1.1A bill for an act1.2relating to greenhouse gas emissions reduction; making findings; providing 1.3for city growth areas; imposing certain density limits in unincorporated areas; 1.4prohibiting new incorporations; modifying tax increment financing standards; 1.5prohibiting the use of minimum acreage standards for new school siting;1.6amending Minnesota Statutes 2008, sections 123B.70, subdivision 1; 462.352, by 1.7adding a subdivision; 462.357, subdivision 1, by adding subdivisions; 462.358, 1.8subdivision 1a; 469.174, by adding a subdivision; 469.176, subdivision 1b, by 1.9adding a subdivision; proposing coding for new law in Minnesota Statutes, 1.10chapter 414; repealing Minnesota Statutes 2008, sections 394.232; 414.02.1.11BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:1.12    Section 1. LEGISLATIVE FINDINGS.1.13The legislature finds that land use reform is a key strategy in the effort to reduce 1.14the state's emission of greenhouse gases. Land use reform will reduce the distance and 1.15frequency of automobile trips and will encourage walking, bicycling, and the use of transit 1.16to get to school and work.1.17The legislature also finds that preservation of agricultural lands, forest, prairie, 1.18and open space contributes to a healthy and economically vibrant Minnesota. To 1.19preserve agricultural lands, forest, prairie, and open space, and to decrease vehicle miles 1.20traveled, economic development policies should give priority to the redevelopment and 1.21rehabilitation of existing residential, commercial, industrial, recreational, and institutional 1.22structures over the construction of new buildings on undeveloped land. Preservation of 1.23Minnesota's agricultural lands, forest, prairie, and open space, as well as the protection and 1.24enhancement of our cultural heritage, requires careful planning at all levels of government.1.25    Sec. 2. Minnesota Statutes 2008, section 123B.70, subdivision 1, is amended to read:2.1    Subdivision 1. Commissioner approval. In determining whether to give a school 2.2facility a positive, negative, or unfavorable review and comment, the commissioner must 2.3evaluate the proposals for facilities using the information provided under section 
         123B.71, 2.4subdivision 9
         . The commissioner may evaluate the proposals using the most recent 2.5"Guide for Planning School Construction in Minnesota" prepared by the Department 2.6of Education, but must not issue a negative or unfavorable review and comment under 2.7this section for a school facility based on the acreage of the proposed school site. The 2.8commissioner must evaluate the energy and environmental impact of any new school 2.9facility. If a school is proposed for a new site, the commissioner must examine the energy 2.10costs associated with that facility, including the change in pupil transportation costs, and 2.11the costs of establishing new infrastructure, including roads, sidewalks, and utility lines.2.12EFFECTIVE DATE.This section is effective for review and comments issued 2.13after July 1, 2009.2.14    Sec. 3. [414.023] INCORPORATIONS PROHIBITED AFTER JUNE 1, 2009.2.15The chief administrative law judge must not order any municipal incorporations 2.16after June 1, 2009.2.17    Sec. 4. Minnesota Statutes 2008, section 462.352, is amended by adding a subdivision 2.18to read:2.19    Subd. 1a.City."City" means a statutory or home rule charter city.2.20    Sec. 5. Minnesota Statutes 2008, section 462.357, subdivision 1, is amended to read:2.21    Subdivision 1. Authority for zoning. For the purpose of promoting the public 2.22health, safety, morals, and general welfare, a municipality may by ordinance regulate 2.23on the earth's surface, in the air space above the surface, and in subsurface areas, the 2.24location, height, width, bulk, type of foundation, number of stories, size of buildings 2.25and other structures, the percentage of lot which may be occupied, the size of yards and 2.26other open spaces, the density and distribution of population, the uses of buildings and 2.27structures for trade, industry, residence, recreation, public activities, or other purposes, 2.28and the uses of land for trade, industry, residence, recreation, agriculture, forestry, soil 2.29conservation, water supply conservation, conservation of shorelands, as defined in 2.30sections 
         103F.201 to 
         103F.221, access to direct sunlight for solar energy systems as 2.31defined in section 
         216C.06, flood control or other purposes, and may establish standards 2.32and procedures regulating such uses. To accomplish these purposes, official controls may 2.33include provision for purchase of development rights by the governing body in the form of 3.1conservation easements under chapter 84C in areas where the governing body considers 3.2preservation desirable and the transfer of development rights from those areas to areas the 3.3governing body considers more appropriate for development. No regulation may prohibit 3.4earth sheltered construction as defined in section 
         216C.06, subdivision 14, relocated 3.5residential buildings, or manufactured homes built in conformance with sections 
         327.313.6to 
         327.35 that comply with all other zoning ordinances promulgated pursuant to this 3.7section. The regulations may divide the surface, above surface, and subsurface areas of the 3.8municipality into districts or zones of suitable numbers, shape, and area. The regulations 3.9shall be uniform for each class or kind of buildings, structures, or land and for each class 3.10or kind of use throughout such district, but the regulations in one district may differ from 3.11those in other districts. The ordinance embodying these regulations shall be known 3.12as the zoning ordinance and shall consist of text and maps. A city may by ordinance 3.13extend the application of its zoning regulations to unincorporated territory located within 3.14two miles of its limits in any direction, but not in a county or town which has adopted 3.15zoning regulations; provided that where two or more noncontiguous municipalities have 3.16boundaries less than four miles apart, each is authorized to control the zoning of land on 3.17its side of a line equidistant between the two noncontiguous municipalities unless a town 3.18or county in the affected area has adopted zoning regulations. Any city may thereafter 3.19enforce such regulations in the area to the same extent as if such property were situated 3.20within its corporate limits, until the county or town board adopts a comprehensive zoning 3.21regulation which includes the area.3.22    Sec. 6. Minnesota Statutes 2008, section 462.357, is amended by adding a subdivision 3.23to read:3.24    Subd. 1i.Limited residential densities in unincorporated areas.(a) This 3.25subdivision does not apply to unincorporated areas within a city's designated growth 3.26boundary, areas that are subdivided and for which there is a recorded plat as of February 3.271, 2009, areas governed by shoreland regulations and zoning, or parcels classified as 3.28noncommercial seasonal residential recreational property for property tax purposes.3.29(b) Unincorporated areas with no more than one residential unit per 40 acres as 3.30of August 1, 2009, must not be developed with residential densities greater than one 3.31unit per 40 acres. If the unincorporated area has a residential density greater than one 3.32residential unit per 40 acres as of August 1, 2009, the density must not be increased. A 3.33county may enact a new or enforce an existing cluster development ordinance provided 3.34that the ordinance:4.1(1) limits the maximum number of dwelling units to no more than 150 percent of the 4.2number otherwise permitted in the zoning district;4.3(2) limits lot sizes to no larger than two acres; and4.4(3) includes cluster development site standards designed to avoid development on, 4.5fragmentation of, or interference with prime farmland soils, tillable farmland, large tracks 4.6of land in agricultural use, woodlands, and other significant stands of vegetation.4.7    Sec. 7. Minnesota Statutes 2008, section 462.357, is amended by adding a subdivision 4.8to read:4.9    Subd. 10.City growth areas.(a) A city may create a growth area by ordinance 4.10when the city council determines that:4.11(1) population growth demands more housing than can be developed in the space 4.12available within the city, or growth in commercial or industrial use requires more space 4.13than available within the city;4.14(2) planning of city services is necessary to facilitate the growth; and4.15(3) the city has the capacity and willingness to extend city services such as sewer 4.16and water throughout the growth area.4.17A city must not include in the growth area any area to which it is not willing or able to 4.18extend sewer or water services. An area is appropriate to be included in a city's growth 4.19area to the extent that future development within the growth area will maximize existing 4.20transportation, water, sewer, and other municipal infrastructure, while avoiding to the 4.21extent practicable the development of class A agricultural land. Upon making the findings 4.22in this paragraph and after the county review and public hearings in paragraph (b), the 4.23city may designate the growth area and update its comprehensive plan to include the 4.24growth area.4.25(b) Before designating the growth area, the city must hold a hearing to present to the 4.26public its proposed findings for a designated growth area. Notice of the hearing must be 4.27published in the city and in the proposed designated growth area. Members of the public 4.28must be given a reasonable opportunity to present their comments. The city also must 4.29provide the proposed findings and designated growth area to the county planning authority 4.30of each county affected. Each county has 45 days to review and comment on the proposal. 4.31The city may but is not required to make changes to its proposed designated growth 4.32area based on comments from the public and each affected county. After receiving and 4.33considering the comments and before adopting the growth area ordinance, the city must 4.34provide notice and hold a second public hearing to present its findings and designated 4.35growth area, and any changes made to them based on comments received by the city.5.1(c) A city's growth area may extend into the unincorporated area beyond the city 5.2limits in any direction. If more than one city claims the same unincorporated area for its 5.3growth area, an administrative law judge will determine which city is best positioned to 5.4serve the area weighing factors that include existing development and population growth 5.5patterns; existing transportation infrastructure; impact on vehicle miles traveled from area 5.6to regional amenities, schools, jobs, and governmental services; and the overall costs 5.7of extending services to the area.5.8(d) If the city's growth area includes land zoned by the county or town for 5.9agricultural use at the time the growth area ordinance is adopted, that land continues to 5.10be subject only to the county's or town's official controls for agricultural use. When the 5.11county, city, or town receives a request to change the zoning classification of that land to a 5.12nonagricultural use, it becomes subject to the city's land use controls.5.13(e) Except as provided in paragraph (d), a city has the exclusive right to plan, adopt, 5.14and enforce official controls in its growth area as though the area were within the city. 5.15Planning and development in the growth area must be at densities that are consistent 5.16with the rest of the city.5.17(f) Growth areas must be reviewed by the city council at least every ten years.5.18(g) As development occurs in the growth area and sewer and water service is 5.19extended to the development, that part of the growth area may be annexed to the city 5.20by ordinance following the procedures in chapter 414. Annexation by ordinance under 5.21this paragraph is not subject to the conditions for annexation by ordinance in section 5.22414.033, subdivision 2.5.23(h) A city that has established a growth area must file its growth area ordinance and 5.24maps with the Office of Administrative Hearings municipal boundary adjustments.5.25    Sec. 8. Minnesota Statutes 2008, section 462.358, subdivision 1a, is amended to read:5.26    Subd. 1a. Authority. To protect and promote the public health, safety, and general 5.27welfare, to provide for the orderly, economic, and safe development of land, to preserve 5.28agricultural lands, to promote the availability of housing affordable to persons and families 5.29of all income levels, and to facilitate adequate provision for transportation, water, sewage, 5.30storm drainage, schools, parks, playgrounds, and other public services and facilities, a 5.31municipality may by ordinance adopt subdivision regulations establishing standards, 5.32requirements, and procedures for the review and approval or disapproval of subdivisions. 5.33The regulations may contain varied provisions respecting, and be made applicable only 5.34to, certain classes or kinds of subdivisions. The regulations shall be uniform for each 5.35class or kind of subdivision.6.1A municipality may by resolution extend the application of its subdivision 6.2regulations to unincorporated territory located within two miles of its limits in any 6.3direction but not in a town which has adopted subdivision regulations; provided that where 6.4two or more noncontiguous municipalities have boundaries less than four miles apart, 6.5each is authorized to control the subdivision of land equal distance from its boundaries 6.6within this area.6.7    Sec. 9. Minnesota Statutes 2008, section 469.174, is amended by adding a subdivision 6.8to read:6.9    Subd. 10c.Compact development district."Compact development district" means 6.10a type of tax increment financing district consisting of a project, or portions of a project, 6.11within which the authority finds by resolution that the following conditions are satisfied:6.12(1) parcels consisting of 70 percent of the area of the district are occupied by 6.13buildings or other structures that are classified as class 3a property under section 273.13, 6.14subdivision 24; and6.15(2) the planned redevelopment or development of the district, when completed, will 6.16increase the total square footage of buildings, classified as class 3a under section 273.13, 6.17subdivision 24, occupying the district by three times or more relative to the square footage 6.18of similar buildings occupying the district when the resolution was approved.6.19EFFECTIVE DATE.This section is effective for districts for which the request for 6.20certification is made after June 30, 2009.6.21    Sec. 10. Minnesota Statutes 2008, section 469.176, subdivision 1b, is amended to read:6.22    Subd. 1b. Duration limits; terms. (a) No tax increment shall in any event be 6.23paid to the authority6.24(1) after 15 years after receipt by the authority of the first increment for a renewal 6.25and renovation district,6.26(2) after 20 years after receipt by the authority of the first increment for a soils 6.27condition district,6.28(3) after eight years after receipt by the authority of the first increment for an 6.29economic development district,6.30(4) for a housing district, a compact development district, or a redevelopment 6.31district, after 25 years from the date of receipt by the authority of the first increment.6.32(b) For purposes of determining a duration limit under this subdivision or subdivision 6.331e that is based on the receipt of an increment, any increments from taxes payable in 6.34the year in which the district terminates shall be paid to the authority. This paragraph 7.1does not affect a duration limit calculated from the date of approval of the tax increment 7.2financing plan or based on the recovery of costs or to a duration limit under subdivision 7.31c. This paragraph does not supersede the restrictions on payment of delinquent taxes in 7.4subdivision 1f.7.5(c) An action by the authority to waive or decline to accept an increment has no 7.6effect for purposes of computing a duration limit based on the receipt of increment under 7.7this subdivision or any other provision of law. The authority is deemed to have received an 7.8increment for any year in which it waived or declined to accept an increment, regardless 7.9of whether the increment was paid to the authority.7.10(d) Receipt by a hazardous substance subdistrict of an increment as a result of a 7.11reduction in original net tax capacity under section 
         469.174, subdivision 7, paragraph 7.12(b), does not constitute receipt of increment by the overlying district for the purpose of 7.13calculating the duration limit under this section.  7.14EFFECTIVE DATE.This section is effective for districts for which the request for 7.15certification is made after June 30, 2009.7.16    Sec. 11. Minnesota Statutes 2008, section 469.176, is amended by adding a subdivision 7.17to read:7.18    Subd. 1i.Compact development districts.Tax increments derived from a compact 7.19development district may only be used to pay:7.20(1) administrative expenses up to the amount permitted under subdivision 3;7.21(2) the cost of acquiring land located in the district or abutting the boundary of 7.22the district;7.23(3) demolition and removal of buildings or other improvements and other site 7.24preparation costs for lands located in the district or abutting the boundary of the district; 7.25and7.26(4) installation of public infrastructure or public improvements serving the district, 7.27but excluding the costs of streets, roads, highways, parking, or other public improvements 7.28primarily designed to serve private passenger motor vehicles.7.29EFFECTIVE DATE.This section is effective for districts for which the request for 7.30certification is made after June 30, 2009.7.31    Sec. 12.  REPEALER.7.32Minnesota Statutes 2008, sections 394.232; and 414.02, are repealed.