SF 3280

as introduced - 89th Legislature (2015 - 2016) Posted on 03/30/2016 08:53am

A bill for an act
relating to local government; modifying sections related to municipal
boundary adjustments and city dissolution; amending Minnesota Statutes 2014,
sections 412.091; 414.01, subdivisions 1b, 8a, 10, 14, 16; 414.011, by adding
subdivisions; 414.012; 414.02, subdivisions 1a, 3; 414.031, subdivisions 1,
1a, 3a, 4, 4a, 6, 7, by adding a subdivision; 414.0325; 414.033; 414.0335,
subdivisions 1, 3; 414.035; 414.036; 414.038; 414.041, subdivisions 1, 5, 6,
8; 414.06, subdivisions 1, 2, 3, 4, 5; 414.061; 414.067, subdivision 1; 414.07,
subdivision 2; 414.09, subdivisions 1, 2; 414.12, subdivision 3; proposing coding
for new law in Minnesota Statutes, chapter 414; repealing Minnesota Statutes
2014, sections 414.0333; 414.051; 414.063; 414.065; 414.08.

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

Section 1.

Minnesota Statutes 2014, section 412.091, is amended to read:

412.091 DISSOLUTION; PETITION; VOTE.

Whenever a number of voters equal to one-third of those voting at the last
preceding city election petition the chief administrative law judge of the state Office of
Administrative Hearings to dissolve the city, a special election shall be called to vote upon
the question. deleted text begin Before the election, the chief administrative law judge shall designate a time
and place for a hearing in accordance with section 414.09. After the hearing, the chief
administrative law judge 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. deleted text end The ballots used at such election shall
be substantially in the following form: "Shall the city of ... be dissolved?" If a majority of
those voting on the question favor dissolution, the clerk shall file a certificate of the result
with the chief administrative law judge, the secretary of state, 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. 2.

Minnesota Statutes 2014, section 414.01, subdivision 1b, is amended to read:

Subd. 1b.

Goals in promoting, regulating municipal development.

The deleted text begin chief
administrative law judge may deleted text end new text begin policy purpose of this chapter is to new text end promote and regulate
development of municipalities:

(1) to provide for the extension of municipal government to areas which are developed
or are in the process of being developed for intensive use for residential, commercial,
industrial, institutional, and governmental purposes or are needed for such purposes; and

(2) to protect the stability of unincorporated areas which are used or developed for
agricultural, open space, and rural residential purposes and are not presently needed for
more intensive uses; and

(3) to protect the integrity of land use planning in municipalities and unincorporated
areas so that the public interest in efficient local government will be properly recognized
and served.

Sec. 3.

Minnesota Statutes 2014, section 414.01, subdivision 8a, is amended to read:

Subd. 8a.

Powers of conductor of proceedings.

Any deleted text begin person deleted text end new text begin administrative law
judge new text end conducting a proceeding under this chapter may administer oaths and affirmations;
receive testimony of witnesses, and the production of papers, books, and documents;
examine witnesses; and receive and report evidence. 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.

Sec. 4.

Minnesota Statutes 2014, section 414.01, subdivision 10, is amended to read:

Subd. 10.

Rulemaking authority.

To carry out the duties and powers imposed upon
the chief administrative law judge under this chapter, the chief administrative law judge
may adopt the rules, that are reasonably necessary, in accordance with the procedure
prescribed in deleted text begin the general laws relating to departments and agencies of the state deleted text end new text begin chapter 14 new text end .

Sec. 5.

Minnesota Statutes 2014, section 414.01, subdivision 14, is amended to read:

Subd. 14.

Population of changed territory, new municipality.

(a) When an
order deleted text begin or approval letter deleted text end under this chapter enlarges or diminishes the area of an existing
municipality or town, the chief administrative law judge shall communicate the order deleted text begin or
approval letter deleted text end to the municipality and the state demographer. The municipality shall
prepare an estimate of population and of the number of households for the annexed or
detached area of the municipality or town new text begin as of the effective date of the order new text end . The
estimate shall be certified by the state demographer. deleted text begin The estimate must estimate the
population as of the effective date of the order or approval letter and must be so dated.
deleted text end

(b) When a new municipality is created by an order under this chapter, the
municipality shall request a separation census from the United States Bureau of the
Census and bear any costs incurred.

Sec. 6.

Minnesota Statutes 2014, section 414.01, subdivision 16, is amended to read:

Subd. 16.

Compelled meetings; report.

In any proceeding under this chapter,
the chief administrative law judge deleted text begin or conductor of the proceeding deleted text end may at any time in
the process require representatives from any petitioning property owner or 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 chief administrative law judge and other issues of mutual concern. The chief
administrative law judge deleted text begin or conductor of the proceeding deleted text end may determine which entities
are required to participate in these discussions. The chief administrative law judge deleted text begin or
conductor of the proceeding deleted text end 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 chief administrative
law judge deleted text begin or conductor of the proceeding deleted text end on the results of the meetings deleted text begin immediately
deleted text end new text begin within ten business days new text end after the last meeting. The parties may be granted additional time
at the discretion of the chief administrative law judge deleted text begin or conductor of the proceedings deleted text end .

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.

Sec. 7.

Minnesota Statutes 2014, section 414.011, is amended by adding a subdivision
to read:

new text begin Subd. 14. new text end

new text begin Town; township. new text end

new text begin "Town" means the governmental units provided the
general powers defined in section 366.01. For purposes of this chapter, town includes
townships.
new text end

Sec. 8.

Minnesota Statutes 2014, section 414.011, is amended by adding a subdivision
to read:

new text begin Subd. 15. new text end

new text begin Orderly annexation. new text end

new text begin "Orderly annexation" means the annexation
process specified in section 414.0325.
new text end

Sec. 9.

Minnesota Statutes 2014, section 414.011, is amended by adding a subdivision
to read:

new text begin Subd. 16. new text end

new text begin Orderly annexation agreement. new text end

new text begin "Orderly annexation agreement"
means a written contract entered into jointly by at least one township and at least one
municipality, or at least one municipality and at least one county, and containing all
negotiated terms and conditions pursuant to which the parties have agreed to an annexation
of designated property, either currently or to take place at some point in the future.
new text end

Sec. 10.

Minnesota Statutes 2014, section 414.011, is amended by adding a subdivision
to read:

new text begin Subd. 17. new text end

new text begin Contiguous. new text end

new text begin "Continuous" has the meaning given to "abut," "abuts,"
and "abutting" in subdivision 6.
new text end

Sec. 11.

Minnesota Statutes 2014, section 414.012, is amended to read:

414.012 FILING OF MAPS IN BOUNDARY ADJUSTMENT PROCEEDINGS.

Subdivision 1.

Corporate boundary map.

deleted text begin A municipality deleted text end new text begin Any party new text end initiating any
boundary adjustment authorized by this chapter shall file with the chief administrative law
judge a corporate boundary map. Any proposed boundary adjustment shall be delineated
on a copy of the corporate boundary map.

Subd. 2.

Plat maps.

Any party initiating a boundary adjustment, which includes
platted land, shall file with the chief administrative law judge maps deleted text begin which deleted text end new text begin that new text end are
necessary to support and identify the deleted text begin land deleted text end new text begin property new text end description. The maps shall include
copies of plats.

Sec. 12.

Minnesota Statutes 2014, section 414.02, subdivision 1a, is amended to read:

Subd. 1a.

Notice of intent to incorporate.

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

(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 deleted text begin by certified mail deleted text end a notice of intent to
incorporate. new text begin Service may be made by first class mail with postage prepaid.
new text end

Sec. 13.

Minnesota Statutes 2014, section 414.02, subdivision 3, is amended to read:

Subd. 3.

Relevant factors, order.

(a) In arriving at a decision, the chief
administrative law judge shall consider the following factors:

(1) present population and number of households, past population and projected
population growth for the subject area;

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

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

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

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

(6) existing levels of governmental services being provided to 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 the services;

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

(8) fiscal impact on the subject area and adjacent units of local government,
including present bonded indebtedness; local tax rates of the county, school district, and
other governmental units, including, where applicable, the net tax capacity of platted and
unplatted lands and the division of homestead and nonhomestead property; and other
tax and governmental aid issues;

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

(10) whether delivery of services to the subject area can be adequately and
economically delivered by the existing government;

(11) analysis of whether necessary governmental services can best be provided
through the proposed action or another type of boundary adjustment;

(12) degree of contiguity of the boundaries of the subject area and adjacent units
of local government; and

(13) analysis of the applicability of the State Building Code.

(b) Based upon these factors, the chief administrative law judge may order the
incorporation deleted text begin on deleted text end new text begin upon new text end finding that:

(1) the property to be incorporated is now, or is about to become, urban or suburban
in character; or

(2) that the existing township form of government is not adequate to protect the
public health, safety, and welfare; or

(3) the proposed incorporation would deleted text begin be in the best interests of the area under
consideration deleted text end new text begin support the goals set forth in section 414.01, subdivision 1b new text end .

(c) The chief administrative law judge may deny the incorporation if the area, or a
part thereof, would be better served by annexation to an adjacent municipality.

(d) The chief administrative law judge may alter the boundaries of the proposed
incorporation by increasing or decreasing the area to be incorporated so as to include only
that property which is now, or is about to become, urban or suburban in character, or may
exclude property that may be better served by another unit of government. The chief
administrative law judge may also alter the boundaries of the proposed incorporation so as
to follow visible, clearly recognizable physical features for municipal boundaries.

(e) In all cases, the chief administrative law judge shall set forth the factors which
are the basis for the decision.

(f) Notwithstanding any other provision of law to the contrary relating to the number
of wards which may be established, the chief administrative law judge may provide
for election of council members by wards, not less than three nor more than seven in
number, whose limits are prescribed in the chief administrative law judge's order upon a
finding that area representation is required to accord proper representation in the proposed
incorporated area because of uneven population density in different parts thereof or the
existence of agricultural lands therein which are in the path of suburban development, but
after four years from the effective date of an incorporation the council of the municipality
may by resolution adopted by a four-fifths vote abolish the ward system and provide for
the election of all council members at large as in other municipalities.

(g) The chief administrative law judge's order for incorporation shall provide for the
election of municipal officers in accordance with section 414.09. The plan of government
shall be "Optional Plan A", provided that an alternate plan may be adopted pursuant
to section 412.551, at any time.

(h) The ordinances of the township in which the new municipality is located shall
continue in effect until repealed by the governing body of the new municipality.

Sec. 14.

Minnesota Statutes 2014, section 414.031, subdivision 1, is amended to read:

Subdivision 1.

Initiating the proceeding.

(a) A proceeding for the annexation of
unincorporated property abutting a municipality may be initiated by submitting to the
chief administrative law judge and the affected township one of the following:

(1) a resolution of the annexing municipality;

(2) a resolution of the township containing the area proposed for annexation;

(3) a petition of 20 percent of the new text begin total number of individuals who own new text end property
deleted text begin owners deleted text end new text begin in the area to be annexed new text end or 100 property owners new text begin in the area to be annexed new text end ,
whichever is less deleted text begin , in the area to be annexed deleted text end ;

(4) a resolution of the municipal council together with a resolution of the township
board stating their desire to have the entire township annexed to the municipality.

(b) The petition, or resolution shall set forth the boundaries of the territory proposed
for annexation, the names of all parties entitled to notice under section 414.09, and the
reasons for requesting annexation.

(c) If the proceeding is initiated by a petition of property owners, the petition shall
be accompanied by a resolution of the annexing municipality supporting the petition.

Sec. 15.

Minnesota Statutes 2014, section 414.031, subdivision 1a, is amended to read:

Subd. 1a.

Notice of intent to annex.

new text begin Except in matters initiated by a township, new text end at
least 30 days before submitting a petition or resolution to the chief administrative law judge
under this section, the petitioning municipality or petitioning property owner or supporting
municipality must serve the township clerk of the affected township deleted text begin by certified mail deleted text end a
notice of the petitioning municipality's or the petitioning property owner's intent to annex
property within the township. The notice must clearly identify the boundaries of the area
proposed to be annexed. new text begin Service may be made by first class mail with postage prepaid.
new text end

Sec. 16.

Minnesota Statutes 2014, section 414.031, is amended by adding a subdivision
to read:

new text begin Subd. 1b. new text end

new text begin Joint informational meeting. new text end

new text begin There must be a joint informational
meeting of the municipal council of the annexing municipality and the township board
of supervisors of the township containing the land proposed to be annexed or included
in annexation proceedings under this section. For an annexation under this section, 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. The time, date, and place of the joint informational meeting must be
determined jointly by the chair of the township board of supervisors and the mayor of the
annexing municipality. The chair of the township board of supervisors and the mayor of
the municipality must serve as the cochairs for the joint informational meeting. Notice of
the time, date, place, and purpose of the joint informational meeting must be posted by the
township clerk in the township's designated place for posting notices and by the municipal
clerk in the municipality's designated place for posting notices. In addition, both the
city and township shall publish, at their own expense, notice in their respective official
newspapers. If the city and township use the same official newspaper, a joint notice may
be published and the costs evenly divided. All notice required by this subdivision must be
provided at least ten days before the date for the joint informational meeting. At the joint
informational meeting, all persons appearing must have an opportunity to be heard, but
the cochairs may, by mutual agreement, establish the amount of time allowed for each
speaker. The clerk of the township must record minutes of the proceedings of the joint
informational meeting, and the municipal clerk must make an audio recording of the joint
informational meeting. The township must provide the chief administrative law judge and
the municipality with a copy of the printed minutes, and the municipality must provide the
chief administrative law judge and the township with a copy of the audio recording. The
record of the joint informational meeting for a proceeding under this section is admissible
in any proceeding under this chapter and shall be taken into consideration by the chief
administrative law judge.
new text end

Sec. 17.

Minnesota Statutes 2014, section 414.031, subdivision 3a, is amended to read:

Subd. 3a.

Presiding administrative law judge; tour.

During the evidentiary
hearing process, new text begin upon the request of any party, new text end 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.

Sec. 18.

Minnesota Statutes 2014, section 414.031, subdivision 4, is amended to read:

Subd. 4.

Relevant factors, order.

(a) In arriving at a decision, the presiding
administrative law judge shall consider the following sources and factors:

(1) recordings and public documents from joint informational meetings under
deleted text begin section 414.0333 deleted text end new text begin subdivision 1b new text end 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;

(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; and

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

(b) Based upon the factors, the presiding administrative law judge may order the
annexation deleted text begin on deleted text end new text begin upon new text end 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 deleted text begin be in the best interest of the subject area deleted text end new text begin support the
goals of section 414.01, subdivision 1b new text end .

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

(d) The presiding administrative law judge shall deny the annexation deleted text begin on deleted text end new text begin upon new text end 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 presiding administrative law judge may deny the annexation deleted text begin on deleted text end new text begin upon new text end finding
new text begin that new text end :

(1) deleted text begin that deleted text end annexation of all or a part of the property to deleted text begin an adjacent deleted text end new text begin a new text end municipality
new text begin adjacent to the subject property new text end would better deleted text begin serve the interests of the residents of the
property deleted text end new text begin support the goals set forth in section 414.01, subdivision 1b new text end ; or

(2) deleted text begin that deleted text end the remainder of the township would suffer undue hardship new text begin if the annexation
were granted new text end .

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

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

(i) In all cases, the presiding administrative law judge shall set forth the factors
which are the basis for the decision.

Sec. 19.

Minnesota Statutes 2014, section 414.031, subdivision 4a, is amended to read:

Subd. 4a.

Providing for election of new municipal officers new text begin for annexation
of entire township new text end .

(a) Any annexation order under this section for annexation by a
single municipality of an entire township shall include a provision for the election of
new municipal officers in accordance with section 414.09. The chief administrative law
judge deleted text begin , or the chief administrative law judge's designee, deleted text end may also order an election of new
municipal officers in accordance with section 414.09 as part of any other annexation
order under this section if the chief administrative law judge deleted text begin or the chief administrative
law judge's designee deleted text end determines that such an election would be deleted text begin equitable deleted text end new text begin reasonable
and necessary new text end .

(b) The expanded municipality shall be governed by the home rule charter or
statutory form which governs the annexing municipality, except that any ward system for
the election of council members shall be inoperable new text begin unless otherwise ordered by the
chief administrative law judge new text end .

(c) The ordinances of both the annexing municipality and the township shall
continue in effect within the former boundaries deleted text begin until repealed by the governing body of
the new municipality deleted text end new text begin as specified in the order of the chief administrative law judge new text end .

(d) Notwithstanding any other provision of law to the contrary, the chief
administrative law judge deleted text begin , or the chief administrative law judge's designee, deleted text end may provide
for election of council members by wards, not less than three nor more than seven in
number, whose limits are prescribed deleted text begin in the chief administrative law judge's deleted text end new text begin by new text end order,
upon a finding that area representation is required to accord proper representation in the
new text begin expanded new text end municipality because of uneven population density in different parts thereof or
the existence of agricultural lands therein which are in the path of suburban development;
but after four years from the effective date of an annexation the council of the municipality
may by resolution adopted by a four-fifths vote abolish the ward system and provide for
the election of all council members at large.

(e) Until the effective date of the annexation order, the town board and other officers
of the town shall continue to exercise their powers and duties under the town laws in that
portion of the municipality that was formerly the town, and the council and other officers
of the annexing municipality shall continue to exercise their powers and duties in that
portion of the expanded municipality that was formerly the municipality. deleted text begin Thereafter deleted text end new text begin On
the effective date specified in the annexation order, new text end the town board and the council of the
annexing municipality shall have no jurisdiction within the municipality, and the new
municipal council and other new officers shall act in respect to any matters previously
undertaken by the town board of supervisors or municipal council within the limits of the
expanded municipality, including the making of any improvement and the levying of
any special assessments therefor in the same manner and to the same effect as if such
improvement had been undertaken by the municipality.

(f) The new municipal council may continue or discontinue any board that may have
previously existed in the town or former municipality.

Sec. 20.

Minnesota Statutes 2014, section 414.031, subdivision 6, is amended to read:

Subd. 6.

Effective date of annexation.

The annexation shall be effective as of the
date fixed in the annexation order deleted text begin or on a later date fixed in the annexation order deleted text end .

Sec. 21.

Minnesota Statutes 2014, section 414.031, subdivision 7, is amended to read:

Subd. 7.

Copy to county auditors.

new text begin Within ten business days of its execution,
new text end a copy of the annexation order must be deleted text begin delivered immediately deleted text end new text begin provided new text end by the chief
administrative law judge to the appropriate county auditors.

Sec. 22.

Minnesota Statutes 2014, section 414.0325, is amended to read:

414.0325 ORDERLY ANNEXATION IN DESIGNATED UNINCORPORATED
AREA.

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 new text begin either currently or at some point in the future by execution of an
orderly annexation agreement new text end . 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 new text begin either currently or at some point in the future
by execution of an orderly annexation agreement new text end .

(b) A designated new text begin orderly annexation new text end area is any area which the signatories to a
joint resolution for orderly annexation have identified as being appropriate for new text begin orderly
new text end annexation, either currently or at some point in the future, pursuant to the negotiated
terms and conditions set forth in deleted text begin the deleted text end new text begin an orderly annexation agreement and included or
incorporated by reference into a new text end joint resolution. Land described as a designated new text begin orderly
annexation new text end 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 new text begin orderly new text end annexations in the designated new text begin orderly annexation new text end area and over the
deleted text begin various deleted text end provisions deleted text begin in said deleted text end new text begin of the orderly annexation new text end agreement by submission of said joint
resolution to the chief administrative law judge.

(d) The new text begin joint new text end resolution shall include a new text begin legal new text end description of the designated new text begin orderly
annexation new text end area and the reasons for new text begin its new text end designation.

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

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

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

(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.

deleted text begin (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.
deleted text end

deleted text begin (h) deleted text end new text begin (g) 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 new text begin no alteration of its stated
boundaries is appropriate and new text end 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 new text begin joint new text end resolution new text begin unless
the joint resolution is invalid under the terms of this chapter new text end .

deleted text begin Subd. 1a. deleted text end

deleted text begin Electric utility service notice. deleted text end

deleted text begin At least 60 days before a petition is filed
under this section or section 414.033, the petitioner must notify the municipality that the
petitioner intends to file a petition for annexation. At least 30 days before a petition is filed
for annexation, the petitioner must be notified by the municipality that the cost of electric
utility service to the petitioner may change if the land is annexed to the municipality. The
notice must include an estimate of the cost impact of any change in electric utility services,
including rate changes and assessments, resulting from the annexation.
deleted text end

Subd. 1b.

Notice of intent to designate an area.

At least ten new text begin business new text end days
before the municipality or township adopts an orderly annexation agreement, a notice
of the intent to include property in deleted text begin an deleted text end new text begin a designated new text end 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 deleted text begin the
deleted text end new text begin a designated new text end orderly annexation deleted text begin agreement deleted text end new text begin area new 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 deleted text begin an deleted text end new text begin a designated new text end orderly annexation area subject to deleted text begin the
deleted text end new text begin an new text end orderly annexation agreement, or any expansion of the new text begin designated new text end orderly annexation
area subject to the new text begin orderly annexation new text end agreement, and not to any subsequent annexation of
any property from within the designated new text begin orderly annexation new 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 deleted text begin petitioned to be annexed
deleted text end new text begin requested annexation by the municipality new text end .

Subd. 2.

Hearing time, place.

Upon receipt of a new text begin joint new text end resolution for new text begin orderly
new text end annexation of a part of the designated new text begin orderly annexation new text end area, the chief administrative
law judge shall set a time and place for a hearing in accordance with section 414.09.

Subd. 3.

Relevant factors, order.

deleted text begin (a) In arriving at a decision, the chief
administrative law judge shall consider the factors in section 414.031, subdivision 4.
deleted text end

deleted text begin (b) deleted text end new text begin (a) new text end Based upon new text begin the new text end factors in section 414.031, subdivision 4, the chief
administrative law judge may order the annexation new text begin upon finding that new text end :

(1) deleted text begin on finding that deleted text end the subject area is now or is about to become urban or suburban in
character and that the annexing municipality is capable of providing the services required
by the area within a reasonable time; or

(2) deleted text begin on finding that deleted text end the existing township form of government is not adequate to
protect the public health, safety, and welfare; or

(3) deleted text begin on finding that deleted text end annexation would deleted text begin be in the best interests of the subject area
deleted text end new text begin support the goals of section 414.01, subdivision 1b new text end .

deleted text begin (c) deleted text end new text begin (b) new text end The chief administrative law judge may deny the new text begin orderly new text end annexation if it
conflicts with any provision of the joint new text begin resolution or orderly annexation new text end agreement.

deleted text begin (d) deleted text end new text begin (c) new text end The chief administrative law judge may alter the boundaries of the proposed
new text begin joint orderly new text end annexation by increasing or decreasing the area so as to include that property
within the designated area deleted text begin which deleted text end new text begin that new text end is in need of municipal services or will be in need of
municipal services new text begin within a reasonable time new text end .

deleted text begin (e) deleted text end new text begin (d) new text end If the new text begin orderly new text end annexation is denied, no proceeding for the new text begin orderly new text end annexation
of substantially the same area may be initiated within two years from the date of the
denial order unless the new proceeding is initiated by a majority of the new text begin subject new text end area's
property owners and the petition is supported by affected parties to the new text begin joint new text end resolution new text begin for
orderly annexation new text end .

deleted text begin (f) deleted text end new text begin (e) new text end In all cases, the chief administrative law judge shall set forth the factors
deleted text begin which deleted text end new text begin that new text end are the basis for the decision.

Subd. 4.

Effective date of annexation.

The chief administrative law judge's order
shall deleted text begin be effective upon the issuance of the order or at such later time as is provided in the
order deleted text end new text begin specify the effective date of the annexation new text end .

Subd. 4a.

Copy to county auditors.

new text begin Within ten business days of its execution,
new text end a copy of the annexation order must be deleted text begin delivered immediately deleted text end new text begin provided new text end by the chief
administrative law judge to the appropriate county auditors.

Subd. 4b.

Timing for tax levy.

For the purposes of taxation, if the annexation
becomes effective on or before August 1 of a levy year, the municipality may levy on the
annexed area beginning with that same levy year. If the annexation becomes effective after
August 1 of a levy year, the town may continue to levy on the annexed area for that levy
year, and the municipality may not levy on the annexed area until the following levy year.

Subd. 5.

new text begin Land use new text end planning new text begin and controls new text end in new text begin designated new text end orderly annexation area.

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

(b) A board or other planning authority designated or established pursuant to an
orderly annexation agreement 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 326B.02, subdivision 5.

(c) The orderly annexation agreement 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 orderly annexation agreement does not provide for joint planning and land
use control, delegate planning and land use control to the municipalities or towns, or
establish some other process for planning and land use authority, 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 deleted text begin , and section 462.358, subdivision 1 deleted text end ; 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 new text begin designated new text end 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
326B.02, subdivision 5.

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 and by the chief administrative law judge, for all purposes new text end . The provisions of an orderly
annexation agreement are not preempted by any provision of this chapter unless the
agreement specifically provides deleted text begin so deleted text end new text begin otherwise new text end . If an orderly annexation agreement provides
the exclusive procedures by which the unincorporated property deleted text begin identified deleted text end in the deleted text begin agreement
deleted text end new text begin designated orderly annexation area new text end may be annexed to the municipality, the municipality
shall not annex that property by any other procedure.

Sec. 23.

Minnesota Statutes 2014, section 414.033, is amended to read:

414.033 ANNEXATION BY ORDINANCE.

Subdivision 1.

Unincorporated property.

Unincorporated property abutting a
municipality may be annexed to the municipality by ordinance as provided for in this
section.

Subd. 2.

deleted text begin Conditions deleted text end new text begin Annexation without opportunity for township objection new text end .

A
municipal council may by ordinance declare land annexed to the municipality and any
such land is deemed to be urban or suburban in character or about to become so if new text begin one of
the following conditions is met new text end :

(1) the land is owned by the municipality;

(2) the land is completely surrounded by land within the municipal limits;

(3) the land abuts the municipality and the area to be annexed is 120 acres or less,
and the area to be annexed is not presently served by public wastewater facilities or public
wastewater facilities are not otherwise available, and the municipality receives a petition
for annexation from all the property owners of the land. Except as provided for by an
orderly annexation agreement new text begin conforming with section 414.0325 new text end , this clause may not be
used to annex any property contiguous to any property either simultaneously proposed to
be or previously annexed under this clause within the preceding 12 months if the property
is or has been owned at any point during that period by the same owners and annexation
would cumulatively exceed 120 acres; or

(4) the land has been approved after August 1, 1995, by a preliminary plat or final
plat for subdivision to provide residential lots that average 21,780 square feet or less in
area and the land is located within two miles of the municipal limits.

Subd. 2b.

Notice, hearing required.

Before a municipality may adopt an ordinance
under subdivision 2, clause (2), (3), or (4), a municipality must hold a public hearing and
give 30 days' written notice deleted text begin by certified mail deleted text end to the town or towns affected by the proposed
ordinance and to all landowners within and contiguous to the area to be annexed. new text begin Service
may be made by first class mail with postage prepaid.
new text end

Subd. 3.

60 percent bordered and 40 acres or less new text begin ; objections; procedure new text end .

If
the perimeter of the area to be annexed by a municipality is 60 percent or more bordered
by the municipality and if the area to be annexed is 40 acres or less, the municipality
shall serve notice of intent to annex upon the town board and the chief administrative
law judge, unless the area is appropriate for annexation by ordinance under subdivision
2, clause (3). new text begin Service may be made by first class mail with postage prepaid. new text end The town
board shall have 90 days from the date of service to serve objections with the chief
administrative law judge. If no objections are forthcoming within the said 90-day period,
deleted text begin such deleted text end new text begin the chief administrative law judge shall issue an order confirming the new text end land deleted text begin may deleted text end new text begin to new text end be
annexed by ordinance. If objections are filed with the chief administrative law judge, the
chief administrative law judge shall conduct hearings and issue an order as in the case of
annexations under section 414.031 deleted text begin , subdivisions 3 and 4 deleted text end .

Subd. 5.

Petition by property owners; objections; procedure.

If the land is
platted, or deleted text begin , if deleted text end new text begin is new text end unplatted deleted text begin , deleted text end new text begin and new text end does not exceed 200 acres, a majority of the property
owners in number may petition the municipal council to have such land included within
the abutting municipality and, within ten new text begin business new text end days thereafter, shall file copies of the
petition with the chief administrative law judge, the town board, the county board and the
municipal council of any other municipality which borders the land to be annexed. Within
90 days from the date of deleted text begin service deleted text end new text begin filing of the petition with the town new text end , the town board or
the municipal council of such abutting municipality may submit written objections to the
annexation to the chief administrative law judge and the annexing municipality. Upon
receipt of such objections, the chief administrative law judge shall proceed to hold a
hearing and issue an order in accordance with section 414.031 deleted text begin , subdivisions 3 and 4 deleted text end . If
written objections are not submitted within the time specified in this section and if the
municipal council determines that property proposed for the annexation is now or is about
to become urban or suburban in character, it may by ordinance declare such land annexed
to the municipality. If the petition is not signed by all the property owners of the land
proposed to be annexed, the ordinance shall not be enacted until the municipal council
has held a hearing on the proposed annexation after at least 30 days' mailed notice new text begin of the
hearing new text end to all property owners within the area to be annexed.

Subd. 6.

If pending proceeding; waivers from parties.

Whenever a proceeding
for annexation is initiated under this section and all or any part of the land is included in
another boundary adjustment proceeding pending before the chief administrative law
judge, no action thereon shall be taken by the municipality, unless otherwise provided by
an order of the chief administrative law judge, until final disposition has been made of the
pending petition. Under this section, the chief administrative law judge will accept a waiver
from all parties having a right to object, stating they have no objections to the proposed
annexation and waiving the 90-day period before an annexation ordinance may be adopted.

Subd. 7.

Filing; effective date; copy to auditors.

Any annexation ordinance
provided for in this section must be filed with the chief administrative law judge, the
township, the county auditor and the secretary of state and is deleted text begin final deleted text end new text begin effective new text end on the date the
ordinance is approved by the chief administrative law judge. A copy of the annexation
ordinance must be deleted text begin delivered immediately deleted text end new text begin provided within ten business days new text end by the
governing body of the municipality to the appropriate county auditors.

Subd. 10.

Chief administrative law judge may require additional information.

The chief administrative law judge may require the deleted text begin city deleted text end new text begin municipality new text end or property owners to
furnish additional information concerning an annexation by ordinance to inform the chief
administrative law judge about the extent to which the proposed annexation conforms to
the statutory criteria set forth in sections 414.01 deleted text begin , subdivision 1 deleted text end deleted text begin , deleted text end and 414.031, subdivision 4.

Subd. 11.

When annexed land is in floodplain or shoreland area.

When a
municipality declares land annexed to the municipality under subdivision 2, clause (3), and
the land is within a designated floodplain, as provided by section 103F.111, subdivision
4, or a shoreland area, as provided by section 103F.205, subdivision 4, the municipality
shall adopt or amend its land use controls to conform to chapter 103F, and any new
development of the annexed land shall be subject to chapter 103F.

Subd. 12.

Property taxes.

When a municipality annexes land under deleted text begin subdivision
2, clause (2), (3), or (4) deleted text end new text begin this section new text end , property taxes payable on the annexed land shall
continue to be paid to the affected town deleted text begin or towns deleted text end for the year in which the annexation
becomes effective. If the annexation becomes effective on or before August 1 of a levy
year, the municipality may levy on the annexed area beginning with that same levy year.
If the annexation becomes effective after August 1 of a levy year, the town may continue
to levy on the annexed area for that levy year, and the municipality may not levy on the
annexed area until the following levy year.

deleted text begin Subd. 13. deleted text end

deleted text begin Electric utility service notice; cost impact. deleted text end

deleted text begin At least 30 days before a
municipality may adopt an ordinance under subdivision 2, clause (2), (3), or (4), the
petitioner must be notified by the municipality that the cost of electric utility service to the
petitioner may change if the land is annexed to the municipality. The notice must include
an estimate of the cost impact of any change in electric utility services, including rate
changes and assessments, resulting from the annexation.
deleted text end

Sec. 24.

new text begin [414.0334] ELECTRIC UTILITY SERVICE NOTICE.
new text end

new text begin At least 60 days before a petition for annexation is filed by a property owner under
section 414.0325 or 414.033, the petitioner must notify the municipality that the petitioner
intends to file a petition for annexation. Within 30 days after receiving the petitioner's
notification under section 414.0325, or at least 30 days before adopting an ordinance
under section 414.033, the municipality must notify the petitioner that the cost of electric
utility service to the petitioner may change if the land is annexed to the municipality. The
notice must include an estimate of the cost impact of any change in electric utility service,
including rate changes and assessments, resulting from the orderly annexation.
new text end

Sec. 25.

Minnesota Statutes 2014, section 414.0335, subdivision 1, is amended to read:

Subdivision 1.

Annexation-by-ordinance alternative.

If a determination or order
by the Pollution Control Agency new text begin is made new text end , under section 115.49 or other similar statute deleted text begin is
made deleted text end , that cooperation by contract is necessary and feasible between a municipality and
an unincorporated area located outside the existing corporate limits of a municipality, the
municipality required to provide or extend through a contract a governmental service to
an unincorporated area, during the statutory 90-day period provided in section 115.49 to
formulate a contract, may in the alternative to formulating a service contract to provide
or extend the service, declare the unincorporated area described in the Pollution Control
Agency's determination letter or order annexed to the municipality by adopting an
ordinance and submitting it to the chief administrative law judge.

Sec. 26.

Minnesota Statutes 2014, section 414.0335, subdivision 3, is amended to read:

Subd. 3.

City to amend plan and controls.

deleted text begin Thereafter deleted text end new text begin Following the effective
date of the annexation new text end , the city shall amend its comprehensive plan and official controls
in accordance with chapter 462.

Sec. 27.

Minnesota Statutes 2014, section 414.035, is amended to read:

414.035 DIFFERENTIAL TAXATION FOR UP TO SIX YEARS.

Whenever an order, under section 414.031, 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 property-tax-supported municipal services to the annexed area. Nothing in this
section prohibits a new text begin similar new text end differential tax provision from being included in an orderly
annexation agreement new text begin approved pursuant to section 414.0325 new text end .

Sec. 28.

Minnesota Statutes 2014, section 414.036, is amended to read:

414.036 CITY REIMBURSEMENT TO TOWN TO ANNEX TAXABLE
PROPERTY.

Unless otherwise agreed to by the annexing municipality and the affected town
new text begin in a lawfully adopted administrative fee schedule or ordinance filed with the chief
administrative law judge new text end , deleted text begin when an deleted text end new text begin any new text end order deleted text begin or other approval deleted text end new text begin approving an annexation
new text end under this chapter deleted text begin annexes part of a town to a municipality, the order or other approval
deleted text end must provide deleted text begin a deleted text end new text begin for new text end reimbursement from the municipality to the town for deleted text begin all or part of the
taxable property annexed as part of the order deleted text end new text begin the value of property taxes paid to the town
in the eight years immediately preceding the annexation new text end . The reimbursement shall be
completed in deleted text begin substantially equal payments over not less than two nor deleted text end new text begin not new text end 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.

Sec. 29.

Minnesota Statutes 2014, section 414.038, is amended to read:

414.038 EFFECT OF ANNEXATION ON TOWNSHIP ROADS.

Whenever a municipality annexes property abutting deleted text begin one side of deleted text end 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.

Sec. 30.

Minnesota Statutes 2014, section 414.041, subdivision 1, is amended to read:

Subdivision 1.

Initiating the proceeding.

(a) Two or more municipalities may be
the subject of a single new text begin consolidation new text end proceeding provided that each municipality abuts at
least one of the included municipalities.

(b) The proceeding shall be initiated in one of the following ways:

(1) submitting to the chief administrative law judge a resolution of the city council
of each affected municipality;

(2) submitting to the chief administrative law judge a petition signed by a number
of residents eligible to vote equivalent to five percent or more of the resident voters of a
municipality who voted deleted text begin for governor at deleted text end new text begin in new text end the last new text begin statewide new text end general election; or

(3) by the chief administrative law judge.

(c) The petition or resolution shall set forth the following information about each
included municipality: name, description of boundaries, the reasons for requesting the
consolidation and the names of all parties entitled to mailed notice under section 414.09.

(d) The party initiating the proceeding shall serve copies of the petition or resolution
on all of the included municipalities. new text begin Service may be made by first class mail with postage
prepaid.
new text end

Sec. 31.

Minnesota Statutes 2014, section 414.041, subdivision 5, is amended to read:

Subd. 5.

Relevant factors, order.

(a) In arriving at a decision, the chief
administrative law judge shall consider the factors in section 414.02, subdivision 3.

(b) The chief administrative law judge shall consider and may accept, amend, return
to the commission for amendment or further study, or reject the commission's findings and
recommendations based upon the chief administrative law judge's written determination
of what is in the best interests of the affected municipalities.

(c) The chief administrative law judge shall order the consolidation deleted text begin on deleted text end new text begin upon new text end finding
that consolidation will be for the best interests of the municipalities. In all cases, the chief
administrative law judge shall set forth the factors which are the basis for the decision.

(d) If the chief administrative law judge orders consolidation, the order shall provide
for election of new municipal officers in accordance with section 414.09.

(e) If the most populous of the included municipalities is a statutory city, the new
municipality shall be a statutory city and the plan of government shall be Optional Plan A,
provided that an alternate plan may be adopted pursuant to section 412.551, at any time. If
the most populous of the included municipalities is a home rule charter city or organized
under a statute other than chapter 412, the new municipality shall be governed by its home
rule charter or the statutory form under which it is governed except that any ward system
for the election of council members shall be inoperable.

(f) If the commission's findings and recommendations include a proposed home rule
charter for the new municipality, the order may combine the issue of the adoption of the
charter and the vote on approval of the order for consolidation into one question on the
ballot, and shall submit it in a special or general election as provided in section 410.10.

(g) The ordinances of all of the included municipalities shall continue in effect within
their former boundaries until repealed by the governing body of the new municipality.

(h) Notwithstanding any other provision of law to the contrary, the order may
establish a ward system in the new municipality, in which event the order shall establish
not less than three nor more than seven wards, each of which shall elect one council
member. When more than two years have elapsed after consolidation, the governing body
may, by a four-fifths vote, abolish the ward system.

(i) The new municipality shall assume the name of the most populous municipality
unless previous to the election another name is chosen by joint resolution of a majority of
the included municipalities or by the consolidation commission.

(j) The number of license privileges existing in the included municipalities prior
to consolidation and pursuant to state law shall not be diminished as a result of the
consolidation.

(k) If the consolidation is denied or defeated in a referendum, no proceeding for the
consolidation of the same municipalities may be initiated within two years from the date
of the order unless authorized by the chief administrative law judge.

Sec. 32.

Minnesota Statutes 2014, section 414.041, subdivision 6, is amended to read:

Subd. 6.

Final approval; petition; referenda.

(a) If the consolidation was initiated
by a petition of the resident voters of a municipality, the order for consolidation shall be
final upon approval by resolution of the city councils in each of the affected municipalities
unless new text begin a number of residents eligible to vote equivalent to new text end ten percent or more of the
resident voters of an affected municipality who voted deleted text begin for governor at deleted text end new text begin in new text end the last new text begin statewide
new text end general election petition the city council for a referendum on the consolidation. The
petition must be submitted within 90 days of the final date of the order or the date of final
approval of the order by the city councils, whichever is later.

(b) Upon receipt and verification of the petition, the chief administrative law judge
shall order the municipalities to conduct separate referenda at a general or special election
in each municipality on the same day, and the referenda shall be held within six months of
the receipt of the petition.

(c) Costs of the respective referenda shall be borne by the respective municipality.
A majority of those voting in each city must approve the proposed consolidation. The
results of the referenda shall be certified to the chief administrative law judge by the chief
election judge within ten days after the referenda. The chief administrative law judge shall
upon receipt of the certificate notify all parties of the election results.

(d) If the consolidation was initiated by a city council resolution of each affected
municipality, the order for consolidation shall be final unless ten percent or more of the
resident voters of an affected municipality petition for a referendum as provided in
paragraph (a).

(e) If the consolidation was initiated by the chief administrative law judge, no
chief administrative law judge's consolidation order involving existing municipalities
shall become effective unless adopted by the council of each affected municipality by a
majority vote and unless the consolidation order is approved by the qualified voters of the
affected municipalities at a general or special election set according to law. The form of
the ballot shall be fixed by the chief administrative law judge; and, if a majority of the
votes cast on the question in each municipality are in favor of its adoption, the order
shall become effective as provided herein.

(f) Notwithstanding a disapproval of the order for consolidation by a city council of
an affected municipality required to approve the order in paragraph (a) or (e), the order for
consolidation shall nevertheless be deemed approved by that city council if new text begin a number of
residents eligible to vote equivalent to new text end ten percent or more of the resident voters of that
municipality who voted deleted text begin for governor at deleted text end new text begin in new text end the last new text begin statewide new text end general election petition the
city council for a referendum on the consolidation as provided in paragraph (a), and a
majority of those voting in that municipality approve the order for consolidation.

Sec. 33.

Minnesota Statutes 2014, section 414.041, subdivision 8, is amended to read:

Subd. 8.

Effective date of consolidation.

The consolidation shall be effective upon
the election and qualification of new municipal officers, or at such later date as set by the
order new text begin of the chief administrative law judge new text end .

Sec. 34.

Minnesota Statutes 2014, section 414.06, subdivision 1, is amended to read:

Subdivision 1.

Initiating the proceeding.

Property deleted text begin which deleted text end new text begin that new text end 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. The proceeding may be initiated by
submitting to the chief administrative law judge a resolution of the municipality to which
the land is attached or by submitting to the chief administrative law judge a petition deleted text begin of
deleted text end new text begin signed by new text end 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 new text begin the land to be detached is new text end over 40 acres.
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
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. If a petition is submitted without
a resolution new text begin of support new text end 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; new text begin and new text end (2) the clerk of any other abutting town or city deleted text begin ;
and (3) the county recorder in the county in which the land is located deleted text end .

Sec. 35.

Minnesota Statutes 2014, section 414.06, subdivision 2, is amended to read:

Subd. 2.

Hearing, if needed.

If both a resolution of support from the municipality
and a petition by all new text begin of new text end the deleted text begin property deleted text end owners new text begin of the subject property new text end 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. 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. 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 deleted text begin , except that instead of the
meetings otherwise required under section 414.01, subdivision 16, the chief administrative
law judge deleted text end new text begin and new text end shall order the parties to participate in a mediation session. The deleted text begin 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 deleted text end new text begin parties must either stipulate to a mediator
of their choice or utilize a mediator assigned by the Office of Administrative Hearings new text end .
The cost of the mediation must be apportioned as provided for in subdivision 7.

Sec. 36.

Minnesota Statutes 2014, section 414.06, subdivision 3, is amended to read:

Subd. 3.

Order.

Upon completion of the hearing, the chief administrative law judge
may order the detachment deleted text begin on deleted text end new text begin upon new text end finding that the requisite number of property owners
have signed the petition if initiated by the property owners, that the property is rural in
character and not developed for urban residential, commercial or industrial purposes, that
the property is within the boundaries of the municipality and abuts a boundary, that the
detachment would not unreasonably affect the symmetry of the detaching municipality,
and that the land is not needed for reasonably anticipated future development. In
making the findings, 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. The chief
administrative law judge may deny the detachment deleted text begin on deleted text end new text begin upon new text end 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. 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. 37.

Minnesota Statutes 2014, section 414.06, subdivision 4, is amended to read:

Subd. 4.

Effective date of detachment.

The detachment shall be effective upon the
deleted text begin issuance of deleted text end new text begin date indicated in new text end the order deleted text begin , or at such later date, as provided by the order deleted text end new text begin of the
chief administrative law judge new text end .

Sec. 38.

Minnesota Statutes 2014, section 414.06, subdivision 5, is amended to read:

Subd. 5.

Copy to county auditors.

new text begin Within ten business days, new text end a copy of the
detachment order must be deleted text begin delivered immediately deleted text end new text begin provided new text end by the chief administrative law
judge to the appropriate county auditors.

Sec. 39.

Minnesota Statutes 2014, section 414.061, is amended to read:

414.061 INCORPORATED LAND; CONCURRENT DETACHMENT deleted text begin , deleted text end new text begin AND
new text end ANNEXATION.

Subdivision 1.

Initiating the proceeding.

Property of one municipality which abuts
another may be concurrently detached and annexed by the procedure set forth in this
section. The proceeding shall be initiated by (1) submitting to the chief administrative
law judge resolutions of both municipalities describing the land and stating their desire
to detach and annex the land, deleted text begin or deleted text end (2) submitting to the chief administrative law judge the
petition of new text begin all of the owners of the subject new text end property deleted text begin owners deleted text end and the resolution of at least
one municipality describing the land and stating its desire to have the land concurrently
detached and annexed as provided in the property owners' petition new text begin , or (3) the chief
administrative law judge, but only with regard to property situated in one municipality and
completely surrounded by another municipality new text end .

Subd. 2.

Order.

If both municipalities have submitted resolutions under subdivision
1 and the resolutions are in order, the chief administrative law judge may order the
detachment and annexation. new text begin In all other cases involving a proposed concurrent detachment
and annexation of incorporated land, the chief administrative law judge shall conduct a
hearing and issue an order pursuant to section 414.09. In arriving at a decision, the chief
administrative law judge shall consider the factors in section 414.02, subdivision 3.
new text end

Subd. 3.

Effective date of order.

The concurrent detachment and annexation shall
be effective upon the issuance of the order, or at such later date as provided by the order.

Subd. 3a.

Copy to county auditors.

new text begin Within ten business days, new text end a copy of the
annexation order must be deleted text begin delivered immediately deleted text end new text begin provided new text end by the chief administrative law
judge to the appropriate county auditors.

Subd. 3b.

Timing of tax levies.

For the purposes of taxation, if the annexation
becomes effective on or before August 1 of a levy year, the municipality acquiring the
detached area of another municipality may levy on it beginning with that same levy year.
If the annexation becomes effective after August 1 of a levy year, the municipality losing
the detached area may continue to levy on it for that levy year, and the municipality
acquiring the detached area may not levy on it until the following levy year.

deleted text begin Subd. 4. deleted text end

deleted text begin Chief administrative law judge's initiative. deleted text end

deleted text begin The chief administrative
law judge (1) may initiate proceedings for the concurrent detachment and annexation of
portions of one municipality completely surrounded by another municipality, or (2) may
act upon the petition of all of the owners of property in the completely surrounded area. In
such cases the chief administrative law judge shall conduct hearings and issue an order
pursuant to section 414.09. In arriving at a decision, the chief administrative law judge
shall consider the factors in section 414.02, subdivision 3. The chief administrative law
judge shall order the proposed action on finding that it will be for the best interests of the
municipalities and the property owners. In all cases, the chief administrative law judge
shall set forth the factors which are the basis for the decision.
deleted text end

deleted text begin Subd. 5. deleted text end

deleted text begin Property owners may initiate. deleted text end

deleted text begin Property owners may initiate proceedings
for the concurrent detachment of their property from one municipality and its annexation
to an adjacent municipality by a petition signed by all of them that they submit to the
chief administrative law judge accompanied by a resolution of the city council of at least
one of the affected municipalities. The chief administrative law judge shall conduct
hearings and issue an order pursuant to section 414.09. In arriving at a decision, the chief
administrative law judge shall consider the factors in section 414.02, subdivision 3. The
chief administrative law judge shall order the proposed action on finding that it will be
for the best interests of the municipalities and the property owner. In all cases, the chief
administrative law judge shall set forth the factors which are the basis for the decision.
deleted text end

Sec. 40.

Minnesota Statutes 2014, section 414.067, subdivision 1, is amended to read:

Subdivision 1.

Township or municipality divided.

Whenever the chief
administrative law judge divides an existing governmental unit, the chief administrative
law judge deleted text begin , or other qualified person designated by the chief administrative law judge with
the concurrence of the parties, deleted 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; the assets, value, and location of all the taxable property in the existing township or
municipality; the indebtedness, the taxes due and delinquent, other revenue accrued but
not paid to the existing township or municipality; 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. 41.

Minnesota Statutes 2014, section 414.07, subdivision 2, is amended to read:

Subd. 2.

Grounds for appeal.

(a) Any person aggrieved by any order issued under
this chapter deleted text begin may appeal to the district court upon the following grounds: deleted text end new text begin is entitled to
judicial review of the order under the provisions of sections 14.63 to 14.69.
new text end

deleted text begin (1) that the order was issued without jurisdiction to act;
deleted text end

deleted text begin (2) that the order exceeded the orderer's jurisdiction;
deleted text end

deleted text begin (3) that the order is arbitrary, fraudulent, capricious or oppressive or in unreasonable
disregard of the best interests of the territory affected; or
deleted text end

deleted text begin (4) that the order is based upon an erroneous theory of law.
deleted text end

deleted text begin (b) The appeal shall be taken in the district court in the county in which the majority
of the area affected is located. The appeal shall not stay the effect of the order. All notices
and other documents shall be served on both the chief administrative law judge and the
attorney general's assistant assigned to the chief administrative law judge for purposes
of this chapter.
deleted text end

deleted text begin (c) If the court determines that the action involved is unlawful or unreasonable or is
not warranted by the evidence in case an issue of fact is involved, the court may vacate or
suspend the action involved, in whole or in part, as the case requires. The matter shall then
be remanded for further action in conformity with the decision of the court.
deleted text end

deleted text begin (d) To render a review of an order effectual, the aggrieved person shall file with the
court administrator of the district court of the county in which the majority of the area is
located, within 30 days of the order, an application for review together with the grounds
upon which the review is sought.
deleted text end

deleted text begin (e) An appeal lies from the district court as in other civil cases.
deleted text end

Sec. 42.

Minnesota Statutes 2014, section 414.09, subdivision 1, is amended to read:

Subdivision 1.

Hearings.

(a) Proceedings initiated by the submission of an initiating
document or by the chief administrative law judge shall deleted text begin come on deleted text end new text begin be scheduled new text end for hearing
within deleted text begin 30 to deleted text end 60 days from receipt of the new text begin initiating new text end document by the chief administrative
law judge or from the date of the chief administrative law judge's action deleted text begin and the person
conducting the hearing must submit an order no later than one year from the date of the
day of the first hearing deleted text end .

(b) new text begin Unless the parties stipulate otherwise, new text end the deleted text begin place of the deleted text end hearing shall be new text begin held new text end in
the county where a majority of the affected territory is situated deleted text begin , and shall be deleted text end new text begin at a location
new text end established for the convenience of the parties.

(c) new text begin At least 30 days before the scheduled hearing, new text end the deleted text begin chief administrative law judge
deleted text end new text begin initiating party new text end shall mail notice of the hearing to the following deleted text begin parties deleted text end new text begin entities new text end : the
township or municipality presently governing the affected territory; any township or
municipality abutting the affected territory; the county where the affected territory is
situated; and each planning agency which has jurisdiction over the affected area. new text begin Proof of
mailing shall be submitted to the chief administrative law judge.
new text end

(d) The deleted text begin chief administrative law judge deleted text end new text begin initiating party new text end shall deleted text begin see deleted text end new text begin ensure new text end that notice
of the hearing is published for two successive weeks in a legal newspaper of general
circulation in the affected area.

(e) new text begin During a hearing, new text end when the chief administrative law judge exercises authority to
change the boundaries of the affected area so as to increase the quantity of the land, the
hearing shall be recessed and reconvened upon new text begin at least new text end two weeks' published notice in a
legal newspaper of general circulation in the affected area.

Sec. 43.

Minnesota Statutes 2014, section 414.09, subdivision 2, is amended to read:

Subd. 2.

Transmittal of order.

The chief administrative law judge shall deleted text begin see
that deleted text end new text begin cause new text end copies of the order deleted text begin are deleted text end new text begin to be new text end mailed to all parties entitled to mailed notice of
hearing under subdivision 1, the secretary of state, the Department of Revenue, the state
demographer, individual property owners if new text begin the proceeding was new text end initiated in that manner,
new text begin the new text end affected county auditor, and any other party of record. The affected county auditor
shall record the order against the affected property.

Sec. 44.

Minnesota Statutes 2014, section 414.12, subdivision 3, is amended to read:

Subd. 3.

Cost of proceedings.

(a) The parties to any matter deleted text begin directed to alternative
dispute resolution under subdivision 1 deleted text end new text begin filed with the Office of Administrative Hearings
new text end must pay the costs of the deleted text begin alternative dispute resolution process or hearing deleted text end new text begin Office of
Administrative Hearings new text end in the proportions deleted text begin that they agree deleted text end new text begin agreed new text end to new text begin or ordered by the
chief administrative law judge new text end .

(b) Notwithstanding section 14.53 or other law, the Office of Administrative
Hearings is not liable for the costs new text begin of any proceedings under this chapter new text end .

(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 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 deleted text begin assess deleted text end new text begin deposit all receipts received by
the parties to these proceedings in payment of new text end the cost of services rendered by the Office
of Administrative Hearings as provided by section deleted text begin 14.53 deleted text end new text begin 14.54 new text end .

Sec. 45. new text begin REVISOR'S INSTRUCTION.
new text end

new text begin The revisor of statutes shall alphabetize the definitions in Minnesota Statutes, section
414.011, and correct all cross-references.
new text end

Sec. 46. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2014, sections 414.0333; 414.051; 414.063; 414.065; and
414.08, new text end new text begin are repealed.
new text end