HF 3357

2nd Engrossment - 85th Legislature (2007 - 2008) Posted on 12/15/2009 12:00am

A bill for an act
relating to municipal boundary adjustments; providing for changes in municipal
boundaries; imposing powers and duties on the chief administrative law judge;
amending Minnesota Statutes 2006, sections 4A.02; 40A.121, subdivision
1; 272.67, subdivision 1; 276A.09; 365.46, subdivision 2; 379.05; 412.021,
subdivision 1; 412.091; 414.01, subdivisions 1, 1a, 8a, 16; 414.011, by adding
a subdivision; 414.02, subdivision 1a; 414.031, subdivisions 1a, 4, by adding
a subdivision; 414.0325, subdivisions 1, 5; 414.0333; 414.035; 414.067,
subdivision 1; 414.12, subdivisions 1, 3, 4, by adding subdivisions; 462.3535,
subdivision 5; 473F.13, subdivision 1; 473H.14; 572A.01, subdivision 2;
572A.015, subdivision 2; 572A.02, subdivision 6; Minnesota Statutes 2007
Supplement, section 414.0325, subdivision 1b; Laws 2006, chapter 270, article
2, section 1, as amended; repealing Minnesota Statutes 2006, sections 414.01,
subdivision 7a; 414.011, subdivision 11; 414.12, subdivision 2.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

ARTICLE 1

MUNICIPAL BOUNDARIES ADJUSTMENTS

Section 1.

Minnesota Statutes 2006, section 414.01, subdivision 1, is amended to read:

Subdivision 1.

A duty of deleted text begin planning director deleted text end new text begin chief administrative law judge new text end .

deleted text begin Among the duties of the director of the Office of Strategic and Long-Range Planning
is the duty to deleted text end new text begin The chief administrative law judge shall new text end conduct proceedings, make
determinations, and issue orders for the creation of a municipality, the combination of two
or more governmental units, or the alteration of a municipal boundary.

Sec. 2.

Minnesota Statutes 2006, section 414.01, subdivision 1a, is amended to read:

Subd. 1a.

Legislative findings.

The legislature finds that:

(1) sound urban development and preservation of agricultural land and open spaces
through land use planning is essential to the continued economic growth of this state;

(2) municipal government most efficiently provides governmental services in areas
intensively developed for residential, commercial, industrial, and governmental purposes;
and township government most efficiently provides governmental services in areas used or
developed for agricultural, open space, and rural residential purposes;

(3) the public interest requires that municipalities be formed when there exists or will
likely exist the necessary resources to provide for their economical and efficient operation;

(4) annexation to existing municipalities of unincorporated areas unable to supply
municipal services should be facilitated; and

(5) new text begin joint resolutions for orderly annexation, consolidation of municipalities, mergers
of towns and municipalities, new text end long-range joint powers planning or other cooperative efforts
among counties, cities, and towns should be encouraged.

Sec. 3.

Minnesota Statutes 2006, section 414.01, subdivision 8a, is amended to read:

Subd. 8a.

Powers of conductor of proceedings.

Any person conducting a
proceeding under this chapter may administer oaths and affirmations; deleted text begin issue subpoenas;
compel the attendance and deleted text end new text begin receive new text end testimony of witnesses, and the production of papers,
books, and documents; examine witnesses; and receive and report evidence. new text begin Upon the
written request of a presiding administrative law judge or a party, the chief administrative
law judge may issue a subpoena for the attendance of a witness or the production of
books, papers, records, or other documents material to any proceeding under this chapter.
The subpoenas shall be enforceable through the district court in the district in which the
subpoena is issued.
new text end

Sec. 4.

Minnesota Statutes 2006, section 414.01, subdivision 16, is amended to read:

Subd. 16.

Compelled meetings; report.

In any proceeding under this chapter, the
deleted text begin director deleted text end new text begin chief administrative law judge new text end or conductor of the proceeding may at any time in
the process require representatives from deleted text begin the deleted text end new text begin any petitioning property owner or new text end involved
city, town, county, political subdivision, or other governmental entity to meet together
to discuss resolution of issues raised by the petition or order that confers jurisdiction on
the deleted text begin director deleted text end new text begin chief administrative law judge new text end and other issues of mutual concern. new text begin The chief
administrative law judge or conductor of the proceeding may determine which entities
are required to participate in these discussions. new text end The deleted text begin director deleted text end new text begin chief administrative law
judge new text end or conductor of the proceeding may require that the parties meet at least three times
during a 60-day period. The parties shall designate a person to report to the deleted text begin director deleted text end new text begin chief
administrative law judge new text end or conductor of the proceeding on the results of the meetings
immediately after the last meeting. new text begin The parties may be granted additional time at the
discretion of the chief administrative law judge or conductor of the proceedings.
new text end

new text begin Any proposed resolution or settlement of contested issues that results in a municipal
boundary change, places conditions on any future municipal boundary change, or results
in the withdrawal of an objection to a pending proceeding or the withdrawal of a pending
proceeding must be filed with the chief administrative law judge and is subject to the
applicable procedures and statutory criteria of this chapter.
new text end

Sec. 5.

Minnesota Statutes 2006, section 414.011, is amended by adding a subdivision
to read:

new text begin Subd. 12. new text end

new text begin Chief administrative law judge. new text end

new text begin "Chief administrative law judge" means
the chief administrative law judge of the state Office of Administrative Hearings or the
delegate of the chief administrative law judge under section 14.48.
new text end

Sec. 6.

Minnesota Statutes 2006, section 414.02, subdivision 1a, is amended to read:

Subd. 1a.

Notice of intent to incorporate.

new text begin (a) new text end At least 30 days before submitting
deleted text begin to the director deleted text end the petition or resolution new text begin to the chief administrative law judge new text end under this
section, the township must serve the clerk of each municipality and each township that is
contiguous to the township by certified mail a notice of the township's intent to incorporate.

new text begin (b) If the proceedings for incorporation are initiated by the requisite number of
property owners, the notice of intent to incorporate must be served by the property owner
or owners or designee in the manner required under this paragraph. The property owner
or owners or designee must serve a notice of intent to incorporate on the town board of
the township containing the area proposed for incorporation. The property owner or
owners or designee must also serve the clerk of each municipality and each township that
is contiguous to the area proposed for incorporation by certified mail a notice of intent
to incorporate.
new text end

Sec. 7.

Minnesota Statutes 2006, section 414.031, subdivision 1a, is amended to read:

Subd. 1a.

Notice of intent to annex.

At least 30 days before submitting deleted text begin to the
director deleted text end a petition or resolution new text begin to the chief administrative law judge new text end under this section,
the new text begin petitioning new text end municipality new text begin or petitioning property owner or supporting municipality
new text end must serve the township clerk of the affected township by certified mail a notice of the
new text begin petitioning new text end municipality's new text begin or the petitioning property owner's new text end intent to annex property
within the township. The notice must clearly identify the boundaries of the area proposed
to be annexed.

Sec. 8.

Minnesota Statutes 2006, section 414.031, is amended by adding a subdivision
to read:

new text begin Subd. 3a. new text end

new text begin Presiding administrative law judge; tour. new text end

new text begin During the evidentiary
hearing process, the presiding administrative law judge shall tour the proposed annexation
area along with at least one representative of each of the affected towns and municipalities.
Prior to the tour of the proposed annexation area, the affected towns and municipalities
shall agree on the route or the administrative law judge shall determine the route for the
affected towns and municipalities and resolve all disputes regarding the tour.
new text end

Sec. 9.

Minnesota Statutes 2006, section 414.031, subdivision 4, is amended to read:

Subd. 4.

Relevant factors, order.

(a) In arriving at a decision, the deleted text begin director deleted text end new text begin presiding
administrative law judge new text end shall consider the following sources and factors:

(1) recordings and public documents from joint informational meetings under
section 414.0333 relevant to other factors listed in this subdivision;

(2) present population and number of households, past population and projected
population growth of the annexing municipality and subject area and adjacent units of
local government;

(3) quantity of land within the subject area and adjacent units of local government;
and natural terrain including recognizable physical features, general topography, major
watersheds, soil conditions and such natural features as rivers, lakes and major bluffs;

(4) degree of contiguity of the boundaries between the annexing municipality and
the subject area;

(5) present pattern of physical development, planning, and intended land uses in the
subject area and the annexing municipality including residential, industrial, commercial,
agricultural and institutional land uses and the impact of the proposed action on those
land uses;

(6) the present transportation network and potential transportation issues, including
proposed highway development;

(7) land use controls and planning presently being utilized in the annexing
municipality and the subject area, including comprehensive plans for development in
the area and plans and policies of the Metropolitan Council, and whether there are
inconsistencies between proposed development and existing land use controls and the
reasons therefore;

(8) existing levels of governmental services being provided in the annexing
municipality and the subject area, including water and sewer service, fire rating and
protection, law enforcement, street improvements and maintenance, administrative
services, and recreational facilities and the impact of the proposed action on the delivery
of said services;

(9) the implementation of previous annexation agreements and orders;

(10) existing or potential environmental problems and whether the proposed action
is likely to improve or resolve these problems;

(11) plans and programs by the annexing municipality for providing needed and
enhanced governmental services to the subject area in a cost-effective and feasible manner
within a reasonable time from the date of the annexation;

(12) an analysis of the fiscal impact on the annexing municipality, the subject area,
and adjacent units of local government, including net tax capacity and the present bonded
indebtedness, and the local tax rates of the county, school district, and township;

(13) relationship and effect of the proposed action on affected and adjacent school
districts and communities;

(14) adequacy of town government to deliver services to the subject area;

(15) analysis of whether necessary governmental services can best be provided
through the proposed action or another type of boundary adjustment; deleted text begin and
deleted text end

(16) if only a part of a township is annexed, the ability of the remainder of the
township to continue or the feasibility of it being incorporated separately or being annexed
to another municipality new text begin ; and
new text end

new text begin (17) information received by the presiding administrative law judge from the tour
required under subdivision 3a new text end .

(b) Based upon the factors, the deleted text begin director deleted text end new text begin presiding administrative law judge new text end may
order the annexation on finding:

(1) that the subject area is now, or is about to become, urban or suburban in character;

(2) that municipal government in the area proposed for annexation is required to
protect the public health, safety, and welfare; or

(3) that the annexation would be in the best interest of the subject area.

(c) If only a part of a township is to be annexed, the deleted text begin director deleted text end new text begin presiding administrative
law judge new text end shall consider whether the remainder of the township can continue to carry on
the functions of government without undue hardship.

(d) The deleted text begin director deleted text end new text begin presiding administrative law judge new text end shall deny the annexation on
finding that the increase in revenues for the annexing municipality bears no reasonable
relation to the monetary value of benefits conferred upon the annexed area.

(e) The deleted text begin director deleted text end new text begin presiding administrative law judge new text end may deny the annexation on
finding:

(1) that annexation of all or a part of the property to an adjacent municipality would
better serve the interests of the residents of the property; or

(2) that the remainder of the township would suffer undue hardship.

(f) The deleted text begin director deleted text end new text begin presiding administrative law judge new text end may alter the boundaries of
the area to be annexed by increasing or decreasing the area so as to include only that
property which is now or is about to become urban or suburban in character or to add
property of such character abutting the area proposed for annexation in order to preserve
or improve the symmetry of the area, or to exclude property that may better be served
by another unit of government.

(g) The deleted text begin director deleted text end new text begin presiding administrative law judge new text end may also alter the boundaries of
the proposed annexation so as to follow visible, clearly recognizable physical features.

(h) If the deleted text begin director deleted text end new text begin presiding administrative law judge new text end determines that part of the
area would be better served by another municipality or township, the deleted text begin director deleted text end new text begin presiding
administrative law judge new text end may initiate and approve annexation by conducting further
hearings and issuing orders pursuant to subdivisions 3 and 4.

(i) In all cases, the deleted text begin director deleted text end new text begin presiding administrative law judge new text end shall set forth the
factors which are the basis for the decision.

Sec. 10.

Minnesota Statutes 2006, section 414.0325, subdivision 1, is amended to read:

Subdivision 1.

Initiating the proceeding.

(a) One or more townships and one or
more municipalities, by joint resolution, may designate an unincorporated area as in
need of orderly annexation. One or more municipalities, by joint resolution with the
county, may designate an unincorporated area in which there is no organized township
government as in need of orderly annexation.

(b) new text begin A designated area is any area which the signatories to a joint resolution for
orderly annexation have identified as being appropriate for annexation, either currently
or at some point in the future, pursuant to the negotiated terms and conditions set forth
in the joint resolution. Land described as a designated area is not, by virtue of being so
described, considered also to be annexed for purposes of this chapter.
new text end

new text begin (c) new text end The joint resolution will confer jurisdiction on the deleted text begin director deleted text end new text begin chief administrative
law judge new text end over annexations in the designated area and over the various provisions in
said agreement by submission of said joint resolution to the deleted text begin director deleted text end new text begin chief administrative
law judge new text end .

deleted text begin (c) deleted text end new text begin (d) new text end The resolution shall include a description of the designated area and the
reasons for designation.

deleted text begin (d) deleted text end new text begin (e) new text end Thereafter, an annexation of any part of the designated area may be initiated
by:

(1) submitting to the deleted text begin director deleted text end new text begin chief administrative law judge new text end a resolution of any
signatory to the joint resolution; or

(2) the deleted text begin director deleted text end new text begin chief administrative law judge new text end .

deleted text begin (e) deleted text end new text begin (f) new text end Whenever a state agency, other than the pollution control agency, orders a
municipality to extend a municipal service to an area, the order confers jurisdiction on
the deleted text begin director deleted text end new text begin chief administrative law judge new text end to consider designation of the area for orderly
annexation.

deleted text begin (f) deleted text end new text begin (g) new text end If a joint resolution designates an area as in need of orderly annexation
and states that no alteration of its stated boundaries is appropriate, the deleted text begin director deleted text end new text begin chief
administrative law judge new text end may review and comment, but may not alter the boundaries.

deleted text begin (g) deleted text end new text begin (h) new text end If a joint resolution designates an area as in need of orderly annexation,
provides for the conditions for its annexation, and states that no consideration by the
deleted text begin director deleted text end new text begin chief administrative law judge new text end is necessary, the deleted text begin director deleted text end new text begin chief administrative
law judge new text end may review and comment, but shall, within 30 days, order the annexation in
accordance with the terms of the resolution.

Sec. 11.

Minnesota Statutes 2007 Supplement, section 414.0325, subdivision 1b,
is amended to read:

Subd. 1b.

Notice of intent to designate an area.

At least ten days before the
municipality or township adopts an orderly annexation agreement, a notice of the intent
to include property in an orderly annexation area must be published in a newspaper of
general circulation in both the township and municipality. The notice must clearly identify
the boundaries of the area proposed to be included in the orderly annexation agreement deleted text begin
and the date, time, and place of the public informational meeting to be held as provided
in section 414.0333 deleted text end . The cost of providing notice must be equally divided between the
municipality and the township, unless otherwise agreed upon by the municipality and the
township. This subdivision applies only to the initial designation to include property in an
orderly annexation area subject to the orderly annexation agreement new text begin , or any expansion of
the orderly annexation area subject to the agreement, new text end and not to any subsequent annexation
of any property from within the designated deleted text begin orderly annexation deleted text end area. This subdivision also
does not apply when the orderly annexation agreement only designates for immediate
annexation property for which all of the property owners have petitioned to be annexed.

Sec. 12.

Minnesota Statutes 2006, section 414.0325, subdivision 5, is amended to read:

Subd. 5.

Planning in orderly annexation area.

(a) deleted text begin A joint resolution deleted text end new text begin An orderly
annexation agreement new text end may provide for the establishment of a board to exercise planning
and land use control authority within any area designated as an orderly annexation area
pursuant to this section, in the manner prescribed by section 471.59 deleted text begin , subdivisions 2 to
8, inclusive deleted text end . new text begin The orderly annexation agreement may also delegate planning and land
use authority to the municipalities or towns or may establish some other process within
the orderly annexation agreement to accomplish planning and land use control of the
designated area.
new text end

(b) A board new text begin or other planning authority designated or new text end established pursuant to deleted text begin a joint
resolution deleted text end new text begin an orderly annexation agreement new text end shall have all of the powers contained in
sections 462.351 to 462.364, and shall have the authority to adopt and enforce the State
Fire Code promulgated pursuant to section 299F.011.

(c) The deleted text begin joint resolution deleted text end new text begin orderly annexation agreement new text end may provide that joint
planning and land use controls shall apply to any or all parts of the area designated
for orderly annexation as well as to any adjacent unincorporated or incorporated area,
provided that the area to be included shall be described in the joint resolution.

(d) If the deleted text begin joint resolution deleted text end new text begin orderly annexation agreement new text end does not provide for joint
planning and land use control, new text begin delegate planning and land use control to the municipalities
or towns, or establish some other process for planning and land use authority, new text end the
following procedures shall govern:

(1) if the county and townships agree to exclude the area from their zoning
and subdivision ordinances, the municipality may extend its zoning and subdivision
regulations to include the entire orderly annexation area as provided in section 462.357,
subdivision 1, and section 462.358, subdivision 1; or

(2) if the county and township do not agree to such extraterritorial zoning and
subdivision regulation by the municipality, zoning and subdivision regulation within
the orderly annexation area shall be controlled by a three-member committee with one
member appointed from each of the municipal, town, and county governing bodies.

(e) The committee under paragraph (d), clause (2), shall:

(1) serve as the "governing body" and "board of appeals and adjustments," for
purposes of sections 462.357 and 462.358, within the orderly annexation area; and

(2) have all of the powers contained in sections 462.351 to 462.364, and the authority
to adopt and enforce the State Fire Code promulgated pursuant to section 299F.011.

Sec. 13.

Minnesota Statutes 2006, section 414.0333, is amended to read:

414.0333 JOINT INFORMATIONAL MEETING.

There must be a joint informational meeting of the municipal council of the annexing
municipality and the town board of supervisors of the township containing the land
proposed to be annexed or included in annexation proceedings under section 414.031.
For an annexation under section 414.031, the joint informational meeting must be held
after the final mediation meeting or the final meeting held pursuant to section 414.01,
subdivision 16, if any, and before the hearing on the matter is held. If no mediation
meetings are held, the joint informational meeting must be held after the initiating
documents have been filed and before the hearing on the matter. The time, date, and
place of the public informational meeting must be determined jointly by the chair of the
town board of supervisors and the mayor of the annexing municipality. The chair of the
town board of supervisors and the mayor must serve as the cochairs for the informational
meeting. Notice of the time, date, place, and purpose of the informational meeting must be
posted by the town clerk in the township's designated place for posting notices, and by the
municipal clerk in the municipality's designated place for posting notices. deleted text begin A joint notice
shall be published in a newspaper of general circulation within both the municipality and
the township. deleted text end new text begin In addition, both the city and town shall publish, at their own expense,
notice in their respective official newspapers. If the city and town use the same official
newspaper, a joint notice may be published and the costs evenly divided. new text end All notice
required by this section must be provided at least ten days before the date for the public
informational meeting. At the public informational meeting, all persons appearing must
have an opportunity to be heard new text begin , but the co-chairs may, by mutual agreement, establish
the amount of time allowed for each speaker new text end . The municipal council, the town board of
supervisors, and any resident or affected property owner may be represented by counsel
and deleted text begin introduce evidence including, but not limited to, expert testimony into the record
of the informational meeting deleted text end new text begin may place into the record of the informational meeting
documents, expert opinions, or other materials supporting their positions on issues raised
by the proposed annexation proceeding new text end . The clerk of the township must record minutes
of the proceedings of the informational meeting and the municipal clerk must make an
audio recording of the informational meeting. The township must provide the deleted text begin director deleted text end
new text begin chief administrative law judge new text end and the municipality with a copy of the printed minutes
and the municipality must provide the deleted text begin director deleted text end new text begin chief administrative law judge new text end and the
township with a copy of the audio recording. The record of the informational meeting for
a proceeding under section 414.031 is admissible in any proceeding under this chapter
and shall be taken into consideration by the deleted text begin director deleted text end new text begin chief administrative law judge new text end or the
deleted text begin director's deleted text end new text begin chief administrative law judge's new text end designee.

Sec. 14.

Minnesota Statutes 2006, section 414.035, is amended to read:

414.035 DIFFERENTIAL TAXATION FOR UP TO SIX YEARS.

Whenever an order, under section 414.031, deleted text begin 414.0325, or 414.033, deleted text end annexes part or all
of a township to a municipality, the order may provide that the tax rate of the annexing
municipality on the area annexed shall be increased in substantially equal proportions
over not more than six years to equality with the tax rate on the property already within
the municipality. The appropriate period, if any, shall be based on the time reasonably
required to effectively provide deleted text begin full deleted text end new text begin property-tax-supported new text end municipal services to the
annexed area. new text begin Nothing in this section prohibits a differential tax provision from being
included in an orderly annexation agreement.
new text end

Sec. 15.

Minnesota Statutes 2006, section 414.067, subdivision 1, is amended to read:

Subdivision 1.

Township or municipality divided.

Whenever the deleted text begin director deleted text end new text begin chief
administrative law judge new text end divides an existing governmental unit, the deleted text begin director deleted text end new text begin chief
administrative law judge, or other qualified person designated by the chief administrative
law judge with the concurrence of the parties, new text end may apportion the property and obligations
between the governmental unit adding territory and the governmental unit from which
the territory was obtained. The apportionment shall be made in a just and equitable
manner having in view the value of the existing township or municipal property located
in the area to be added deleted text begin , deleted text end new text begin ; new text end the assets, value, and location of all the taxable property in the
existing township or municipality deleted text begin , deleted text end new text begin ; new text end the indebtedness, the taxes due and delinquent, other
revenue accrued but not paid to the existing township or municipality new text begin ; new text end and the ability of
any remainder of the township or municipality to function as an effective governmental
unit. The order shall not relieve any property from any tax liability for payment for
any bonded obligation, but the taxable property in the new municipality may be made
primarily liable thereon.

Sec. 16.

Minnesota Statutes 2006, section 414.12, subdivision 1, is amended to read:

Subdivision 1.

Alternative dispute resolution.

(a) Notwithstanding anything to
the contrary in sections 414.01 to 414.09, new text begin before assigning a matter to an administrative
law judge for hearing, new text end the deleted text begin director deleted text end new text begin chief administrative law judge new text end , upon consultation with
affected parties and considering the procedures and principles established in sections
414.01 to 414.09, deleted text begin and Laws 1997, chapter 202, article 4, sections 1 to 13, deleted text end may require that
disputes over proposed boundary adjustments be deleted text begin resolved deleted text end new text begin addressed in whole or in part
new text end by means of alternative dispute resolution processes in place of new text begin , or in connection with, new text end
hearings that would otherwise be required pursuant to sections 414.01 to 414.09, including
those provided in chapter 14 deleted text begin , in the execution of the director's duties under this chapter deleted text end .

deleted text begin (b) Alternative dispute resolution processes that may be required include:
deleted text end

deleted text begin (1) the contested case procedures provided by sections 14.57 to 14.62;
deleted text end

deleted text begin (2) the mediation and arbitration process provided by sections 572A.015 to 572A.03;
or
deleted text end

deleted text begin (3) another mediation and arbitration process ordered by the director deleted text end .

new text begin (b) In all proceedings, the chief administrative law judge has the authority and
responsibility to conduct hearings and issue final orders related to the hearings under
sections 414.01 to 414.09.
new text end

Sec. 17.

Minnesota Statutes 2006, section 414.12, subdivision 3, is amended to read:

Subd. 3.

Cost of proceedings.

(a) The parties to any matter directed to alternative
dispute resolution under subdivision 1 deleted text begin or delegated to the Office of Administrative
Hearings under subdivision 2 deleted text end must pay the costs of the alternative dispute resolution
process or hearing in the proportions that they agree to.

(b) Notwithstanding section 14.53 or other law, the Office of deleted text begin strategic and long-range
planning deleted text end new text begin Administrative Hearings new text end is not liable for the costs.

(c) If the parties do not agree to a division of the costs before the commencement of
mediation, arbitration, or hearing, the costs must be allocated on an equitable basis by
the mediator, arbitrator, or chief administrative law judge.

(d) The chief administrative law judge may contract with the parties to a matter
deleted text begin directed or delegated to the Office of Administrative Hearings under subdivisions 1 and 2 deleted text end
for the purpose of providing administrative law judges and reporters for an administrative
proceeding or alternative dispute resolution.

(e) The chief administrative law judge shall assess the cost of services rendered new text begin by
the Office of Administrative Hearings new text end as provided by section 14.53.

Sec. 18.

Minnesota Statutes 2006, section 414.12, subdivision 4, is amended to read:

Subd. 4.

Parties.

In this section, "party" means:

(1) a property owner, group of property owners, municipality, or township that files
an initiating document or timely objection under this chapter;

(2) the municipality or township within which the subject area is located;

(3) a municipality abutting the subject area; and

(4) any other person, group of persons, or governmental agency residing in, owning
property in, or exercising jurisdiction over the subject area that deleted text begin files with the director
a notice of appearance within 14 days of publication of the notice required by section
414.09. deleted text end new text begin submits a timely request, and is determined by the presiding administrative law
judge to have a direct legal interest that will be affected by the outcome of the proceeding. new text end

Sec. 19.

Minnesota Statutes 2006, section 414.12, is amended by adding a subdivision
to read:

new text begin Subd. 5. new text end

new text begin Effectuation of agreements. new text end

new text begin Matters resolved or agreed to by the parties
as a result of an alternative dispute resolution process, or otherwise, may be incorporated
into a joint resolution adopted pursuant to section 414.0325, subdivision 1, or into one or
more stipulations for purposes of further proceedings in accordance with the applicable
procedures and statutory criteria of this chapter.
new text end

Sec. 20.

Minnesota Statutes 2006, section 414.12, is amended by adding a subdivision
to read:

new text begin Subd. 6. new text end

new text begin Limitations on authority. new text end

new text begin Nothing in this section shall be construed to
permit any municipality, town, or other political subdivision to take, or agree to take, any
action that is not otherwise authorized by this chapter.
new text end

Sec. 21.

Laws 2006, chapter 270, article 2, section 1, as amended by Laws 2007,
chapter 90, section 4, is amended to read:

Section 1. MUNICIPAL BOUNDARY ADJUSTMENT ADVISORY TASK
FORCE ESTABLISHED.

Subdivision 1.

Membership.

An advisory task force on municipal boundary
adjustments is established to study and make recommendations on what, if any, changes
should be made to the law governing municipal boundary adjustments. The task force
shall develop recommendations regarding best practices annexation training for city and
township officials to better communicate and jointly plan potential annexations. The task
force is comprised of the following members:

(1) two members of the senate, one appointed by the majority leader and one
appointed by the minority leader;

(2) two members of the house of representatives, one appointed by the speaker of the
house and one appointed by the minority leader;

(3) three representatives of city interests, appointed by the League of Minnesota
Cities in consultation with the Association of Metropolitan Municipalities, the Coalition
of Greater Minnesota Cities, and the Minnesota Association of Small Cities;

(4) three representatives of township interests, appointed by the Minnesota
Association of Townships; and

(5) one person appointed jointly by the senate majority leader and the speaker of the
house of representatives to serve as chair of the task force, selected based on knowledge
and experience in municipal boundary adjustment issues and who could serve without bias
towards either side of the issue of annexation. The chair must convene the first meeting of
the task force no later than August 1, 2007.

All appointing authorities must make the appointments to the task force within 30 days of
the effective date of this section and shall provide for balance of geographic areas of the
state and city and town interests.

Subd. 2.

Report by deleted text begin January 2008 deleted text end new text begin January 16, 2009 new text end .

The task force shall report its
new text begin interim new text end recommendations to the chairs and members of the house of representatives and
senate committees with jurisdiction over municipal boundary adjustments by deleted text begin January 15 deleted text end new text begin
March 1 new text end , 2008 new text begin , and its final recommendations by January 16, 2009 new text end . The task force shall
also provide a copy of its recommendations to the Legislative Reference Library.

Subd. 3.

Expenses.

The cost of preparing the report must be divided among the
League of Minnesota Cities, the Coalition of Greater Minnesota Cities, and the Minnesota
Association of Townships.

EFFECTIVE DATE.

This section is effective the day following final enactment.
The Municipal Boundary Adjustment Advisory Task Force expires on deleted text begin June 30, 2008 deleted text end
new text begin January 16, 2009, or the day after the report required by subdivision 2 is submitted,
whichever is later new text end .

Sec. 22. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2006, sections 414.01, subdivision 7a; 414.011, subdivision 11;
and 414.12, subdivision 2, new text end new text begin are repealed.
new text end

Sec. 23. new text begin EFFECTIVE DATE.
new text end

new text begin This article is effective the day following final enactment.
new text end

ARTICLE 2

CONFORMING CHANGES

Section 1.

Minnesota Statutes 2006, section 4A.02, is amended to read:

4A.02 STATE DEMOGRAPHER.

(a) The director shall appoint a state demographer. The demographer must be
professionally competent in demography and must possess demonstrated ability based
upon past performance.

(b) The demographer shall:

(1) continuously gather and develop demographic data relevant to the state;

(2) design and test methods of research and data collection;

(3) periodically prepare population projections for the state and designated regions
and periodically prepare projections for each county or other political subdivision of the
state as necessary to carry out the purposes of this section;

(4) review, comment on, and prepare analysis of population estimates and
projections made by state agencies, political subdivisions, other states, federal agencies, or
nongovernmental persons, institutions, or commissions;

(5) serve as the state liaison with the United States Bureau of the Census, coordinate
state and federal demographic activities to the fullest extent possible, and aid the
legislature in preparing a census data plan and form for each decennial census;

(6) compile an annual study of population estimates on the basis of county, regional,
or other political or geographical subdivisions as necessary to carry out the purposes of
this section and section 4A.03;

(7) by January 1 of each year, issue a report to the legislature containing an analysis
of the demographic implications of the annual population study and population projections;

(8) prepare maps for all counties in the state, all municipalities with a population
of 10,000 or more, and other municipalities as needed for census purposes, according to
scale and detail recommended by the United States Bureau of the Census, with the maps
of cities showing precinct boundaries;

(9) prepare an estimate of population and of the number of households for each
governmental subdivision for which the Metropolitan Council does not prepare an annual
estimate, and convey the estimates to the governing body of each political subdivision
by June 1 of each year;

(10) direct, under section 414.01, subdivision 14, and certify population and
household estimates of annexed or detached areas of municipalities or towns after being
notified of the order or letter of approval by the deleted text begin director deleted text end new text begin chief administrative law judge of
the State Office of Administrative Hearings new text end ;

(11) prepare, for any purpose for which a population estimate is required by law
or needed to implement a law, a population estimate of a municipality or town whose
population is affected by action under section 379.02 or 414.01, subdivision 14; and

(12) prepare an estimate of average household size for each statutory or home rule
charter city with a population of 2,500 or more by June 1 of each year.

(c) A governing body may challenge an estimate made under paragraph (b) by filing
their specific objections in writing with the state demographer by June 24. If the challenge
does not result in an acceptable estimate, the governing body may have a special census
conducted by the United States Bureau of the Census. The political subdivision must
notify the state demographer by July 1 of its intent to have the special census conducted.
The political subdivision must bear all costs of the special census. Results of the special
census must be received by the state demographer by the next April 15 to be used in that
year's June 1 estimate to the political subdivision under paragraph (b).

(d) The state demographer shall certify the estimates of population and household
size to the commissioner of revenue by July 15 each year, including any estimates still
under objection.

Sec. 2.

Minnesota Statutes 2006, section 40A.121, subdivision 1, is amended to read:

Subdivision 1.

Annexation prohibited.

Land within an agricultural preserve that is
within a township may not be annexed to a municipality under chapter 414, unless the
deleted text begin director of the Office of Strategic and Long-Range Planning deleted text end new text begin chief administrative law
judge of the state Office of Administrative Hearings new text end finds that either:

(1) the owner or the county has initiated termination of the zone under section
40A.11;

(2) because of size, tax base, population or other relevant factors, the township
would not be able to provide normal governmental functions and services; or

(3) the zone would be completely surrounded by lands within a municipality.

Sec. 3.

Minnesota Statutes 2006, section 272.67, subdivision 1, is amended to read:

Subdivision 1.

City powers.

Any city however organized, except in those counties
situated in a metropolitan area as defined in Minnesota Statutes 1961, Section 473.02,
Subdivision 5, which contain cities of the first class, may by ordinance adopted in the
manner provided in this section divide its area into an urban service district and a rural
service district, constituting separate taxing districts for the purpose of all municipal
property taxes except those levied for the payment of bonds and judgments and interest
thereon. In proceedings for annexation, incorporation, or consolidation being conducted
pursuant to chapter 414, the deleted text begin director of the Office of Strategic and Long-Range Planning deleted text end new text begin
chief administrative law judge of the state Office of Administrative Hearings new text end may divide a
municipality into an urban service district and a rural service district, such districts to be
designated in accordance with the criteria set out in subdivision 2. Thereafter, said urban
service district and rural service district may be changed in the same manner that an
ordinance or amendment is changed in accordance with this section.

Sec. 4.

Minnesota Statutes 2006, section 276A.09, is amended to read:

276A.09 CHANGE IN STATUS OF MUNICIPALITY.

If a municipality is dissolved, is consolidated with all or part of another municipality,
annexes territory, has a portion of its territory detached from it, or is newly incorporated,
the secretary of state shall immediately certify that fact to the commissioner of revenue.
The secretary of state shall also certify to the commissioner of revenue the current
population of the new, enlarged, or successor municipality, if determined by the deleted text begin director of
the Office of Strategic and Long-Range Planning deleted text end new text begin chief administrative law judge of the state
Office of Administrative Hearings new text end incident to consolidation, annexation, or incorporation
proceedings. The population so certified shall govern for purposes of sections 276A.01 to
276A.09 until the state demographer files the first population estimate as of a later date
with the commissioner of revenue. If an annexation of unincorporated land occurs without
proceedings before the deleted text begin director of the Office of Strategic and Long-Range Planning deleted text end new text begin chief
administrative law judge of the state Office of Administrative Hearings new text end , the population of
the annexing municipality as previously determined shall continue to govern for purposes
of sections 276A.01 to 276A.09 until the state demographer files the first population
estimate as of a later date with the commissioner of revenue.

Sec. 5.

Minnesota Statutes 2006, section 365.46, subdivision 2, is amended to read:

Subd. 2.

Copies.

The county auditor shall also send a copy of the notice of the
dissolution to: (1) the state demographer, (2) the Land Management Information Center,
(3) the deleted text begin director of the Office of Strategic and Long-Range Planning deleted text end new text begin chief administrative
law judge of the state Office of Administrative Hearings new text end , and (4) the commissioner of
transportation.

Sec. 6.

Minnesota Statutes 2006, section 379.05, is amended to read:

379.05 AUDITOR TO SUM UP REPORT FOR STATE, MAKE TOWN
RECORD.

Each county auditor shall within 30 days after any such town is organized transmit
by mail to the commissioner of revenue, the secretary of state, the state demographer,
the Land Management Information Center, the deleted text begin director of the Office of Strategic and
Long-Range Planning deleted text end new text begin chief administrative law judge of the state Office of Administrative
Hearings new text end , and the commissioner of transportation an abstract of such report, giving the
name and boundaries of such town and record in a book kept for that purpose a full
description of each such town.

Sec. 7.

Minnesota Statutes 2006, section 412.021, subdivision 1, is amended to read:

Subdivision 1.

Election.

Upon the filing of the certificate with the secretary of state,
if the vote is in favor of incorporation, the judges of election appointed by the deleted text begin director of
the Office of Strategic and Long-Range Planning deleted text end new text begin chief administrative law judge of the state
Office of Administrative Hearings new text end or the county board as the case may be, shall fix a day at
least 15 and not more than 30 days thereafter and a place for the holding of an election for
officers. The judges shall also fix the time, not less than three hours, during which the polls
shall remain open at the election and shall post a notice setting forth the time and place of
such election in three public places in the city for at least ten days preceding the election.

Sec. 8.

Minnesota Statutes 2006, section 412.091, is amended to read:

412.091 DISSOLUTION.

Whenever a number of voters equal to one-third of those voting at the last preceding
city election petition the deleted text begin director of the Office of Strategic and Long-Range Planning
therefor deleted text end new text begin chief administrative law judge of the state Office of Administrative Hearings to
dissolve the city new text end , a special election shall be called to vote upon the question deleted text begin of dissolving
the city deleted text end . Before the election, the deleted text begin director deleted text end new text begin chief administrative law judge new text end shall designate
a time and place for a hearing in accordance with section 414.09. After the hearing new text begin , new text end the
deleted text begin director deleted text end new text begin chief administrative law judge new text end shall issue an order which shall include a date for
the election, a determination of what town or towns the territory of the city shall belong to
if the voters favor dissolution, and other necessary provisions. The ballots used at such
election shall bear the printed words, "For Dissolution" and "Against Dissolution," with a
square before each phrase in which the voter may express a preference by a cross. If a
majority of those voting on the question favor dissolution, the clerk shall file a certificate
of the result with the deleted text begin director deleted text end new text begin chief administrative law judge new text end , the secretary of state new text begin , new text end and the
county auditor of the county in which the city is situated. Six months after the date of
such election, the city shall cease to exist. Within such six months, the council shall audit
all claims against the city, settle with the treasurer, and other city officers, and apply the
assets of the city to the payment of its debts. If any debts remain unpaid, other than bonds,
the city clerk shall file a schedule of such debts with the county treasurer and the council
shall levy a tax sufficient for their payment, the proceeds of which, when collected, shall
be paid by the county treasurer to the creditors in proportion to their several claims until
all are discharged. The principal and interest on outstanding bonds shall be paid when due
by the county treasurer from a tax annually spread by the county auditor against property
formerly included within the city until the bonds are fully paid. All city property and all
rights of the city shall, upon dissolution, inure in the town or towns designated as the legal
successor to the city. If the city territory goes to more than one town, surplus cash assets
and unsold city property shall be distributed as provided by the order for the election.

Sec. 9.

Minnesota Statutes 2006, section 462.3535, subdivision 5, is amended to read:

Subd. 5.

Urban growth area boundary adjustment process.

(a) After an urban
growth area has been identified in a county or city plan, a city shall negotiate, as part of
the comprehensive planning process and in coordination with the county, an orderly
annexation agreement with the townships containing the affected unincorporated areas
located within the identified urban growth area. The agreement shall contain a boundary
adjustment staging plan that establishes a sequencing plan over the subsequent 20-year
period for the orderly growth of the city based on its reasonably anticipated development
pattern and ability to extend municipal services into designated unincorporated areas
located within the identified urban growth area. The city shall include the staging plan
agreed upon in the orderly annexation agreement in its comprehensive plan. Upon
agreement by the city and town, prior adopted orderly annexation agreements may be
included as part of the boundary adjustment plan and comprehensive plan without regard
to whether the prior adopted agreement is consistent with this section. When either the city
or town requests that an existing orderly annexation agreement affecting unincorporated
areas located within an identified or proposed urban growth area be renegotiated, the
renegotiated plan shall be consistent with this section.

(b) After a city's community-based comprehensive plan is approved under this
section, the orderly annexation agreement shall be filed with the deleted text begin municipal board deleted text end new text begin chief
administrative law judge of the state Office of Administrative Hearings new text end or deleted text begin its deleted text end new text begin any
new text end successor agency. Thereafter, the city may orderly annex the part or parts of the designated
unincorporated area according to the sequencing plan and conditions contained in the
negotiated orderly annexation agreement by submitting a resolution to the deleted text begin municipal
board or its successor agency deleted text end new text begin chief administrative law judge new text end . The resolution shall specify
the legal description of the area designated pursuant to the staging plan contained in
the agreement, a map showing the new boundary and its relation to the existing city
boundary, a description of and schedule for extending municipal services to the area, and a
determination that all applicable conditions in the agreement have been satisfied. Within 30
days of receipt of the resolution, the deleted text begin municipal board or its successor deleted text end new text begin chief administrative
law judge new text end shall review the resolution and if it finds that the terms and conditions of the
orderly annexation agreement have been met, shall order the annexation. The boundary
adjustment shall become effective upon issuance of an order by the deleted text begin municipal board or
its successor deleted text end new text begin chief administrative law judge new text end . The deleted text begin municipal board or its successor deleted text end new text begin chief
administrative law judge new text end shall cause copies of the boundary adjustment order to be mailed
to the secretary of state, Department of Revenue, state demographer, and Department of
Transportation. No further proceedings under chapter 414 or 572A shall be required to
accomplish the boundary adjustment. This section provides the sole method for annexing
unincorporated land within an urban growth area, unless the parties agree otherwise.

(c) If a community-based comprehensive plan is updated, the parties shall renegotiate
the orderly annexation agreement as needed to incorporate the adjustments and shall refile
the agreement with the deleted text begin municipal board or its successor deleted text end new text begin chief administrative law judge new text end .

Sec. 10.

Minnesota Statutes 2006, section 473F.13, subdivision 1, is amended to read:

Subdivision 1.

Certification of change in status.

If a municipality is dissolved, is
consolidated with all or part of another municipality, annexes territory, has a portion of its
territory detached from it, or is newly incorporated, the secretary of state shall immediately
certify that fact to the commissioner of revenue. The secretary of state shall also certify to
the commissioner of revenue the current population of the new, enlarged, or successor
municipality, if determined by the deleted text begin director of the Office of Strategic and Long-Range
Planning deleted text end new text begin chief administrative law judge of the state Office of Administrative Hearings new text end
incident to consolidation, annexation, or incorporation proceedings. The population so
certified shall govern for purposes of sections 473F.01 to 473F.13 until the Metropolitan
Council files its first population estimate as of a later date with the commissioner of
revenue. If an annexation of unincorporated land occurs without proceedings before
the deleted text begin director deleted text end new text begin chief administrative law judge new text end , the population of the annexing municipality
as previously determined shall continue to govern for purposes of sections 473F.01 to
473F.13 until the Metropolitan Council files its first population estimate as of a later
date with the commissioner of revenue.

Sec. 11.

Minnesota Statutes 2006, section 473H.14, is amended to read:

473H.14 ANNEXATION PROCEEDINGS.

Agricultural preserve land within a township shall not be annexed to a municipality
pursuant to chapter 414, without a specific finding by the deleted text begin director of the Office of
Strategic and Long-Range Planning deleted text end new text begin chief administrative law judge of the state Office of
Administrative Hearings new text end that either (a) the expiration period as provided for in section
473H.08 has begun; (b) the township due to size, tax base, population or other relevant
factors would not be able to provide normal governmental functions and services; or (c)
the agricultural preserve would be completely surrounded by lands within a municipality.

This section shall not apply to annexation agreements approved under proceedings
authorized by chapter 414 prior to creation of the preserve.

Sec. 12.

Minnesota Statutes 2006, section 572A.01, subdivision 2, is amended to read:

Subd. 2.

Mediation.

Within ten days of receiving a request for mediation in
subdivision 1, the Bureau of Mediation Services shall provide written notice of the request
for mediation to the parties and provide a list of neutrals experienced in land use planning
or local government issues obtained from the Supreme Court, deleted text begin Minnesota Municipal Board deleted text end new text begin
chief administrative law judge of the state Office of Administrative Hearings new text end , Bureau of
Mediation Services, Minnesota State Bar Association, Hennepin County Bar Association,
Office of Dispute Resolution, and others. Within 30 days thereafter, the affected parties
shall select a mediator from the list of neutrals or someone else acceptable to the parties
and submit to mediation for a period of 30 days facilitated by the bureau. If the dispute
remains unresolved after the close of the 30-day mediation period, the bureau shall
prepare a report of its recommendations and transmit the report within 30 days to the
parties. Within 60 days after the date of issuance of the mediator's report, the dispute shall
be submitted to binding arbitration as provided in this chapter. The mediator's report
submitted to the parties is informational only and is not admissible in arbitration.

Sec. 13.

Minnesota Statutes 2006, section 572A.015, subdivision 2, is amended to read:

Subd. 2.

Mediation.

Within ten days of receiving a request for mediation that the
deleted text begin director of the Office of Strategic and Long-Range Planning deleted text end new text begin chief administrative law
judge of the state Office of Administrative Hearings new text end has required under section 414.12,
subdivision 1, the bureau shall provide written notice of the request for mediation to
the parties and provide a list of neutrals experienced in land use planning and local
government issues obtained from the Supreme Court, Bureau of Mediation Services,
Minnesota State Bar Association, Hennepin County Bar Association, Office of Dispute
Resolution, and others. Within 30 days thereafter, the affected parties, shall select a
mediator from the list of neutrals or someone else acceptable to the parties and submit
to mediation for a period of 30 days facilitated by the bureau. If the dispute remains
unresolved after the close of the 30-day mediation period, the bureau shall prepare a report
of its recommendations and transmit the report within 30 days to the parties. Within 60
days after the date of issuance of the mediator's report, the dispute shall be submitted to
binding arbitration as provided in this chapter. The mediator's report submitted to the
parties is informational only and is not admissible in arbitration.

Sec. 14.

Minnesota Statutes 2006, section 572A.02, subdivision 6, is amended to read:

Subd. 6.

Decision.

The arbitrators, after a hearing on the matter, shall make a
decision regarding the dispute within 60 days and transmit an order to the parties and
new text begin to new text end the Office of Strategic and Long-Range Planning new text begin in comprehensive planning disputes
or to the chief administrative law judge in chapter 414 disputes new text end . Unless appealed by an
aggrieved party within 30 days of receipt of the arbitration panel's order by the office, the
office shall execute an order in accordance with the arbitration panel's order and shall
cause copies of the same to be mailed to all parties entitled to mailed notice, the secretary
of state, the Department of Revenue, the state demographer, individual property owners if
initiated in that manner, the affected county auditor, and any other party of record. The
affected county auditor shall record the order against the affected property.

Sec. 15. new text begin REVISOR INSTRUCTION.
new text end

new text begin The revisor of statutes shall change the word "director" or "director's" to "chief
administrative law judge" or "chief administrative law judge's," as appropriate, wherever
the words appear in the following sections of Minnesota Statutes: 414.01, subdivisions
1b, 5, 8, 10, 11, 12, 14, and 17; 414.012; 414.02, subdivisions 1, 2, and 3; 414.031,
subdivisions 1, 3, 4a, and 7; 414.0325, subdivisions 2, 3, 4, and 4a; 414.033, subdivisions
3, 5, 6, 7, and 10; 414.0335, subdivisions 1 and 2; 414.041, subdivisions 1, 2, 3, 4, 5,
6, and 7; 414.051; 414.06, subdivisions 1, 2, 3, and 5; 414.061, subdivisions 1, 2, 3a,
4, and 5; 414.063; 414.067, subdivision 3; 414.07, subdivision 2; 414.08; and 414.09,
subdivisions 1, 2, and 3.
new text end

Sec. 16. new text begin EFFECTIVE DATE.
new text end

new text begin This article is effective the day following final enactment.
new text end