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Minnesota Legislature

Office of the Revisor of Statutes

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

                            CHAPTER 223-S.F.No. 1471 
                  An act relating to statutes; conforming the statutes 
                  to reflect the transfer of authority from the 
                  municipal board to the office of strategic and 
                  long-range planning; explicitly authorizing delegation 
                  by the director; amending Minnesota Statutes 2000, 
                  sections 414.01; 414.011, subdivision 7, and by adding 
                  a subdivision; 414.012; 414.02; 414.031; 414.0325; 
                  414.033, subdivisions 3, 5, 6, 7, and 10; 414.0335; 
                  414.035; 414.036; 414.041; 414.051; 414.06; 414.061; 
                  414.063; 414.067, subdivisions 1 and 3; 414.07; 
                  414.08; 414.09; 414.12, subdivisions 1 and 2; 
                  repealing Minnesota Statutes 2000, sections 414.01, 
                  subdivisions 2 and 6a; 414.011, subdivision 8; and 
                  414.11. 
        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
           Section 1.  Minnesota Statutes 2000, section 414.01, is 
        amended to read: 
           414.01 [CREATION; ENABLING PROVISIONS.] 
           Subdivision 1.  [PURPOSE.] The Minnesota municipal board is 
        hereby created to Among the duties of the director of the office 
        of strategic and long-range planning is the duty 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.  
        The Minnesota municipal board is empowered to director may 
        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. 
           Subd. 2.  [MEMBERS, QUALIFICATIONS, MEETINGS.] 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. 
           Subd. 5.  [MAJORITY ACTS, CHAIR'S AUTHORITY CONSOLIDATION.] 
        The board shall transact business and conduct hearings by a 
        majority of its members except as otherwise provided for by 
        subdivision 12 but a smaller number may adjourn from time to 
        time.  The chair director may order the consolidation of 
        separate proceedings in the interest of economy and expedience.  
        In those proceedings in which the board is composed of five 
        members, no order of the board shall be final unless approved by 
        three of the five members, and in all other proceedings unless 
        approved by two of the three members. 
           Subd. 6a.  [PER DIEM; EXPENSES.] 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. 
           Subd. 7a.  [EXECUTIVE DIRECTOR DIRECTOR'S DESIGNEE.] The 
        Minnesota municipal board shall appoint an executive director, 
        not a member of the board, who shall be qualified as a result of 
        practical, professional, or educational experience and receive a 
        salary 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 is charged with 
        conducting the administrative affairs of the board.  A power or 
        duty of the director under this chapter may be delegated by the 
        director as provided in section 15.06, subdivision 6, clause 
        (1), for commissioners.  
           Subd. 8.  [PLANNING, CONSULTANTS, HEARING FORMALITIES.] The 
        board shall have authority to director may contract with 
        regional, state, county, or local planning commissions or to and 
        hire expert consultants to provide specialized information and 
        assistance.  Any member of the board conducting or participating 
        in any hearing, or its executive director, shall have the power 
        to person conducting a proceeding under this chapter may 
        administer oaths and affirmations, to; issue subpoenas, to; 
        compel the attendance and testimony of witnesses, and the 
        production of papers, books, and documents; examine witnesses, 
        and receive and report evidence. 
           Subd. 10.  [RULES.] In order To carry out the duties and 
        powers imposed upon the board, it shall have the power to make 
        such director under this chapter, the director may adopt the 
        rules, as that are reasonably necessary, in accordance with the 
        procedure prescribed in the general laws relating to departments 
        and agencies of the state. 
           Subd. 11.  [FEES.] The board director may prescribe a 
        schedule of filing fees for any petitions, resolutions or 
        ordinances filed pursuant to this chapter by an appropriate rule 
        promulgated in accordance with the procedure prescribed in the 
        general laws relating to departments and agencies of the state 
        for the issuance of administrative rules. 
           Subd. 12.  [TRANSCRIPTS, EVIDENCE REPORTS.] In proceedings 
        pursuant to this chapter, the executive director or any board 
        member may 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 to 
        cause a transcript of the hearing to be made and distributed to 
        all board members.  Any party requesting a copy of the 
        transcript for board members is responsible for its costs. 
           Subd. 14.  [POPULATION OF CHANGED TERRITORY.] When a board 
        an order or approval letter under this chapter enlarges or 
        diminishes the area of an existing municipality or town, 
        the board director shall communicate its the order or approval 
        letter 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.  The estimate shall be certified by the 
        state demographer.  The estimate must estimate the population as 
        of the effective date of the board order or approval letter and 
        must be so dated.  When a new municipality is created by an 
        order of the board under this chapter, the municipality shall 
        request a separation census from the United States bureau of the 
        census and bear any costs incurred.  
           Subd. 15.  [INCREASED COSTS, LEVY PERIOD.] When a board an 
        order under this chapter enlarges an existing municipality or 
        creates a new municipality, the board order may indicate in its 
        order the estimated increased costs to the municipality as the 
        result of the boundary adjustment, and the time period that the 
        municipality would be allowed a levy for these increased costs. 
           Subd. 16.  [COMPELLED MEETINGS; REPORT.] In any proceeding 
        before the board under this chapter, the board director or 
        conductor of the proceeding may at any time in the process 
        require representatives from the involved city, town, county, 
        political subdivision, or other governmental entity to meet 
        together to discuss resolution of issues raised by said the 
        petition or order which that confers jurisdiction on the board 
        director and other issues of mutual concern.  The board director 
        or conductor of the proceeding 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 director or conductor 
        of the proceeding on the results of the meetings immediately 
        after the last meeting. 
           Subd. 17.  [DATA FROM STATE AGENCIES.] The board director 
        may request information from any state department or agency in 
        order to assist it to carry out its in carrying out the 
        director's duties under this chapter.  The department or agency 
        shall promptly furnish the requested information to the board. 
           Sec. 2.  Minnesota Statutes 2000, section 414.011, 
        subdivision 7, is amended to read: 
           Subd. 7.  [BOUNDARY ADJUSTMENT.] "Boundary adjustment" 
        means any proceeding by the municipal board authorized by this 
        chapter. 
           Sec. 3.  Minnesota Statutes 2000, section 414.011, is 
        amended by adding a subdivision to read: 
           Subd. 11.  [DIRECTOR.] "Director" means the director of the 
        office of strategic and long-range planning. 
           Sec. 4.  Minnesota Statutes 2000, section 414.012, is 
        amended to read: 
           414.012 [MAPS.] 
           Subdivision 1.  [CORPORATE BOUNDARY MAP.] A municipality 
        initiating any boundary adjustment authorized by this chapter 
        shall file with the municipal board director 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 
        municipal board director maps which are necessary to support and 
        identify the land description.  The maps shall include copies of 
        plats. 
           Sec. 5.  Minnesota Statutes 2000, section 414.02, is 
        amended to read: 
           414.02 [MUNICIPAL INCORPORATION.] 
           Subdivision 1.  [INITIATING THE PROCEEDINGS.] This section 
        provides the exclusive method of incorporating a municipality in 
        Minnesota.  Proceedings for incorporation of a municipality may 
        be initiated by petition of 100 or more property owners or by 
        resolution of the town board within an area which is not 
        included within the limits of any incorporated municipality and 
        which area includes land that has been platted into lots and 
        blocks in the manner provided by law.  The petition or 
        resolution shall be submitted to the executive director and 
        shall state the proposed name of the municipality, the names of 
        all parties entitled to mailed notice under section 414.09, the 
        reason for requesting incorporation, and shall include a 
        proposed corporate boundary map. 
           Subd. 2.  [HEARING TIME, PLACE.] Upon receipt of a petition 
        or resolution made pursuant to subdivision 1, the executive 
        director of the board shall designate a time and place for a 
        hearing in accordance with section 414.09. 
           Subd. 3.  [BOARD RELEVANT FACTORS, ORDER.] (a) In arriving 
        at its a decision, the board director shall consider the 
        following factors: 
           (a) (1) present population and number of households, past 
        population and projected population growth for the subject area; 
           (b) (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; 
           (c) (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; 
           (d) (4) the present transportation network and potential 
        transportation issues, including proposed highway development; 
           (e) (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; 
           (f) (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; 
           (g) (7) existing or potential environmental problems and 
        whether the proposed action is likely to improve or resolve 
        these problems; 
           (h) (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; 
           (i) (9) relationship and effect of the proposed action on 
        affected and adjacent school districts and communities; 
           (j) (10) whether delivery of services to the subject area 
        can be adequately and economically delivered by the existing 
        government; 
           (k) (11) analysis of whether necessary governmental 
        services can best be provided through the proposed action or 
        another type of boundary adjustment; 
           (l) (12) degree of contiguity of the boundaries of the 
        subject area and adjacent units of local government; and 
           (m) (13) analysis of the applicability of the state 
        building code. 
           (b) Based upon these factors, the board director may order 
        the incorporation if it finds on finding that (a): 
           (1) the property to be incorporated is now, or is about to 
        become, urban or suburban in character,; or (b) 
           (2) that the existing township form of government is not 
        adequate to protect the public health, safety, and welfare,; or 
        (c) 
           (3) the proposed incorporation would be in the best 
        interests of the area under consideration. 
           (c) The board director may deny the incorporation if the 
        area, or a part thereof, would be better served by annexation to 
        an adjacent municipality. 
           (d) The board director 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 director 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 board director 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 board director 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 
        director'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 board's director'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. 
           Subd. 4.  [EFFECTIVE DATE.] The incorporation shall be 
        effective upon the election and qualification of new municipal 
        officers or on such later date as is fixed by the board in its 
        director's order. 
           Sec. 6.  Minnesota Statutes 2000, section 414.031, is 
        amended to read: 
           414.031 [ANNEXATION OF UNINCORPORATED PROPERTY BY BOARD 
        DIRECTOR'S ORDER.] 
           Subdivision 1.  [INITIATING THE PROCEEDING.] (a) A 
        proceeding for the annexation of unincorporated property 
        abutting a municipality may be initiated by submitting to 
        the executive director and the affected township one of the 
        following: 
           (a) (1) a resolution of the annexing municipality; 
           (b) (2) a resolution of the township containing the area 
        proposed for annexation; 
           (c) (3) a petition of 20 percent of the property owners or 
        100 property owners, whichever is less, in the area to be 
        annexed; 
           (d) (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. 
           Subd. 3.  [HEARING TIME, PLACE.] Upon receipt of a petition 
        or resolution initiating an annexation the executive director 
        shall designate a time and a place for a hearing in accordance 
        with section 414.09. 
           Subd. 4.  [BOARD RELEVANT FACTORS, ORDER.] (a) In arriving 
        at its a decision, the board director shall consider the 
        following factors: 
           (a) (1) present population and number of households, past 
        population and projected population growth of the subject area 
        and adjacent units of local government; 
           (b) (2) 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; 
           (c) (3) degree of contiguity of the boundaries between the 
        annexing municipality and the subject area; 
           (d) (4) 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; 
           (e) (5) the present transportation network and potential 
        transportation issues, including proposed highway development; 
           (f) (6) 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; 
           (g) (7) 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; 
           (h) (8) existing or potential environmental problems and 
        whether the proposed action is likely to improve or resolve 
        these problems; 
           (i) (9) plans and programs by the annexing municipality for 
        providing needed governmental services to the subject area; 
           (j) (10) 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; 
           (k) (11) relationship and effect of the proposed action on 
        affected and adjacent school districts and communities; 
           (l) (12) adequacy of town government to deliver services to 
        the subject area; 
           (m) (13) analysis of whether necessary governmental 
        services can best be provided through the proposed action or 
        another type of boundary adjustment; and 
           (n) (14) 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. 
           (b) Based upon the factors, the board director may order 
        the annexation (a) if it finds on finding: 
           (1) that the subject area is now, or is about to become, 
        urban or suburban in character, or (b) if it finds; 
           (2) that municipal government in the area proposed for 
        annexation is required to protect the public health, safety, and 
        welfare,; or (c) if it finds 
           (3) that the annexation would be in the best interest of 
        the subject area. 
           (c) If only a part of a township is to be annexed, the 
        board director shall consider whether the remainder of the 
        township can continue to carry on the functions of government 
        without undue hardship.  
           (d) The board director shall deny the annexation if it 
        finds on 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 board director may deny the annexation (a) if it 
        appears on finding (1) 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 (2) that 
        the remainder of the township would suffer undue hardship. 
           (f) The board director 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 board director may also alter the boundaries of the 
        proposed annexation so as to follow visible, clearly 
        recognizable physical features.  
           (h) If the board director determines that part of the area 
        would be better served by another municipality or township, 
        the board director may initiate and approve annexation on its 
        own motion by conducting further hearings and issuing orders 
        pursuant to subdivisions 3 and 4.  
           (i) In all cases, the board director shall set forth the 
        factors which are the basis for the decision. 
           Subd. 4a.  [PROCEEDINGS INITIATED BY JOINT RESOLUTION.] (a) 
        If the proceeding has been initiated under subdivision 
        1, paragraph (a), clause (d) (4), any annexation order shall 
        include a provision for the election of new municipal officers 
        in accordance with section 414.09. 
           (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. 
           (c) The ordinances of both the annexing municipality and 
        the township shall continue in effect within the former 
        boundaries until repealed by the governing body of the new 
        municipality. 
           (d) Notwithstanding any other provision of law to the 
        contrary the board director 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 director's 
        order, upon a finding that area representation is required to 
        accord proper representation in the 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.  
        Thereafter 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. 
           Subd. 6.  [EFFECTIVE DATE.] The annexation shall be 
        effective as of the date fixed in the annexation order or on 
        such a later date as is fixed in the annexation order.  A copy 
        of the annexation order must be delivered immediately by the 
        executive director of the Minnesota municipal board to the 
        appropriate county auditor or auditors.  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. 
           Sec. 7.  Minnesota Statutes 2000, section 414.0325, is 
        amended to read: 
           414.0325 [ORDERLY ANNEXATIONS WITHIN A DESIGNATED 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.  
           (b) The joint resolution will confer jurisdiction on 
        the board director over annexations in the designated area and 
        over the various provisions in said agreement by submission of 
        said joint resolution to the executive director.  
           (c) The resolution shall include a description of the 
        designated area and the reasons for designation.  
           (d) 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 
           (2) the board of its own motion director. 
           (e) Whenever a state agency, other than the pollution 
        control agency, orders a municipality to extend a municipal 
        service to an area, such an the order will confer confers 
        jurisdiction on the Minnesota municipal board director to 
        consider designation of the area for orderly annexation. 
           (f) 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 director may review and 
        comment, but may not alter the boundaries.  
           (g) 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 
        director is necessary, the board director may review and 
        comment, but shall, within 30 days, order the annexation in 
        accordance with the terms of the resolution.  
           Subd. 1a.  [ELECTRIC UTILITY SERVICE NOTICE.] 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. 
           Subd. 2.  [HEARING TIME, PLACE.] Upon receipt of a 
        resolution for annexation of a part of the designated area, the 
        executive director shall set a time and place for a hearing in 
        accordance with section 414.09. 
           Subd. 3.  [BOARD RELEVANT FACTORS, ORDER.] (a) In arriving 
        at its a decision, the board director shall consider the factors 
        in section 414.031, subdivision 4. 
           (b) Based upon factors in section 414.031, subdivision 4, 
        the board director may order the annexation: 
           (a) (1) if it finds on finding that 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 (b) 
           (2) if it finds on finding that the existing township form 
        of government is not adequate to protect the public health, 
        safety, and welfare; or (c) 
           (3) if it finds on finding that annexation would be in the 
        best interests of the subject area.  
           (c) The board director may deny the annexation if it 
        conflicts with any provision of the joint agreement.  
           (d) The board director 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. 
           (e) 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 denial 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.  
           (f) In all cases, the board director shall set forth the 
        factors which are the basis for the decision. 
           Subd. 4.  [EFFECTIVE DATE OF ANNEXATION.] The board's 
        director's order shall be effective upon the issuance of the 
        order or at such later time as is provided by the board in its 
        the order.  A copy of the annexation order must be delivered 
        immediately by the executive director of the Minnesota municipal 
        board to the appropriate county auditor or auditors.  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.  [PLANNING IN THE AREA DESIGNATED FOR ORDERLY 
        ANNEXATION AREA.] (a) A joint resolution may provide for the 
        establishment of a board to exercise planning and land use 
        control authority within any area designated as an orderly 
        annexation area pursuant to this section, in the manner 
        prescribed by Minnesota Statutes 1976, section 471.59, 
        subdivisions 2 to 8, inclusive. 
           (a) (b) A board established pursuant to a joint resolution 
        shall have all of the powers contained in sections 462.351 to 
        462.364, and shall have the authority to adopt and enforce the 
        Uniform Fire Code promulgated pursuant to section 299F.011. 
           (b) (c) The joint resolution 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. 
           (c) (d) If the joint resolution does not provide for joint 
        planning and land use control, 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, and section 462.358, subdivision 1.; 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) This 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 orderly annexation area.; and 
           (2) The committee shall have all of the powers contained in 
        sections 462.351 to 462.364, and shall have the authority to 
        adopt and enforce the Uniform Fire Code promulgated pursuant to 
        section 299F.011. 
           Sec. 8.  Minnesota Statutes 2000, section 414.033, 
        subdivision 3, is amended to read: 
           Subd. 3.  [PERIMETER, ACREAGE REQUIREMENTS.] 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 municipal 
        board director, unless the area is appropriate for annexation by 
        ordinance under subdivision 2, clause (3).  The town board shall 
        have 90 days from the date of service to serve objections with 
        the board director.  If no objections are forthcoming within the 
        said 90 day period, such land may be annexed by ordinance.  If 
        objections are filed with the board director, the board director 
        shall conduct hearings and issue its an order as in the case of 
        annexations under section 414.031, subdivisions 3 and 4. 
           Sec. 9.  Minnesota Statutes 2000, section 414.033, 
        subdivision 5, is amended to read: 
           Subd. 5.  [PETITION, OBJECTIONS.] 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 director, 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 director and the annexing municipality.  
        Upon receipt of such objections, the board director shall 
        proceed to hold a hearing and issue its an order in accordance 
        with section 414.031, subdivisions 3 and 4.  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 to all property owners within the area to be 
        annexed. 
           Sec. 10.  Minnesota Statutes 2000, section 414.033, 
        subdivision 6, is amended to read: 
           Subd. 6.  [IF ALSO IN BOARD DIRECTOR'S PROCEEDING.] 
        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 board 
        director, no action thereon shall be taken by the municipality, 
        unless otherwise provided by an order of the board director, 
        until final disposition has been made of the pending petition 
        pending before the board.  Under this section the board director 
        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. 
           Sec. 11.  Minnesota Statutes 2000, section 414.033, 
        subdivision 7, is amended to read: 
           Subd. 7.  [FILING; EFFECTIVE DATE; COPY, LEVIES.] Any 
        annexation ordinance provided for in this section must be filed 
        with the board director, the township, the county auditor and 
        the secretary of state and is final on the date the ordinance is 
        approved by the board director.  A copy of the annexation 
        ordinance must be delivered immediately by the governing body of 
        the municipality to the appropriate county auditor or auditors.  
           Sec. 12.  Minnesota Statutes 2000, section 414.033, 
        subdivision 10, is amended to read: 
           Subd. 10.  [ADDITIONAL INFORMATION TO BOARD.] The municipal 
        board director may, at its discretion, require the city or 
        property owners to furnish additional information concerning an 
        annexation by ordinance to inform the board director about the 
        extent to which the proposed annexation conforms to the 
        statutory criteria set forth in sections 414.01, subdivision 1 
        and 414.031, subdivision 4. 
           Sec. 13.  Minnesota Statutes 2000, section 414.0335, is 
        amended to read: 
           414.0335 [ORDERED GOVERNMENTAL SERVICE EXTENSION; 
        ANNEXATION BY ORDINANCE.] 
           If a determination or order by the pollution control 
        agency, under section 115.49 or other similar statute is made, 
        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 municipal board or its successor director.  
        The municipal board or its successor director may review and 
        comment on the ordinance but shall approve the ordinance within 
        30 days of receipt.  The ordinance is final and the annexation 
        is effective on the date the municipal board or its successor 
        director approves the ordinance.  Thereafter, the city shall 
        amend its comprehensive plan and official controls in accordance 
        with chapter 462. 
           Sec. 14.  Minnesota Statutes 2000, section 414.035, is 
        amended to read: 
           414.035 [DIFFERENTIAL TAXATION.] 
           Whenever a board an order, under section 414.031, 414.0325, 
        or 414.033, annexes part or all of a township to a municipality, 
        the board 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 full 
        municipal services to the annexed area. 
           Sec. 15.  Minnesota Statutes 2000, section 414.036, is 
        amended to read: 
           414.036 [MUNICIPAL REIMBURSEMENT.] 
           When a board an order under section 414.0325 annexes part 
        of a town to a municipality, the orderly annexation agreement 
        between the town and municipality may provide a reimbursement 
        from the municipality to the town for all or part of the taxable 
        property annexed as part of the board order.  The reimbursement 
        shall be completed in substantially equal payments over not less 
        than two nor more than six years from the time of annexation. 
           Sec. 16.  Minnesota Statutes 2000, section 414.041, is 
        amended to read: 
           414.041 [CONSOLIDATION OF MUNICIPALITIES.] 
           Subdivision 1.  [INITIATING THE PROCEEDING.] (a) Two or 
        more municipalities may be the subject of a single 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:  
           (a) (1) submitting to the executive director a resolution 
        of the city council of each affected municipality; 
           (b) (2) submitting to the executive director a petition 
        signed by five percent or more of the resident voters of a 
        municipality who voted for governor at the last general 
        election; or 
           (c) (3) by the board on its own motion director.  
           (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. 
           Subd. 2.  [CONSOLIDATION COMMISSION.] Upon receipt of a 
        petition or a resolution requesting consolidation or upon the 
        board's director's own motion, the board director shall appoint 
        a consolidation commission from a list of ten candidates 
        submitted by each affected city council.  The commission shall 
        be composed of not fewer than five members from each affected 
        municipality.  From a separate list of three persons submitted 
        by each affected city council, the board director shall appoint 
        a commission chair who is not a resident of an affected 
        municipality but who resides in an affected county.  
           No person is disqualified from serving on a consolidation 
        commission by reason of holding other elected or appointed 
        office.  Consolidation commission members shall hold office 
        until a consolidation report has been issued by the commission.  
        The board director shall fill vacancies in the commission by 
        appointment.  The consolidation commission shall make rules with 
        reference to its operation and procedures including quorum 
        requirements with reference to its operations and procedures.  
           Subd. 3.  [COMMISSION'S HEARING AND REPORT.] (a) The 
        consolidation commission shall conduct hearings regarding the 
        proposed consolidation.  
           (b) The hearings shall include, but are not limited to, the 
        following subjects:  
           (a) (1) the contents of any city charter for the proposed 
        consolidated city or the form of government of the proposed 
        consolidated city; 
           (b) (2) analysis of whether a ward system shall be included 
        in the form of government of the proposed consolidated city; and 
           (c) (3) each factor considered by the board director under 
        section 414.02, subdivision 3. 
           (c) Based on these factors and upon other matters which 
        come before the consolidation commission, the commission shall 
        issue a report to the municipal board director with findings and 
        recommendations within two years from the date of the board's 
        director's initial appointment of the commission.  
           Subd. 4.  [BOARD'S DIRECTOR'S HEARING AND NOTICE.] Upon 
        receipt of the commission's report, the executive director shall 
        designate a time and a place for a hearing in accordance with 
        section 414.09. 
           Subd. 5.  [BOARD'S RELEVANT FACTORS, ORDER.] (a) In 
        arriving at its a decision, the board director shall consider 
        the factors in section 414.02, subdivision 3. 
           (b) The board director 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 director's written determination of what is in 
        the best interests of the affected municipalities.  
           (c) The board director shall order the consolidation if it 
        finds on finding that consolidation will be for the best 
        interests of the municipalities.  In all cases, the board 
        director shall set forth the factors which are the basis for the 
        decision.  
           (d) If the board director orders consolidation, it 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 board may in its 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 board may in its order may establish a ward system 
        in the new municipality, in which event it 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 board's order unless authorized by the board director. 
           Subd. 6.  [FINAL APPROVAL.] (a) If the consolidation was 
        initiated by a petition of the resident voters of a 
        municipality, the board's order for consolidation shall be final 
        upon approval by resolution of the city councils in each of the 
        affected municipalities unless ten percent or more of the 
        resident voters of an affected municipality who voted for 
        governor at the last 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 board's order 
        or the date of final approval of the board's order by the city 
        councils, whichever is later. 
           (b) Upon receipt and verification of the petition, the 
        board director 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 executive director of 
        the municipal board by the chief election judge within ten days 
        after the referenda.  The executive director shall upon receipt 
        of the certificate notify all parties of the election results. 
           (b) (d) If the consolidation was initiated by a city 
        council resolution of each affected municipality, the board's 
        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 clause paragraph (a).  
           (c) (e) If the consolidation was initiated by the board's 
        own motion director, no director's consolidation order of the 
        board involving existing municipalities shall become effective 
        unless adopted by the council of each affected municipality by a 
        majority vote and unless the consolidation order of the board 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 board director; and, if a 
        majority of the votes cast on the question in each municipality 
        are in favor of its adoption, the order of the board shall 
        become effective as provided herein.  
           (d) (f) Notwithstanding a disapproval of the board's order 
        for consolidation by a city council of an affected municipality 
        required to approve the board's order in clause paragraph (a) or 
        (c) (e), the board's order for consolidation shall nevertheless 
        be deemed approved by that city council if ten percent or more 
        of the resident voters of that municipality who voted for 
        governor at the last general election petition the city council 
        for a referendum on the consolidation as provided in clause 
        paragraph (a), and a majority of those voting in that 
        municipality approve the board's order for consolidation.  
           Subd. 7.  [DIFFERENTIAL TAXATION.] Where one municipality 
        is receiving substantially fewer municipal services, the board 
        director may provide that the tax rate of the municipality shall 
        be increased in substantially equal proportions over a period of 
        not more than five years to equality with the tax rate in the 
        remainder of the new municipality.  The period shall be 
        determined by the board director on the basis of the period 
        reasonably required to provide substantially equal municipal 
        services. 
           Subd. 8.  [EFFECTIVE DATE.] The consolidation shall be 
        effective upon the election and qualification of new municipal 
        officers, or at such later date as set by the board in its order.
           Sec. 17.  Minnesota Statutes 2000, section 414.051, is 
        amended to read: 
           414.051 [BOARD'S REVIEW OF TOWNSHIPS ACCORDING TO 
        POPULATION.] 
           After each federal census the board director may determine 
        the townships which have a population in excess of 2,000 
        exclusive of any municipality or part of a municipality within 
        the township and make recommendations which it deems the 
        director considers necessary and reasonable to the board of any 
        such township. 
           Sec. 18.  Minnesota Statutes 2000, section 414.06, is 
        amended to read: 
           414.06 [DETACHMENT OF PROPERTY FROM A MUNICIPALITY.] 
           Subdivision 1.  [INITIATING THE PROCEEDING.] Property which 
        is situated within a municipality and abutting the municipal 
        boundary, rural in character and not developed for urban 
        residential, commercial, or industrial purposes may be detached 
        from the municipality according to the following procedure.  The 
        proceeding may be initiated by submitting to the board director 
        a resolution of the municipality to which the land is attached 
        or by submitting to the board director a petition of all of the 
        property owners of the land to be detached if the area is less 
        than 40 acres or of 75 percent of the property owners if over 40 
        acres.  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. 
           Subd. 2.  [HEARING, IF NEEDED.] If both a resolution of the 
        municipality and a petition by all the property owners are 
        submitted, no hearing is necessary.  In any other case, upon 
        receipt of a petition or resolution, the executive director of 
        the board shall designate a time and place for a hearing in 
        accordance with section 414.09. 
           Subd. 3.  [BOARD'S ORDER.] Upon completion of the hearing, 
        the board director may order the detachment if it finds on 
        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.  
        The board director may deny the detachment if it finds on 
        finding that the remainder of the municipality cannot continue 
        to carry on the functions of government without undue hardship.  
        The board shall have authority to director 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 
        township, it shall become a part of each township, being divided 
        by projecting through it the boundary line between the 
        townships.  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 township of which 
        it becomes a part, in such proportion as the board director 
        shall deem just and equitable having in view the amount of taxes 
        due and delinquent and the indebtedness of each township 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 township and 
        municipality. 
           Subd. 4.  [EFFECTIVE DATE.] The detachment shall be 
        effective upon the issuance of the board's order, or at such 
        later date, as provided by the board in its order.  A copy of 
        the detachment order must be delivered immediately by 
        the executive director of the Minnesota municipal board to the 
        appropriate county auditor or auditors.  For the purposes of 
        taxation, if the detachment becomes effective on or before 
        August 1 of a levy year, the town or towns acquiring the 
        detached area may levy on it beginning with that same levy 
        year.  If the detachment becomes effective after August 1 of a 
        levy year, the municipality may continue to levy on the detached 
        area for that levy year, and the town or towns acquiring the 
        detached area may not levy on it until the following levy year. 
           Sec. 19.  Minnesota Statutes 2000, section 414.061, is 
        amended to read: 
           414.061 [CONCURRENT DETACHMENT AND ANNEXATION OF 
        INCORPORATED LAND.] 
           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 submitting to the 
        executive director resolutions of both municipalities describing 
        the land and stating their desire to detach and annex the land. 
           Subd. 2.  [BOARD'S ORDER.] If the resolutions are in order, 
        the board director may order the detachment and annexation. 
           Subd. 3.  [EFFECTIVE DATE.] The concurrent detachment and 
        annexation shall be effective upon the issuance of the board's 
        order, or at such later date as provided by the board in its 
        order.  A copy of the annexation order must be delivered 
        immediately by the executive director of the Minnesota municipal 
        board to the appropriate county auditor or auditors.  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. 
           Subd. 4.  [BOARD INITIATION DIRECTOR'S INITIATIVE.] 
        The board director (1) may initiate proceedings for the 
        concurrent detachment and annexation of portions of one 
        municipality completely surrounded by another municipality, on 
        its own motion or (2) may act upon the petition of all of the 
        owners of property in the completely surrounded area.  In such 
        cases the board director shall conduct hearings and issue its an 
        order pursuant to section 414.09.  In arriving at its a 
        decision, the board director shall consider the factors in 
        section 414.02, subdivision 3.  The board director shall order 
        the proposed action if it finds on finding that it will be for 
        the best interests of the municipalities and the property 
        owners.  In all cases, the board director shall set forth the 
        factors which are the basis for the decision. 
           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 director accompanied by a resolution of the 
        city council of at least one of the affected municipalities.  
        The board director shall conduct hearings and issue its an order 
        pursuant to section 414.09.  In arriving at its a decision, 
        the board director shall consider the factors in section 414.02, 
        subdivision 3.  The board director shall order the proposed 
        action if it finds on finding that it will be for the best 
        interests of the municipalities and the property owner.  In all 
        cases, the board director shall set forth the factors which are 
        the basis for the decision. 
           Sec. 20.  Minnesota Statutes 2000, section 414.063, is 
        amended to read: 
           414.063 [JOINT AGREEMENTS.] 
           After notice and hearing as provided in section 414.09, the 
        board director may include provisions of joint agreements 
        between political subdivisions in its the orders. 
           Sec. 21.  Minnesota Statutes 2000, section 414.067, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [TOWNSHIP OR MUNICIPALITY DIVIDED.] 
        Whenever the board director divides an existing governmental 
        unit, the board director 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. 22.  Minnesota Statutes 2000, section 414.067, 
        subdivision 3, is amended to read: 
           Subd. 3.  [REVISION OF TAX RECORDS; REDISTRIBUTION OF 
        LEVIES.] In an apportionment made under this section the board 
        director may order the county auditor to revise tax records and 
        respread levies at any time prior to December 15 or order the 
        county treasurer to redistribute taxes levied and receivable. 
           Sec. 23.  Minnesota Statutes 2000, section 414.07, is 
        amended to read: 
           414.07 [APPEALS.] 
           Subdivision 1.  [ORDERS OF BOARD, TIME LIMITATION LIMIT.] 
        All orders of the board in proceedings under this chapter shall 
        be issued within 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. 
           Subd. 2.  [GROUNDS FOR APPEAL.] (a) Any person aggrieved by 
        any order of the board issued under this chapter may appeal to 
        the district court upon the following grounds: 
           (a) (1) that the board had no order was issued without 
        jurisdiction to act; 
           (b) (2) that the board order exceeded its the orderer's 
        jurisdiction; 
           (c) (3) that the order of the board is arbitrary, 
        fraudulent, capricious or oppressive or in unreasonable 
        disregard of the best interests of the territory affected; or 
           (d) (4) that the order is based upon an erroneous theory of 
        law. 
           (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 executive 
        director and the attorney general's assistant assigned to the 
        board director for purposes of this chapter. 
           (c) If the court determines that the action of the board 
        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 of the board involved, in whole or 
        in part, as the case requires.  The matter shall then be 
        remanded to the board for further action in conformity with the 
        decision of the court. 
           (d) To render a review of a board 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.
           (e) An appeal lies from the district court as in other 
        civil cases. 
           Sec. 24.  Minnesota Statutes 2000, section 414.08, is 
        amended to read: 
           414.08 [APPEALS FROM DISTRICT COURT.] 
           An appeal may be taken under the rules of civil appellate 
        procedure by the Minnesota municipal board director from a final 
        order or judgment made or rendered by the district court when 
        the board director determines that the final order or judgment 
        adversely affects the public interest. 
           Sec. 25.  Minnesota Statutes 2000, section 414.09, is 
        amended to read: 
           414.09 [UNIFORM PROCEDURES OF BOARD.] 
           Subdivision 1.  [HEARINGS.] Proceedings initiated by the 
        submission of an initiating document or by the board of its own 
        motion director shall come on for hearing within 30 to 60 days 
        from receipt of the document by the board director or from the 
        date of board the director's action and the board person 
        conducting the hearing must submit its an 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 see that notice of the hearing to be is published 
        for two successive weeks in a legal newspaper of general 
        circulation in the affected area.  When the board director 
        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. 
           Subd. 2.  [TRANSMITTAL OF BOARD'S ORDER.] The executive 
        director shall cause see that copies of the board's order to 
        be are 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. 
           Subd. 3.  [ELECTIONS OF MUNICIPAL OFFICERS.] An order 
        approving an incorporation or consolidation pursuant to this 
        chapter shall set a date for this an election of new municipal 
        officers not less than 45 days nor more than 60 days after the 
        issuance of such the order.  The board director shall appoint an 
        acting clerk for election purposes, at least three election 
        judges who shall be residents of the new municipality, and shall 
        designate polling places within the new municipality. 
           The acting clerk shall prepare the official election 
        ballot.  Affidavits of candidacy may be filed by any person 
        eligible to hold municipal office not more than four weeks nor 
        less than two weeks before the date designated by the board 
        director for the election.  
           The election shall be conducted in conformity with the 
        charter and the laws for conducting municipal elections insofar 
        as applicable.  Any person eligible to vote at a township or 
        municipal election within the area of the new municipality, is 
        eligible to vote at such election. 
           Any excess in the expense of conducting the election over 
        receipts from filing fees shall be a charge against the new 
        municipality; any excess of receipts shall be deposited in the 
        treasury of the new municipality. 
           Sec. 26.  Minnesota Statutes 2000, section 414.12, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [ALTERNATIVE DISPUTE RESOLUTION.] (a) 
        Notwithstanding anything to the contrary in sections 414.01 to 
        414.11 414.09, the director of the office of strategic and 
        long-range planning, upon consultation with affected parties and 
        considering the procedures and principles established in 
        sections 414.01 to 414.11 414.09, and Laws 1997, chapter 202, 
        article 4, sections 1 to 13, may require that disputes over 
        proposed boundary adjustments be resolved by means of 
        alternative dispute resolution processes in place of hearings 
        that would otherwise be required pursuant to sections 414.01 to 
        414.09, including those provided in chapter 14, in the execution 
        of the office's director's duties under this chapter. 
           (b) Alternative dispute resolution processes that may be 
        required include: 
           (1) the contested case procedures provided by sections 
        14.57 to 14.62; 
           (2) the mediation and arbitration process provided by 
        sections 572A.015 to 572A.03; or 
           (3) another mediation and arbitration process ordered by 
        the director. 
           Sec. 27.  Minnesota Statutes 2000, section 414.12, 
        subdivision 2, is amended to read: 
           Subd. 2.  [DELEGATION OF AUTHORITY.] The director may, with 
        the agreement of the chief administrative law judge, delegate to 
        the office of administrative hearings, in any individual case or 
        group of cases, the director's authority and responsibility to 
        conduct hearings and issue final orders related to the hearings 
        under sections 414.01 to 414.09.  In the case of detachment of 
        lands from a municipality, if the parties do not agree to 
        resolve a boundary adjustment matter by mediation or 
        arbitration, then the case shall be referred to an 
        administrative law judge to conduct hearings and issue final 
        orders related to the hearings under sections 414.01 to 414.09. 
           Sec. 28.  [TEMPORARY RULES.] 
           Notwithstanding Minnesota Statutes, section 414.01, 
        subdivision 10, until new rules are adopted by the office of 
        strategic and long-range planning as provided in this section, 
        Minnesota Rules, chapter 6000, must be followed to the extent 
        applicable and consistent with the transfer of authority from 
        the former municipal board to the director of the office of 
        strategic and long-range planning.  Notwithstanding Laws 2000, 
        chapter 446, section 2, the office of strategic and long-range 
        planning is exempt from any requirement to adopt or amend rules 
        governing boundary adjustment procedures until after May 1, 2004.
           Sec. 29.  [REPEALER.] 
           Minnesota Statutes 2000, sections 414.01, subdivisions 2 
        and 6a; 414.011, subdivision 8; and 414.11, are repealed. 
           Presented to the governor March 4, 2002 
           Signed by the governor March 5, 2002, 2:30 p.m.