1.1 	A bill for an act
1.2 	relating to local government; modifying municipal and county planning and 
1.3 	zoning provisions; providing standards for preliminary plat approval in a 
1.4 	proposed development; modifying municipal boundary adjustment provisions; 
1.5 	permitting certain nonconformities; establishing a municipal boundary 
1.6 	adjustment task force; requiring a report; making certain funds available to the 
1.7 	task force;amending Minnesota Statutes 2004, sections 204B.14, subdivision 5; 
1.8 	394.25, subdivision 7; 394.36, subdivision 1, by adding subdivisions; 414.01, 
1.9 	subdivision 1a; 414.02, by adding a subdivision; 414.031, subdivision 4, by 
1.10 	adding a subdivision; 414.0325, subdivision 1, by adding a subdivision; 414.033, 
1.11 	subdivisions 2, 12; 414.036; 414.061, subdivision 5; 462.358, subdivision 3b; 
1.12 	proposing coding for new law in Minnesota Statutes, chapter 414.
1.13 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.14 	ARTICLE 1
1.15 	MUNICIPAL AND COUNTY PLANNING AND ZONING PROVISIONS

1.16 	Section 1. Minnesota Statutes 2004, section 204B.14, subdivision 5, is amended to read:
1.17 		 Subd. 5.Precinct boundaries; description; maps. When If  a precinct boundary 
1.18 	has been changed, or an annexation has occurred affecting a precinct boundary, the 
1.19 	municipal clerk shall immediately notify the county auditor and secretary of state.  
1.20 	The municipal clerk shall file a corrected base map with the secretary of state and 
1.21 	county auditor within 30 days after the boundary change was made or, in the case of an 
1.22 	annexation, the later of:  (1) 30 days after the approval of the annexation order; or (2) the 
1.23 	effective date of the annexation order.  Upon request, the secretary of state county auditor 
1.24 	shall provide a base map and precinct finder to the municipal clerk. The secretary of 
1.25 	state shall update the precinct boundary database, prepare a corrected precinct map, and 
1.26 	provide the corrected precinct map to the county auditor and the municipal clerk who shall 
1.27 	make them available for public inspection. The municipal clerk shall prepare a corrected 
2.1 	precinct map and provide the corrected map to the county auditor, who shall correct the 
2.2 	precinct finder in the statewide voter registration system and make the corrected map and 
2.3 	precinct finder available for public inspection, and to the secretary of state, who shall 
2.4 	update the precinct boundary database. The county auditor shall prepare and file precinct 
2.5 	boundary maps for precincts in unorganized territories in the same manner as provided 
2.6 	for precincts in municipalities.  For every election held in the municipality the election 
2.7 	judges shall be furnished precinct maps as provided in section 201.061, subdivision 6.  If a 
2.8 	municipality changes the boundary of an election precinct, or if an annexation affecting a 
2.9 	precinct boundary occurs, the county auditor shall notify each school district with territory 
2.10 	affected by the boundary change at least 30 days before the effective date of the change.

2.11 	Sec. 2. Minnesota Statutes 2004, section 394.25, subdivision 7, is amended to read:
2.12 		Subd. 7.Specific controls; other subjects. (a) Specific controls pertaining to other 
2.13 	subjects incorporated in the comprehensive plan or establishing standards and procedures 
2.14 	to be employed in land development including, but not limited to, subdividing of land and 
2.15 	the approval of land plats and the preservation and dedication of streets and land for other 
2.16 	public purposes and the general design of physical improvement.
2.17 	(b) A county must approve a preliminary plat that meets the applicable standards 
2.18 	and criteria contained in the county's zoning and subdivision regulations unless the 
2.19 	county adopts written findings based on a record from the public proceedings why the 
2.20 	application shall not be approved.
2.21 	(b) (c) The controls may require that a portion of any proposed subdivision be 
2.22 	dedicated to the public or preserved for public use as parks, recreational facilities, 
2.23 	playgrounds, trails, wetlands, or open space. The requirement must be imposed by 
2.24 	ordinance.
2.25 	(c) (d) If a county adopts the ordinance required by paragraph (b) (c), the county 
2.26 	must adopt a capital improvement program and adopt a parks and open space plan or have 
2.27 	a parks, trails, and open space component in its comprehensive plan subject to the terms 
2.28 	and conditions in this paragraph and in paragraphs (d) (e) through (o) (p).
2.29 	(d) (e) The county may choose to accept a per lot cash fee as set by ordinance from 
2.30 	the applicant for some or all of the new lots created in the subdivision.
2.31 	(e) (f) In establishing the portion to be dedicated or preserved or the per lot cash 
2.32 	fee, the controls must consider the open space, park, recreational, or common areas and 
2.33 	facilities that the applicant proposes to reserve for the subdivision.
2.34 	(f) (g) The county must reasonably determine that it will need to acquire that portion 
2.35 	of land for the purposes stated in this subdivision as a result of approval of the subdivision.
3.1 	(g) (h) The fees or dedication must be fair, reasonable, and proportionate to the 
3.2 	need created.
3.3 	(h) (i) Any cash payments received must be placed by the county in a special fund to 
3.4 	be used only for the purposes for which the money was obtained.
3.5 	(i) (j) Any cash payments received must be used only for the acquisition and 
3.6 	development or improvement of parks, recreational facilities, playgrounds, trails, 
3.7 	wetlands, or open space. Cash payments must not be used for ongoing operation, 
3.8 	maintenance, or redevelopment of parks, recreational facilities, playgrounds, trails, 
3.9 	wetlands, or open space.
3.10 	(j) (k) The county must not deny the approval of a subdivision based on an 
3.11 	inadequate supply of parks, open spaces, trails, or recreational areas within the county.
3.12 	(k) (l) The county must not condition the approval of any proposed subdivision 
3.13 	or development on an agreement to waive the right to challenge the validity of a fee 
3.14 	or dedication.
3.15 	(l) (m) The county must use at least 75 percent of the funds collected under this 
3.16 	subdivision according to the plan required in paragraph (c) (d) in the township or city 
3.17 	where the collection of funds occurs. However, the township board or city council may 
3.18 	agree to allow the county to use these funds outside of the township or city in a manner 
3.19 	consistent with the county parks, trails, and open space capital improvement plan or the 
3.20 	county parks and open space component in its comprehensive plan. The remainder of the 
3.21 	funds may be used by the county only for parks and trails connectivity and accessibility 
3.22 	purposes. The county must annually report to cities and townships on where funds were 
3.23 	collected and where funds were expended in the past year.
3.24 	(m) (n) Previously subdivided property from which a park dedication has been 
3.25 	received, being resubdivided with the same number of lots, is exempt from park dedication 
3.26 	requirements. If, as a result of resubdividing the property, the number of lots is increased, 
3.27 	then the park dedication or per lot cash fee must apply only to the net increase of lots.
3.28 	(n) (o) A county must not require a dedication of a portion of a proposed subdivision 
3.29 	or a payment in lieu of dedication in a town or city that has adopted a requirement 
3.30 	to dedicate or a payment in place of dedication as a provision of the town or city's 
3.31 	subdivision regulations under section  462.358, subdivision 2b, or chapter 366. 
3.32 	(o) (p) A county may negotiate an agreement with a town or city to share the 
3.33 	revenue generated by dedicating a portion of a proposed subdivision or a payment in 
3.34 	place of dedication.

3.35 	Sec. 3. Minnesota Statutes 2004, section 394.36, subdivision 1, is amended to read:
4.1 		Subdivision 1.Continuous or it ends. Except as provided in subdivision 2, 3, 
4.2 	or 4, any nonconformity, including the lawful use or occupation of land or premises 
4.3 	existing at the time of the adoption of an official control hereunder  under this chapter, may 
4.4 	be continued, except as regulated, terminated or acquired by the board as provided in 
4.5 	subdivisions 2 or 3, although such use or occupation does not conform to the provisions 
4.6 	thereof, but  although the use or occupation does not conform to the official control. If 
4.7 	such the nonconformity or occupancy is discontinued for a period of more than one year, 
4.8 	or any nonconforming building or structure is destroyed by fire or other peril to the extent 
4.9 	of 50 percent of its market value, any subsequent use or occupancy of the land or premises 
4.10 	shall be a conforming use or occupancy. 

4.11 	EFFECTIVE DATE. This section is effective the day following final enactment 
4.12 	and applies retroactively from August 1, 2004.

4.13 	Sec. 4. Minnesota Statutes 2004, section 394.36, is amended by adding a subdivision 
4.14 	to read:
4.15 		Subd. 1b.Designated floodplains. Notwithstanding subdivision 1, a county 
4.16 	shall regulate the repair, replacement, maintenance, improvement, or expansion of 
4.17 	nonconforming uses and structures in floodplain areas to the extent necessary to maintain 
4.18 	eligibility in the National Flood Insurance Program and not increase flood damage 
4.19 	potential or increase the degree of obstruction to flood flows in the floodway.

4.20 	EFFECTIVE DATE. This section is effective the day following final enactment 
4.21 	and applies retroactively from August 1, 2004.

4.22 	Sec. 5. Minnesota Statutes 2004, section 394.36, is amended by adding a subdivision 
4.23 	to read:
4.24 		Subd. 4.Nonconformities; certain classes of property. This subdivision applies 
4.25 	to homestead and nonhomestead residential real estate and seasonal residential real 
4.26 	estate occupied for recreational purposes. A nonconformity, including the lawful use or 
4.27 	occupation of land or premises existing at the time of the adoption of an official control 
4.28 	under this chapter, may be continued, including through repair, replacement, restoration, 
4.29 	maintenance, or improvement, but not including expansion. If the nonconformity or 
4.30 	occupancy is discontinued for a period of more than one year, or any nonconforming 
4.31 	building or structure is destroyed by fire or other peril to the extent of 50 percent of its 
4.32 	market value, and no building permit has been applied for within 180 days of when the 
4.33 	property is damaged, any subsequent use or occupancy of the land or premises must be a 
5.1 	conforming use or occupancy. If a nonconforming building or structure is destroyed by 
5.2 	fire or other peril to the extent of 50 percent of its market value, the board may impose 
5.3 	reasonable conditions upon a building permit in order to mitigate any newly created 
5.4 	impact on adjacent property.

5.5 	EFFECTIVE DATE. This section is effective the day following final enactment 
5.6 	and applies retroactively from August 1, 2004. For nonconforming property to which this 
5.7 	section applies that was destroyed by fire or other peril during the period from August 1, 
5.8 	2004, to the effective date of this section, the 180-day time limit to apply for a building 
5.9 	permit begins on the effective date of this section.

5.10 	Sec. 6. Minnesota Statutes 2004, section 462.358, subdivision 3b, is amended to read:
5.11 		Subd. 3b.Review procedures. The regulations shall include provisions regarding 
5.12 	the content of applications for proposed subdivisions, the preliminary and final review and 
5.13 	approval or disapproval of applications, and the coordination of such reviews with affected 
5.14 	political subdivisions and state agencies. Subdivisions including lands abutting upon any 
5.15 	existing or proposed trunk highway, county road or highway, or county state-aid highway 
5.16 	shall also be subject to review. The regulations may provide for the consolidation of the 
5.17 	preliminary and final review and approval or disapproval of subdivisions. Preliminary 
5.18 	or final approval may be granted or denied for parts of subdivision applications. The 
5.19 	regulations may delegate the authority to review proposals to the planning commission, 
5.20 	but final approval or disapproval shall be the decision of the governing body of the 
5.21 	municipality unless otherwise provided by law or charter. A municipality must approve 
5.22 	a preliminary plat that meets the applicable standards and criteria contained in the 
5.23 	municipality's zoning and subdivision regulations unless the municipality adopts written 
5.24 	findings based on a record from the public proceedings why the application shall not 
5.25 	be approved. The regulations shall require that a public hearing shall be held on all 
5.26 	subdivision applications prior to preliminary approval, unless otherwise provided by law 
5.27 	or charter. The hearing shall be held following publication of notice of the time and 
5.28 	place thereof in the official newspaper at least ten days before the day of the hearing. At 
5.29 	the hearing, all persons interested shall be given an opportunity to make presentations. 
5.30 	A subdivision application shall be preliminarily approved or disapproved within 120 
5.31 	days following delivery of an application completed in compliance with the municipal 
5.32 	ordinance by the applicant to the municipality, unless an extension of the review period has 
5.33 	been agreed to by the applicant. When a division or subdivision to which the regulations 
5.34 	of the municipality do not apply is presented to the city, the clerk of the municipality 
6.1 	shall within ten days certify that the subdivision regulations of the municipality do not 
6.2 	apply to the particular division.
6.3 	If the municipality or the responsible agency of the municipality fails to preliminarily 
6.4 	approve or disapprove an application within the review period, the application shall 
6.5 	be deemed preliminarily approved, and upon demand the municipality shall execute 
6.6 	a certificate to that effect. Following preliminary approval the applicant may request 
6.7 	final approval by the municipality, and upon such request the municipality shall certify 
6.8 	final approval within 60 days if the applicant has complied with all conditions and 
6.9 	requirements of applicable regulations and all conditions and requirements upon which 
6.10 	the preliminary approval is expressly conditioned either through performance or the 
6.11 	execution of appropriate agreements assuring performance. If the municipality fails to 
6.12 	certify final approval as so required, and if the applicant has complied with all conditions 
6.13 	and requirements, the application shall be deemed finally approved, and upon demand the 
6.14 	municipality shall execute a certificate to that effect. After final approval a subdivision 
6.15 	may be filed or recorded.

6.16 	ARTICLE 2
6.17 	MUNICIPAL BOUNDARY ADJUSTMENT

6.18 	Section 1. MUNICIPAL BOUNDARY ADJUSTMENT ADVISORY TASK 
6.19 	FORCE ESTABLISHED.
 6.20 		Subdivision 1.Membership. An advisory task force on municipal boundary 
6.21 	adjustments is established to study and make recommendations on what, if any, changes 
6.22 	should be made to the law governing municipal boundary adjustments. The task force 
6.23 	shall develop recommendations regarding best practices annexation training for city and 
6.24 	township officials to better communicate and jointly plan potential annexations. The task 
6.25 	force is comprised of the following members:
6.26 	(1) two members of the senate, one appointed by the majority leader and one 
6.27 	appointed by the minority leader;
6.28 	(2) two members of the house of representatives, one appointed by the speaker of the 
6.29 	house and one appointed by the minority leader;
6.30 	(3) three representatives of city interests, appointed by the League of Minnesota 
6.31 	Cities in consultation with the Association of Metropolitan Municipalities, the Coalition 
6.32 	of Greater Minnesota Cities, and the Minnesota Association of Small Cities;
6.33 	(4) three representatives of township interests, appointed by the Minnesota 
6.34 	Association of Townships; and
7.1 	(5) one person appointed jointly by the senate majority leader and the speaker of the 
7.2 	house of representatives to serve as chair of the task force, selected based on knowledge 
7.3 	and experience in municipal boundary adjustment issues and who could serve without bias 
7.4 	towards either side of the issue of annexation.
7.5 	All appointing authorities shall provide for balance of geographic areas of the state and 
7.6 	city and town interests.
7.7 		Subd. 2.Report by January 2007. The task force shall report its recommendations 
7.8 	to the chairs and members of the house of representatives and senate committees with 
7.9 	jurisdiction over municipal boundary adjustments by January 1, 2007. The task force shall 
7.10 	also provide a copy of its recommendations to the Legislative Reference Library.
7.11 		Subd. 3.Funds available.  Any funds remaining in the committee budgets for the 
7.12 	house local government committee or the senate state and local government operations 
7.13 	committee as of the 2006 adjournment of the legislature will be available to pay for the 
7.14 	administrative expenses of the task force, including per diems and expenses of members 
7.15 	and the services of a facilitator from the management analysis division of the Department 
7.16 	of Administration.

7.17 	Sec. 2. Minnesota Statutes 2004, section 414.01, subdivision 1a, is amended to read:
7.18 		Subd. 1a.Legislative findings. The legislature finds that:
7.19 	(1) sound urban development and preservation of agricultural land and open spaces 
7.20 	through land use planning is essential to the continued economic growth of this state;
7.21 	(2) municipal government most efficiently provides governmental services in areas 
7.22 	intensively developed for residential, commercial, industrial, and governmental purposes; 
7.23 	and township government most efficiently provides governmental services in areas used or 
7.24 	developed for agricultural, open space, and rural residential purposes;
7.25 	(3) the public interest requires that municipalities be formed when there exists or will 
7.26 	likely exist the necessary resources to provide for their economical and efficient operation;
7.27 	(4) annexation to existing municipalities of unincorporated areas unable to supply 
7.28 	municipal services should be facilitated; and
7.29 	(5) the consolidation of municipalities should be encouraged. long-range joint 
7.30 	powers planning or other cooperative efforts among counties, cities, and towns should 
7.31 	be encouraged.

7.32 	Sec. 3. Minnesota Statutes 2004, section 414.02, is amended by adding a subdivision 
7.33 	to read:
8.1 		Subd. 1a.Notice of intent to incorporate. At least 30 days before submitting to the 
8.2 	director the petition or resolution under this section, the township must serve the clerk of 
8.3 	each municipality and each township that is contiguous to the township by certified mail a 
8.4 	notice of the township's intent to incorporate.

8.5 	Sec. 4. Minnesota Statutes 2004, section 414.031, is amended by adding a subdivision 
8.6 	to read:
8.7 		Subd. 1a.Notice of intent to annex. At least 30 days before submitting to the 
8.8 	director a petition or resolution under this section, the municipality must serve the 
8.9 	township clerk of the affected township by certified mail a notice of the municipality's 
8.10 	intent to annex property within the township. The notice must clearly identify the 
8.11 	boundaries of the area proposed to be annexed.

8.12 	Sec. 5. Minnesota Statutes 2004, section 414.031, subdivision 4, is amended to read:
8.13 		Subd. 4.Relevant factors, order. (a) In arriving at a decision, the director shall 
8.14 	consider the following sources and factors:
8.15 	(1) recordings and public documents from joint informational meetings under 
8.16 	section 414.0333 relevant to other factors listed in this subdivision;
8.17 	(1) (2) present population and number of households, past population and projected 
8.18 	population growth of the annexing municipality and subject area and adjacent units of 
8.19 	local government;
8.20 	(2) (3) quantity of land within the subject area and adjacent units of local government; 
8.21 	and natural terrain including recognizable physical features, general topography, major 
8.22 	watersheds, soil conditions and such natural features as rivers, lakes and major bluffs;
8.23 	(3) (4) degree of contiguity of the boundaries between the annexing municipality 
8.24 	and the subject area;
8.25 	(4) (5) present pattern of physical development, planning, and intended land 
8.26 	uses in the subject area and the annexing municipality including residential, industrial, 
8.27 	commercial, agricultural and institutional land uses and the impact of the proposed action 
8.28 	on those land uses;
8.29 	(5) (6) the present transportation network and potential transportation issues, 
8.30 	including proposed highway development;
8.31 	(6) (7) land use controls and planning presently being utilized in the annexing 
8.32 	municipality and the subject area, including comprehensive plans for development in 
8.33 	the area and plans and policies of the Metropolitan Council, and whether there are 
9.1 	inconsistencies between proposed development and existing land use controls and the 
9.2 	reasons therefore;
9.3 	(7) (8) existing levels of governmental services being provided in the annexing 
9.4 	municipality and the subject area, including water and sewer service, fire rating and 
9.5 	protection, law enforcement, street improvements and maintenance, administrative 
9.6 	services, and recreational facilities and the impact of the proposed action on the delivery 
9.7 	of said services;
9.8 	(9) the implementation of previous annexation agreements and orders;
9.9 	(8) (10) existing or potential environmental problems and whether the proposed 
9.10 	action is likely to improve or resolve these problems;
9.11 	(9) (11) plans and programs by the annexing municipality for providing needed and 
9.12 	enhanced governmental services to the subject area in a cost-effective and feasible manner 
9.13 	within a reasonable time from the date of the annexation;
9.14 	(10) (12) an analysis of the fiscal impact on the annexing municipality, the subject 
9.15 	area, and adjacent units of local government, including net tax capacity and the present 
9.16 	bonded indebtedness, and the local tax rates of the county, school district, and township;
9.17 	(11) (13) relationship and effect of the proposed action on affected and adjacent 
9.18 	school districts and communities;
9.19 	(12) (14) adequacy of town government to deliver services to the subject area;
9.20 	(13) (15) analysis of whether necessary governmental services can best be provided 
9.21 	through the proposed action or another type of boundary adjustment; and
9.22 	(14) (16) if only a part of a township is annexed, the ability of the remainder of the 
9.23 	township to continue or the feasibility of it being incorporated separately or being annexed 
9.24 	to another municipality.
9.25 	(b) Based upon the factors, the director may order the annexation on finding:
9.26 	(1) that the subject area is now, or is about to become, urban or suburban in character;
9.27 	(2) that municipal government in the area proposed for annexation is required to 
9.28 	protect the public health, safety, and welfare; or
9.29 	(3) that the annexation would be in the best interest of the subject area.
9.30 	(c) If only a part of a township is to be annexed, the director shall consider whether 
9.31 	the remainder of the township can continue to carry on the functions of government 
9.32 	without undue hardship.
9.33 	(d) The director shall deny the annexation on finding that the increase in revenues for 
9.34 	the annexing municipality bears no reasonable relation to the monetary value of benefits 
9.35 	conferred upon the annexed area.
9.36 	(e) The director may deny the annexation on finding:
10.1 	(1) that annexation of all or a part of the property to an adjacent municipality would 
10.2 	better serve the interests of the residents of the property; or
10.3 	(2) that the remainder of the township would suffer undue hardship.
10.4 	(f) The director may alter the boundaries of the area to be annexed by increasing or 
10.5 	decreasing the area so as to include only that property which is now or is about to become 
10.6 	urban or suburban in character or to add property of such character abutting the area 
10.7 	proposed for annexation in order to preserve or improve the symmetry of the area, or to 
10.8 	exclude property that may better be served by another unit of government.
10.9 	(g) The director may also alter the boundaries of the proposed annexation so as to 
10.10 	follow visible, clearly recognizable physical features.
10.11 	(h) If the director determines that part of the area would be better served by another 
10.12 	municipality or township, the director may initiate and approve annexation by conducting 
10.13 	further hearings and issuing orders pursuant to subdivisions 3 and 4.
10.14 	(i) In all cases, the director shall set forth the factors which are the basis for the 
10.15 	decision.

10.16 	Sec. 6. Minnesota Statutes 2004, section 414.0325, subdivision 1, is amended to read:
10.17 		Subdivision 1.Initiating the proceeding. (a) One or more townships and one or 
10.18 	more municipalities, by joint resolution, may designate an unincorporated area as in 
10.19 	need of orderly annexation. One or more municipalities, by joint resolution with the 
10.20 	county, may designate an unincorporated area in which there is no organized township 
10.21 	government as in need of orderly annexation.
10.22 	(b) The joint resolution will confer jurisdiction on the director over annexations in 
10.23 	the designated area and over the various provisions in said agreement by submission of 
10.24 	said joint resolution to the director.
10.25 	(c) The resolution shall include a description of the designated area and the reasons 
10.26 	for designation.
10.27 	(d) Thereafter, an annexation of any part of the designated area may be initiated by:
10.28 	(1) submitting to the director a resolution of any signatory to the joint resolution; or
10.29 	(2) the director.
10.30 	(e) Whenever a state agency, other than the pollution control agency, orders a 
10.31 	municipality to extend a municipal service to an area, the order confers jurisdiction on the 
10.32 	director to consider designation of the area for orderly annexation.
10.33 	(f) If a joint resolution designates an area as in need of orderly annexation and states 
10.34 	that no alteration of its stated boundaries is appropriate, the director may review and 
10.35 	comment, but may not alter the boundaries.
11.1 	(g) If a joint resolution designates an area as in need of orderly annexation, provides 
11.2 	for the conditions for its annexation, and states that no consideration by the director is 
11.3 	necessary, the director may review and comment, but shall, within 30 days, order the 
11.4 	annexation in accordance with the terms of the resolution.

11.5 	Sec. 7. Minnesota Statutes 2004, section 414.0325, is amended by adding a subdivision 
11.6 	to read:
11.7 		Subd. 1b.Notice of intent to designate an area. At least ten days before the 
11.8 	municipality or township adopts an orderly annexation agreement, a notice of the intent to 
11.9 	include property in an orderly annexation area must be published in a newspaper of general 
11.10 	circulation in both the township and municipality. The notice must clearly identify the 
11.11 	boundaries of the area proposed to be included in the orderly annexation agreement and the 
11.12 	date, time, and place of the public informational meeting to be held as provided in section 
11.13 	414.0333. The cost of providing notice must be equally divided between the municipality 
11.14 	and the township, unless otherwise agreed upon by the municipality and the township.

11.15 	Sec. 8. Minnesota Statutes 2004, section 414.033, subdivision 2, is amended to read:
11.16 		Subd. 2.Conditions. A municipal council may by ordinance declare land annexed 
11.17 	to the municipality and any such land is deemed to be urban or suburban in character 
11.18 	or about to become so if:
11.19 	(1) the land is owned by the municipality;
11.20 	(2) the land is completely surrounded by land within the municipal limits;
11.21 	(3) the land abuts the municipality and the area to be annexed is 60 120 acres or less, 
11.22 	and the area to be annexed is not presently served by public sewer wastewater facilities 
11.23 	or public sewer wastewater facilities are not otherwise available, and the municipality 
11.24 	receives a petition for annexation from all the property owners of the land. Except as 
11.25 	provided for by an orderly annexation agreement, the director must not accept a petition 
11.26 	from a property owner for more than one annexation per year of property contiguous to 
11.27 	the parcel previously annexed under this clause; or
11.28 	(4) the land has been approved after August 1, 1995, by a preliminary plat or final 
11.29 	plat for subdivision to provide residential lots that average 21,780 square feet or less in 
11.30 	area and the land is located within two miles of the municipal limits.

11.31 	EFFECTIVE DATE. This section is effective until July 1, 2007.

11.32 	Sec. 9. Minnesota Statutes 2004, section 414.033, subdivision 12, is amended to read:
12.1 		Subd. 12.Property taxes. When a municipality annexes land under subdivision 2, 
12.2 	clause (2), (3), or (4), property taxes payable on the annexed land shall continue to be paid 
12.3 	to the affected town or towns for the year in which the annexation becomes effective. If 
12.4 	the annexation becomes effective on or before August 1 of a levy year, the municipality 
12.5 	may levy on the annexed area beginning with that same levy year. If the annexation 
12.6 	becomes effective after August 1 of a levy year, the town may continue to levy on the 
12.7 	annexed area for that levy year, and the municipality may not levy on the annexed area 
12.8 	until the following levy year. In the first year following the year when the municipality 
12.9 	could first levy on the annexed area under this subdivision, and thereafter, property taxes 
12.10 	on the annexed land shall be paid to the municipality. In the first year following the year 
12.11 	the municipality could first levy on the annexed area, the municipality shall make a cash 
12.12 	payment to the affected town or towns in an amount equal to 90 percent of the property 
12.13 	taxes distributed to the town in regard to the annexed area in the last year the property 
12.14 	taxes from the annexed area were payable to the town; in the second year, an amount 
12.15 	equal to 70 percent; in the third year, an amount equal to 50 percent; in the fourth year, 
12.16 	an amount equal to 30 percent; and in the fifth year, an amount equal to ten percent. The 
12.17 	municipality and the affected township may agree to a different payment.

12.18 	Sec. 10. [414.0333] JOINT INFORMATIONAL MEETING.
12.19 	There must be a joint informational meeting of the municipal council of the annexing 
12.20 	municipality and the town board of supervisors of the township containing the land 
12.21 	proposed to be annexed or included in annexation proceedings under section  414.031. For 
12.22 	an annexation under section 414.031, the joint information meeting must be held after the 
12.23 	final mediation meeting or the final meeting held pursuant to section 414.01, subdivision 
12.24 	16, if any, and before the hearing on the matter is held. If no mediation meetings are held, 
12.25 	the joint informational meeting must be held after the initiating documents have been filed 
12.26 	and before the hearing on the matter. The time, date, and place of the public informational 
12.27 	meeting must be determined jointly by the chair of the town board of supervisors and the 
12.28 	mayor of the annexing municipality. The chair of the town board of supervisors and 
12.29 	the mayor must serve as the cochairs for the informational meeting. Notice of the time, 
12.30 	date, place, and purpose of the informational meeting must be posted by the town clerk 
12.31 	in the township's designated place for posting notices, and by the municipal clerk in the 
12.32 	municipality's designated place for posting notices. A joint notice shall be published 
12.33 	in a newspaper of general circulation within both the municipality and the township. 
12.34 	All notice required by this section must be provided at least ten days before the date 
12.35 	for the public informational meeting. At the public informational meeting, all persons 
13.1 	appearing must have an opportunity to be heard. The municipal council, the town board of 
13.2 	supervisors, and any resident or affected property owner may be represented by counsel 
13.3 	and introduce evidence including, but not limited to, expert testimony into the record of the 
13.4 	informational meeting. The clerk of the township must record minutes of the proceedings 
13.5 	of the informational meeting and the municipal clerk must make an audio recording of 
13.6 	the informational meeting. The township must provide the director and the municipality 
13.7 	with a copy of the printed minutes and the municipality must provide the director and the 
13.8 	township with a copy of the audio recording. The record of the informational meeting for 
13.9 	a proceeding under section 414.031 is admissible in any proceeding under this chapter and 
13.10 	shall be taken into consideration by the director or the director's designee.

13.11 	Sec. 11. Minnesota Statutes 2004, section 414.036, is amended to read:
13.12 	414.036 CITY REIMBURSEMENT TO TOWN TO ANNEX TAXABLE 
13.13 	PROPERTY.
13.14 	Unless otherwise agreed to by the annexing municipality and the affected town, when 
13.15 	an order or other approval under section  414.0325 this chapter annexes part of a town to a 
13.16 	municipality, the orderly annexation agreement between the town and municipality may
13.17 	order or other approval must provide a reimbursement from the municipality to the town 
13.18 	for all or part of the taxable property annexed as part of the order. The reimbursement shall 
13.19 	be completed in substantially equal payments over not less than two nor more than six
13.20 	eight years from the time of annexation. The municipality must reimburse the township 
13.21 	for all special assessments assigned by the township to the annexed property, and any 
13.22 	portion of debt incurred by the town prior to the annexation and attributable to the property 
13.23 	to be annexed but for which no special assessments are outstanding, in substantially equal 
13.24 	payments over a period of not less than two or no more than eight years.

13.25 	Sec. 12. Minnesota Statutes 2004, section 414.061, subdivision 5, is amended to read:
13.26 		Subd. 5.Property owners may initiate. Property owners may initiate proceedings 
13.27 	for the concurrent detachment of their property from one municipality and its annexation 
13.28 	to an adjacent municipality by a petition signed by all of them that they submit to the 
13.29 	director accompanied by a resolution of the city council of at least one each of the affected 
13.30 	municipalities. The director shall conduct hearings and issue an order pursuant to section  
13.31 	414.09. In arriving at a decision, the director shall consider the factors in section  414.02, 
13.32 	subdivision 3. The director shall order the proposed action on finding that it will be for the 
13.33 	best interests of the municipalities and the property owner. In all cases, the director shall 
13.34 	set forth the factors which are the basis for the decision. 

14.1 	Sec. 13. EFFECTIVE DATE.
 14.2 	Section 8 is effective until July 1, 2007.