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Key: (1) language to be deleted (2) new language

                            CHAPTER 511-H.F.No. 228 
                  An act relating to local government; providing 
                  procedures and criteria for municipal annexations; 
                  providing for the application of city development 
                  regulations; amending Minnesota Statutes 1992, 
                  sections 414.01, subdivision 14, and by adding a 
                  subdivision; 414.0325, subdivision 1a; 414.033, 
                  subdivisions 2, 2a, and by adding subdivisions; 
                  414.061, subdivision 5; 414.07, subdivision 1; and 
                  414.09, subdivisions 1 and 2. 
        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
           Section 1.  Minnesota Statutes 1992, section 414.01, 
        subdivision 14, is amended to read: 
           Subd. 14.  When a board order enlarges or diminishes the 
        area of an existing municipality or town, the population of the 
        annexed or detached area shall be as found by the board at its 
        hearing or, in cases in which no hearing by the board for the 
        boundary change is required, as stated in the resolution or 
        ordinance.  The effective date of the population change shall be 
        the same as the effective date of the order whether or not the 
        order is from a hearing or from the approval of an annexation 
        resolution or ordinance.  The board shall communicate its 
        population finding to the state demographer who shall 
        incorporate that data into the population estimate for the 
        municipality or town.  When a new municipality is created by an 
        order of the board, the municipality shall request a separation 
        census from the United States bureau of the census and bear any 
        costs incurred.  
           Sec. 2.  Minnesota Statutes 1992, section 414.01, is 
        amended by adding a subdivision to read: 
           Subd. 17.  [DATA FROM STATE AGENCIES.] The board may 
        request information from any state department or agency in order 
        to assist it to carry out its duties.  The department or agency 
        shall promptly furnish the requested information to the board. 
           Sec. 3.  Minnesota Statutes 1992, section 414.0325, 
        subdivision 1a, is amended to read: 
           Subd. 1a.  [ORDERLY ANNEXATION BY PETITION.] If the board 
        receives a petition for annexation of an area owned by a 
        municipality or from all of the property owners in an area, and 
        the area is within two miles of the corporate boundaries of the 
        municipality, the petition shall confer jurisdiction on the 
        board to consider designation of the area for orderly annexation.
        Upon receipt of the petition, the board shall inform the 
        affected parties of their opportunity to request a hearing 
        before the board on the petition, and if a hearing is requested, 
        it must be held within 60 days of the request.  Any person 
        aggrieved by the board's designation of an area as appropriate 
        for orderly annexation may appeal the board's order to district 
        court in accordance with section 414.07. 
           At least 60 days before a petition is filed, 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 under this subdivision or section 
        414.033, 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. 
           Sec. 4.  Minnesota Statutes 1992, section 414.033, 
        subdivision 2, is amended to read: 
           Subd. 2.  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: 
           (1) the land is owned by the municipality; 
           (2) the land is completely surrounded by land within the 
        municipal limits; or 
           (3) the land abuts the municipality and the area to be 
        annexed is 60 acres or less, and the area to be annexed is not 
        presently served by public sewer facilities or public sewer 
        facilities are not otherwise available, and the municipality 
        receives a petition for annexation from all the property owners 
        of the land; 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.
           Sec. 5.  Minnesota Statutes 1992, section 414.033, 
        subdivision 2a, is amended to read: 
           Subd. 2a.  [MUNICIPALITY MAY ANNEX.] Notwithstanding the 
        abutting requirement of subdivision 1, if land is owned by a 
        municipality or if all of the landowners petition for 
        annexation, and the land is within an existing orderly 
        annexation area as provided by section 414.0325, then the 
        municipality may declare the land annexed.  This municipal 
        action does not otherwise affect the other terms and conditions 
        of existing orderly annexation agreements entered into pursuant 
        to section 414.0325. 
           Sec. 6.  Minnesota Statutes 1992, section 414.033, is 
        amended by adding a subdivision to read: 
           Subd. 2b.  [NOTICE REQUIRED.] Before a municipality may 
        adopt an ordinance under subdivision 2, clause (2), (3), or (4), 
        or subdivision 2a, a municipality must hold a public hearing and 
        give 30 days' written notice by certified mail to the town or 
        towns affected by the proposed ordinance and to all landowners 
        within and contiguous to the area to be annexed.  
           Sec. 7.  Minnesota Statutes 1992, section 414.033, is 
        amended by adding a subdivision to read: 
           Subd. 11.  [FLOOD PLAIN; SHORELAND AREA.] When a 
        municipality declares land annexed to the municipality under 
        subdivision 2, clause (3), or subdivision 2a, and the land is 
        within a designated flood plain, 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. 
           Sec. 8.  Minnesota Statutes 1992, section 414.033, is 
        amended by adding a subdivision to read: 
           Subd. 12.  [PROPERTY TAXES.] When a municipality annexes 
        land under subdivision 2, clause (2), (3) or (4), or subdivision 
        2a, property taxes payable on the annexed land shall continue to 
        be paid to the affected town or towns for the year in which the 
        annexation becomes effective.  Thereafter, property taxes on the 
        annexed land shall be paid to the municipality.  In the first 
        year following the year the land was annexed, the municipality 
        shall make a cash payment to the affected town or towns in an 
        amount equal to 90 percent of the property taxes paid in the 
        year the land was annexed; in the second year, an amount equal 
        to 70 percent of the property taxes paid in the year the land 
        was annexed; in the third year, an amount equal to 50 percent of 
        the property taxes paid in the year the land was annexed; in the 
        fourth year, an amount equal to 30 percent of the property taxes 
        paid in the year the land was annexed; and in the fifth year, an 
        amount equal to ten percent of the property taxes paid in the 
        year the land was annexed.  The municipality and the affected 
        township may agree to a different payment. 
           Sec. 9.  Minnesota Statutes 1992, section 414.061, 
        subdivision 5, is amended to read: 
           Subd. 5.  [PROPERTY OWNER INITIATION.] 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 board accompanied by a resolution of the city 
        council of at least one of the affected municipalities.  The 
        board shall conduct hearings and issue its order as in the case 
        of consolidations of two or more municipalities under sections 
        414.041, subdivision 5 and 414.09. 
           Sec. 10.  Minnesota Statutes 1992, section 414.07, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [ORDERS OF BOARD, TIME LIMITATION.] All 
        orders of the board shall be issued within two years one year 
        from the date of the day of the first hearing thereon provided 
        that the time may be extended for a fixed additional period upon 
        consent of all parties of record.  Failure to so order shall be 
        deemed to be an order denying the matter before the board.  An 
        appeal may be taken from such failure to so order in the same 
        manner as an appeal from an order as provided in subdivision 2. 
           Sec. 11.  Minnesota Statutes 1992, section 414.09, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [HEARINGS.] Proceedings initiated by the 
        submission of an initiating document or by the board of its own 
        motion shall come on for hearing within 30 to 120 60 days from 
        receipt of the document by the board or from the date of board 
        action and the board must submit its order no later than one 
        year from the date of the day of the first hearing.  In any 
        proceeding before the board and upon the request of any party, 
        the board shall meet physically rather than by means of 
        electronic media.  The place of the hearing shall be in the 
        county where a majority of the affected territory is situated, 
        and shall be established for the convenience of the parties.  
        The executive director shall mail notice of the hearing to the 
        following parties:  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.  The executive director 
        shall cause notice of the hearing to be published for two 
        successive weeks in a legal newspaper of general circulation in 
        the affected area.  When the board exercises its 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 two weeks published notice in a legal newspaper 
        of general circulation in the affected area. 
           Sec. 12.  Minnesota Statutes 1992, section 414.09, 
        subdivision 2, is amended to read: 
           Subd. 2.  [TRANSMITTAL OF BOARD'S ORDER.] The executive 
        director shall cause copies of the board's order to be 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 
        initiated in that manner, affected county auditor, and any other 
        party of record.  The affected county auditor shall record the 
        order against the affected property. 
           Sec. 13.  [REPORT TO LEGISLATURE.] 
           The office of strategic and long-range planning shall 
        establish criteria for defining the terms "urban or suburban in 
        character," and "rural residential" as the terms are used in 
        Minnesota Statutes, chapter 414, and report the criteria to the 
        legislature by February 1, 1995. 
           Sec. 14.  [EFFECTIVE DATE.] 
           Section 4 is effective August 1, 1995.  The other sections 
        are effective August 1, 1994, and apply to annexations initiated 
        on or after that date. 
           Presented to the governor April 22, 1994 
           Signed by the governor April 25, 1994, 1:42 p.m.