1.1                          A bill for an act 
  1.2             relating to statutes; conforming the statutes to 
  1.3             reflect the transfer of authority from the municipal 
  1.4             board to the office of strategic and long-range 
  1.5             planning; explicitly authorizing delegation by the 
  1.6             director; amending Minnesota Statutes 2000, sections 
  1.7             414.01; 414.011, subdivision 7, and by adding a 
  1.8             subdivision; 414.012; 414.02; 414.031; 414.0325; 
  1.9             414.033, subdivisions 3, 5, 6, 7, and 10; 414.0335; 
  1.10            414.035; 414.036; 414.041; 414.051; 414.06; 414.061; 
  1.11            414.063; 414.067, subdivisions 1 and 3; 414.07; 
  1.12            414.08; 414.09; 414.12, subdivisions 1 and 2; 
  1.13            repealing Minnesota Statutes 2000, sections 414.01, 
  1.14            subdivisions 2 and 6a; 414.011, subdivision 8; and 
  1.15            414.11. 
  1.16  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.17     Section 1.  Minnesota Statutes 2000, section 414.01, is 
  1.18  amended to read: 
  1.19     414.01 [CREATION; ENABLING PROVISIONS.] 
  1.20     Subdivision 1.  [PURPOSE.] The Minnesota municipal board is 
  1.21  hereby created to Among the duties of the director of the office 
  1.22  of strategic and long-range planning is the duty to conduct 
  1.23  proceedings, make determinations, and issue orders for the 
  1.24  creation of a municipality, the combination of two or more 
  1.25  governmental units, or the alteration of a municipal boundary. 
  1.26     The legislature finds that:  (1) sound urban development 
  1.27  and preservation of agricultural land and open spaces through 
  1.28  land use planning is essential to the continued economic growth 
  1.29  of this state; (2) municipal government most efficiently 
  1.30  provides governmental services in areas intensively developed 
  2.1   for residential, commercial, industrial, and governmental 
  2.2   purposes; and township government most efficiently provides 
  2.3   governmental services in areas used or developed for 
  2.4   agricultural, open space, and rural residential purposes; (3) 
  2.5   the public interest requires that municipalities be formed when 
  2.6   there exists or will likely exist the necessary resources to 
  2.7   provide for their economical and efficient operation; (4) 
  2.8   annexation to existing municipalities of unincorporated areas 
  2.9   unable to supply municipal services should be facilitated; and, 
  2.10  (5) the consolidation of municipalities should be encouraged.  
  2.11  The Minnesota municipal board is empowered to director may 
  2.12  promote and regulate development of municipalities to provide 
  2.13  for the extension of municipal government to areas which are 
  2.14  developed or are in the process of being developed for intensive 
  2.15  use for residential, commercial, industrial, institutional, and 
  2.16  governmental purposes or are needed for such purposes; and to 
  2.17  protect the stability of unincorporated areas which are used or 
  2.18  developed for agricultural, open space, and rural residential 
  2.19  purposes and are not presently needed for more intensive uses; 
  2.20  and to protect the integrity of land use planning in 
  2.21  municipalities and unincorporated areas so that the public 
  2.22  interest in efficient local government will be properly 
  2.23  recognized and served. 
  2.24     Subd. 2.  [MEMBERS, QUALIFICATIONS, MEETINGS.] The board 
  2.25  shall be composed of three members appointed by the governor, at 
  2.26  least one of whom shall be learned in the law, and at least one 
  2.27  of whom shall be a resident from outside of the metropolitan 
  2.28  area as defined in section 473.121, subdivision 2.  The board 
  2.29  shall select from its members a chair who shall have the powers 
  2.30  and duties prescribed by the general law applicable to the heads 
  2.31  of departments and agencies of the state.  All those appointed 
  2.32  must be residents of the state for at least five years before 
  2.33  the appointment.  Each appointed member shall serve for six 
  2.34  years.  The board shall meet once each month at a regular time 
  2.35  to be established by the chair.  The removal of members and 
  2.36  filling of vacancies for members other than county commissioner 
  3.1   members on the board are as provided in section 15.0575.  
  3.2      In proceedings before the board for the incorporation of a 
  3.3   statutory city, consolidation of two or more municipalities, or 
  3.4   annexation of unincorporated land to a municipality, two county 
  3.5   commissioners of the board of the county in which all or a 
  3.6   majority of the affected land is located shall serve on the 
  3.7   board during such time as the board shall have under 
  3.8   consideration said matter.  The executive director of the board 
  3.9   shall upon initiation of a proceeding for such incorporation, 
  3.10  consolidation, or annexation notify the county auditor of the 
  3.11  county in which the majority of the affected property is 
  3.12  situated of the need for the appointment of the two county 
  3.13  commissioners to the board.  At the next succeeding meeting of 
  3.14  the county board the commissioners shall designate the two 
  3.15  appointed and shall thereupon immediately notify the Minnesota 
  3.16  municipal board executive director of their action.  The county 
  3.17  commissioners shall represent districts which do not contain any 
  3.18  of the affected territory.  If commissioners from the unaffected 
  3.19  districts are unavailable, commissioners from the affected 
  3.20  district may serve. 
  3.21     Subd. 5.  [MAJORITY ACTS, CHAIR'S AUTHORITY CONSOLIDATION.] 
  3.22  The board shall transact business and conduct hearings by a 
  3.23  majority of its members except as otherwise provided for by 
  3.24  subdivision 12 but a smaller number may adjourn from time to 
  3.25  time.  The chair director may order the consolidation of 
  3.26  separate proceedings in the interest of economy and expedience.  
  3.27  In those proceedings in which the board is composed of five 
  3.28  members, no order of the board shall be final unless approved by 
  3.29  three of the five members, and in all other proceedings unless 
  3.30  approved by two of the three members. 
  3.31     Subd. 6a.  [PER DIEM; EXPENSES.] Each member of the 
  3.32  municipal board shall receive $50 per day when in attendance at 
  3.33  board meetings or hearings, or when otherwise engaged in the 
  3.34  performance of duties.  The county commissioners shall be paid 
  3.35  $25 per day for each hearing or meeting attended.  The county 
  3.36  auditors and commissioners shall be deemed to be performing 
  4.1   duties for the county without additional compensation when 
  4.2   serving as ex officio members of the board.  Each member of the 
  4.3   board and the county commission members of the board shall be 
  4.4   reimbursed for actual expenses incurred in accordance with state 
  4.5   travel regulations. 
  4.6      Subd. 7a.  [EXECUTIVE DIRECTOR DIRECTOR'S DESIGNEE.] The 
  4.7   Minnesota municipal board shall appoint an executive director, 
  4.8   not a member of the board, who shall be qualified as a result of 
  4.9   practical, professional, or educational experience and receive a 
  4.10  salary fixed by law.  The director shall devote full time to the 
  4.11  duties of office.  All correspondence and petitions shall be 
  4.12  addressed to the executive director who is charged with 
  4.13  conducting the administrative affairs of the board.  A power or 
  4.14  duty of the director under this chapter may be delegated by the 
  4.15  director as provided in section 15.06, subdivision 6, clause 
  4.16  (1), for commissioners.  
  4.17     Subd. 8.  [PLANNING, CONSULTANTS, HEARING FORMALITIES.] The 
  4.18  board shall have authority to director may contract with 
  4.19  regional, state, county, or local planning commissions or to and 
  4.20  hire expert consultants to provide specialized information and 
  4.21  assistance.  Any member of the board conducting or participating 
  4.22  in any hearing, or its executive director, shall have the power 
  4.23  to person conducting a proceeding under this chapter may 
  4.24  administer oaths and affirmations, to; issue subpoenas, to; 
  4.25  compel the attendance and testimony of witnesses, and the 
  4.26  production of papers, books, and documents; examine witnesses, 
  4.27  and receive and report evidence. 
  4.28     Subd. 10.  [RULES.] In order To carry out the duties and 
  4.29  powers imposed upon the board, it shall have the power to make 
  4.30  such director under this chapter, the director may adopt the 
  4.31  rules, as that are reasonably necessary, in accordance with the 
  4.32  procedure prescribed in the general laws relating to departments 
  4.33  and agencies of the state. 
  4.34     Subd. 11.  [FEES.] The board director may prescribe a 
  4.35  schedule of filing fees for any petitions, resolutions or 
  4.36  ordinances filed pursuant to this chapter by an appropriate rule 
  5.1   promulgated in accordance with the procedure prescribed in the 
  5.2   general laws relating to departments and agencies of the state 
  5.3   for the issuance of administrative rules. 
  5.4      Subd. 12.  [TRANSCRIPTS, EVIDENCE REPORTS.] In proceedings 
  5.5   pursuant to this chapter, the executive director or any board 
  5.6   member may administer oaths and affirmations to witnesses, 
  5.7   examine witnesses, and receive and report evidence.  In any 
  5.8   proceeding in which the evidence is received by one board member 
  5.9   or by the executive director, the board member or executive 
  5.10  director shall make a report of the evidence to the board.  When 
  5.11  all members of the board do not attend a hearing in a 
  5.12  proceeding, Any party may request the executive director to 
  5.13  cause a transcript of the hearing to be made and distributed to 
  5.14  all board members.  Any party requesting a copy of the 
  5.15  transcript for board members is responsible for its costs. 
  5.16     Subd. 14.  [POPULATION OF CHANGED TERRITORY.] When a board 
  5.17  an order or approval letter under this chapter enlarges or 
  5.18  diminishes the area of an existing municipality or town, 
  5.19  the board director shall communicate its the order or approval 
  5.20  letter to the municipality and the state demographer.  The 
  5.21  municipality shall prepare an estimate of population and of the 
  5.22  number of households for the annexed or detached area of the 
  5.23  municipality or town.  The estimate shall be certified by the 
  5.24  state demographer.  The estimate must estimate the population as 
  5.25  of the effective date of the board order or approval letter and 
  5.26  must be so dated.  When a new municipality is created by an 
  5.27  order of the board under this chapter, the municipality shall 
  5.28  request a separation census from the United States bureau of the 
  5.29  census and bear any costs incurred.  
  5.30     Subd. 15.  [INCREASED COSTS, LEVY PERIOD.] When a board an 
  5.31  order under this chapter enlarges an existing municipality or 
  5.32  creates a new municipality, the board order may indicate in its 
  5.33  order the estimated increased costs to the municipality as the 
  5.34  result of the boundary adjustment, and the time period that the 
  5.35  municipality would be allowed a levy for these increased costs. 
  5.36     Subd. 16.  [COMPELLED MEETINGS; REPORT.] In any proceeding 
  6.1   before the board under this chapter, the board director or 
  6.2   conductor of the proceeding may at any time in the process 
  6.3   require representatives from the involved city, town, county, 
  6.4   political subdivision, or other governmental entity to meet 
  6.5   together to discuss resolution of issues raised by said the 
  6.6   petition or order which that confers jurisdiction on the board 
  6.7   director and other issues of mutual concern.  The board director 
  6.8   or conductor of the proceeding may require that the parties meet 
  6.9   at least three times during a 60-day period.  The parties shall 
  6.10  designate a person to report to the board director or conductor 
  6.11  of the proceeding on the results of the meetings immediately 
  6.12  after the last meeting. 
  6.13     Subd. 17.  [DATA FROM STATE AGENCIES.] The board director 
  6.14  may request information from any state department or agency in 
  6.15  order to assist it to carry out its in carrying out the 
  6.16  director's duties under this chapter.  The department or agency 
  6.17  shall promptly furnish the requested information to the board. 
  6.18     Sec. 2.  Minnesota Statutes 2000, section 414.011, 
  6.19  subdivision 7, is amended to read: 
  6.20     Subd. 7.  [BOUNDARY ADJUSTMENT.] "Boundary adjustment" 
  6.21  means any proceeding by the municipal board authorized by this 
  6.22  chapter. 
  6.23     Sec. 3.  Minnesota Statutes 2000, section 414.011, is 
  6.24  amended by adding a subdivision to read: 
  6.25     Subd. 11.  [DIRECTOR.] "Director" means the director of the 
  6.26  office of strategic and long-range planning. 
  6.27     Sec. 4.  Minnesota Statutes 2000, section 414.012, is 
  6.28  amended to read: 
  6.29     414.012 [MAPS.] 
  6.30     Subdivision 1.  [CORPORATE BOUNDARY MAP.] A municipality 
  6.31  initiating any boundary adjustment authorized by this chapter 
  6.32  shall file with the municipal board director a corporate 
  6.33  boundary map.  Any proposed boundary adjustment shall be 
  6.34  delineated on a copy of the corporate boundary map. 
  6.35     Subd. 2.  [PLAT MAPS.] Any party initiating a boundary 
  6.36  adjustment, which includes platted land, shall file with the 
  7.1   municipal board director maps which are necessary to support and 
  7.2   identify the land description.  The maps shall include copies of 
  7.3   plats. 
  7.4      Sec. 5.  Minnesota Statutes 2000, section 414.02, is 
  7.5   amended to read: 
  7.6      414.02 [MUNICIPAL INCORPORATION.] 
  7.7      Subdivision 1.  [INITIATING THE PROCEEDINGS.] This section 
  7.8   provides the exclusive method of incorporating a municipality in 
  7.9   Minnesota.  Proceedings for incorporation of a municipality may 
  7.10  be initiated by petition of 100 or more property owners or by 
  7.11  resolution of the town board within an area which is not 
  7.12  included within the limits of any incorporated municipality and 
  7.13  which area includes land that has been platted into lots and 
  7.14  blocks in the manner provided by law.  The petition or 
  7.15  resolution shall be submitted to the executive director and 
  7.16  shall state the proposed name of the municipality, the names of 
  7.17  all parties entitled to mailed notice under section 414.09, the 
  7.18  reason for requesting incorporation, and shall include a 
  7.19  proposed corporate boundary map. 
  7.20     Subd. 2.  [HEARING TIME, PLACE.] Upon receipt of a petition 
  7.21  or resolution made pursuant to subdivision 1, the executive 
  7.22  director of the board shall designate a time and place for a 
  7.23  hearing in accordance with section 414.09. 
  7.24     Subd. 3.  [BOARD RELEVANT FACTORS, ORDER.] (a) In arriving 
  7.25  at its a decision, the board director shall consider the 
  7.26  following factors: 
  7.27     (a) (1) present population and number of households, past 
  7.28  population and projected population growth for the subject area; 
  7.29     (b) (2) quantity of land within the subject area; the 
  7.30  natural terrain including recognizable physical features, 
  7.31  general topography, major watersheds, soil conditions and such 
  7.32  natural features as rivers, lakes and major bluffs; 
  7.33     (c) (3) present pattern of physical development, planning, 
  7.34  and intended land uses in the subject area including 
  7.35  residential, industrial, commercial, agricultural, and 
  7.36  institutional land uses and the impact of the proposed action on 
  8.1   those uses; 
  8.2      (d) (4) the present transportation network and potential 
  8.3   transportation issues, including proposed highway development; 
  8.4      (e) (5) land use controls and planning presently being 
  8.5   utilized in the subject area, including comprehensive plans, 
  8.6   policies of the metropolitan council; and whether there are 
  8.7   inconsistencies between proposed development and existing land 
  8.8   use controls; 
  8.9      (f) (6) existing levels of governmental services being 
  8.10  provided to the subject area, including water and sewer service, 
  8.11  fire rating and protection, law enforcement, street improvements 
  8.12  and maintenance, administrative services, and recreational 
  8.13  facilities and the impact of the proposed action on the delivery 
  8.14  of the services; 
  8.15     (g) (7) existing or potential environmental problems and 
  8.16  whether the proposed action is likely to improve or resolve 
  8.17  these problems; 
  8.18     (h) (8) fiscal impact on the subject area and adjacent 
  8.19  units of local government, including present bonded 
  8.20  indebtedness; local tax rates of the county, school district, 
  8.21  and other governmental units, including, where applicable, the 
  8.22  net tax capacity of platted and unplatted lands and the division 
  8.23  of homestead and nonhomestead property; and other tax and 
  8.24  governmental aid issues; 
  8.25     (i) (9) relationship and effect of the proposed action on 
  8.26  affected and adjacent school districts and communities; 
  8.27     (j) (10) whether delivery of services to the subject area 
  8.28  can be adequately and economically delivered by the existing 
  8.29  government; 
  8.30     (k) (11) analysis of whether necessary governmental 
  8.31  services can best be provided through the proposed action or 
  8.32  another type of boundary adjustment; 
  8.33     (l) (12) degree of contiguity of the boundaries of the 
  8.34  subject area and adjacent units of local government; and 
  8.35     (m) (13) analysis of the applicability of the state 
  8.36  building code. 
  9.1      (b) Based upon these factors, the board director may order 
  9.2   the incorporation if it finds on finding that (a): 
  9.3      (1) the property to be incorporated is now, or is about to 
  9.4   become, urban or suburban in character,; or (b) 
  9.5      (2) that the existing township form of government is not 
  9.6   adequate to protect the public health, safety, and welfare,; or 
  9.7   (c) 
  9.8      (3) the proposed incorporation would be in the best 
  9.9   interests of the area under consideration. 
  9.10     (c) The board director may deny the incorporation if the 
  9.11  area, or a part thereof, would be better served by annexation to 
  9.12  an adjacent municipality. 
  9.13     (d) The board director may alter the boundaries of the 
  9.14  proposed incorporation by increasing or decreasing the area to 
  9.15  be incorporated so as to include only that property which is 
  9.16  now, or is about to become, urban or suburban in character, or 
  9.17  may exclude property that may be better served by another unit 
  9.18  of government.  The board director may also alter the boundaries 
  9.19  of the proposed incorporation so as to follow visible, clearly 
  9.20  recognizable physical features for municipal boundaries. 
  9.21     (e) In all cases, the board director shall set forth the 
  9.22  factors which are the basis for the decision. 
  9.23     (f) Notwithstanding any other provision of law to the 
  9.24  contrary relating to the number of wards which may be 
  9.25  established, the board director may provide for election of 
  9.26  council members by wards, not less than three nor more than 
  9.27  seven in number, whose limits are prescribed in the board 
  9.28  director's order upon a finding that area representation is 
  9.29  required to accord proper representation in the proposed 
  9.30  incorporated area because of uneven population density in 
  9.31  different parts thereof or the existence of agricultural lands 
  9.32  therein which are in the path of suburban development, but after 
  9.33  four years from the effective date of an incorporation the 
  9.34  council of the municipality may by resolution adopted by a 
  9.35  four-fifths vote abolish the ward system and provide for the 
  9.36  election of all council members at large as in other 
 10.1   municipalities. 
 10.2      (g) The board's director's order for incorporation shall 
 10.3   provide for the election of municipal officers in accordance 
 10.4   with section 414.09.  The plan of government shall be "Optional 
 10.5   Plan A", provided that an alternate plan may be adopted pursuant 
 10.6   to section 412.551, at any time. 
 10.7      (h) The ordinances of the township in which the new 
 10.8   municipality is located shall continue in effect until repealed 
 10.9   by the governing body of the new municipality. 
 10.10     Subd. 4.  [EFFECTIVE DATE.] The incorporation shall be 
 10.11  effective upon the election and qualification of new municipal 
 10.12  officers or on such later date as is fixed by the board in its 
 10.13  director's order. 
 10.14     Sec. 6.  Minnesota Statutes 2000, section 414.031, is 
 10.15  amended to read: 
 10.16     414.031 [ANNEXATION OF UNINCORPORATED PROPERTY BY BOARD 
 10.17  DIRECTOR'S ORDER.] 
 10.18     Subdivision 1.  [INITIATING THE PROCEEDING.] (a) A 
 10.19  proceeding for the annexation of unincorporated property 
 10.20  abutting a municipality may be initiated by submitting to 
 10.21  the executive director and the affected township one of the 
 10.22  following: 
 10.23     (a) (1) a resolution of the annexing municipality; 
 10.24     (b) (2) a resolution of the township containing the area 
 10.25  proposed for annexation; 
 10.26     (c) (3) a petition of 20 percent of the property owners or 
 10.27  100 property owners, whichever is less, in the area to be 
 10.28  annexed; 
 10.29     (d) (4) a resolution of the municipal council together with 
 10.30  a resolution of the township board stating their desire to have 
 10.31  the entire township annexed to the municipality. 
 10.32     (b) The petition, or resolution shall set forth the 
 10.33  boundaries of the territory proposed for annexation, the names 
 10.34  of all parties entitled to notice under section 414.09, and the 
 10.35  reasons for requesting annexation. 
 10.36     (c) If the proceeding is initiated by a petition of 
 11.1   property owners, the petition shall be accompanied by a 
 11.2   resolution of the annexing municipality supporting the petition. 
 11.3      Subd. 3.  [HEARING TIME, PLACE.] Upon receipt of a petition 
 11.4   or resolution initiating an annexation the executive director 
 11.5   shall designate a time and a place for a hearing in accordance 
 11.6   with section 414.09. 
 11.7      Subd. 4.  [BOARD RELEVANT FACTORS, ORDER.] (a) In arriving 
 11.8   at its a decision, the board director shall consider the 
 11.9   following factors: 
 11.10     (a) (1) present population and number of households, past 
 11.11  population and projected population growth of the subject area 
 11.12  and adjacent units of local government; 
 11.13     (b) (2) quantity of land within the subject area and 
 11.14  adjacent units of local government; and natural terrain 
 11.15  including recognizable physical features, general topography, 
 11.16  major watersheds, soil conditions and such natural features as 
 11.17  rivers, lakes and major bluffs; 
 11.18     (c) (3) degree of contiguity of the boundaries between the 
 11.19  annexing municipality and the subject area; 
 11.20     (d) (4) present pattern of physical development, planning, 
 11.21  and intended land uses in the subject area and the annexing 
 11.22  municipality including residential, industrial, commercial, 
 11.23  agricultural and institutional land uses and the impact of the 
 11.24  proposed action on those land uses; 
 11.25     (e) (5) the present transportation network and potential 
 11.26  transportation issues, including proposed highway development; 
 11.27     (f) (6) land use controls and planning presently being 
 11.28  utilized in the annexing municipality and the subject area, 
 11.29  including comprehensive plans for development in the area and 
 11.30  plans and policies of the metropolitan council, and whether 
 11.31  there are inconsistencies between proposed development and 
 11.32  existing land use controls and the reasons therefore; 
 11.33     (g) (7) existing levels of governmental services being 
 11.34  provided in the annexing municipality and the subject area, 
 11.35  including water and sewer service, fire rating and protection, 
 11.36  law enforcement, street improvements and maintenance, 
 12.1   administrative services, and recreational facilities and the 
 12.2   impact of the proposed action on the delivery of said services; 
 12.3      (h) (8) existing or potential environmental problems and 
 12.4   whether the proposed action is likely to improve or resolve 
 12.5   these problems; 
 12.6      (i) (9) plans and programs by the annexing municipality for 
 12.7   providing needed governmental services to the subject area; 
 12.8      (j) (10) an analysis of the fiscal impact on the annexing 
 12.9   municipality, the subject area, and adjacent units of local 
 12.10  government, including net tax capacity and the present bonded 
 12.11  indebtedness, and the local tax rates of the county, school 
 12.12  district, and township; 
 12.13     (k) (11) relationship and effect of the proposed action on 
 12.14  affected and adjacent school districts and communities; 
 12.15     (l) (12) adequacy of town government to deliver services to 
 12.16  the subject area; 
 12.17     (m) (13) analysis of whether necessary governmental 
 12.18  services can best be provided through the proposed action or 
 12.19  another type of boundary adjustment; and 
 12.20     (n) (14) if only a part of a township is annexed, the 
 12.21  ability of the remainder of the township to continue or the 
 12.22  feasibility of it being incorporated separately or being annexed 
 12.23  to another municipality. 
 12.24     (b) Based upon the factors, the board director may order 
 12.25  the annexation (a) if it finds on finding: 
 12.26     (1) that the subject area is now, or is about to become, 
 12.27  urban or suburban in character, or (b) if it finds; 
 12.28     (2) that municipal government in the area proposed for 
 12.29  annexation is required to protect the public health, safety, and 
 12.30  welfare,; or (c) if it finds 
 12.31     (3) that the annexation would be in the best interest of 
 12.32  the subject area. 
 12.33     (c) If only a part of a township is to be annexed, the 
 12.34  board director shall consider whether the remainder of the 
 12.35  township can continue to carry on the functions of government 
 12.36  without undue hardship.  
 13.1      (d) The board director shall deny the annexation if it 
 13.2   finds on finding that the increase in revenues for the annexing 
 13.3   municipality bears no reasonable relation to the monetary value 
 13.4   of benefits conferred upon the annexed area.  
 13.5      (e) The board director may deny the annexation (a) if it 
 13.6   appears on finding (1) that annexation of all or a part of the 
 13.7   property to an adjacent municipality would better serve the 
 13.8   interests of the residents of the property or (b) if (2) that 
 13.9   the remainder of the township would suffer undue hardship. 
 13.10     (f) The board director may alter the boundaries of the area 
 13.11  to be annexed by increasing or decreasing the area so as to 
 13.12  include only that property which is now or is about to become 
 13.13  urban or suburban in character or to add property of such 
 13.14  character abutting the area proposed for annexation in order to 
 13.15  preserve or improve the symmetry of the area, or to exclude 
 13.16  property that may better be served by another unit of government.
 13.17     (g) The board director may also alter the boundaries of the 
 13.18  proposed annexation so as to follow visible, clearly 
 13.19  recognizable physical features.  
 13.20     (h) If the board director determines that part of the area 
 13.21  would be better served by another municipality or township, 
 13.22  the board director may initiate and approve annexation on its 
 13.23  own motion by conducting further hearings and issuing orders 
 13.24  pursuant to subdivisions 3 and 4.  
 13.25     (i) In all cases, the board director shall set forth the 
 13.26  factors which are the basis for the decision. 
 13.27     Subd. 4a.  [PROCEEDINGS INITIATED BY JOINT RESOLUTION.] (a) 
 13.28  If the proceeding has been initiated under subdivision 
 13.29  1, paragraph (a), clause (d) (4), any annexation order shall 
 13.30  include a provision for the election of new municipal officers 
 13.31  in accordance with section 414.09. 
 13.32     (b) The expanded municipality shall be governed by the home 
 13.33  rule charter or statutory form which governs the annexing 
 13.34  municipality, except that any ward system for the election of 
 13.35  council members shall be inoperable. 
 13.36     (c) The ordinances of both the annexing municipality and 
 14.1   the township shall continue in effect within the former 
 14.2   boundaries until repealed by the governing body of the new 
 14.3   municipality. 
 14.4      (d) Notwithstanding any other provision of law to the 
 14.5   contrary the board director may provide for election of council 
 14.6   members by wards, not less than three nor more than seven in 
 14.7   number, whose limits are prescribed in the board director's 
 14.8   order, upon a finding that area representation is required to 
 14.9   accord proper representation in the municipality because of 
 14.10  uneven population density in different parts thereof or the 
 14.11  existence of agricultural lands therein which are in the path of 
 14.12  suburban development; but after four years from the effective 
 14.13  date of an annexation the council of the municipality may by 
 14.14  resolution adopted by a four-fifths vote abolish the ward system 
 14.15  and provide for the election of all council members at large. 
 14.16     (e) Until the effective date of the annexation order, the 
 14.17  town board and other officers of the town shall continue to 
 14.18  exercise their powers and duties under the town laws in that 
 14.19  portion of the municipality that was formerly the town, and the 
 14.20  council and other officers of the annexing municipality shall 
 14.21  continue to exercise their powers and duties in that portion of 
 14.22  the expanded municipality that was formerly the municipality.  
 14.23  Thereafter the town board and the council of the annexing 
 14.24  municipality shall have no jurisdiction within the municipality, 
 14.25  and the new municipal council and other new officers shall act 
 14.26  in respect to any matters previously undertaken by the town 
 14.27  board of supervisors or municipal council within the limits of 
 14.28  the expanded municipality, including the making of any 
 14.29  improvement and the levying of any special assessments therefor 
 14.30  in the same manner and to the same effect as if such improvement 
 14.31  had been undertaken by the municipality. 
 14.32     (f) The new municipal council may continue or discontinue 
 14.33  any board that may have previously existed in the town or former 
 14.34  municipality. 
 14.35     Subd. 6.  [EFFECTIVE DATE.] The annexation shall be 
 14.36  effective as of the date fixed in the annexation order or on 
 15.1   such a later date as is fixed in the annexation order.  A copy 
 15.2   of the annexation order must be delivered immediately by the 
 15.3   executive director of the Minnesota municipal board to the 
 15.4   appropriate county auditor or auditors.  For the purposes of 
 15.5   taxation, if the annexation becomes effective on or before 
 15.6   August 1 of a levy year, the municipality may levy on the 
 15.7   annexed area beginning with that same levy year.  If the 
 15.8   annexation becomes effective after August 1 of a levy year, the 
 15.9   town may continue to levy on the annexed area for that levy 
 15.10  year, and the municipality may not levy on the annexed area 
 15.11  until the following levy year. 
 15.12     Sec. 7.  Minnesota Statutes 2000, section 414.0325, is 
 15.13  amended to read: 
 15.14     414.0325 [ORDERLY ANNEXATIONS WITHIN A DESIGNATED AREA.] 
 15.15     Subdivision 1.  [INITIATING THE PROCEEDING.] (a) One or 
 15.16  more townships and one or more municipalities, by joint 
 15.17  resolution, may designate an unincorporated area as in need of 
 15.18  orderly annexation.  
 15.19     (b) The joint resolution will confer jurisdiction on 
 15.20  the board director over annexations in the designated area and 
 15.21  over the various provisions in said agreement by submission of 
 15.22  said joint resolution to the executive director.  
 15.23     (c) The resolution shall include a description of the 
 15.24  designated area and the reasons for designation.  
 15.25     (d) Thereafter, an annexation of any part of the designated 
 15.26  area may be initiated by: 
 15.27     (1) submitting to the executive director a resolution of 
 15.28  any signatory to the joint resolution; or 
 15.29     (2) the board of its own motion director. 
 15.30     (e) Whenever a state agency, other than the pollution 
 15.31  control agency, orders a municipality to extend a municipal 
 15.32  service to an area, such an the order will confer confers 
 15.33  jurisdiction on the Minnesota municipal board director to 
 15.34  consider designation of the area for orderly annexation. 
 15.35     (f) If a joint resolution designates an area as in need of 
 15.36  orderly annexation and states that no alteration of its stated 
 16.1   boundaries is appropriate, the board director may review and 
 16.2   comment, but may not alter the boundaries.  
 16.3      (g) If a joint resolution designates an area as in need of 
 16.4   orderly annexation, provides for the conditions for its 
 16.5   annexation, and states that no consideration by the board 
 16.6   director is necessary, the board director may review and 
 16.7   comment, but shall, within 30 days, order the annexation in 
 16.8   accordance with the terms of the resolution.  
 16.9      Subd. 1a.  [ELECTRIC UTILITY SERVICE NOTICE.] At least 60 
 16.10  days before a petition is filed under this section or section 
 16.11  414.033, the petitioner must notify the municipality that the 
 16.12  petitioner intends to file a petition for annexation.  At least 
 16.13  30 days before a petition is filed for annexation, the 
 16.14  petitioner must be notified by the municipality that the cost of 
 16.15  electric utility service to the petitioner may change if the 
 16.16  land is annexed to the municipality.  The notice must include an 
 16.17  estimate of the cost impact of any change in electric utility 
 16.18  services, including rate changes and assessments, resulting from 
 16.19  the annexation. 
 16.20     Subd. 2.  [HEARING TIME, PLACE.] Upon receipt of a 
 16.21  resolution for annexation of a part of the designated area, the 
 16.22  executive director shall set a time and place for a hearing in 
 16.23  accordance with section 414.09. 
 16.24     Subd. 3.  [BOARD RELEVANT FACTORS, ORDER.] (a) In arriving 
 16.25  at its a decision, the board director shall consider the factors 
 16.26  in section 414.031, subdivision 4. 
 16.27     (b) Based upon factors in section 414.031, subdivision 4, 
 16.28  the board director may order the annexation: 
 16.29     (a) (1) if it finds on finding that the subject area is now 
 16.30  or is about to become urban or suburban in character and that 
 16.31  the annexing municipality is capable of providing the services 
 16.32  required by the area within a reasonable time; or (b) 
 16.33     (2) if it finds on finding that the existing township form 
 16.34  of government is not adequate to protect the public health, 
 16.35  safety, and welfare; or (c) 
 16.36     (3) if it finds on finding that annexation would be in the 
 17.1   best interests of the subject area.  
 17.2      (c) The board director may deny the annexation if it 
 17.3   conflicts with any provision of the joint agreement.  
 17.4      (d) The board director may alter the boundaries of the 
 17.5   proposed annexation by increasing or decreasing the area so as 
 17.6   to include that property within the designated area which is in 
 17.7   need of municipal services or will be in need of municipal 
 17.8   services. 
 17.9      (e) If the annexation is denied, no proceeding for the 
 17.10  annexation of substantially the same area may be initiated 
 17.11  within two years from the date of the board's denial order 
 17.12  unless the new proceeding is initiated by a majority of the 
 17.13  area's property owners and the petition is supported by affected 
 17.14  parties to the resolution.  
 17.15     (f) In all cases, the board director shall set forth the 
 17.16  factors which are the basis for the decision. 
 17.17     Subd. 4.  [EFFECTIVE DATE OF ANNEXATION.] The board's 
 17.18  director's order shall be effective upon the issuance of the 
 17.19  order or at such later time as is provided by the board in its 
 17.20  the order.  A copy of the annexation order must be delivered 
 17.21  immediately by the executive director of the Minnesota municipal 
 17.22  board to the appropriate county auditor or auditors.  For the 
 17.23  purposes of taxation, if the annexation becomes effective on or 
 17.24  before August 1 of a levy year, the municipality may levy on the 
 17.25  annexed area beginning with that same levy year.  If the 
 17.26  annexation becomes effective after August 1 of a levy year, the 
 17.27  town may continue to levy on the annexed area for that levy 
 17.28  year, and the municipality may not levy on the annexed area 
 17.29  until the following levy year. 
 17.30     Subd. 5.  [PLANNING IN THE AREA DESIGNATED FOR ORDERLY 
 17.31  ANNEXATION AREA.] (a) A joint resolution may provide for the 
 17.32  establishment of a board to exercise planning and land use 
 17.33  control authority within any area designated as an orderly 
 17.34  annexation area pursuant to this section, in the manner 
 17.35  prescribed by Minnesota Statutes 1976, section 471.59, 
 17.36  subdivisions 2 to 8, inclusive. 
 18.1      (a) (b) A board established pursuant to a joint resolution 
 18.2   shall have all of the powers contained in sections 462.351 to 
 18.3   462.364, and shall have the authority to adopt and enforce the 
 18.4   Uniform Fire Code promulgated pursuant to section 299F.011. 
 18.5      (b) (c) The joint resolution may provide that joint 
 18.6   planning and land use controls shall apply to any or all parts 
 18.7   of the area designated for orderly annexation as well as to any 
 18.8   adjacent unincorporated or incorporated area, provided that the 
 18.9   area to be included shall be described in the joint resolution. 
 18.10     (c) (d) If the joint resolution does not provide for joint 
 18.11  planning and land use control, the following procedures shall 
 18.12  govern: 
 18.13     (1) if the county and townships agree to exclude the area 
 18.14  from their zoning and subdivision ordinances, the municipality 
 18.15  may extend its zoning and subdivision regulations to include the 
 18.16  entire orderly annexation area as provided in section 462.357, 
 18.17  subdivision 1, and section 462.358, subdivision 1.; or 
 18.18     (2) if the county and township do not agree to such 
 18.19  extraterritorial zoning and subdivision regulation by the 
 18.20  municipality, zoning and subdivision regulation within the 
 18.21  orderly annexation area shall be controlled by a three-member 
 18.22  committee with one member appointed from each of the municipal, 
 18.23  town, and county governing bodies.  
 18.24     (e) This The committee under paragraph (d), clause (2), 
 18.25  shall: 
 18.26     (1) serve as the "governing body" and "board of appeals and 
 18.27  adjustments", for purposes of sections 462.357 and 462.358, 
 18.28  within the orderly annexation area.; and 
 18.29     (2) The committee shall have all of the powers contained in 
 18.30  sections 462.351 to 462.364, and shall have the authority to 
 18.31  adopt and enforce the Uniform Fire Code promulgated pursuant to 
 18.32  section 299F.011. 
 18.33     Sec. 8.  Minnesota Statutes 2000, section 414.033, 
 18.34  subdivision 3, is amended to read: 
 18.35     Subd. 3.  [PERIMETER, ACREAGE REQUIREMENTS.] If the 
 18.36  perimeter of the area to be annexed by a municipality is 60 
 19.1   percent or more bordered by the municipality and if the area to 
 19.2   be annexed is 40 acres or less, the municipality shall serve 
 19.3   notice of intent to annex upon the town board and the municipal 
 19.4   board director, unless the area is appropriate for annexation by 
 19.5   ordinance under subdivision 2, clause (3).  The town board shall 
 19.6   have 90 days from the date of service to serve objections with 
 19.7   the board director.  If no objections are forthcoming within the 
 19.8   said 90 day period, such land may be annexed by ordinance.  If 
 19.9   objections are filed with the board director, the board director 
 19.10  shall conduct hearings and issue its an order as in the case of 
 19.11  annexations under section 414.031, subdivisions 3 and 4. 
 19.12     Sec. 9.  Minnesota Statutes 2000, section 414.033, 
 19.13  subdivision 5, is amended to read: 
 19.14     Subd. 5.  [PETITION, OBJECTIONS.] If the land is platted, 
 19.15  or, if unplatted, does not exceed 200 acres, a majority of the 
 19.16  property owners in number may petition the municipal council to 
 19.17  have such land included within the abutting municipality and, 
 19.18  within ten days thereafter, shall file copies of the petition 
 19.19  with the board director, the town board, the county board and 
 19.20  the municipal council of any other municipality which borders 
 19.21  the land to be annexed.  Within 90 days from the date of 
 19.22  service, the town board or the municipal council of such 
 19.23  abutting municipality may submit written objections to the 
 19.24  annexation to the board director and the annexing municipality.  
 19.25  Upon receipt of such objections, the board director shall 
 19.26  proceed to hold a hearing and issue its an order in accordance 
 19.27  with section 414.031, subdivisions 3 and 4.  If written 
 19.28  objections are not submitted within the time specified in this 
 19.29  section and if the municipal council determines that property 
 19.30  proposed for the annexation is now or is about to become urban 
 19.31  or suburban in character, it may by ordinance declare such land 
 19.32  annexed to the municipality.  If the petition is not signed by 
 19.33  all the property owners of the land proposed to be annexed, the 
 19.34  ordinance shall not be enacted until the municipal council has 
 19.35  held a hearing on the proposed annexation after at least 30 
 19.36  days' mailed notice to all property owners within the area to be 
 20.1   annexed. 
 20.2      Sec. 10.  Minnesota Statutes 2000, section 414.033, 
 20.3   subdivision 6, is amended to read: 
 20.4      Subd. 6.  [IF ALSO IN BOARD DIRECTOR'S PROCEEDING.] 
 20.5   Whenever a proceeding for annexation is initiated under this 
 20.6   section and all or any part of the land is included in another 
 20.7   boundary adjustment proceeding pending before the board 
 20.8   director, no action thereon shall be taken by the municipality, 
 20.9   unless otherwise provided by an order of the board director, 
 20.10  until final disposition has been made of the pending petition 
 20.11  pending before the board.  Under this section the board director 
 20.12  will accept a waiver from all parties having a right to object, 
 20.13  stating they have no objections to the proposed annexation and 
 20.14  waiving the 90 day period before an annexation ordinance may be 
 20.15  adopted. 
 20.16     Sec. 11.  Minnesota Statutes 2000, section 414.033, 
 20.17  subdivision 7, is amended to read: 
 20.18     Subd. 7.  [FILING; EFFECTIVE DATE; COPY, LEVIES.] Any 
 20.19  annexation ordinance provided for in this section must be filed 
 20.20  with the board director, the township, the county auditor and 
 20.21  the secretary of state and is final on the date the ordinance is 
 20.22  approved by the board director.  A copy of the annexation 
 20.23  ordinance must be delivered immediately by the governing body of 
 20.24  the municipality to the appropriate county auditor or auditors.  
 20.25     Sec. 12.  Minnesota Statutes 2000, section 414.033, 
 20.26  subdivision 10, is amended to read: 
 20.27     Subd. 10.  [ADDITIONAL INFORMATION TO BOARD.] The municipal 
 20.28  board director may, at its discretion, require the city or 
 20.29  property owners to furnish additional information concerning an 
 20.30  annexation by ordinance to inform the board director about the 
 20.31  extent to which the proposed annexation conforms to the 
 20.32  statutory criteria set forth in sections 414.01, subdivision 1 
 20.33  and 414.031, subdivision 4. 
 20.34     Sec. 13.  Minnesota Statutes 2000, section 414.0335, is 
 20.35  amended to read: 
 20.36     414.0335 [ORDERED GOVERNMENTAL SERVICE EXTENSION; 
 21.1   ANNEXATION BY ORDINANCE.] 
 21.2      If a determination or order by the pollution control 
 21.3   agency, under section 115.49 or other similar statute is made, 
 21.4   that cooperation by contract is necessary and feasible between a 
 21.5   municipality and an unincorporated area located outside the 
 21.6   existing corporate limits of a municipality, the municipality 
 21.7   required to provide or extend through a contract a governmental 
 21.8   service to an unincorporated area, during the statutory 90-day 
 21.9   period provided in section 115.49 to formulate a contract, may 
 21.10  in the alternative to formulating a service contract to provide 
 21.11  or extend the service, declare the unincorporated area described 
 21.12  in the pollution control agency's determination letter or order 
 21.13  annexed to the municipality by adopting an ordinance and 
 21.14  submitting it to the municipal board or its successor director.  
 21.15  The municipal board or its successor director may review and 
 21.16  comment on the ordinance but shall approve the ordinance within 
 21.17  30 days of receipt.  The ordinance is final and the annexation 
 21.18  is effective on the date the municipal board or its successor 
 21.19  director approves the ordinance.  Thereafter, the city shall 
 21.20  amend its comprehensive plan and official controls in accordance 
 21.21  with chapter 462. 
 21.22     Sec. 14.  Minnesota Statutes 2000, section 414.035, is 
 21.23  amended to read: 
 21.24     414.035 [DIFFERENTIAL TAXATION.] 
 21.25     Whenever a board an order, under section 414.031, 414.0325, 
 21.26  or 414.033, annexes part or all of a township to a municipality, 
 21.27  the board order may provide that the tax rate of the annexing 
 21.28  municipality on the area annexed shall be increased in 
 21.29  substantially equal proportions over not more than six years to 
 21.30  equality with the tax rate on the property already within the 
 21.31  municipality.  The appropriate period, if any, shall be based on 
 21.32  the time reasonably required to effectively provide full 
 21.33  municipal services to the annexed area. 
 21.34     Sec. 15.  Minnesota Statutes 2000, section 414.036, is 
 21.35  amended to read: 
 21.36     414.036 [MUNICIPAL REIMBURSEMENT.] 
 22.1      When a board an order under section 414.0325 annexes part 
 22.2   of a town to a municipality, the orderly annexation agreement 
 22.3   between the town and municipality may provide a reimbursement 
 22.4   from the municipality to the town for all or part of the taxable 
 22.5   property annexed as part of the board order.  The reimbursement 
 22.6   shall be completed in substantially equal payments over not less 
 22.7   than two nor more than six years from the time of annexation. 
 22.8      Sec. 16.  Minnesota Statutes 2000, section 414.041, is 
 22.9   amended to read: 
 22.10     414.041 [CONSOLIDATION OF MUNICIPALITIES.] 
 22.11     Subdivision 1.  [INITIATING THE PROCEEDING.] (a) Two or 
 22.12  more municipalities may be the subject of a single proceeding 
 22.13  provided that each municipality abuts at least one of the 
 22.14  included municipalities.  
 22.15     (b) The proceeding shall be initiated in one of the 
 22.16  following ways:  
 22.17     (a) (1) submitting to the executive director a resolution 
 22.18  of the city council of each affected municipality; 
 22.19     (b) (2) submitting to the executive director a petition 
 22.20  signed by five percent or more of the resident voters of a 
 22.21  municipality who voted for governor at the last general 
 22.22  election; or 
 22.23     (c) (3) by the board on its own motion director.  
 22.24     (c) The petition or resolution shall set forth the 
 22.25  following information about each included municipality:  name, 
 22.26  description of boundaries, the reasons for requesting the 
 22.27  consolidation and the names of all parties entitled to mailed 
 22.28  notice under section 414.09.  
 22.29     (d) The party initiating the proceeding shall serve copies 
 22.30  of the petition or resolution on all of the included 
 22.31  municipalities. 
 22.32     Subd. 2.  [CONSOLIDATION COMMISSION.] Upon receipt of a 
 22.33  petition or a resolution requesting consolidation or upon the 
 22.34  board's director's own motion, the board director shall appoint 
 22.35  a consolidation commission from a list of ten candidates 
 22.36  submitted by each affected city council.  The commission shall 
 23.1   be composed of not fewer than five members from each affected 
 23.2   municipality.  From a separate list of three persons submitted 
 23.3   by each affected city council, the board director shall appoint 
 23.4   a commission chair who is not a resident of an affected 
 23.5   municipality but who resides in an affected county.  
 23.6      No person is disqualified from serving on a consolidation 
 23.7   commission by reason of holding other elected or appointed 
 23.8   office.  Consolidation commission members shall hold office 
 23.9   until a consolidation report has been issued by the commission.  
 23.10  The board director shall fill vacancies in the commission by 
 23.11  appointment.  The consolidation commission shall make rules with 
 23.12  reference to its operation and procedures including quorum 
 23.13  requirements with reference to its operations and procedures.  
 23.14     Subd. 3.  [COMMISSION'S HEARING AND REPORT.] (a) The 
 23.15  consolidation commission shall conduct hearings regarding the 
 23.16  proposed consolidation.  
 23.17     (b) The hearings shall include, but are not limited to, the 
 23.18  following subjects:  
 23.19     (a) (1) the contents of any city charter for the proposed 
 23.20  consolidated city or the form of government of the proposed 
 23.21  consolidated city; 
 23.22     (b) (2) analysis of whether a ward system shall be included 
 23.23  in the form of government of the proposed consolidated city; and 
 23.24     (c) (3) each factor considered by the board director under 
 23.25  section 414.02, subdivision 3. 
 23.26     (c) Based on these factors and upon other matters which 
 23.27  come before the consolidation commission, the commission shall 
 23.28  issue a report to the municipal board director with findings and 
 23.29  recommendations within two years from the date of the board's 
 23.30  director's initial appointment of the commission.  
 23.31     Subd. 4.  [BOARD'S DIRECTOR'S HEARING AND NOTICE.] Upon 
 23.32  receipt of the commission's report, the executive director shall 
 23.33  designate a time and a place for a hearing in accordance with 
 23.34  section 414.09. 
 23.35     Subd. 5.  [BOARD'S RELEVANT FACTORS, ORDER.] (a) In 
 23.36  arriving at its a decision, the board director shall consider 
 24.1   the factors in section 414.02, subdivision 3. 
 24.2      (b) The board director shall consider and may accept, 
 24.3   amend, return to the commission for amendment or further study, 
 24.4   or reject the commission's findings and recommendations based 
 24.5   upon the board's director's written determination of what is in 
 24.6   the best interests of the affected municipalities.  
 24.7      (c) The board director shall order the consolidation if it 
 24.8   finds on finding that consolidation will be for the best 
 24.9   interests of the municipalities.  In all cases, the board 
 24.10  director shall set forth the factors which are the basis for the 
 24.11  decision.  
 24.12     (d) If the board director orders consolidation, it the 
 24.13  order shall provide for election of new municipal officers in 
 24.14  accordance with section 414.09. 
 24.15     (e) If the most populous of the included municipalities is 
 24.16  a statutory city, the new municipality shall be a statutory city 
 24.17  and the plan of government shall be Optional Plan A, provided 
 24.18  that an alternate plan may be adopted pursuant to section 
 24.19  412.551, at any time.  If the most populous of the included 
 24.20  municipalities is a home rule charter city or organized under a 
 24.21  statute other than chapter 412, the new municipality shall be 
 24.22  governed by its home rule charter or the statutory form under 
 24.23  which it is governed except that any ward system for the 
 24.24  election of council members shall be inoperable. 
 24.25     (f) If the commission's findings and recommendations 
 24.26  include a proposed home rule charter for the new municipality, 
 24.27  the board may in its order may combine the issue of the adoption 
 24.28  of the charter and the vote on approval of the order for 
 24.29  consolidation into one question on the ballot, and shall submit 
 24.30  it in a special or general election as provided in section 
 24.31  410.10. 
 24.32     (g) The ordinances of all of the included municipalities 
 24.33  shall continue in effect within their former boundaries until 
 24.34  repealed by the governing body of the new municipality. 
 24.35     (h) Notwithstanding any other provision of law to the 
 24.36  contrary, the board may in its order may establish a ward system 
 25.1   in the new municipality, in which event it the order shall 
 25.2   establish not less than three nor more than seven wards, each of 
 25.3   which shall elect one council member.  When more than two years 
 25.4   have elapsed after consolidation, the governing body may, by a 
 25.5   four-fifths vote, abolish the ward system. 
 25.6      (i) The new municipality shall assume the name of the most 
 25.7   populous municipality unless previous to the election another 
 25.8   name is chosen by joint resolution of a majority of the included 
 25.9   municipalities or by the consolidation commission. 
 25.10     (j) The number of license privileges existing in the 
 25.11  included municipalities prior to consolidation and pursuant to 
 25.12  state law shall not be diminished as a result of the 
 25.13  consolidation. 
 25.14     (k) If the consolidation is denied or defeated in a 
 25.15  referendum, no proceeding for the consolidation of the same 
 25.16  municipalities may be initiated within two years from the date 
 25.17  of the board's order unless authorized by the board director. 
 25.18     Subd. 6.  [FINAL APPROVAL.] (a) If the consolidation was 
 25.19  initiated by a petition of the resident voters of a 
 25.20  municipality, the board's order for consolidation shall be final 
 25.21  upon approval by resolution of the city councils in each of the 
 25.22  affected municipalities unless ten percent or more of the 
 25.23  resident voters of an affected municipality who voted for 
 25.24  governor at the last general election petition the city council 
 25.25  for a referendum on the consolidation.  The petition must be 
 25.26  submitted within 90 days of the final date of the board's order 
 25.27  or the date of final approval of the board's order by the city 
 25.28  councils, whichever is later. 
 25.29     (b) Upon receipt and verification of the petition, the 
 25.30  board director shall order the municipalities to conduct 
 25.31  separate referenda at a general or special election in each 
 25.32  municipality on the same day, and the referenda shall be held 
 25.33  within six months of the receipt of the petition. 
 25.34     (c) Costs of the respective referenda shall be borne by the 
 25.35  respective municipality.  A majority of those voting in each 
 25.36  city must approve the proposed consolidation.  The results of 
 26.1   the referenda shall be certified to the executive director of 
 26.2   the municipal board by the chief election judge within ten days 
 26.3   after the referenda.  The executive director shall upon receipt 
 26.4   of the certificate notify all parties of the election results. 
 26.5      (b) (d) If the consolidation was initiated by a city 
 26.6   council resolution of each affected municipality, the board's 
 26.7   order for consolidation shall be final unless ten percent or 
 26.8   more of the resident voters of an affected municipality petition 
 26.9   for a referendum as provided in clause paragraph (a).  
 26.10     (c) (e) If the consolidation was initiated by the board's 
 26.11  own motion director, no director's consolidation order of the 
 26.12  board involving existing municipalities shall become effective 
 26.13  unless adopted by the council of each affected municipality by a 
 26.14  majority vote and unless the consolidation order of the board is 
 26.15  approved by the qualified voters of the affected municipalities 
 26.16  at a general or special election set according to law.  The form 
 26.17  of the ballot shall be fixed by the board director; and, if a 
 26.18  majority of the votes cast on the question in each municipality 
 26.19  are in favor of its adoption, the order of the board shall 
 26.20  become effective as provided herein.  
 26.21     (d) (f) Notwithstanding a disapproval of the board's order 
 26.22  for consolidation by a city council of an affected municipality 
 26.23  required to approve the board's order in clause paragraph (a) or 
 26.24  (c) (e), the board's order for consolidation shall nevertheless 
 26.25  be deemed approved by that city council if ten percent or more 
 26.26  of the resident voters of that municipality who voted for 
 26.27  governor at the last general election petition the city council 
 26.28  for a referendum on the consolidation as provided in clause 
 26.29  paragraph (a), and a majority of those voting in that 
 26.30  municipality approve the board's order for consolidation.  
 26.31     Subd. 7.  [DIFFERENTIAL TAXATION.] Where one municipality 
 26.32  is receiving substantially fewer municipal services, the board 
 26.33  director may provide that the tax rate of the municipality shall 
 26.34  be increased in substantially equal proportions over a period of 
 26.35  not more than five years to equality with the tax rate in the 
 26.36  remainder of the new municipality.  The period shall be 
 27.1   determined by the board director on the basis of the period 
 27.2   reasonably required to provide substantially equal municipal 
 27.3   services. 
 27.4      Subd. 8.  [EFFECTIVE DATE.] The consolidation shall be 
 27.5   effective upon the election and qualification of new municipal 
 27.6   officers, or at such later date as set by the board in its order.
 27.7      Sec. 17.  Minnesota Statutes 2000, section 414.051, is 
 27.8   amended to read: 
 27.9      414.051 [BOARD'S REVIEW OF TOWNSHIPS ACCORDING TO 
 27.10  POPULATION.] 
 27.11     After each federal census the board director may determine 
 27.12  the townships which have a population in excess of 2,000 
 27.13  exclusive of any municipality or part of a municipality within 
 27.14  the township and make recommendations which it deems the 
 27.15  director considers necessary and reasonable to the board of any 
 27.16  such township. 
 27.17     Sec. 18.  Minnesota Statutes 2000, section 414.06, is 
 27.18  amended to read: 
 27.19     414.06 [DETACHMENT OF PROPERTY FROM A MUNICIPALITY.] 
 27.20     Subdivision 1.  [INITIATING THE PROCEEDING.] Property which 
 27.21  is situated within a municipality and abutting the municipal 
 27.22  boundary, rural in character and not developed for urban 
 27.23  residential, commercial, or industrial purposes may be detached 
 27.24  from the municipality according to the following procedure.  The 
 27.25  proceeding may be initiated by submitting to the board director 
 27.26  a resolution of the municipality to which the land is attached 
 27.27  or by submitting to the board director a petition of all of the 
 27.28  property owners of the land to be detached if the area is less 
 27.29  than 40 acres or of 75 percent of the property owners if over 40 
 27.30  acres.  The petition or resolution shall set forth the 
 27.31  boundaries and the area of the land to be detached, the number 
 27.32  and character of the buildings, the resident population, and the 
 27.33  municipal improvements, if any, in the area. 
 27.34     Subd. 2.  [HEARING, IF NEEDED.] If both a resolution of the 
 27.35  municipality and a petition by all the property owners are 
 27.36  submitted, no hearing is necessary.  In any other case, upon 
 28.1   receipt of a petition or resolution, the executive director of 
 28.2   the board shall designate a time and place for a hearing in 
 28.3   accordance with section 414.09. 
 28.4      Subd. 3.  [BOARD'S ORDER.] Upon completion of the hearing, 
 28.5   the board director may order the detachment if it finds on 
 28.6   finding that the requisite number of property owners have signed 
 28.7   the petition if initiated by the property owners, that the 
 28.8   property is rural in character and not developed for urban 
 28.9   residential, commercial or industrial purposes, that the 
 28.10  property is within the boundaries of the municipality and abuts 
 28.11  a boundary, that the detachment would not unreasonably affect 
 28.12  the symmetry of the detaching municipality, and that the land is 
 28.13  not needed for reasonably anticipated future development.  
 28.14  The board director may deny the detachment if it finds on 
 28.15  finding that the remainder of the municipality cannot continue 
 28.16  to carry on the functions of government without undue hardship.  
 28.17  The board shall have authority to director may decrease the area 
 28.18  of property to be detached and may include only a part of the 
 28.19  proposed area to be detached.  If the tract abuts more than one 
 28.20  township, it shall become a part of each township, being divided 
 28.21  by projecting through it the boundary line between the 
 28.22  townships.  The detached area may be relieved of the primary 
 28.23  responsibility for existing indebtedness of the municipality and 
 28.24  be required to assume the indebtedness of the township of which 
 28.25  it becomes a part, in such proportion as the board director 
 28.26  shall deem just and equitable having in view the amount of taxes 
 28.27  due and delinquent and the indebtedness of each township and the 
 28.28  municipality affected, if any, and for what purpose the same was 
 28.29  incurred, all in relation to the benefit inuring to the detached 
 28.30  area as a result of the indebtedness and the last net tax 
 28.31  capacity of the taxable property in each township and 
 28.32  municipality. 
 28.33     Subd. 4.  [EFFECTIVE DATE.] The detachment shall be 
 28.34  effective upon the issuance of the board's order, or at such 
 28.35  later date, as provided by the board in its order.  A copy of 
 28.36  the detachment order must be delivered immediately by 
 29.1   the executive director of the Minnesota municipal board to the 
 29.2   appropriate county auditor or auditors.  For the purposes of 
 29.3   taxation, if the detachment becomes effective on or before 
 29.4   August 1 of a levy year, the town or towns acquiring the 
 29.5   detached area may levy on it beginning with that same levy 
 29.6   year.  If the detachment becomes effective after August 1 of a 
 29.7   levy year, the municipality may continue to levy on the detached 
 29.8   area for that levy year, and the town or towns acquiring the 
 29.9   detached area may not levy on it until the following levy year. 
 29.10     Sec. 19.  Minnesota Statutes 2000, section 414.061, is 
 29.11  amended to read: 
 29.12     414.061 [CONCURRENT DETACHMENT AND ANNEXATION OF 
 29.13  INCORPORATED LAND.] 
 29.14     Subdivision 1.  [INITIATING THE PROCEEDING.] Property of 
 29.15  one municipality which abuts another may be concurrently 
 29.16  detached and annexed by the procedure set forth in this 
 29.17  section.  The proceeding shall be initiated by submitting to the 
 29.18  executive director resolutions of both municipalities describing 
 29.19  the land and stating their desire to detach and annex the land. 
 29.20     Subd. 2.  [BOARD'S ORDER.] If the resolutions are in order, 
 29.21  the board director may order the detachment and annexation. 
 29.22     Subd. 3.  [EFFECTIVE DATE.] The concurrent detachment and 
 29.23  annexation shall be effective upon the issuance of the board's 
 29.24  order, or at such later date as provided by the board in its 
 29.25  order.  A copy of the annexation order must be delivered 
 29.26  immediately by the executive director of the Minnesota municipal 
 29.27  board to the appropriate county auditor or auditors.  For the 
 29.28  purposes of taxation, if the annexation becomes effective on or 
 29.29  before August 1 of a levy year, the municipality acquiring the 
 29.30  detached area of another municipality may levy on it beginning 
 29.31  with that same levy year.  If the annexation becomes effective 
 29.32  after August 1 of a levy year, the municipality losing the 
 29.33  detached area may continue to levy on it for that levy year, and 
 29.34  the municipality acquiring the detached area may not levy on it 
 29.35  until the following levy year. 
 29.36     Subd. 4.  [BOARD INITIATION DIRECTOR'S INITIATIVE.] 
 30.1   The board director (1) may initiate proceedings for the 
 30.2   concurrent detachment and annexation of portions of one 
 30.3   municipality completely surrounded by another municipality, on 
 30.4   its own motion or (2) may act upon the petition of all of the 
 30.5   owners of property in the completely surrounded area.  In such 
 30.6   cases the board director shall conduct hearings and issue its an 
 30.7   order pursuant to section 414.09.  In arriving at its a 
 30.8   decision, the board director shall consider the factors in 
 30.9   section 414.02, subdivision 3.  The board director shall order 
 30.10  the proposed action if it finds on finding that it will be for 
 30.11  the best interests of the municipalities and the property 
 30.12  owners.  In all cases, the board director shall set forth the 
 30.13  factors which are the basis for the decision. 
 30.14     Subd. 5.  [PROPERTY OWNER INITIATION.] Property owners may 
 30.15  initiate proceedings for the concurrent detachment of their 
 30.16  property from one municipality and its annexation to an adjacent 
 30.17  municipality by a petition signed by all of them that they 
 30.18  submit to the board director accompanied by a resolution of the 
 30.19  city council of at least one of the affected municipalities.  
 30.20  The board director shall conduct hearings and issue its an order 
 30.21  pursuant to section 414.09.  In arriving at its a decision, 
 30.22  the board director shall consider the factors in section 414.02, 
 30.23  subdivision 3.  The board director shall order the proposed 
 30.24  action if it finds on finding that it will be for the best 
 30.25  interests of the municipalities and the property owner.  In all 
 30.26  cases, the board director shall set forth the factors which are 
 30.27  the basis for the decision. 
 30.28     Sec. 20.  Minnesota Statutes 2000, section 414.063, is 
 30.29  amended to read: 
 30.30     414.063 [JOINT AGREEMENTS.] 
 30.31     After notice and hearing as provided in section 414.09, the 
 30.32  board director may include provisions of joint agreements 
 30.33  between political subdivisions in its the orders. 
 30.34     Sec. 21.  Minnesota Statutes 2000, section 414.067, 
 30.35  subdivision 1, is amended to read: 
 30.36     Subdivision 1.  [TOWNSHIP OR MUNICIPALITY DIVIDED.] 
 31.1   Whenever the board director divides an existing governmental 
 31.2   unit, the board director may apportion the property and 
 31.3   obligations between the governmental unit adding territory and 
 31.4   the governmental unit from which the territory was obtained.  
 31.5   The apportionment shall be made in a just and equitable manner 
 31.6   having in view the value of the existing township or municipal 
 31.7   property located in the area to be added, the assets, value, and 
 31.8   location of all the taxable property in the existing township or 
 31.9   municipality, the indebtedness, the taxes due and delinquent, 
 31.10  other revenue accrued but not paid to the existing township or 
 31.11  municipality and the ability of any remainder of the township or 
 31.12  municipality to function as an effective governmental unit.  The 
 31.13  order shall not relieve any property from any tax liability for 
 31.14  payment for any bonded obligation, but the taxable property in 
 31.15  the new municipality may be made primarily liable thereon. 
 31.16     Sec. 22.  Minnesota Statutes 2000, section 414.067, 
 31.17  subdivision 3, is amended to read: 
 31.18     Subd. 3.  [REVISION OF TAX RECORDS; REDISTRIBUTION OF 
 31.19  LEVIES.] In an apportionment made under this section the board 
 31.20  director may order the county auditor to revise tax records and 
 31.21  respread levies at any time prior to December 15 or order the 
 31.22  county treasurer to redistribute taxes levied and receivable. 
 31.23     Sec. 23.  Minnesota Statutes 2000, section 414.07, is 
 31.24  amended to read: 
 31.25     414.07 [APPEALS.] 
 31.26     Subdivision 1.  [ORDERS OF BOARD, TIME LIMITATION LIMIT.] 
 31.27  All orders of the board in proceedings under this chapter shall 
 31.28  be issued within one year from the date of the day of the first 
 31.29  hearing thereon provided that the time may be extended for a 
 31.30  fixed additional period upon consent of all parties of record.  
 31.31  Failure to so order shall be deemed to be an order denying the 
 31.32  matter before the board.  An appeal may be taken from such 
 31.33  failure to so order in the same manner as an appeal from an 
 31.34  order as provided in subdivision 2. 
 31.35     Subd. 2.  [GROUNDS FOR APPEAL.] (a) Any person aggrieved by 
 31.36  any order of the board issued under this chapter may appeal to 
 32.1   the district court upon the following grounds: 
 32.2      (a) (1) that the board had no order was issued without 
 32.3   jurisdiction to act; 
 32.4      (b) (2) that the board order exceeded its the orderer's 
 32.5   jurisdiction; 
 32.6      (c) (3) that the order of the board is arbitrary, 
 32.7   fraudulent, capricious or oppressive or in unreasonable 
 32.8   disregard of the best interests of the territory affected; or 
 32.9      (d) (4) that the order is based upon an erroneous theory of 
 32.10  law. 
 32.11     (b) The appeal shall be taken in the district court in the 
 32.12  county in which the majority of the area affected is located.  
 32.13  The appeal shall not stay the effect of the order.  All notices 
 32.14  and other documents shall be served on both the executive 
 32.15  director and the attorney general's assistant assigned to the 
 32.16  board director for purposes of this chapter. 
 32.17     (c) If the court determines that the action of the board 
 32.18  involved is unlawful or unreasonable or is not warranted by the 
 32.19  evidence in case an issue of fact is involved, the court may 
 32.20  vacate or suspend the action of the board involved, in whole or 
 32.21  in part, as the case requires.  The matter shall then be 
 32.22  remanded to the board for further action in conformity with the 
 32.23  decision of the court. 
 32.24     (d) To render a review of a board an order effectual, the 
 32.25  aggrieved person shall file with the court administrator of the 
 32.26  district court of the county in which the majority of the area 
 32.27  is located, within 30 days of the order, an application for 
 32.28  review together with the grounds upon which the review is sought.
 32.29     (e) An appeal lies from the district court as in other 
 32.30  civil cases. 
 32.31     Sec. 24.  Minnesota Statutes 2000, section 414.08, is 
 32.32  amended to read: 
 32.33     414.08 [APPEALS FROM DISTRICT COURT.] 
 32.34     An appeal may be taken under the rules of civil appellate 
 32.35  procedure by the Minnesota municipal board director from a final 
 32.36  order or judgment made or rendered by the district court when 
 33.1   the board director determines that the final order or judgment 
 33.2   adversely affects the public interest. 
 33.3      Sec. 25.  Minnesota Statutes 2000, section 414.09, is 
 33.4   amended to read: 
 33.5      414.09 [UNIFORM PROCEDURES OF BOARD.] 
 33.6      Subdivision 1.  [HEARINGS.] Proceedings initiated by the 
 33.7   submission of an initiating document or by the board of its own 
 33.8   motion director shall come on for hearing within 30 to 60 days 
 33.9   from receipt of the document by the board director or from the 
 33.10  date of board the director's action and the board person 
 33.11  conducting the hearing must submit its an order no later than 
 33.12  one year from the date of the day of the first hearing.  In any 
 33.13  proceeding before the board and upon the request of any party, 
 33.14  the board shall meet physically rather than by means of 
 33.15  electronic media.  The place of the hearing shall be in the 
 33.16  county where a majority of the affected territory is situated, 
 33.17  and shall be established for the convenience of the parties.  
 33.18  The executive director shall mail notice of the hearing to the 
 33.19  following parties:  the township or municipality presently 
 33.20  governing the affected territory; any township or municipality 
 33.21  abutting the affected territory; the county where the affected 
 33.22  territory is situated; and each planning agency which has 
 33.23  jurisdiction over the affected area.  The executive director 
 33.24  shall cause see that notice of the hearing to be is published 
 33.25  for two successive weeks in a legal newspaper of general 
 33.26  circulation in the affected area.  When the board director 
 33.27  exercises its authority to change the boundaries of the affected 
 33.28  area so as to increase the quantity of the land, the hearing 
 33.29  shall be recessed and reconvened upon two weeks' published 
 33.30  notice in a legal newspaper of general circulation in the 
 33.31  affected area. 
 33.32     Subd. 2.  [TRANSMITTAL OF BOARD'S ORDER.] The executive 
 33.33  director shall cause see that copies of the board's order to 
 33.34  be are mailed to all parties entitled to mailed notice of 
 33.35  hearing under subdivision 1, the secretary of state, the 
 33.36  department of revenue, the state demographer, individual 
 34.1   property owners if initiated in that manner, affected county 
 34.2   auditor, and any other party of record.  The affected county 
 34.3   auditor shall record the order against the affected property. 
 34.4      Subd. 3.  [ELECTIONS OF MUNICIPAL OFFICERS.] An order 
 34.5   approving an incorporation or consolidation pursuant to this 
 34.6   chapter shall set a date for this an election of new municipal 
 34.7   officers not less than 45 days nor more than 60 days after the 
 34.8   issuance of such the order.  The board director shall appoint an 
 34.9   acting clerk for election purposes, at least three election 
 34.10  judges who shall be residents of the new municipality, and shall 
 34.11  designate polling places within the new municipality. 
 34.12     The acting clerk shall prepare the official election 
 34.13  ballot.  Affidavits of candidacy may be filed by any person 
 34.14  eligible to hold municipal office not more than four weeks nor 
 34.15  less than two weeks before the date designated by the board 
 34.16  director for the election.  
 34.17     The election shall be conducted in conformity with the 
 34.18  charter and the laws for conducting municipal elections insofar 
 34.19  as applicable.  Any person eligible to vote at a township or 
 34.20  municipal election within the area of the new municipality, is 
 34.21  eligible to vote at such election. 
 34.22     Any excess in the expense of conducting the election over 
 34.23  receipts from filing fees shall be a charge against the new 
 34.24  municipality; any excess of receipts shall be deposited in the 
 34.25  treasury of the new municipality. 
 34.26     Sec. 26.  Minnesota Statutes 2000, section 414.12, 
 34.27  subdivision 1, is amended to read: 
 34.28     Subdivision 1.  [ALTERNATIVE DISPUTE RESOLUTION.] (a) 
 34.29  Notwithstanding anything to the contrary in sections 414.01 to 
 34.30  414.11 414.09, the director of the office of strategic and 
 34.31  long-range planning, upon consultation with affected parties and 
 34.32  considering the procedures and principles established in 
 34.33  sections 414.01 to 414.11 414.09, and Laws 1997, chapter 202, 
 34.34  article 4, sections 1 to 13, may require that disputes over 
 34.35  proposed boundary adjustments be resolved by means of 
 34.36  alternative dispute resolution processes in place of hearings 
 35.1   that would otherwise be required pursuant to sections 414.01 to 
 35.2   414.09, including those provided in chapter 14, in the execution 
 35.3   of the office's director's duties under this chapter. 
 35.4      (b) Alternative dispute resolution processes that may be 
 35.5   required include: 
 35.6      (1) the contested case procedures provided by sections 
 35.7   14.57 to 14.62; 
 35.8      (2) the mediation and arbitration process provided by 
 35.9   sections 572A.015 to 572A.03; or 
 35.10     (3) another mediation and arbitration process ordered by 
 35.11  the director. 
 35.12     Sec. 27.  Minnesota Statutes 2000, section 414.12, 
 35.13  subdivision 2, is amended to read: 
 35.14     Subd. 2.  [DELEGATION OF AUTHORITY.] The director may, with 
 35.15  the agreement of the chief administrative law judge, delegate to 
 35.16  the office of administrative hearings, in any individual case or 
 35.17  group of cases, the director's authority and responsibility to 
 35.18  conduct hearings and issue final orders related to the hearings 
 35.19  under sections 414.01 to 414.09.  In the case of detachment of 
 35.20  lands from a municipality, if the parties do not agree to 
 35.21  resolve a boundary adjustment matter by mediation or 
 35.22  arbitration, then the case shall be referred to an 
 35.23  administrative law judge to conduct hearings and issue final 
 35.24  orders related to the hearings under sections 414.01 to 414.09. 
 35.25     Sec. 28.  [TEMPORARY RULES.] 
 35.26     Notwithstanding Minnesota Statutes, section 414.01, 
 35.27  subdivision 10, until new rules are adopted by the office of 
 35.28  strategic and long-range planning as provided in this section, 
 35.29  Minnesota Rules, chapter 6000, must be followed to the extent 
 35.30  applicable and consistent with the transfer of authority from 
 35.31  the former municipal board to the director of the office of 
 35.32  strategic and long-range planning.  Notwithstanding Laws 2000, 
 35.33  chapter 446, section 2, the office of strategic and long-range 
 35.34  planning is exempt from any requirement to adopt or amend rules 
 35.35  governing boundary adjustment procedures until after May 1, 2004.
 35.36     Sec. 29.  [REPEALER.] 
 36.1      Minnesota Statutes 2000, sections 414.01, subdivisions 2 
 36.2   and 6a; 414.011, subdivision 8; and 414.11, are repealed.