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                            CHAPTER 303-H.F.No. 2670 
                  An act relating to the Minnesota municipal board; 
                  clarifying authority and procedures; amending 
                  Minnesota Statutes 1994, sections 414.01, subdivisions 
                  1, 2, 6a, 7a, 8, 12, and 16; 414.02, subdivision 3; 
                  414.031, subdivision 4; 414.0325, subdivisions 1, 1a, 
                  and 3; 414.033, subdivision 5, and by adding a 
                  subdivision; 414.041, subdivisions 3 and 5; and 
                  414.061, subdivisions 4 and 5; repealing Minnesota 
                  Statutes 1994, sections 414.01, subdivisions 3, 3a, 
                  and 4; and 414.061, subdivision 4a. 
        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
           Section 1.  Minnesota Statutes 1994, section 414.01, 
        subdivision 1, is amended to read: 
           Subdivision 1.  A board to be known as The Minnesota 
        municipal board is hereby created to conduct proceedings, make 
        determinations and issue orders for the creation of a 
        municipality, the combination of two or more governmental units, 
        or the alteration of a municipal boundary. 
           The legislature finds that:  (1) sound urban development 
        and preservation of agricultural land and open spaces through 
        land use planning is essential to the continued economic growth 
        of this state; (2) municipal government most efficiently 
        provides governmental services in areas intensively developed 
        for residential, commercial, industrial, and governmental 
        purposes; and township government most efficiently provides 
        governmental services in areas used or developed for 
        agricultural, open space, and rural residential purposes; (3) 
        the public interest requires that municipalities be formed when 
        there exists or will likely exist the necessary resources to 
        provide for their economical and efficient operation; (4) 
        annexation to existing municipalities of unincorporated areas 
        unable to supply municipal services should be facilitated; and, 
        (5) the consolidation of municipalities should be 
        encouraged.  It is the purpose of this chapter to empower The 
        Minnesota municipal board is empowered to promote and regulate 
        development of municipalities 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 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 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. 2.  Minnesota Statutes 1994, section 414.01, 
        subdivision 2, is amended to read: 
           Subd. 2.  The board shall be composed of three members 
        appointed by the governor, at least one of whom shall be learned 
        in the law, and at least one of whom shall be a resident from 
        outside of the metropolitan area as defined in section 473.121, 
        subdivision 2.  The board shall select from its members a chair 
        who shall have the powers and duties prescribed by the general 
        law applicable to the heads of departments and agencies of the 
        state.  All those appointed must be residents of the state for 
        at least five years before the appointment.  Each appointed 
        member shall serve for six years.  The board shall meet once 
        each month at a regular time to be established by the chair.  
        The removal of members and filling of vacancies for members 
        other than county commissioner members on the board are as 
        provided in section 15.0575.  
           In proceedings before the board for the incorporation of a 
        statutory city, consolidation of two or more municipalities, or 
        annexation of unincorporated land to a municipality, two county 
        commissioners of the board of the county in which all or a 
        majority of the affected land is located shall serve on the 
        board during such time as the board shall have under 
        consideration said matter.  The executive director of the board 
        shall upon initiation of a proceeding for such incorporation, 
        consolidation, or annexation notify the county auditor of the 
        county in which the majority of the affected property is 
        situated of the need for the appointment of the two county 
        commissioners to the board.  At the next succeeding meeting of 
        the county board the commissioners shall designate the two 
        appointed and shall thereupon immediately notify the Minnesota 
        municipal board executive director of their action.  The county 
        commissioners shall represent districts which do not contain any 
        of the affected territory.  If commissioners from the unaffected 
        districts are unavailable, commissioners from the affected 
        district may serve. 
           Sec. 3.  Minnesota Statutes 1994, section 414.01, 
        subdivision 6a, is amended to read: 
           Subd. 6a.  Each member of the municipal board shall receive 
        $50 per day when in attendance at board meetings or hearings, or 
        when otherwise engaged in the performance of duties.  The county 
        commissioners shall be paid $25 per day for each hearing or 
        meeting attended.  The county auditors and commissioners shall 
        be deemed to be performing duties for the county without 
        additional compensation when serving as ex officio members of 
        the board.  Each member of the board and the county commission 
        members of the board shall be reimbursed for actual expenses 
        incurred in accordance with state travel regulations relative to 
        travel and expenses of state officers and employees. 
           Sec. 4.  Minnesota Statutes 1994, section 414.01, 
        subdivision 7a, is amended to read: 
           Subd. 7a.  The Minnesota municipal board shall appoint an 
        executive director, not a member of the board, who shall be 
        learned in the law qualified as a result of practical, 
        professional, or educational experience and receive a salary in 
        an amount fixed by law.  The director shall devote full time to 
        the duties of office.  All correspondence and petitions shall be 
        addressed to the executive director who shall be is charged with 
        conducting the administrative affairs of the board. 
           Sec. 5.  Minnesota Statutes 1994, section 414.01, 
        subdivision 8, is amended to read: 
           Subd. 8.  The board shall have authority to contract with 
        regional, state, county, or local planning commissions or to 
        hire expert consultants to provide specialized information and 
        assistance, and.  Any member of the board conducting or 
        participating in the conduct of any hearings hearing, or its 
        executive director, shall have the power to administer oaths and 
        affirmations, to issue subpoenas, and to compel the attendance 
        and testimony of witnesses, and the production of papers, books, 
        and documents. 
           Sec. 6.  Minnesota Statutes 1994, section 414.01, 
        subdivision 12, is amended to read: 
           Subd. 12.  In proceedings pursuant to this chapter, the 
        executive director or any board member may receive and report 
        evidence and such person shall have power to administer 
        oaths and affirmations to witnesses, examine witnesses, and 
        receive and report evidence.  In any proceeding in which the 
        evidence is received by one board member or by the executive 
        director, the board member or executive director shall make a 
        report of the evidence to the board.  When all members of the 
        board do not attend a hearing in a proceeding, any party may 
        request the executive director shall to cause a transcript of 
        the hearing to be made and distributed to all board members if 
        requested by a party to the proceeding.  Thereupon, the board 
        shall proceed to make its decision based on all the evidence 
        presented.  When the evidence is received by fewer than two 
        permanent board members, the board's order shall be stayed for a 
        period of 30 days, during which time any party of record may 
        demand a rehearing by the full board.  Any party requesting a 
        copy of the transcript for board members is responsible for its 
        costs. 
           Sec. 7.  Minnesota Statutes 1994, section 414.01, 
        subdivision 16, is amended to read: 
           Subd. 16.  In a any proceeding before the board, the board 
        may at any time in the process require that representatives from 
        the involved city, town, and county, political subdivision, or 
        other governmental entity to meet together to discuss the 
        resolution of issues raised at the hearing before the board by 
        said petition or order which confers jurisdiction on the board 
        and other issues of mutual concern.  The board 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 board on 
        the results of the meetings immediately after the last meeting. 
           Sec. 8.  Minnesota Statutes 1994, section 414.02, 
        subdivision 3, is amended to read: 
           Subd. 3.  [BOARD'S ORDER.] In arriving at its decision, the 
        board shall consider the following factors: 
           (a) Present population and number of households, past 
        population growth and projected population growth for the 
        subject area; 
           (b) Quantity of land, both platted and unplatted, within 
        the area proposed for incorporation within the subject area; the 
        natural terrain of the area including recognizable physical 
        features, general topography, major watersheds, soil conditions 
        and such natural features as rivers, lakes and major bluffs; 
           (c) 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; 
           (d) The present transportation network and potential 
        transportation issues, including proposed highway development; 
           (d) (e) Land use controls and planning presently being 
        utilized in the subject area, including comprehensive plans for 
        development in the area and, policies of the metropolitan 
        council.  If; and whether there is an inconsistency are 
        inconsistencies between the proposed development and the land 
        use planning ordinance in force, the reason for the 
        inconsistency existing land use controls; 
           (e) Present (f) Existing levels of governmental services 
        being provided to the subject area, including water and sewer 
        service, fire rating and protection, police 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; 
           (f) (g) Existing or potential problems of environmental 
        pollution problems and whether the need for additional services 
        to proposed action is likely to improve or resolve these 
        problems; 
           (g) (h) Fiscal data of impact on the subject area and 
        adjacent units of local government, including the net tax 
        capacity of both platted and unplatted lands and the division 
        between homestead and nonhomestead property, and the present 
        bonded indebtedness; and the local tax rates of the county, 
        school district, and township 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; 
           (h) (i) Relationship and effect of the proposed 
        incorporation action on communities adjacent to the area and on 
        affected and adjacent school districts within and adjacent to 
        the area communities; 
           (i) Adequacy of town government to deliver services to the 
        area (j) Whether delivery of services to the subject area can be 
        adequately and economically delivered by the existing 
        government; and 
           (j) (k) Analysis of whether necessary governmental services 
        can best be provided through incorporation or annexation to an 
        adjacent municipality. the proposed action or another type of 
        boundary adjustment; 
           (1) Degree of contiguity of the boundaries of the subject 
        area and adjacent units of local government; and 
           (m) Analysis of the applicability of the state building 
        code. 
           Based upon these factors, the board may order the 
        incorporation if it finds that (a) the property to be 
        incorporated is now, or is about to become, urban or suburban in 
        character, or (b) that the existing township form of government 
        is not adequate to protect the public health, safety, and 
        welfare, or (c) the proposed incorporation would be in the best 
        interests of the area under consideration.  The board may deny 
        the incorporation if the area, or a part thereof, would be 
        better served by annexation to an adjacent municipality. 
           The board 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 board may also alter the boundaries of the 
        proposed incorporation so as to follow visible, clearly 
        recognizable physical features for municipal boundaries.  In all 
        cases, the board shall set forth the factors which are the basis 
        for the decision. 
           Notwithstanding any other provision of law to the contrary 
        relating to the number of wards which may be established, the 
        board 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 board 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. 
           The board'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.  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. 9.  Minnesota Statutes 1994, section 414.031, 
        subdivision 4, is amended to read: 
           Subd. 4.  [BOARD'S ORDER.] In arriving at its decision, the 
        board shall consider the following factors: 
           (a) Present population and number of households, past 
        population growth and projected population growth of the 
        property proposed for annexation and the annexing 
        municipality subject area and adjacent units of local 
        government; 
           (b) Quantity of land within the property proposed for 
        annexation and the annexing municipality 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; 
           (c) Degree of contiguity of the boundaries between the 
        annexing municipality and the property proposed for annexation 
        subject area; 
           (d) Present pattern of physical development of, planning, 
        and intended land uses in the property proposed for annexation 
        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; 
           (e) The present transportation network and potential 
        transportation issues, including proposed highway development; 
           (e) (f) Land use controls and planning presently being 
        utilized in the annexing municipality and the property proposed 
        for annexation subject area, including comprehensive plans for 
        development in the area and plans and policies of the 
        metropolitan council.  If, and whether there is an inconsistency 
        are inconsistencies between the proposed development and the 
        existing land use planning ordinance in force, the reason for 
        the inconsistency controls and the reasons therefore; 
           (f) Present (g) Existing levels of governmental services 
        being provided in the annexing municipality and the property 
        proposed for annexation subject area, including water and sewer 
        service, fire rating and protection, police 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; 
           (g) (h) Existing or potential problems of environmental 
        pollution problems and whether the need for additional services 
        to proposed action is likely to improve or resolve these 
        problems; 
           (h) (i) Plans and programs by the annexing municipality for 
        providing needed governmental services to the property proposed 
        for annexation subject area; 
           (i) Fiscal data of (j) An analysis of the fiscal impact on 
        the annexing municipality and the property proposed for 
        annexation 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; 
           (j) (k) Relationship and effect of the proposed annexation 
        action on communities affected and adjacent to the area and on 
        school districts within and adjacent to the area and 
        communities; 
           (k) (l) Adequacy of town government to deliver services to 
        the property proposed for annexation subject area; 
           (l) (m) Analysis of whether necessary governmental services 
        can best be provided through incorporation or annexation to an 
        adjacent municipality the proposed action or another type of 
        boundary adjustment; and 
           (m) (n) 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. 
           Based upon these the factors, the board may order the 
        annexation (a) if it finds that the property proposed for 
        annexation subject area is now, or is about to become, urban or 
        suburban in character, or (b) if it finds that municipal 
        government in the area proposed for annexation is required to 
        protect the public health, safety, and welfare, or (c) if it 
        finds that the annexation would be in the best interest of 
        the property proposed for annexation subject area.  If only a 
        part of a township is to be annexed, the board shall consider 
        whether the remainder of the township can continue to carry on 
        the functions of government without undue hardship.  The board 
        shall deny the annexation if it finds that the increase in 
        revenues for the annexing municipality bears no reasonable 
        relation to the monetary value of benefits conferred upon the 
        annexed area.  The board may deny the annexation (a) if it 
        appears that annexation of all or a part of the property to an 
        adjacent municipality would better serve the interests of the 
        residents of the property or (b) if the remainder of the 
        township would suffer undue hardship. 
           The board 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.  The board 
        may also alter the boundaries of the proposed annexation so as 
        to follow visible, clearly recognizable physical features.  If 
        the board determines that part of the area would be better 
        served by another municipality or township, the board may 
        initiate and approve annexation on its own motion by conducting 
        further hearings and issuing orders pursuant to subdivisions 
        3, and 4, and 5.  In all cases, the board shall set forth the 
        factors which are the basis for the decision. 
           Sec. 10.  Minnesota Statutes 1994, section 414.0325, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [INITIATING THE PROCEEDING.] One or more 
        townships and one or more municipalities, by joint resolution, 
        may designate an unincorporated area as in need of orderly 
        annexation and may.  The joint resolution will confer 
        jurisdiction on the board over annexations in the designated 
        area and over the various provisions in said agreement by 
        submission of said joint resolution to the executive director.  
        The resolution shall include a description of the designated 
        area and the reasons for designation.  Thereafter, an annexation 
        of any part of the designated area may be initiated by: 
           (1) submitting to the executive director a resolution of 
        any signatory to the joint resolution; or by 
           (2) the board of its own motion; or 
           (3) as provided in section 414.033, subdivision 2a. 
           Whenever the pollution control agency or other state agency 
        pursuant to sections 115.03, 115.071, 115.49, or any law giving 
        a state agency similar powers, orders a municipality to extend a 
        municipal service to a designated unincorporated an area, such 
        an order will confer jurisdiction on the Minnesota municipal 
        board to consider designation of the area for orderly annexation.
           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 board may review and comment, but 
        may not alter the boundaries.  
           If a joint resolution designates an area as in need of 
        orderly annexation, provides for the conditions for its 
        annexation, and states that no consideration by the board is 
        necessary, the board may review and comment, but shall, within 
        30 days, order the annexation in accordance with the terms of 
        the resolution. 
           Sec. 11.  Minnesota Statutes 1994, section 414.0325, 
        subdivision 1a, is amended to read: 
           Subd. 1a.  [ORDERLY ANNEXATION BY PETITION ELECTRIC UTILITY 
        SERVICE NOTICE.] 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 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 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. 12.  Minnesota Statutes 1994, section 414.0325, 
        subdivision 3, is amended to read: 
           Subd. 3.  [BOARD'S ORDER.] In arriving at its decision, the 
        board shall consider the following factors: in section 414.031, 
        subdivision 4. 
           (a) Present population, past population growth and 
        projected population of the property proposed for annexation and 
        the annexing municipality; 
           (b) Quantity of land within the property proposed for 
        annexation and the annexing municipality; and natural terrain 
        including general topography, major watersheds, soil conditions 
        and such natural features as rivers, lakes and major bluffs; 
           (c) Degree of contiguity of the boundaries between the 
        annexing municipality and the property proposed for annexation; 
           (d) Present pattern of physical development of the property 
        proposed for annexation and the annexing municipality including 
        residential, industrial, commercial, agricultural and 
        institutional land uses; the present transportation network and 
        potential transportation issues, including proposed highway 
        development; 
           (e) Land use controls and planning presently being utilized 
        in the annexing municipality and the property proposed for 
        annexation, including comprehensive plans for development in the 
        area and plans and policies of the metropolitan council.  If 
        there is an inconsistency between the proposed development and 
        the land use planning ordinance in force, the reason for the 
        inconsistency; 
           (f) Present governmental services being provided in the 
        annexing municipality and the property proposed for annexation, 
        including water and sewer service, fire rating and protection, 
        police protection, street improvements and maintenance, 
        administrative services, and recreational facilities; 
           (g) Existing or potential problems of environmental 
        pollution and the need for additional services to resolve these 
        problems; 
           (h) Plans and programs by the annexing municipality for 
        providing needed governmental services to the property proposed 
        for annexation; 
           (i) Fiscal data of the annexing municipality and the 
        property proposed for annexation, including net tax capacity and 
        the present bonded indebtedness, and the local tax rates of the 
        county, school district, and township; 
           (j) Relationship and effect of the proposed annexation on 
        communities adjacent to the area and on school districts within 
        and adjacent to the area; 
           (k) Adequacy of town government to deliver necessary 
        services to the property proposed for annexation; 
           (l) Analysis of whether the needed governmental services 
        can best be provided through incorporation or annexation to an 
        adjacent municipality; and 
           (m) 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. 
           Based upon these factors in section 414.031, subdivision 4, 
        the board may order the annexation: 
           (a) if it finds that the subject area proposed for 
        annexation (a) 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 (b) if it finds that the existing township form of 
        government is not adequate to protect the public health, safety, 
        and welfare; or (c) if it finds that annexation would be in the 
        best interests of the area proposed for annexation subject 
        area.  The board may deny the annexation if it conflicts with 
        any provision of the joint agreement. The board may alter the 
        boundaries of the proposed annexation by increasing or 
        decreasing the area so as to include that property within the 
        designated area which is in need of municipal services or will 
        be in need of municipal services. 
           If the annexation is denied, no proceeding for the 
        annexation of substantially the same area may be initiated 
        within two years from the date of the board's order unless the 
        new proceeding is initiated by a majority of the area's property 
        owners and the petition is supported by affected parties to the 
        resolution.  In all cases, the board shall set forth the factors 
        which are the basis for the decision. 
           Sec. 13.  Minnesota Statutes 1994, section 414.033, 
        subdivision 5, is amended to read: 
           Subd. 5.  If the land is platted, or, if unplatted, 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 days 
        thereafter, shall file copies of the petition with the board, 
        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 service, the town board or the 
        municipal council of such abutting municipality may submit 
        written objections to the annexation to the board and the 
        annexing municipality.  Upon receipt of such objections, the 
        board shall proceed to hold a hearing and issue its order in 
        accordance with section 414.031, subdivisions 3, and 4, and 5. 
        If written objections are not submitted within the time 
        specified hereunder 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 to all property 
        owners within the area to be annexed. 
           Sec. 14.  Minnesota Statutes 1994, section 414.033, is 
        amended by adding a subdivision to read: 
           Subd. 13.  [ELECTRIC UTILITY SERVICE NOTICE.] At least 60 
        days before a petition is filed under section 414.0325 or this 
        section, 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.  
           Sec. 15.  Minnesota Statutes 1994, section 414.041, 
        subdivision 3, is amended to read: 
           Subd. 3.  [COMMISSION'S HEARING AND REPORT.] The 
        consolidation commission shall conduct hearings regarding the 
        proposed consolidation.  The hearings shall include, but are not 
        limited to, the following subjects:  
           (a) The contents of any city charter for the proposed 
        consolidated city or the form of government of the proposed 
        consolidated city; 
           (b) Analysis of whether a ward system shall be included in 
        the form of government of the proposed consolidated city; and 
           (c) Each factor considered by the board under section 
        414.02, subdivision 5, clauses (a) to (i) 3.  
           Based on these factors and upon other matters which come 
        before the consolidation commission, the commission shall issue 
        a report to the municipal board with findings and 
        recommendations within two years from the date of the board's 
        initial appointment of the commission.  
           Sec. 16.  Minnesota Statutes 1994, section 414.041, 
        subdivision 5, is amended to read: 
           Subd. 5.  [BOARD'S ORDER.] In arriving at its decision, the 
        board shall consider the following factors: in section 414.02, 
        subdivision 3. 
           (a) Present population, past population growth and 
        projected population of the included municipalities; 
           (b) Quantity of land within the included municipalities; 
        and natural terrain including general topography, major 
        watersheds, soil conditions, and such natural features as 
        rivers, lakes and major bluffs; 
           (c) Degree of contiguity of the boundaries between the 
        included municipalities; 
           (d) Analysis of whether present planning and physical 
        development in the included municipalities indicates that the 
        consolidation of these municipalities will benefit planning and 
        land use patterns in the area; the present transportation 
        network and potential transportation issues, including proposed 
        highway development; 
           (e) Analysis of whether consolidation of the included 
        municipalities is consistent with comprehensive plans for the 
        area; 
           (f) Analysis of whether governmental services now available 
        in the included municipalities can be more effectively or more 
        economically provided by consolidation; 
           (g) Analysis of whether there are existing or potential 
        environmental problems and whether municipal consolidation will 
        help improve such conditions; 
           (h) Analysis of tax and governmental aid issues involved in 
        the consolidation of the included municipalities; and 
           (i) Analysis of the effect of consolidation on area school 
        districts. 
           (j) Analysis of the applicability of the state building 
        code.  
           The board 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 board's 
        written determination of what is in the best interests of the 
        affected municipalities.  
           The board shall order the consolidation if it finds that 
        consolidation will be for the best interests of the 
        municipalities.  In all cases, the board shall set forth the 
        factors which are the basis for the decision.  
           If the board orders consolidation, it shall provide for 
        election of new municipal officers in accordance with section 
        414.09.  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.  If the 
        commission's findings and recommendations include a proposed 
        home rule charter for the new municipality, the board may in its 
        order 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.  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. 
           Notwithstanding any other provision of law to the contrary, 
        the board may in its order establish a ward system in the new 
        municipality, in which event it 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. 
           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. 
           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. 
           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 board's 
        order unless authorized by the board. 
           Sec. 17.  Minnesota Statutes 1994, section 414.061, 
        subdivision 4, is amended to read: 
           Subd. 4.  [BOARD INITIATION.] The board may initiate 
        proceedings for the concurrent detachment and annexation of 
        portions of one municipality completely surrounded by another 
        municipality, on its own motion or upon the petition of all of 
        the owners of property in the completely surrounded area.  In 
        such cases 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 pursuant to section 
        414.09.  In arriving at its decision, the board shall consider 
        the factors in section 414.02, subdivision 3.  The board shall 
        order the proposed action if it finds that it will be for the 
        best interests of the municipalities and the property owners.  
        In all cases, the board shall set forth the factors which are 
        the basis for the decision. 
           Sec. 18.  Minnesota Statutes 1994, 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 pursuant to section 414.09.  In 
        arriving at its decision, the board shall consider the factors 
        in section 414.02, subdivision 3.  The board shall order the 
        proposed action if it finds that it will be for the best 
        interests of the municipalities and the property owner.  In all 
        cases, the board shall set forth the factors which are the basis 
        for the decision. 
           Sec. 19.  [REPEALER.] 
           Minnesota Statutes 1994, sections 414.01, subdivisions 3, 
        3a, and 4; and 414.061, subdivision 4a, are repealed. 
           Sec. 20.  [EFFECTIVE DATE.] 
           Sections 1 to 19 are effective August 1, 1996, to apply to 
        petitions filed after July 31, 1996. 
           Presented to the governor March 12, 1996 
           Signed by the governor March 13, 1996, 2:14 p.m.