1.1                          A bill for an act 
  1.2             relating to housing; defining mixed housing 
  1.3             development; requiring negotiation on proposed mixed 
  1.4             income developments; changing the burden of proof 
  1.5             under certain circumstances; requiring housing fiscal 
  1.6             impact notes; authorizing collector street utilities; 
  1.7             amending Minnesota Statutes 2000, section 462.361, by 
  1.8             adding a subdivision; proposing coding for new law in 
  1.9             Minnesota Statutes, chapter 462; proposing coding for 
  1.10            new law as Minnesota Statutes, chapter 444A. 
  1.11  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.12     Section 1.  [444A.01] [DEFINITIONS.] 
  1.13     Subdivision 1.  [SCOPE.] For purposes of sections 444A.01 
  1.14  to 444A.07, the following terms have the meanings given them. 
  1.15     Subd. 2.  [MUNICIPALITY.] "Municipality" means a home rule 
  1.16  charter or statutory city or town as described in section 
  1.17  368.01, subdivision 1. 
  1.18     Subd. 3.  [STREET UTILITY; STREET UTILITIES.] "Street 
  1.19  utility" or "street utilities" means grading; base construction; 
  1.20  surface construction; installation of curb, gutter, and drainage 
  1.21  appurtenances; signalization; lighting; increasing the capacity 
  1.22  of an existing collector street; sidewalks and boulevard 
  1.23  improvements within the designated right-of-way of a new 
  1.24  collector street; and related engineering and financing.  The 
  1.25  boulevard improvements must be subject to the normal and 
  1.26  customary standards for such improvements throughout the 
  1.27  municipality as adopted by ordinance of the municipality. 
  1.28     Subd. 4.  [COLLECTOR STREET.] "Collector street" means a 
  2.1   public roadway classified as a collector street or higher 
  2.2   classification in a functional classification system used by the 
  2.3   municipality in planning or programming roadways, excluding 
  2.4   state trunk highways and interstate freeways. 
  2.5      Subd. 5.  [TRAVEL SHED.] "Travel shed" means a geographic 
  2.6   area designated by a municipality within which street utilities 
  2.7   are undertaken and financed in accordance with sections 1 to 7. 
  2.8      Sec. 2.  [444A.02] [AUTHORIZATION.] 
  2.9      A municipality may: 
  2.10     (1) construct, reconstruct, repair, enlarge, improve, or in 
  2.11  any other manner obtain street utilities to increase or maintain 
  2.12  traffic capacity of new or existing collector streets for the 
  2.13  collection, transport, and disbursement of traffic within its 
  2.14  corporate limits; 
  2.15     (2) acquire by gift, purchase, lease, condemnation, or 
  2.16  otherwise any or all real property required for these purposes; 
  2.17  and 
  2.18     (3) provide a local matching amount for a street utility on 
  2.19  a county collector street located within the corporate 
  2.20  boundaries of the municipality. 
  2.21     Sec. 3.  [444A.03] [CHARGES; NET REVENUES.] 
  2.22     To pay for the street utilities, a municipality may, by 
  2.23  ordinance, impose just and equitable periodic charges for the 
  2.24  use and availability of the street utilities and make contracts 
  2.25  for the charges as provided in this section.  The charges must 
  2.26  be tied to an approved capital improvement plan and the 
  2.27  transportation section of the comprehensive plan of the 
  2.28  municipality.  The municipality shall be divided into different 
  2.29  travel sheds and may establish different charges for each shed 
  2.30  based on current and projected uses of land and needs as 
  2.31  supported by the comprehensive plan of the municipality.  The 
  2.32  municipality may defer charges against unimproved properties 
  2.33  until a designated future year or until platting of the property 
  2.34  or construction of improvements on the property and the deferred 
  2.35  charges may bear interest at the rate determined by the 
  2.36  municipality.  Any charges that are not used for the authorized 
  3.1   purpose must be returned to the individual, corporation, or 
  3.2   partnership that paid the charges.  If the municipality cannot 
  3.3   locate the individual, corporation, or partnership that paid the 
  3.4   charges, the municipality may use the funds solely for other 
  3.5   street utilities authorized in this section.  All charges 
  3.6   collected must be placed in a separate fund for the street 
  3.7   utilities and spent for the purpose of meeting authorized 
  3.8   obligations relating to street utilities in the travel shed from 
  3.9   which charges are collected.  In resolutions authorizing the 
  3.10  issuance of general or special obligations and pledging net 
  3.11  revenues or other revenues to them, the municipality may make 
  3.12  covenants for the protection of the holders of the obligations 
  3.13  and taxpayers of the municipality as it deems necessary that it 
  3.14  will impose and collect charges authorized by this section at 
  3.15  the times and in the amounts required to produce net revenues 
  3.16  adequate to pay all principal and interest when due on the 
  3.17  obligations and to create and maintain reserves to secure the 
  3.18  payments as required by the resolutions.  The governing body of 
  3.19  the municipality may obligate the owner, leasee, occupant, or 
  3.20  all of them to pay the charges and may certify unpaid charges to 
  3.21  the county auditor with taxes against the property for 
  3.22  collection at the same times and in the same manner as other ad 
  3.23  valorem taxes are collected.  Net revenues from the charges 
  3.24  authorized by this section may not be used for the operation and 
  3.25  maintenance of the street utility. 
  3.26     Sec. 4.  [444A.04] [PROCEDURES FOR ADOPTION.] 
  3.27     A municipality may impose the street utility charges 
  3.28  authorized in this section by ordinance adopted by the governing 
  3.29  body.  The charges must be fair, reasonable, and proportionate 
  3.30  to the actual cost of the street utilities for which the charges 
  3.31  are imposed.  The ordinance must not be voted on or adopted 
  3.32  until after a public hearing has been held on the question.  A 
  3.33  notice of the time, place, and purpose of the hearing must be 
  3.34  published at least once in each week for two successive weeks in 
  3.35  the official newspaper of the municipality, or in a newspaper of 
  3.36  general content and circulation within the municipality, and the 
  4.1   last notice must be published at least seven but no more than 30 
  4.2   days before the hearing.  If the ordinance is adopted, the 
  4.3   municipality must file the ordinance of record with the county 
  4.4   recorder and provide a copy to the county auditor. 
  4.5      Sec. 5.  [444A.05] [FINANCING.] 
  4.6      (a) A municipality may issue and sell its general or 
  4.7   special obligations to finance street utilities authorized in 
  4.8   this section. 
  4.9      (b) The obligations may be in an amount the municipality 
  4.10  considers necessary to defray in whole or in part the expense 
  4.11  incurred or estimated to be incurred in connection with the 
  4.12  street utilities, including every item of cost from inception to 
  4.13  completion and all fees and expenses incurred in connection with 
  4.14  the street utilities or the financing of those utilities. 
  4.15     (c) The obligations may be paid from the net revenues 
  4.16  derived from street utility charges imposed under this section 
  4.17  or from other revenues pledged for their payment under charter 
  4.18  or law.  But if other revenues are pledged for this purpose, 
  4.19  they must reduce the charges imposed under this section for the 
  4.20  street utility. 
  4.21     (d) All obligations relating to street utilities must be 
  4.22  issued and sold in accordance with chapter 475, except that: 
  4.23     (1) an election is not required; 
  4.24     (2) the amount of the obligation is not included in 
  4.25  determining the net indebtedness of the municipality under the 
  4.26  provisions of any law or charter limiting such indebtedness; and 
  4.27     (3) the obligations may be sold at public or private sale 
  4.28  at the price or prices the municipality determines by resolution.
  4.29     Sec. 6.  [444A.06] [ADVANCE FUNDING AGREEMENTS.] 
  4.30     An individual, corporation, or partnership may enter into 
  4.31  an agreement with the municipality to undertake and fund any 
  4.32  street utilities before the collection of any charges authorized 
  4.33  in this section.  The agreement may provide that net revenues 
  4.34  from the charges collected for the street utility must be paid 
  4.35  to the individual, corporation, or partnership subject to the 
  4.36  terms and conditions of the agreement.  Sections 471.345 and 
  5.1   574.26 do not apply to street utilities undertaken by an 
  5.2   individual, corporation, or partnership pursuant to such an 
  5.3   agreement. 
  5.4      Sec. 7.  [444A.07] [SPECIAL ASSESSMENTS.] 
  5.5      In a municipality that adopts an ordinance under section 
  5.6   444A.04, charges for property that has direct driveway access to 
  5.7   the collector street may be levied as special assessments only 
  5.8   by agreement with the owner.  Otherwise special assessments must 
  5.9   not be used to finance the same transportation utilities in a 
  5.10  municipality that adopts an ordinance under section 444A.04. 
  5.11     Sec. 8.  [462.3609] [MIXED HOUSING DEVELOPMENT.] 
  5.12     Subdivision 1.  [DEFINITIONS.] In this chapter, "mixed 
  5.13  housing development" means a proposed housing development in 
  5.14  which: 
  5.15     (a) all of the residential dwelling units in the 
  5.16  development are for-sale units and at least 20 percent of the 
  5.17  residential dwelling units have an initial selling price, 
  5.18  including closing costs and brokerage fees, that is less than 
  5.19  the lower of: 
  5.20     (1) the median sales price for homes in the city based on 
  5.21  the most recently available data from the department of revenue 
  5.22  from certificates of real estate value filed under section 
  5.23  272.115; or 
  5.24     (2) the median sales price for homes in the county 
  5.25  according to the most recently available data from the 
  5.26  department of revenue from certificates of real estate value 
  5.27  filed under section 272.115; 
  5.28     (b) both rental and for-sale residential dwelling units 
  5.29  will be available and at least 20 percent of the residential 
  5.30  dwelling units in the development are rental units; 
  5.31     (c) all of the residential dwelling units in the 
  5.32  development are rental units and at least 20 percent of the 
  5.33  units are affordable to households earning 50 percent or less of 
  5.34  the greater of state or area median income or 40 percent of the 
  5.35  units are affordable to households earning 60 percent or less of 
  5.36  the greater of state or area median income; or 
  6.1      (d) both rental and for-sale dwelling units will be 
  6.2   available in the development and the development does not meet 
  6.3   the requirements of paragraph (b), but the total number of 
  6.4   rental units and for-sale units that meet the requirements of 
  6.5   paragraph (a) will equal at least 30 percent of the dwelling 
  6.6   units in the development. 
  6.7      Subd. 2.  [NEGOTIATIONS.] If a person seeks to develop a 
  6.8   mixed housing development meeting the requirements of this 
  6.9   section, the municipality in which the development will be 
  6.10  located must negotiate reasonable regulatory accommodations 
  6.11  necessary to achieve the proposed mixed housing development. 
  6.12     Subd. 3.  [REGULATORY ACCOMMODATIONS.] (a) "Regulatory 
  6.13  accommodations" means adjustments to or relief from permissible 
  6.14  location, height, width, bulk, type of foundation, number of 
  6.15  stories, size of buildings and other structures, the percentage 
  6.16  of the lot occupied, the size of yards and other open spaces, 
  6.17  the density and distribution of population, the uses of 
  6.18  buildings, design, or other provisions of local zoning 
  6.19  ordinances or regulations relating to residential housing 
  6.20  development and related infrastructure.  Examples of regulatory 
  6.21  accommodations include, but are not limited to:  increased 
  6.22  density, reduced setbacks and parking requirements, 
  6.23  smaller-sized dwelling units, decreased street widths, and 
  6.24  smaller lots. 
  6.25     (b) A municipality may condition the provision of 
  6.26  regulatory accommodations, issuance of variances, or special or 
  6.27  conditional use permits on the development containing a higher 
  6.28  percentage of dwelling units subject to the rent or sales price 
  6.29  limitations set forth in subdivision 1 or on the development 
  6.30  containing units with sales prices or rent levels below the 
  6.31  price or rent levels required to meet the definition of mixed 
  6.32  housing development in subdivision 1. 
  6.33     Subd. 4.  [EXEMPTIONS.] Cities located in counties with a 
  6.34  population under 30,000 residents as determined by the most 
  6.35  recent data published by the United States Census Bureau and 
  6.36  cities that have adopted an inclusionary housing ordinance that 
  7.1   requires a designated portion of the units constructed in a 
  7.2   housing development to meet locally established affordability 
  7.3   requirements are exempt from the requirements of subdivisions 2 
  7.4   and 3. 
  7.5      Sec. 9.  Minnesota Statutes 2000, section 462.361, is 
  7.6   amended by adding a subdivision to read: 
  7.7      Subd. 3.  [BURDEN ON MUNICIPALITY.] In actions brought 
  7.8   under this section in which the aggrieved party has sought to 
  7.9   construct a mixed housing development under section 462.3609, 
  7.10  the burden shall be on the municipality to prove, based on the 
  7.11  record, that the municipality offered alternative regulatory 
  7.12  accommodations that would achieve the proposed mixed housing 
  7.13  development or that the municipality failed to provide 
  7.14  reasonable regulatory accommodation in order to protect the 
  7.15  public health, safety, or general welfare of the residents of 
  7.16  the municipality, or that the proposed mixed housing development 
  7.17  is inconsistent with the municipality's comprehensive land-use 
  7.18  plan.  A mixed housing development that proposes densities 
  7.19  within the densities allowable in the comprehensive land-use 
  7.20  plan is presumed to be reasonable with respect to density. 
  7.21     Sec. 10.  [462.3611] [NO REDUCTION OF DENSITY CONDITION.] 
  7.22     A municipality must not condition the issuance of a plat 
  7.23  approval, conditional use permit, land use permit, or building 
  7.24  permit on a reduction in the density of a housing development 
  7.25  below the level of density permissible under the applicable 
  7.26  zoning ordinances.  
  7.27     Sec. 11.  [462.3612] [HOUSING FISCAL IMPACT NOTES.] 
  7.28     Subdivision 1.  [DEFINED.] "Housing fiscal impact" means 
  7.29  increased or decreased costs that a housing development would 
  7.30  incur as a result of an official control adopted or amended by a 
  7.31  municipality after August 1, 2002, that adds to or changes the 
  7.32  regulation of the location, height, width, bulk, type of 
  7.33  foundation, number of stories, size of buildings and other 
  7.34  structures, the percentage of the lot occupied, the size of 
  7.35  yards and other open spaces, the density and distribution of 
  7.36  population, the uses of buildings, or design of residential 
  8.1   housing. 
  8.2      Subd. 2.  [CONDITIONS; CONTENTS.] (a) Where there is the 
  8.3   potential for a housing fiscal impact resulting from the 
  8.4   adoption or amendment of an official control, a housing fiscal 
  8.5   impact note must be prepared by the responsible municipality 
  8.6   prior to the public hearing on the proposed adoption or 
  8.7   amendment of an official control. 
  8.8      (b) The housing fiscal impact note shall: 
  8.9      (1) estimate in dollar amounts the increase or decrease in 
  8.10  the costs as a result of the municipal proposed action; 
  8.11     (2) specify long-range implications of the proposed action; 
  8.12     (3) describe appropriate alternatives to the proposed 
  8.13  action; and 
  8.14     (4) discuss the rationale for the proposed change.