1.1 	A bill for an act
1.2 	relating to transportation; creating pilot program to authorize establishment and 
1.3 	evaluate use of transportation improvement districts by certain local governments 
1.4 	for specified projects; establishing Transportation Improvement District Project 
1.5 	Selection Council; requiring report.
1.6 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.7 	Section 1. TRANSPORTATION IMPROVEMENT DISTRICT PILOT 
1.8 	PROGRAM.
 1.9 	The commissioner of transportation shall conduct a transportation improvement 
1.10 	district pilot program to select projects within the metropolitan area to be funded by 
1.11 	a transportation improvement fee, to support and evaluate the use of the transportation 
1.12 	improvement district by local governments, and to report to the legislature.

1.13 	Sec. 2. TRANSPORTATION UTILITY FEE PILOT PROGRAM.
 1.14 		Subdivision 1.Definitions. For the purposes of this section, the following terms 
1.15 	have the meanings given.
1.16 	(a) "Facility upgrade" means the installation or improvement of a traffic signal, 
1.17 	turn lane, median, street approach, alley, right-of-way, sidewalk, or retaining wall; the 
1.18 	installation of a fence; or the addition of a traffic lane.
1.19 	(b) "Commissioner" means the commissioner of transportation.
1.20 	(c) "Governing body" means the body elected to govern a municipality.
1.21 	(d) "Maintenance" means striping, seal coating, crack sealing, sidewalk maintenance, 
1.22 	signal maintenance, street light maintenance, and signage.
1.23 	(e) "Metropolitan area" means the counties of Anoka, Carver, Dakota, Hennepin, 
1.24 	Ramsey, Scott, and Washington.
2.1 	(f) "Municipality" means a county, home rule charter or statutory city, or town.
2.2 	(g) "Reconstruction" means paving, grading, curbs or gutters, bridge repair, overlays, 
2.3 	drainage work, base work, subgrade corrections, and boulevard restoration.
2.4 		Subd. 2.Application. A municipality in the metropolitan area may apply to 
2.5 	participate in the transportation improvement district pilot program. The application must 
2.6 	state all information reasonably requested by the commissioner; describe the planned 
2.7 	construction, facility upgrade, reconstruction, or maintenance project described in the 
2.8 	master plan; state the estimated cost of the improvement; and identify the transportation 
2.9 	improvement district against which a fee is proposed to be assessed.
2.10 		Subd. 3.Procedure for adoption. A municipality that has been selected for 
2.11 	participation in the pilot program by the selection committee may create the transportation 
2.12 	improvement district by ordinance adopted by a two-thirds vote of its governing body. The 
2.13 	resolution must not be voted on or adopted and the municipality may not contract for any 
2.14 	improvement until after a public hearing has been held on the question. A notice of the 
2.15 	time, place, and purpose of the hearing, including the general nature of the improvement, 
2.16 	its estimated costs, and the area against which a fee is proposed to be assessed, must be 
2.17 	published at least once in each week for two successive weeks in the official newspaper 
2.18 	of the municipality, or in a newspaper of general content and circulation within the 
2.19 	municipality, and the last notice must be published at least seven days before the hearing. 
2.20 	The municipality must file the adopted ordinance of record with the county recorder, and 
2.21 	the municipality must provide a copy to the county auditor.
2.22 		Subd. 4.Collection. The ordinance adopted under this section must provide for 
2.23 	the billing and payment of a fee on a monthly, quarterly, or other basis as directed by the 
2.24 	governing body. Fees that, as of October 15 each calendar year, have remained unpaid 
2.25 	for at least 30 days must be certified to the county auditor for collection as a special 
2.26 	assessment payable in the following calendar year against the affected property.
2.27 		Subd. 5.Master plan requirement. A municipality may not create a transportation 
2.28 	improvement district or impose the fee provided in this section unless it has prepared 
2.29 	and adopted a master plan that includes information on the proposed construction, 
2.30 	reconstruction, facility upgrade, and maintenance for the following five years. A capital 
2.31 	improvement plan, public facility plan, or comparable information qualifies as a master 
2.32 	plan. The master plan must include information on the proposed funding sources for 
2.33 	all projects required to be included in the plan. The master plan must be adopted by 
2.34 	resolution of the governing body following a hearing and publication of notice of the 
2.35 	hearing, as provided in subdivision 3.
3.1 		Subd. 6.Use of proceeds. Revenues from the fee authorized in this section may only 
3.2 	be used for specific projects listed in the master plan and described in the pilot program 
3.3 	application and are limited to projected costs of the needs approved in the master plan and 
3.4 	described in the published notice before the required public hearing. The municipality 
3.5 	may not accumulate revenues from the fee beyond the estimated costs for construction, 
3.6 	reconstruction, facility upgrades, and maintenance that are described in the master plan.
3.7 		Subd. 7.Calculation of fee. The fee imposed must be calculated based on the 
3.8 	relationship of the revenues the municipality proposes to generate and the relative benefit, 
3.9 	as determined by the municipality, that will accrue to each category of land use from the 
3.10 	projects to be financed. The amount of revenue the municipality proposes to generate must 
3.11 	be that amount reasonable and necessary to complete the proposed improvement. The fee 
3.12 	may be imposed only against property that will benefit by the improvement, whether or 
3.13 	not the property abuts the improvement.
3.14 		Subd. 8.Appeals. A property owner may administratively appeal the amount of 
3.15 	the fee to the governing body within 60 days after notice of the amount of fee due has 
3.16 	been mailed to the property owner. The appeal must be in writing, signed, and dated by 
3.17 	the property owner, and must state the reasons why the amount of the fee is incorrect. 
3.18 	The appeal may state reasons why the fee imposed by the municipality generates funds 
3.19 	in excess of the amount reasonable and necessary for the improvement described in the 
3.20 	published notice, or why the property against which the fee is imposed does not benefit 
3.21 	from the proposed improvement.  The decision of the governing body may be appealed to 
3.22 	the Tax Court in the same manner as appeals of determinations regarding property tax 
3.23 	matters provided for in chapter 271.  If the governing body does not make a decision 
3.24 	within six months after the filing of an administrative appeal, the property owner may elect 
3.25 	to appeal to the Tax Court. The appeal procedures in this subdivision are in lieu of any 
3.26 	appeal procedures relating to special assessments provided for in chapter 429.
3.27 		Subd. 9.Special assessments; bonds; property tax levies. The creation of a 
3.28 	transportation improvement district and use of associated fees by a municipality does 
3.29 	not restrict the municipality from imposing special assessments, issuing bond debt, or 
3.30 	levying property taxes to pay the costs of local street reconstruction, facility upgrades, or 
3.31 	maintenance.

3.32 	Sec. 3. TRANSPORTATION IMPROVEMENT DISTRICT PROJECT 
3.33 	SELECTION COUNCIL.
 4.1 		Subdivision 1.Establishment of council. A Transportation Improvement District 
4.2 	Project Selection Council is established to select, evaluate, and support local government 
4.3 	projects funded by a transportation improvement district fee.
4.4 		Subd. 2.Duties of council. In order to accomplish these purposes, the council shall:
4.5 	(1) review applications for participation from local governments in the metropolitan 
4.6 	area;
4.7 	(2) select for participation in the pilot program a maximum of ten projects in the 
4.8 	metropolitan area, no more than three of which may be located in the same county;
4.9 	(3) determine that the establishment of the transportation improvement district to 
4.10 	fund designated projects would serve the interest of the affected property owners, as well 
4.11 	as the local government and region it serves; and
4.12 	(4) determine the suitability of the project for funding by collection of a 
4.13 	transportation improvement district fee.
4.14 		Subd. 3.Membership. (a) The council is composed of the following members:
4.15 	(1) one county commissioner from the metropolitan area, selected by the Association 
4.16 	of Minnesota Counties;
4.17 	(2) one elected representative from a home rule charter or statutory city in the 
4.18 	metropolitan area, selected by the League of Minnesota Cities;
4.19 	(3) the chair of the Metropolitan Council Transportation Committee or a designee;
4.20 	(4) the commissioner of transportation or a designee from the Minnesota Department 
4.21 	of Transportation Division of State Aid for Local Transportation;
4.22 	(5) two representatives of the business community in the metropolitan area selected 
4.23 	by the Minnesota Chamber of Commerce; and
4.24 	(6) one realtor based in the metropolitan area, selected by the Minnesota Board of 
4.25 	Realtors.
4.26 	(b) All appointments required by paragraph (a) must be completed by August 
4.27 	1, 2010.
4.28 	(c) The commissioner of transportation or the commissioner's designee shall 
4.29 	convene the first meeting of the council within two weeks after the members have been 
4.30 	appointed to the council and shall serve as chair of the council.

4.31 	Sec. 4. REPORT TO LEGISLATURE.
 4.32 	By October 1 of each odd-numbered year, and upon completion of all projects 
4.33 	performed under the pilot program, the commissioner shall submit a report to the chairs of 
4.34 	the legislative committees with jurisdiction over transportation budget and policy and to 
4.35 	the legislature. The report must summarize the transportation improvement district project 
5.1 	selection process, including the number of applications considered; projects undertaken; 
5.2 	projects completed and associated revenues raised; and the number of property owner 
5.3 	appeals and their disposition. The report must be made electronically with paper copies 
5.4 	furnished only upon request.

5.5 	Sec. 5. EXPIRATION.
 5.6 	The Transportation Improvement District Project Selection Council expires on 
5.7 	October 1, 2013, or upon the selection of up to ten projects under this pilot program, 
5.8 	whichever occurs first.

5.9 	Sec. 6. EFFECTIVE DATE.
 5.10 	This act is effective the day following final enactment for fees payable in 2011 
5.11 	and thereafter.