivision 2, is amended to read: 
  6.24     Subd. 2.  [AMOUNT OF AID.] The annual amount of aid to be 
  6.25  paid to each eligible local government unit or units may not 
  6.26  exceed the following per capita amounts, based on the combined 
  6.27  population of the units, as estimated by the state demographer, 
  6.28  or $100,000, whichever is less. 
  6.29        Combined Population                   Aid
  6.30         after Combination                 Per Capita
  6.31               0 -  2,500                     $25 
  6.32           2,500 -  5,000                      20 
  6.33           5,000 - 20,000                      15
  6.34              over 20,000                      10
  6.35  If two or more units are eligible for a single award under this 
  6.36  subdivision, the award must be divided among the units in pro 
  7.1   rata shares based on each unit's population.  Payments must be 
  7.2   made on the dates provided for payments of local government aid 
  7.3   under section 477A.013, beginning in the year during which 
  7.4   substantial cooperative activities under the plan initially 
  7.5   occur, unless those activities begin after July 1, in which case 
  7.6   the initial aid payment must be made in the following calendar 
  7.7   year.  Payments to a local government unit that qualifies for 
  7.8   aid under subdivision 1a must be made on the dates provided for 
  7.9   payments of local government aids under section 477A.013, 
  7.10  beginning in the calendar year during which a combination in any 
  7.11  form is expected to be ordered by the Minnesota municipal board 
  7.12  as evidenced in a resolution adopted by July 1 by the affected 
  7.13  local government units declaring their intent to combine.  The 
  7.14  resolutions must certify that the combination agreement 
  7.15  addressing all issues relative to the combination is 
  7.16  substantially complete.  The total amount of aid paid may not 
  7.17  exceed the amount appropriated to the board for purposes of this 
  7.18  section. 
  7.19     Sec. 10.  Minnesota Statutes 1996, section 465.87, 
  7.20  subdivision 3, is amended to read: 
  7.21     Subd. 3.  [TERMINATION OF AID; RECAPTURE.] If a second 
  7.22  referendum under section 465.84 fails, or if an initial 
  7.23  referendum fails and the governing body does not, or the 
  7.24  governing bodies do not, schedule a second referendum within one 
  7.25  year after the first has failed, or if one or more of the local 
  7.26  government units that proposed to combine terminates its or 
  7.27  their participation in the cooperation or combination, no 
  7.28  additional aid may be paid under this section.  The amount 
  7.29  previously paid under this section to a unit must be repaid if 
  7.30  the governing body of the unit acts to terminate its current 
  7.31  level of participation in the plan.  The amount previously paid 
  7.32  to the unit or units must be repaid in annual installments equal 
  7.33  to the total amount paid to the unit for all years under 
  7.34  subdivisions 1c and 2, divided by the number of years when 
  7.35  payments were made. 
  7.36     Sec. 11.  Minnesota Statutes 1996, section 465.88, is 
  8.1   amended to read: 
  8.2      465.88 [PLANNING AID FOR CONSOLIDATION STUDIES.] 
  8.3      Two or more local units of government with a combined 
  8.4   population of 2,500 30,000 or less based on the most recent 
  8.5   decennial census may apply to the board for aid to assist in the 
  8.6   study of a possible consolidation or combination.  To be 
  8.7   eligible for receipt of aid under this section, the two or more 
  8.8   local units of government must be subject to a municipal 
  8.9   board motion proceeding to form a consolidation commission under 
  8.10  section 414.041, subdivision 2, or the governing bodies of the 
  8.11  local units of government must have approved a resolution 
  8.12  expressing their intent to develop and submit a combination plan 
  8.13  for consideration by the board.  The application must be on a 
  8.14  form prescribed by the board and must provide a proposed budget 
  8.15  detailing how the requested aid shall is to be used.  The 
  8.16  governing bodies of the local units of government must shall 
  8.17  also approve resolutions certifying that the requested aid is 
  8.18  essential for paying a portion of the costs associated with the 
  8.19  consolidation or combination study.  The board may grant up to 
  8.20  $10,000 in aid for each application received.  Two or more local 
  8.21  government units with a combined population of at least 2,500 
  8.22  but not greater than 30,000, based on the most recent decennial 
  8.23  census, must agree to provide at least $1 for the study of a 
  8.24  possible consolidation or combination for each dollar of aid 
  8.25  granted by the board under this section.