HF 3382

as introduced - 92nd Legislature (2021 - 2022) Posted on 02/14/2022 01:58pm

A bill for an act
relating to local government; modifying orderly annexation and detachment
provisions; amending Minnesota Statutes 2020, sections 414.031, by adding a
subdivision; 414.0325, subdivisions 1, 1b, 6; 414.033, by adding a subdivision;
414.036; 414.038; 414.06, subdivisions 1, 2, 3, 7; proposing coding for new law
in Minnesota Statutes, chapter 414.

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

Section 1.

Minnesota Statutes 2020, section 414.031, is amended by adding a subdivision
to read:

new text begin Subd. 1b. new text end

new text begin Annexation election. new text end

new text begin If the annexation is denied or if it is defeated in the
referendum under section 414.0322, no proceeding for the annexation of substantially the
same area may be initiated within two years from the date of the chief administrative law
judge's order, unless the new proceeding is initiated by a majority of the area's property
owners and the petition is supported by any abutting townships and municipalities.
new text end

Sec. 2.

new text begin [414.0322] ANNEXATION ELECTION.
new text end

new text begin Subdivision 1. new text end

new text begin Proceedings triggering an election. new text end

new text begin Where proceedings for annexation
are initiated under section 414.031 or 414.033, subdivision 2, clause (2) or (4), 3, or 5, the
chief administrative law judge shall order an election on the question of annexation. The
chief administrative law judge shall:
new text end

new text begin (1) fix a day not less than 30 days nor more than 90 days after the entry of such order
when an election shall be held;
new text end

new text begin (2) designate a place within the area to be primarily and substantially interested in the
proposed annexation, giving preference to the polling place or places usually used in the
area;
new text end

new text begin (3) cause a copy of the order affirming the petition, including the notice of election, to
be posted at least 20 days before the election in three public places in the area;
new text end

new text begin (4) cause notice of the election to be published for at least two successive weeks in a
newspaper qualified under chapter 331A as a legal publication in general circulation in the
area; and
new text end

new text begin (5) appoint necessary election judges from voters in the area and supervise them in their
duties.
new text end

new text begin Subd. 2. new text end

new text begin Eligible voters. new text end

new text begin Only voters residing within the area of the proposed annexation
are entitled to vote.
new text end

new text begin Subd. 3. new text end

new text begin Election. new text end

new text begin The election judges shall conduct the election so far as practicable
in accordance with the laws regulating special elections. The ballot shall bear the words
"For Annexation" and "Against Annexation." The petitioners or annexing municipality shall
pay for the ballots and election supplies and the wages of election judges. Immediately upon
completion of the counting of the ballots, the election judges shall make a signed and verified
certificate declaring the time and place of holding the election, that they have canvassed
the ballots cast and the number cast both for and against the proposition, and they shall then
file the certificate with the chief administrative law judge. If the certificate shows the majority
of the votes cast were "For Annexation," the chief administrative law judge may issue an
order for annexation. If a majority of votes were cast against the annexation, or if there are
an equal number of votes for and against annexation, the chief administrative law judge
shall not issue an order for annexation. If the annexation is denied, or if it is defeated in the
referendum, no proceeding for the annexation of substantially the same area may be initiated
within two years from the date of the chief administrative law judge's order, unless the new
proceeding is initiated by a majority of the area's property owners and the petition is
supported by any abutting townships and municipalities. The chief administrative law judge
shall notify all parties of record of the election results.
new text end

Sec. 3.

Minnesota Statutes 2020, 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) 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.

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

(d) The resolution shall include a description of the designated area and the reasons for
designation.

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

(1) submitting to the chief administrative law judge a resolution of any signatory to the
joint resolution; or

(2) the chief administrative law judge.

(f) 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
chief administrative law judge to consider designation of the area for orderly annexation.

(g) 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 chief administrative law judge
may review and comment, but may not alter the boundaries.

(h) 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 chief administrative
law judge is necessary, the chief administrative law judge may review and comment, but
shall, within 30 days, order the annexation in accordance with the terms of the resolution.

Sec. 4.

Minnesota Statutes 2020, section 414.0325, subdivision 1b, is amended to read:

Subd. 1b.

Notice of intent to designate an area.

new text begin (a) At least 30 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 provided to municipalities adjacent
to the designated area.
new text end

new text begin (b) new text end 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.

new text begin (c) new text end The deleted text begin notice deleted text end new text begin notices under paragraphs (a) and (b) new text end must clearly identify the boundaries
of the area proposed to be included in the orderly annexation agreement. 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, or any expansion of the orderly annexation area subject to
the agreement, and not to any subsequent annexation of any property from within the
designated 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. 5.

Minnesota Statutes 2020, section 414.0325, subdivision 6, is amended to read:

Subd. 6.

Validity, effect of orderly annexation agreement.

An orderly annexation
agreement is a binding contract upon all parties to the agreement and is enforceable in the
district court in the county in which the unincorporated property in question is located. new text begin For
agreements entered into on or after August 1, 2021, the parties shall mutually agree to the
terms of the orderly annexation agreement, but the agreement must not run for more than
ten years. new text end The provisions of an orderly annexation agreement are not preempted by any
provision of this chapter unless the agreement specifically provides so. If an orderly
annexation agreement provides the exclusive procedures by which the unincorporated
property identified in the agreement may be annexed to the municipality, the municipality
shall not annex that property by any other procedure. new text begin Annexation of the designated area by
means other than those identified in the orderly annexation agreement or by a nonparty to
the orderly annexation agreement is prohibited. A petition or other filing by a nonparty to
the orderly annexation agreement shall be denied as soon as the parcel to be annexed is
identified as being subject to an orderly annexation agreement. An ordinance adopted by a
nonparty municipality seeking to annex property subject to an orderly annexation agreement
is void and unenforceable.
new text end

Sec. 6.

Minnesota Statutes 2020, section 414.033, is amended by adding a subdivision to
read:

new text begin Subd. 2c. new text end

new text begin Annexation election. new text end

new text begin If the annexation is denied or if it is defeated in the
referendum under section 414.0322, no proceeding for the annexation of substantially the
same area may be initiated within two years from the date of the chief administrative law
judge's order unless the new proceeding is initiated by a majority of the area's property
owners and the petition is supported by any abutting townships and municipalities.
new text end

Sec. 7.

Minnesota Statutes 2020, section 414.036, is amended to read:

414.036 CITY REIMBURSEMENT TO TOWN TO ANNEX TAXABLE
PROPERTY new text begin ; CEASING REIMBURSEMENT IF PROPERTY DETACHED new text end .

new text begin (a) new text end Unless otherwise agreed to by the annexing municipality and the affected town, when
an order or other approval under this chapter annexes part of a town to a municipality, the
order or other approval must provide a reimbursement from the municipality to the town
for all or part of the taxable property annexed as part of the order. The reimbursement shall
be completed in substantially equal payments over not less than two nor more than eight
years from the time of annexation. The municipality must reimburse the township for all
special assessments assigned by the township to the annexed property, and any portion of
debt incurred by the town prior to the annexation and attributable to the property to be
annexed but for which no special assessments are outstanding, in substantially equal payments
over a period of not less than two or no more than eight years.

new text begin (b) Unless otherwise agreed to by the annexing town and affected city, when an order
or other approval under this chapter detaches property that is subject to reimbursement
under paragraph (a), the reimbursement from the municipality to the town ceases on the
date of the order or approval of the detachment.
new text end

Sec. 8.

Minnesota Statutes 2020, section 414.038, is amended to read:

414.038 EFFECT OF ANNEXATION new text begin AND DETACHMENT new text end ON TOWNSHIP
ROADS.

new text begin (a) new text end Whenever a municipality annexes property abutting one side of a township road, the
segment of road abutting the annexed property must be treated as a line road and is subject
to section 164.14. Whenever a municipality annexes the property on both sides of a township
road, that portion of road abutting the annexed property ceases to be a town road and becomes
the obligation of the annexing municipality. This section does not prohibit the annexing
municipality from contracting with the township for continued maintenance of the road.
Any portion of a township road that ceases to be a township road pursuant to this section
may still be counted as a township road for the road-and-bridge account revenues for the
year in which the annexation occurs.

new text begin (b) Whenever a town detaches property abutting one side of a township road, the segment
of road abutting the detached property must be treated as a line road and is subject to section
164.14. Whenever a town detaches the property on both sides of a township road, that
portion of road abutting the detached property ceases to be the obligation of the municipality
and becomes the obligation of the detaching town. This section does not prohibit the
detaching town from contracting with the municipality for continued maintenance of the
road.
new text end

Sec. 9.

Minnesota Statutes 2020, section 414.06, subdivision 1, is amended to read:

Subdivision 1.

Initiating the proceeding.

new text begin (a) new text end Property which is situated within a
municipality and abutting the municipal boundary, rural in character and not developed for
urban residential, commercial, or industrial purposes may be detached from the municipality
according to the following procedure.

new text begin (b) new text end The proceeding may be initiated new text begin : (1) new text end by submitting to the chief administrative law
judge a resolution of the municipality to which the land is attached deleted text begin or deleted text end new text begin ; (2) new text end by submitting to
the chief administrative law judge a petition of all of the property owners of the land to be
detached if the area is less than 40 acres or of 75 percent of the property owners if over 40
acres new text begin ; or (3) by submitting to the chief administrative law judge a resolution of the township
of the land to be detached, if: (i) the land was annexed by ordinance under section 414.033;
(ii) over five years have lapsed since the annexation; and (iii) the land remains rural in
character and not developed for urban residential, commercial, or industrial purposes new text end .

new text begin (c) new text end The petition or resolution shall set forth the boundaries and the area of the land to
be detached, the number and character of the buildings, the resident population, and the
municipal improvements, if any, in the area, and a statement of the reasons the petitioners new text begin ,
the township, new text end or the municipality is seeking the detachment. In addition, the petitioners
shall summarize what, if any, efforts were undertaken prior to filing the resolution or petition
to resolve the issues forming the basis for the resolution or petition.

new text begin (d) new text end If a petition is submitted without a resolution from the city, the petitioners shall also
provide a copy of the petition to the city from which the land may be detached, and if the
petition includes land for which a property owner has not signed the petition, to each property
owner subject to the petition who has not signed the petition. A copy must also be mailed
or otherwise delivered to the following parties: (1) the clerk of the town to which the property
would be attached if the detachment is granted; (2) the clerk of any other abutting town or
city; and (3) the county recorder in the county in which the land is located.

new text begin (e) If a resolution is submitted by the township, the township shall also provide a copy
of the resolution to the city from which the land may be detached and each property owner
subject to the resolution. A copy must also be mailed or otherwise delivered to the following
parties: (1) the clerk of the city from which the property would be detached if the detachment
is granted; (2) the clerk of any other abutting town or city; and (3) the county recorder in
the county in which the land is located.
new text end

Sec. 10.

Minnesota Statutes 2020, section 414.06, subdivision 2, is amended to read:

Subd. 2.

Hearing, if needed.

new text begin (a) new text end If both a resolution of support from the municipality
and a petition by all the property owners are submitted, and no resolution of opposition has
been received from a town as provided in subdivision 1a, no hearing is necessary and the
chief administrative law judge shall grant the petition.

new text begin (b) If a resolution from a town is submitted, and both a resolution of support from the
municipality and a petition by all property owners are submitted, no hearing is necessary
and the administrative law judge shall grant the resolution.
new text end

new text begin (c) new text end If both the municipality and town submit a resolution opposing the petition, a hearing
must not be held and the chief administrative law judge shall deny the petition.

new text begin (d) If both the municipality and all property owners subject to the detachment submit a
petition or resolution opposing the town resolution, a hearing must not be held and the chief
administrative law judge shall deny the resolution.
new text end

new text begin (e) new text end In any other case, upon receipt of a petition or resolution, the chief administrative
law judge shall designate a time and place for a hearing in accordance with section 414.09,
except that instead of the meetings otherwise required under section 414.01, subdivision
16, the chief administrative law judge shall order the parties to participate in a mediation
session. The mediator must be on a list of mediators approved by the Office of Administrative
Hearings, unless the parties stipulate to a mediator not on the list. The cost of the mediation
must be apportioned as provided for in subdivision 7.

Sec. 11.

Minnesota Statutes 2020, section 414.06, subdivision 3, is amended to read:

Subd. 3.

Order.

new text begin (a) new text end Upon completion of the hearing, the chief administrative law judge
may order the detachment new text begin initiated by property owners or a township resolution, new text end on finding
that new text begin : (1) new text end the requisite number of property owners have signed the petition if initiated by the
property owners deleted text begin , that deleted text end new text begin or the resolution meets the requirements of subdivision 1, paragraph
(b), clause (3), if initiated by a township; (2) new text end the property is rural in character and not
developed for urban residential, commercial or industrial purposes deleted text begin , that deleted text end new text begin ; (3) new text end the property is
within the boundaries of the municipality and abuts a boundary deleted text begin , that deleted text end new text begin ; (4) new text end the detachment
would not unreasonably affect the symmetry of the detaching municipality deleted text begin , and that deleted text end new text begin ; and
(5) new text end the land is not needed for reasonably anticipated future development.

new text begin (b) new text end In making the findings new text begin under paragraph (a) new text end , the chief administrative law judge shall
consider all applicable comprehensive plans, land use regulations, and land use maps of the
affected municipality, town, and county that have been adopted at the time the petition was
submitted.

new text begin (c) new text end The chief administrative law judge may deny the detachment on finding that the
remainder of the municipality cannot continue to carry on the functions of government
without undue hardship. The chief administrative law judge may decrease the area of property
to be detached and may include only a part of the proposed area to be detached. If the tract
abuts more than one town, it shall become a part of each town, being divided by projecting
through it the boundary line between the towns.

new text begin (d) new text end The detached area may be relieved of the primary responsibility for existing
indebtedness of the municipality and be required to assume the indebtedness of the town
of which it becomes a part, in such proportion as the chief administrative law judge shall
deem just and equitable having in view the amount of taxes due and delinquent and the
indebtedness of each town and the municipality affected, if any, and for what purpose the
same was incurred, all in relation to the benefit inuring to the detached area as a result of
the indebtedness and the last net tax capacity of the taxable property in each town and
municipality.

Sec. 12.

Minnesota Statutes 2020, section 414.06, subdivision 7, is amended to read:

Subd. 7.

Costs.

Notwithstanding the provisions of section 414.067, the chief
administrative law judge shall apportion the costs of the mediation and hearing in an equitable
manner, but unless the chief administrative law judge makes specific findings as to why a
party shall be responsible for a greater share, the deleted text begin petitioning landowners are deleted text end new text begin party initiating
the proceeding is new text end responsible for at least 50 percent of the total costs.