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

                            CHAPTER 178-H.F.No. 2103 
                  An act relating to real property; local planning and 
                  zoning; authorizing municipalities to require the 
                  dedication of land for public purposes; providing 
                  certain terms and conditions for the dedication; 
                  amending Minnesota Statutes 2002, section 462.358, 
                  subdivision 2b, by adding a subdivision; Minnesota 
                  Statutes 2003 Supplement, section 462.353, subdivision 
                  4. 
        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
           Section 1.  Minnesota Statutes 2003 Supplement, section 
        462.353, subdivision 4, is amended to read: 
           Subd. 4.  [FEES.] (a) A municipality may prescribe fees 
        sufficient to defray the costs incurred by it in reviewing, 
        investigating, and administering an application for an amendment 
        to an official control established pursuant to sections 462.351 
        to 462.364 or an application for a permit or other approval 
        required under an official control established pursuant to those 
        sections.  Except as provided in subdivision 4a, fees as 
        prescribed must be by ordinance.  Fees must be fair, reasonable, 
        and proportionate and have a nexus to the actual cost of the 
        service for which the fee is imposed.  
           (b) A municipality shall must adopt management and 
        accounting procedures to ensure that fees are maintained and 
        used only for the purpose for which they are collected.  Upon 
        request, a municipality must explain the basis of its fees. 
           (c) Except as provided in this paragraph, a fee ordinance 
        or amendment to a fee ordinance is effective January 1 after its 
        adoption.  A municipality may adopt a fee ordinance or an 
        amendment to a fee ordinance with an effective date other than 
        the next January 1, but the ordinance or amendment does not 
        apply if an application for final approval has been submitted to 
        the municipality. 
           (d) If a dispute arises over a specific fee imposed by a 
        municipality related to a specific application, the amount of 
        the fee must be deposited and held in escrow, and the person 
        aggrieved by the fee may appeal under section 462.361, provided 
        that the appeal must be brought within 60 days after approval of 
        an application under this section and deposit of the fee into 
        escrow.  A municipality must not condition the approval of any 
        proposed subdivision or development on an agreement to waive the 
        right to challenge the validity of a fee.  An approved 
        application may proceed as if the fee had been paid, pending a 
        decision on the appeal.  This paragraph must not be construed to 
        preclude the municipality from conditioning approval of any 
        proposed subdivision or development on an agreement to waive a 
        challenge to the cost associated with municipally installed 
        improvements of the type described in section 429.021. 
           Sec. 2.  Minnesota Statutes 2002, section 462.358, 
        subdivision 2b, is amended to read: 
           Subd. 2b.  [DEDICATION.] (a) The regulations may require 
        that a reasonable portion of any proposed subdivision be 
        dedicated to the public or preserved for public use as streets, 
        roads, sewers, electric, gas, and water facilities, storm water 
        drainage and holding areas or ponds and similar utilities and 
        improvements.  
           (b) In addition, the regulations may require that a 
        reasonable portion of any proposed subdivision be dedicated to 
        the public or preserved for conservation purposes or for public 
        use as parks, recreational facilities as defined and outlined in 
        section 471.191, playgrounds, trails, wetlands, or open space; 
        provided that (a) (1) the municipality may choose to accept an 
        equivalent amount in cash from the applicant for part or all of 
        the portion required to be dedicated to such public uses or 
        purposes based on the fair market value of the land no later 
        than at the time of final approval, (b) (2) any cash payments 
        received shall be placed in a special fund by the municipality 
        used only for the purposes for which the money was obtained, (c) 
        and may not be used for ongoing operation or maintenance, (3) in 
        establishing the reasonable portion to be dedicated, the 
        regulations may consider the open space, park, recreational, or 
        common areas and facilities which the applicant proposes to 
        reserve for the subdivision, and (d) (4) the municipality 
        reasonably determines that it will need to acquire that portion 
        of land for the purposes stated in this paragraph as a result of 
        approval of the subdivision.  The basis for calculating the 
        amount to be dedicated or preserved must be established by 
        ordinance or pursuant to the procedures established in section 
        462.353, subdivision 4a. 
           Sec. 3.  Minnesota Statutes 2002, section 462.358, is 
        amended by adding a subdivision to read: 
           Subd. 2c.  [NEXUS.] (a) There must be an essential nexus 
        between the fees or dedication imposed under subdivision 2b and 
        the municipal purpose sought to be achieved by the fee or 
        dedication.  The fee or dedication must bear a rough 
        proportionality to the need created by the proposed subdivision 
        or development. 
           (b) If a municipality is given written notice of a dispute 
        over a proposed fee in lieu of dedication before the 
        municipality's final decision on an application, a municipality 
        must not condition the approval of any proposed subdivision or 
        development on an agreement to waive the right to challenge the 
        validity of a fee in lieu of dedication. 
           (c) An application may proceed as if the fee had been paid, 
        pending a decision on the appeal of a dispute over a proposed 
        fee in lieu of dedication, if (1) the person aggrieved by the 
        fee puts the municipality on written notice of a dispute over a 
        proposed fee in lieu of dedication, (2) prior to the 
        municipality's final decision on the application, the fee in 
        lieu of dedication is deposited in escrow, and (3) the person 
        aggrieved by the fee appeals under section 462.361, within 60 
        days of the approval of the application.  If such an appeal is 
        not filed by the deadline, or if the person aggrieved by the fee 
        does not prevail on the appeal, then the funds paid into escrow 
        must be transferred to the municipality. 
           Sec. 4.  [EFFECTIVE DATE; APPLICATION.] 
           This act is effective August 1, 2004, and applies to 
        ordinances relating to fees, fee schedules, and dedications 
        adopted or amended on or after August 1, 2004. 
           Presented to the governor May 7, 2004 
           Signed by the governor May 10, 2004, 10:30 p.m.