1.1 	A bill for an act
1.2 	relating to local government; amending the municipal boundary adjustment law; 
1.3 	amending Minnesota Statutes 2008, sections 13.02, subdivision 11; 394.33, 
1.4 	subdivision 1; 414.01, subdivisions 1a, 1b; 414.011, by adding a subdivision; 
1.5 	414.031, subdivision 4; 414.0325, subdivision 3; 414.033, subdivisions 2, 12; 
1.6 	414.0333; 414.036; 414.041, subdivisions 3, 5; 414.061, subdivisions 4, 5; 
1.7 	462.357, subdivision 1; 462.358, subdivision 1a; proposing coding for new 
1.8 	law in Minnesota Statutes, chapter 414; repealing Minnesota Statutes 2008, 
1.9 	sections 414.02; 414.031, subdivision 1a; 414.0325, subdivision 1a; 414.033, 
1.10 	subdivisions 10, 13; 414.08; 462.3535; 462.3585; 572A.03, subdivision 3.
1.11 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.12 	Section 1. Minnesota Statutes 2008, section 13.02, subdivision 11, is amended to read:
1.13 		Subd. 11.Political subdivision. "Political subdivision" means any county, statutory 
1.14 	or home rule charter city, school district, special district, any town exercising powers 
1.15 	under chapter 368 and located in the metropolitan area, as defined in section 473.121, 
1.16 	subdivision 2, and any board, commission, district, or authority created pursuant to law, 
1.17 	local ordinance or charter provision. It includes any nonprofit corporation which is a 
1.18 	community action agency organized pursuant to the Economic Opportunity Act of 1964 
1.19 	(Public Law 88-452) as amended, to qualify for public funds, or any nonprofit social 
1.20 	service agency which performs services under contract to a government entity, to the 
1.21 	extent that the nonprofit social service agency or nonprofit corporation collects, stores, 
1.22 	disseminates, and uses data on individuals because of a contractual relationship with a 
1.23 	government entity. 

1.24 	Sec. 2. Minnesota Statutes 2008, section 394.33, subdivision 1, is amended to read:
1.25 		Subdivision 1.Not inconsistent. Unless otherwise provided by law, the governing 
1.26 	body of any town including any town with the powers of a statutory city pursuant to law 
2.1 	may continue to exercise the authority to plan and zone as provided by law, but after 
2.2 	the adoption of official controls for a county or portion thereof by the board of county 
2.3 	commissioners no town shall enact or enforce official controls inconsistent with or less 
2.4 	restrictive than the standards prescribed in the official controls adopted by the board. 
2.5 	Nothing in this section shall limit any town's power to adopt official controls, including 
2.6 	shoreland regulations which are more restrictive than provided in the controls adopted by 
2.7 	the county. Upon the adoption or amendment of any official controls the governing body 
2.8 	of the town shall record a certified copy thereof with the county recorder or registrar of 
2.9 	titles. A certified copy of any official controls of any town which are in effect on August 
2.10 	1, 1974, shall also be filed by the governing body of the town with the county recorder or 
2.11 	registrar of titles for record within one year from August 1, 1974.

2.12 	Sec. 3. Minnesota Statutes 2008, section 414.01, subdivision 1a, is amended to read:
2.13 		Subd. 1a. Legislative findings. The legislature finds that: 
2.14 	(1) sound urban development and preservation of agricultural land and open spaces 
2.15 	through land use planning is essential to the continued economic growth of this state; 
2.16 	(2) municipal government most efficiently provides governmental services in areas 
2.17 	intensively developed for residential, commercial, industrial, and governmental purposes; 
2.18 	and township government most efficiently provides governmental services in areas used or 
2.19 	developed for agricultural, open space, and rural residential purposes; 
2.20 	(3) the public interest requires that municipalities be formed when there exists or will 
2.21 	likely exist the necessary resources to provide for their economical and efficient operation; 
2.22 	(4) annexation to existing municipalities of unincorporated areas unable to supply 
2.23 	municipal services should be facilitated; and
2.24 	(5) joint resolutions for orderly annexation, consolidation of municipalities, mergers 
2.25 	of towns and municipalities, long-range joint powers planning or other cooperative efforts 
2.26 	among counties, cities, and towns should be encouraged; and 
2.27 	(6) sound land use planning is necessary for Minnesota to achieve its goals in 
2.28 	greenhouse gas reduction through energy conservation, the reduction in the number and 
2.29 	length of vehicle trips, and maximizing the use of transit and existing transportation 
2.30 	infrastructure. 

2.31 	Sec. 4. Minnesota Statutes 2008, section 414.01, subdivision 1b, is amended to read:
2.32 		Subd. 1b.Goals in promoting, regulating municipal development. The chief 
2.33 	administrative law judge may promote and regulate development of municipalities:
3.1 	(1) to provide for the extension of municipal government to areas which are 
3.2 	developed or are in the process of being developed for intensive use for residential, 
3.3 	commercial, industrial, institutional, and governmental purposes or are needed for such 
3.4 	purposes; and
3.5 	(2) to protect the stability of unincorporated areas which are used or developed for 
3.6 	agricultural, open space, and rural residential purposes and are not presently needed for 
3.7 	more intensive uses; and
3.8 	(3) to protect the integrity of land use planning in municipalities and unincorporated 
3.9 	areas so that the public interest in efficient local government will be properly recognized 
3.10 	and served; and
3.11 	(4) to reduce greenhouse gas emissions through land use practices that encourage 
3.12 	compact urban development.

3.13 	Sec. 5. Minnesota Statutes 2008, section 414.011, is amended by adding a subdivision 
3.14 	to read:
3.15 		Subd. 13.Urban or suburban in character. "Urban or suburban in character" 
3.16 	means any area, property, or collection of properties where actual or planned residential 
3.17 	densities exceed one unit per 40 acres or any area where actual or planned governmental, 
3.18 	institutional, commercial, or industrial development exists, excluding industrial 
3.19 	development that is appropriate for rural settings such as those connected with agricultural, 
3.20 	forestry, mining, or energy production industries.

3.21 	Sec. 6. [414.023] INCORPORATIONS PROHIBITED AFTER JUNE 1, 2009.
3.22 	The chief administrative law judge must not order any municipal incorporations 
3.23 	after June 1, 2009.

3.24 	Sec. 7. Minnesota Statutes 2008, section 414.031, subdivision 4, is amended to read:
3.25 		Subd. 4. Relevant factors, order. (a) In arriving at a decision, the presiding 
3.26 	administrative law judge shall consider the following sources and factors: 
3.27 	(1) recordings and public documents from joint informational meetings under 
3.28 	section 414.0333 relevant to other factors listed in this subdivision; 
3.29 	(2) present population and number of households, past population and projected 
3.30 	population growth of the annexing municipality and subject area and adjacent units of 
3.31 	local government; 
4.1 	(3)(2) quantity of land within the subject area and adjacent units of local government; 
4.2 	and natural terrain including recognizable physical features, general topography, major 
4.3 	watersheds, soil conditions and such natural features as rivers, lakes and major bluffs; 
4.4 	(4)(3) degree of contiguity of the boundaries between the annexing municipality 
4.5 	and the subject area; 
4.6 	(5)(4) present pattern of physical development, planning, and intended land 
4.7 	uses in the subject area and the annexing municipality including residential, industrial, 
4.8 	commercial, agricultural and institutional land uses and the impact of the proposed action 
4.9 	on those land uses; 
4.10 	(6)(5) the present transportation network and potential transportation issues, 
4.11 	including proposed highway development; 
4.12 	(7)(6) land use controls and planning presently being utilized in the annexing 
4.13 	municipality and the subject area, including comprehensive plans for development in 
4.14 	the area and plans and policies of the Metropolitan Council, and whether there are 
4.15 	inconsistencies between proposed development and existing land use controls and the 
4.16 	reasons therefore; 
4.17 	(8)(7) existing levels of governmental services being provided in the annexing 
4.18 	municipality and the subject area, including water and sewer service, fire rating and 
4.19 	protection, law enforcement, street improvements and maintenance, administrative 
4.20 	services, and recreational facilities and the impact of the proposed action on the delivery 
4.21 	of said services; 
4.22 	(9) the implementation of previous annexation agreements and orders;
4.23 	(10)(8) existing or potential environmental problems and whether the proposed 
4.24 	action is likely to improve or resolve these problems; 
4.25 	(11)(9) plans and programs by the annexing municipality for providing needed and 
4.26 	enhanced governmental services to the subject area in a cost-effective and feasible manner 
4.27 	within a reasonable time from the date of the annexation; 
4.28 	(12)(10) an analysis of the fiscal impact on the annexing municipality, the subject 
4.29 	area, and adjacent units of local government, including net tax capacity and the present 
4.30 	bonded indebtedness, and the local tax rates of the county, school district, and township; 
4.31 	(13)(11) relationship and effect of the proposed action on affected and adjacent 
4.32 	school districts and communities; 
4.33 	(14) adequacy of town government to deliver services to the subject area; 
4.34 	(15) analysis of whether necessary governmental services can best be provided 
4.35 	through the proposed action or another type of boundary adjustment; 
5.1 	(16)(12) if only a part of a township is annexed, the ability of the remainder of the 
5.2 	township to continue or the feasibility of it being incorporated separately or being, to be
5.3 	annexed to another municipality, or to be merged with the annexing municipality; and
5.4 	(17)(13) information received by the presiding administrative law judge from the 
5.5 	tour required under subdivision 3a.; and
5.6 	(14) analysis of whether the annexation is consistent with the state's goals in 
5.7 	reducing vehicle miles traveled, and is likely to help the state achieve its greenhouse 
5.8 	gas reduction goals by encouraging development that would be more dense than is 
5.9 	contemplated by township or county comprehensive planning and land use controls.
5.10 	(b) The presiding administrative law judge must not consider as evidence statements 
5.11 	made during a joint informational meeting under section 414.0333 or statements made 
5.12 	during any subsequent public meeting that may be held in accordance with a hearing under 
5.13 	sections 414.031 and 414.09, unless the statements are subject to examination or cross 
5.14 	examination by counsel for either the town or municipality or other party to the proceeding.
5.15 	(b) (c) Based upon the factors, the presiding administrative law judge may must
5.16 	order the annexation on finding: 
5.17 	(1) that the subject area is now, or is about to become, urban or suburban in character; 
5.18 	(2) that municipal government in the area proposed for annexation is required to 
5.19 	protect the public health, safety, and welfare; 
5.20 	(3) that the annexing municipality has a plan to provide needed services to the 
5.21 	subject area including water and sewer in a reasonable amount of time; 
5.22 	(4) that municipal land use planning is more likely to result in fewer vehicle miles 
5.23 	traveled and more likely to help the state achieve its goals in greenhouse gas reduction 
5.24 	than existing county or township land use controls; or 
5.25 	(3) (5) that the annexation would be in the best interest of the subject area. 
5.26 	(c) (d) If only a part of a township is to be annexed, the presiding administrative 
5.27 	law judge shall consider whether the remainder of the township can continue to carry on 
5.28 	the functions of government without undue hardship. If the presiding administrative law 
5.29 	judge finds that the remaining areas of the township would suffer undue hardship, the 
5.30 	presiding administrative law judge must order the annexation of the entire township to the 
5.31 	municipality or to another municipality adjoining the township.
5.32 	(d) The presiding administrative law judge shall deny the annexation on finding that 
5.33 	the increase in revenues for the annexing municipality bears no reasonable relation to the 
5.34 	monetary value of benefits conferred upon the annexed area. 
5.35 	(e) The presiding administrative law judge may deny the annexation on finding:
6.1 	(1) that annexation of all or a part of the property to an adjacent municipality would 
6.2 	better serve the interests of the residents of the property; or
6.3 	(2) that the remainder of the township would suffer undue hardship. 
6.4 	(f) The presiding administrative law judge may alter the boundaries of the area to be 
6.5 	annexed by increasing or decreasing the area so as to include only that property which 
6.6 	is now or is about to become urban or suburban in character or to add property of such 
6.7 	character abutting the area proposed for annexation in order to preserve or improve the 
6.8 	symmetry of the area, or to exclude property that may better be served by another unit 
6.9 	of government. 
6.10 	(g) The presiding administrative law judge may also alter the boundaries of the 
6.11 	proposed annexation so as to follow visible, clearly recognizable physical features. 
6.12 	(h) If the presiding administrative law judge determines that part of the area would 
6.13 	be better served by another municipality or township, the presiding administrative law 
6.14 	judge may initiate and approve annexation by conducting further hearings and issuing 
6.15 	orders pursuant to subdivisions 3 and 4. 
6.16 	(i) In all cases, the presiding administrative law judge shall set forth and explain the 
6.17 	factors which are the basis for the decision. 

6.18 	Sec. 8. Minnesota Statutes 2008, section 414.0325, subdivision 3, is amended to read:
6.19 		Subd. 3.Relevant factors, order. (a) In arriving at a decision, the chief 
6.20 	administrative law judge shall consider the factors in section 414.031, subdivision 4.
6.21 	(b) Based upon factors in section 414.031, subdivision 4, The chief administrative 
6.22 	law judge may shall order the annexation: 
6.23 	(1) on finding that the orderly annexation petition complies with relevant state 
6.24 	statutes; or
6.25 	(1) (2) on finding that the subject area is now or is about to become urban or 
6.26 	suburban in character and that the annexing municipality is capable of providing the 
6.27 	services required by the area within a reasonable time; or
6.28 	(2) (3) on finding that the existing township form of government is not adequate to 
6.29 	protect the public health, safety, and welfare; or
6.30 	(3) (4) on finding that annexation would be in the best interests of the subject area.
6.31 	(c) The chief administrative law judge may deny the annexation if it conflicts with 
6.32 	any provision of the joint agreement.
6.33 	(d) The chief administrative law judge may alter the boundaries of the proposed 
6.34 	annexation by increasing or decreasing the area so as to include that property within the 
7.1 	designated area which is in need of municipal services or will be in need of municipal 
7.2 	services.
7.3 	(e) If the annexation is denied, no proceeding for the annexation of substantially the 
7.4 	same area may be initiated within two years from the date of the denial order unless the 
7.5 	new proceeding is initiated by a majority of the area's property owners and the petition is 
7.6 	supported by affected parties to the resolution.
7.7 	(f) (b) In all cases, the chief administrative law judge shall set forth and explain the 
7.8 	factors which are the basis for the decision granting or not granting the order.

7.9 	Sec. 9. Minnesota Statutes 2008, section 414.033, subdivision 2, is amended to read:
7.10 		Subd. 2.Conditions. (a) A municipal council may by ordinance declare land 
7.11 	annexed to the municipality and any such land is deemed to be urban or suburban in 
7.12 	character or about to become so if:
7.13 	(1) the land is owned by the municipality;
7.14 	(2) the land is completely surrounded by land within the municipal limits;
7.15 	(3) the land abuts the municipality and the area to be annexed is 120 acres or less, 
7.16 	and the area to be annexed is not presently served by public wastewater facilities or 
7.17 	public wastewater facilities are not otherwise available, and the municipality receives a 
7.18 	petition for annexation from alla majority of the property owners of the land. Except as 
7.19 	provided for by an orderly annexation agreement, this clause may not be used to annex 
7.20 	any property contiguous to any property previously annexed under this clause within the 
7.21 	preceding 12 months if the property is owned by the same owners and annexation would 
7.22 	cumulatively exceed 120 acres; or
7.23 	(4) the land is platted or has been approved after August 1, 1995, by a for a
7.24 	preliminary plat or final plat for subdivision to provide residential lots that average 21,780
7.25 	43,560 square feet or less in area and the land is located within two miles of the municipal 
7.26 	limits or for commercial, industrial, governmental, or institutional development.
7.27 	(b) A municipality also may annex by ordinance unincorporated territory that abuts 
7.28 	the municipality under the procedures in this paragraph.
7.29 	(1) The municipality must adopt a resolution of consideration and file it with the 
7.30 	Office of Administrative Hearings, the clerk of the county where the property is located, 
7.31 	and the clerk of the affected township at least 90 days before the municipality may enact 
7.32 	an annexation ordinance. The resolution must include a statement of the municipality's 
7.33 	intent to annex under this paragraph and a legal description of the area to be annexed.
7.34 	(2) After the adoption of the resolution of consideration the municipality must 
7.35 	update its comprehensive plan to include the area proposed for annexation and must 
8.1 	prepare a report detailing the urban characteristics of the area and a plan for the provision 
8.2 	of urban services. The report and service plan must include:
8.3 	(i) a map showing the area proposed for annexation and its relation to current 
8.4 	municipal boundaries;
8.5 	(ii) a description of the general physical land use pattern, current and proposed 
8.6 	land uses, current and proposed land use controls, service needs, projected growth, 
8.7 	environmental conditions, and current and future transportation needs within the proposed 
8.8 	annexation area;
8.9 	(iii) plans for the provision of water and sewer services including a schedule of 
8.10 	when services would be extended to the annexation area;
8.11 	(iv) a plan for the extension of public safety services such as police and fire 
8.12 	protection;
8.13 	(v) a plan for the extension of other municipal services such as recreation, street 
8.14 	maintenance, and administration; and
8.15 	(vi) an updated comprehensive plan that does not allow residential densities in the 
8.16 	annexation area that are less than what is already in effect for the existing residential 
8.17 	parts of the municipality.
8.18 	(3) The updated comprehensive plan, report, and service plan must be completed at 
8.19 	least 30 days before a public hearing is held on the proposed annexation. Copies of the 
8.20 	plans must be sent to the Office of Administrative Hearings and the affected town, and 
8.21 	must also be made available at city hall for public inspection and copying.
8.22 	(4) After the compilation of the report required under clause (2), the municipality 
8.23 	must fix a date for a public hearing on the question of annexation. The municipality 
8.24 	must publish notice in a newspaper of general circulation at least ten days before the 
8.25 	hearing. The municipality must also send a notice of the public hearing to the town clerk 
8.26 	of the affected township and to all property owners within and contiguous to the proposed 
8.27 	annexation area. Notice must be given to the town clerk of the affected township and the 
8.28 	property owners no later than 14 days before the public hearing.
8.29 	(5) At the public hearing the municipality shall present its findings and 
8.30 	recommendations and hear public testimony on the question of annexation. All persons 
8.31 	appearing must have an opportunity to be heard at least once. The governing body of the 
8.32 	municipality also may accept written comments on the question of annexation at that time 
8.33 	and for ten days following the public hearing.
8.34 	(6) After the public hearing and before enacting an annexation ordinance under this 
8.35 	paragraph, the governing body of the municipality must make the following findings:
8.36 	(i) the proposed annexation area is contiguous to the municipality's boundaries;
9.1 	(ii) at least 40 percent of the existing lots in the proposed annexation area are 
9.2 	developed or are proposed to be developed for residential, commercial, industrial, 
9.3 	governmental, or institutional uses and at least 40 percent of the lots within the proposed 
9.4 	annexation area have an average lot size of 20 acres or less; and 
9.5 	(iii) the municipality is capable of extending services in a manner consistent with the 
9.6 	municipality's service plan in a reasonable time.
9.7 	(7) Upon making the findings required by clause (6), the municipality may enact the 
9.8 	annexation ordinance declaring the land to be annexed to the municipality.

9.9 	Sec. 10. Minnesota Statutes 2008, section 414.033, subdivision 12, is amended to read:
9.10 		Subd. 12.Property taxes. When a municipality annexes land under subdivision 
9.11 	2, paragraph (a), clause (2), (3), or (4), or paragraph (b), property taxes payable on the 
9.12 	annexed land shall continue to be paid to the affected town or towns for the year in which 
9.13 	the annexation becomes effective. If the annexation becomes effective on or before 
9.14 	August 1 of a levy year, the municipality may levy on the annexed area beginning with 
9.15 	that same levy year. If the annexation becomes effective after August 1 of a levy year, the 
9.16 	town may continue to levy on the annexed area for that levy year, and the municipality 
9.17 	may not levy on the annexed area until the following levy year. 

9.18 	Sec. 11. Minnesota Statutes 2008, section 414.0333, is amended to read:
9.19 	414.0333 JOINT INFORMATIONAL MEETING. 
9.20 	There must be a joint informational meeting of the municipal council of the annexing 
9.21 	municipality and the town board of supervisors of the township containing the land 
9.22 	proposed to be annexed or included in annexation proceedings under section 414.031. 
9.23 	For an annexation under section 414.031, the joint informational meeting must be held 
9.24 	after the final mediation meeting or the final meeting held pursuant to section 414.01, 
9.25 	subdivision 16, if any, and before the hearing on the matter is held. If no mediation 
9.26 	meetings are held, the joint informational meeting must be held after the initiating 
9.27 	documents have been filed and before the hearing on the matter. The time, date, and 
9.28 	place of the public informational meeting must be determined jointly by the chair of the 
9.29 	town board of supervisors and the mayor of the annexing municipality. The chair of the 
9.30 	town board of supervisors and the mayor must serve as the cochairs for the informational 
9.31 	meeting. Notice of the time, date, place, and purpose of the informational meeting must be 
9.32 	posted by the town clerk in the township's designated place for posting notices, and by the 
9.33 	municipal clerk in the municipality's designated place for posting notices. In addition, 
9.34 	both the city and town shall publish, at their own expense, notice in their respective 
10.1 	official newspapers. If the city and town use the same official newspaper, a joint notice 
10.2 	may be published and the costs evenly divided. All notice required by this section must 
10.3 	be provided at least ten days before the date for the public informational meeting. At 
10.4 	the public informational meeting, all persons appearing must have an opportunity to be 
10.5 	heard, but the co-chairs may, by mutual agreement, establish the amount of time allowed 
10.6 	for each speaker. The municipal council, the town board of supervisors, and any resident 
10.7 	or affected property owner may be represented by counsel and may place into the record 
10.8 	of the informational meeting documents, expert opinions, or other materials supporting 
10.9 	their positions on issues raised by the proposed annexation proceeding. The clerk of the 
10.10 	township must record minutes of the proceedings of the informational meeting and the 
10.11 	municipal clerk must make an audio recording of the informational meeting. The township 
10.12 	must provide the chief administrative law judge and the municipality with a copy of the 
10.13 	printed minutes and the municipality must provide the chief administrative law judge and 
10.14 	the township with a copy of the audio recording. The record of the informational meeting 
10.15 	for a proceeding under section 414.031 is admissible in any proceeding under this chapter 
10.16 	and shall be taken into consideration by the chief administrative law judge or the chief 
10.17 	administrative law judge's designee. 

10.18 	Sec. 12. Minnesota Statutes 2008, section 414.036, is amended to read:
10.19 	414.036 CITY REIMBURSEMENTLIMITATION ON PAYMENTS TO 
10.20 	TOWN TO ANNEX TAXABLE PROPERTY.
10.21 		Subdivision 1.Orderly annexation. Unless otherwise agreed to by the annexing 
10.22 	municipality and the affected town, when an order or other approval under this chapter
10.23 	section 414.0325 annexes part of a town to a municipality, the order or other approval 
10.24 	must provide a reimbursement from the municipality to the town for all or part of the 
10.25 	taxable property annexed at the town tax rate at the time of annexation as part of the 
10.26 	order. The reimbursement shall be completed in substantially equal payments over not 
10.27 	less than two nor more than eight years from the time of annexation. The municipality 
10.28 	must reimburse the township for all special assessments assigned by the township to the 
10.29 	annexed property that are received by the municipality, and any portion of debt incurred 
10.30 	by the town prior to the annexation and attributable to the property to be annexed but 
10.31 	for which no special assessments are outstanding, provided the town makes a written 
10.32 	request and includes supporting documentation to the municipality within 60 days of the 
10.33 	order. Reimbursement for debt attributable to the annexed property must either be paid 
10.34 	by the municipality in substantially equal payments over a period of not less than two or 
10.35 	no more than eight years or upon the same terms as the debt was incurred by the town. 
11.1 	Reimbursement for special assessments must be paid to the town within 30 days of receipt 
11.2 	of assessment payments by the municipality from the county or property owner.
11.3 		Subd. 2.Annexation by ordinance. When a municipality adopts an ordinance 
11.4 	under section 414.033 annexing part of a town to a municipality, the ordinance must 
11.5 	provide a reimbursement from the municipality to the town for the loss of taxes from the 
11.6 	property annexed for the period and in accordance with the following schedule:
11.7 	(1) in the first levy year following the year when the annexing municipality could 
11.8 	first levy on the annexed area, the municipality must make a cash payment to the affected 
11.9 	town in an amount equal to 90 percent of the property taxes distributed to the town 
11.10 	in regard to the annexed area in the last year the property taxes from the annexed area 
11.11 	were payable to the town;
11.12 	(2) in the second year, an amount equal to 80 percent;
11.13 	(3) in the third year, an amount equal to 60 percent;
11.14 	(4) in the fourth year, an amount equal to 40 percent; and
11.15 	(5) in the fifth and final year, an amount equal to 20 percent.
11.16 		Subd. 3.Exclusive. The reimbursements authorized in this section are the only 
11.17 	payments or consideration that can be made by a municipality to a town under this chapter.

11.18 	Sec. 13. [414.037] COMPETING PETITIONS FOR ANNEXATION.
11.19 	If two or more municipalities seek to annex all or a portion of the same 
11.20 	unincorporated area, the chief administrative law judge shall designate a time and place 
11.21 	for a hearing in accordance with sections 414.031 and 414.09. The hearing shall be 
11.22 	limited to a determination of which municipality can better serve all or a portion of the 
11.23 	area to be annexed.

11.24 	Sec. 14. Minnesota Statutes 2008, section 414.041, subdivision 3, is amended to read:
11.25 		Subd. 3.Commission's hearing and report. (a) The consolidation commission 
11.26 	shall conduct hearings regarding the proposed consolidation.
11.27 	(b) The hearings shall include, but are not limited to, the following subjects:
11.28 	(1) the contents of any city charter for the proposed consolidated city or the form of 
11.29 	government of the proposed consolidated city;
11.30 	(2) analysis of whether a ward system shall be included in the form of government 
11.31 	of the proposed consolidated city; and
11.32 	(3) each factor considered by the chief administrative law judge under section 
11.33 	414.02, subdivision 3 5. 
12.1 	(c) Based on these factors and upon other matters which come before the 
12.2 	consolidation commission, the commission shall issue a report to the chief administrative 
12.3 	law judge with findings and recommendations within two years from the date of the chief 
12.4 	administrative law judge's initial appointment of the commission.

12.5 	Sec. 15. Minnesota Statutes 2008, section 414.041, subdivision 5, is amended to read:
12.6 		Subd. 5.Relevant factors, order. (a) In arriving at a decision, the chief 
12.7 	administrative law judge shall consider the following factors in section 414.02, subdivision 
12.8 	3.:
12.9 	(1) present population and number of households, past population, and projected 
12.10 	population growth for the subject area;
12.11 	(2) quantity of land within the subject area; the natural terrain including recognizable 
12.12 	physical features, general topography, major watersheds, soil conditions, and such natural 
12.13 	features as rivers, lakes, and major bluffs;
12.14 	(3) present pattern of physical development, planning, and intended land uses in the 
12.15 	subject area, including residential, industrial, commercial, agricultural, and institutional 
12.16 	land uses, and the impact of the proposed action on those uses;
12.17 	(4) the present transportation network and potential transportation issues, including 
12.18 	proposed highway development;
12.19 	(5) land use controls and planning presently being utilized in the subject area, 
12.20 	including comprehensive plans, policies of the Metropolitan Council; and whether there 
12.21 	are inconsistencies between proposed development and existing land use controls;
12.22 	(6) existing levels of governmental services being provided to the subject area, 
12.23 	including water and sewer service, fire rating and protection, law enforcement, street 
12.24 	improvements and maintenance, administrative services, and recreational facilities, and 
12.25 	the impact of the proposed action on the delivery of the services;
12.26 	(7) existing or potential environmental problems and whether the proposed action is 
12.27 	likely to improve or resolve these problems;
12.28 	(8) fiscal impact on the subject area and adjacent units of local government, 
12.29 	including present bonded indebtedness; local tax rates of the county, school district, and 
12.30 	other governmental units including, where applicable, the net tax capacity of platted and 
12.31 	unplatted lands and the division of homestead and nonhomestead property; and other 
12.32 	tax and governmental aid issues;
12.33 	(9) relationship and effect of the proposed action on affected and adjacent school 
12.34 	districts and communities;
13.1 	(10) whether delivery of services to the subject area can be adequately and 
13.2 	economically delivered by the existing government;
13.3 	(11) analysis of whether necessary governmental services can best be provided 
13.4 	through the proposed action or another type of boundary adjustment; and
13.5 	(12) degree of contiguity of the boundaries of the subject area and adjacent units of 
13.6 	local government.
13.7 	(b) The chief administrative law judge shall consider and may accept, amend, return 
13.8 	to the commission for amendment or further study, or reject the commission's findings and 
13.9 	recommendations based upon the chief administrative law judge's written determination 
13.10 	of what is in the best interests of the affected municipalities.
13.11 	(c) The chief administrative law judge shall order the consolidation on finding that 
13.12 	consolidation will be for the best interests of the municipalities. In all cases, the chief 
13.13 	administrative law judge shall set forth the factors which are the basis for the decision.
13.14 	(d) If the chief administrative law judge orders consolidation, the order shall provide 
13.15 	for election of new municipal officers in accordance with section 414.09. 
13.16 	(e) If the most populous of the included municipalities is a statutory city, the new 
13.17 	municipality shall be a statutory city and the plan of government shall be Optional Plan A, 
13.18 	provided that an alternate plan may be adopted pursuant to section 412.551, at any time. If 
13.19 	the most populous of the included municipalities is a home rule charter city or organized 
13.20 	under a statute other than chapter 412, the new municipality shall be governed by its home 
13.21 	rule charter or the statutory form under which it is governed except that any ward system 
13.22 	for the election of council members shall be inoperable. 
13.23 	(f) If the commission's findings and recommendations include a proposed home rule 
13.24 	charter for the new municipality, the order may combine the issue of the adoption of the 
13.25 	charter and the vote on approval of the order for consolidation into one question on the 
13.26 	ballot, and shall submit it in a special or general election as provided in section 410.10. 
13.27 	(g) The ordinances of all of the included municipalities shall continue in effect within 
13.28 	their former boundaries until repealed by the governing body of the new municipality.
13.29 	(h) Notwithstanding any other provision of law to the contrary, the order may 
13.30 	establish a ward system in the new municipality, in which event the order shall establish 
13.31 	not less than three nor more than seven wards, each of which shall elect one council 
13.32 	member. When more than two years have elapsed after consolidation, the governing body 
13.33 	may, by a four-fifths vote, abolish the ward system.
13.34 	(i) The new municipality shall assume the name of the most populous municipality 
13.35 	unless previous to the election another name is chosen by joint resolution of a majority of 
13.36 	the included municipalities or by the consolidation commission.
14.1 	(j) The number of license privileges existing in the included municipalities prior 
14.2 	to consolidation and pursuant to state law shall not be diminished as a result of the 
14.3 	consolidation.
14.4 	(k) If the consolidation is denied or defeated in a referendum, no proceeding for the 
14.5 	consolidation of the same municipalities may be initiated within two years from the date 
14.6 	of the order unless authorized by the chief administrative law judge.

14.7 	Sec. 16. Minnesota Statutes 2008, section 414.061, subdivision 4, is amended to read:
14.8 		Subd. 4.Chief administrative law judge's initiative. The chief administrative 
14.9 	law judge (1) may initiate proceedings for the concurrent detachment and annexation 
14.10 	of portions of one municipality completely surrounded by another municipality, or (2) 
14.11 	may act upon the petition of all of the owners of property in the completely surrounded 
14.12 	area. In such cases the chief administrative law judge shall conduct hearings and issue 
14.13 	an order pursuant to section 414.09. In arriving at a decision, the chief administrative 
14.14 	law judge shall consider the factors in section 414.02 414.041, subdivision 3 5. The 
14.15 	chief administrative law judge shall order the proposed action on finding that it will be 
14.16 	for the best interests of the municipalities and the property owners. In all cases, the chief 
14.17 	administrative law judge shall set forth the factors which are the basis for the decision. 

14.18 	Sec. 17. Minnesota Statutes 2008, section 414.061, subdivision 5, is amended to read:
14.19 		Subd. 5.Property owners may initiate. Property owners may initiate proceedings 
14.20 	for the concurrent detachment of their property from one municipality and its annexation 
14.21 	to an adjacent municipality by a petition signed by all of them that they submit to the chief 
14.22 	administrative law judge accompanied by a resolution of the city council of each of the 
14.23 	affected municipalities. The chief administrative law judge shall conduct hearings and 
14.24 	issue an order pursuant to section 414.09. In arriving at a decision, the chief administrative 
14.25 	law judge shall consider the factors in section 414.02 414.041, subdivision 3 5. The 
14.26 	chief administrative law judge shall order the proposed action on finding that it will be 
14.27 	for the best interests of the municipalities and the property owner. In all cases, the chief 
14.28 	administrative law judge shall set forth the factors which are the basis for the decision. 

14.29 	Sec. 18. Minnesota Statutes 2008, section 462.357, subdivision 1, is amended to read:
14.30 		Subdivision 1.Authority for zoning. For the purpose of promoting the public 
14.31 	health, safety, morals, and general welfare, a municipality may by ordinance regulate 
14.32 	on the earth's surface, in the air space above the surface, and in subsurface areas, the 
14.33 	location, height, width, bulk, type of foundation, number of stories, size of buildings 
15.1 	and other structures, the percentage of lot which may be occupied, the size of yards and 
15.2 	other open spaces, the density and distribution of population, the uses of buildings and 
15.3 	structures for trade, industry, residence, recreation, public activities, or other purposes, 
15.4 	and the uses of land for trade, industry, residence, recreation, agriculture, forestry, soil 
15.5 	conservation, water supply conservation, conservation of shorelands, as defined in 
15.6 	sections 103F.201 to 103F.221, access to direct sunlight for solar energy systems as 
15.7 	defined in section 216C.06, flood control or other purposes, and may establish standards 
15.8 	and procedures regulating such uses. To accomplish these purposes, official controls may 
15.9 	include provision for purchase of development rights by the governing body in the form of 
15.10 	conservation easements under chapter 84C in areas where the governing body considers 
15.11 	preservation desirable and the transfer of development rights from those areas to areas the 
15.12 	governing body considers more appropriate for development. No regulation may prohibit 
15.13 	earth sheltered construction as defined in section 216C.06, subdivision 14, relocated 
15.14 	residential buildings, or manufactured homes built in conformance with sections 327.31
15.15 	to 327.35 that comply with all other zoning ordinances promulgated pursuant to this 
15.16 	section. The regulations may divide the surface, above surface, and subsurface areas of the 
15.17 	municipality into districts or zones of suitable numbers, shape, and area. The regulations 
15.18 	shall be uniform for each class or kind of buildings, structures, or land and for each class 
15.19 	or kind of use throughout such district, but the regulations in one district may differ from 
15.20 	those in other districts. The ordinance embodying these regulations shall be known as the 
15.21 	zoning ordinance and shall consist of text and maps. A city that provides water and sewer 
15.22 	services to a majority of its households may by ordinance extend the application of its 
15.23 	zoning regulations to unincorporated territory located within two miles of its limits in any 
15.24 	direction, but not in a county or town which has adopted zoningand the city's regulations
15.25 	supersede any existing regulations in the unincorporated area to which the city's 
15.26 	regulations are extended; provided that where two or more noncontiguous municipalities
15.27 	cities have boundaries less than four miles apart, each is authorized to control the zoning 
15.28 	of land on its side of a line equidistant between the two noncontiguous municipalities
15.29 	cities unless a town or county in the affected area has adopted zoning regulations the cities 
15.30 	otherwise agree. Any city may thereafter enforce such regulations in the area to the same 
15.31 	extent as if such property were situated within its corporate limits, until the county or town 
15.32 	board adopts a comprehensive zoning regulation which includes the area. 

15.33 	Sec. 19. Minnesota Statutes 2008, section 462.358, subdivision 1a, is amended to read:
15.34 		Subd. 1a.Authority. To protect and promote the public health, safety, and general 
15.35 	welfare, to provide for the orderly, economic, and safe development of land, to preserve 
16.1 	agricultural lands, to promote the availability of housing affordable to persons and families 
16.2 	of all income levels, and to facilitate adequate provision for transportation, water, sewage, 
16.3 	storm drainage, schools, parks, playgrounds, and other public services and facilities, a 
16.4 	municipality may by ordinance adopt subdivision regulations establishing standards, 
16.5 	requirements, and procedures for the review and approval or disapproval of subdivisions. 
16.6 	The regulations may contain varied provisions respecting, and be made applicable only 
16.7 	to, certain classes or kinds of subdivisions. The regulations shall be uniform for each 
16.8 	class or kind of subdivision.
16.9 	A municipalitycity that provides water and sewer services to a majority of its 
16.10 	households may by resolution extend the application of its subdivision regulations to 
16.11 	unincorporated territory located within two miles of its limits in any direction but not 
16.12 	in a town which has adopted subdivision but the city's  regulations shall supersede any 
16.13 	existing regulations in the unincorporated area to which they are extended; provided that 
16.14 	where two or more noncontiguous municipalities cities have boundaries less than four 
16.15 	miles apart, each is authorized to control the subdivision of land equal distance from its 
16.16 	boundaries within this area unless the cities otherwise agree. Any city may thereafter 
16.17 	enforce such regulations in the area to the same extent as if the property were situated 
16.18 	within its corporate limits.

16.19 	Sec. 20.  REPEALER.
 16.20 	Minnesota Statutes 2008, sections 414.02; 414.031, subdivision 1a; 414.0325, 
16.21 	subdivision 1a; 414.033, subdivisions 10 and 13; 414.08; 462.3535; 462.3585; and 
16.22 	572A.03, subdivision 3, are repealed.