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

CHAPTER 196--H.F.No. 3357

An act

relating to municipal boundary adjustments; providing for changes in municipal boundaries; imposing powers and duties on the chief administrative law judge;

amending Minnesota Statutes 2006, sections 4A.02; 40A.121, subdivision 1; 272.67, subdivision 1; 276A.09; 365.46, subdivision 2; 379.05; 412.021, subdivision 1; 412.091; 414.01, subdivisions 1, 1a, 8a, 16; 414.011, by adding a subdivision; 414.02, subdivision 1a; 414.031, subdivisions 1a, 4, by adding a subdivision; 414.0325, subdivisions 1, 5; 414.0333; 414.035; 414.067, subdivision 1; 414.12, subdivisions 1, 3, 4, by adding subdivisions; 462.3535, subdivision 5; 473F.13, subdivision 1; 473H.14; 572A.01, subdivision 2; 572A.015, subdivision 2; 572A.02, subdivision 6; Minnesota Statutes 2007 Supplement, section 414.0325, subdivision 1b; Laws 2006, chapter 270, article 2, section 1, as amended; repealing Minnesota Statutes 2006, sections 414.01, subdivision 7a; 414.011, subdivision 11; 414.12, subdivision 2.

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

ARTICLE 1

MUNICIPAL BOUNDARIES ADJUSTMENTS

Section 1.

Minnesota Statutes 2006, section 414.01, subdivision 1, is amended to read:

Subdivision 1.

A duty of planning director chief administrative law judge.

Among the duties of the director of the Office of Strategic and Long-Range Planning is the duty to The chief administrative law judge shall 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.

Sec. 2.

Minnesota Statutes 2006, section 414.01, subdivision 1a, is amended to read:

Subd. 1a.

Legislative findings.

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) joint resolutions for orderly annexation, consolidation of municipalities, mergers of towns and municipalities, long-range joint powers planning or other cooperative efforts among counties, cities, and towns should be encouraged.

Sec. 3.

Minnesota Statutes 2006, section 414.01, subdivision 8a, is amended to read:

Subd. 8a.

Powers of conductor of proceedings.

Any person conducting a proceeding under this chapter may administer oaths and affirmations; issue subpoenas; compel the attendance and receive testimony of witnesses, and the production of papers, books, and documents; examine witnesses; and receive and report evidence. Upon the written request of a presiding administrative law judge or a party, the chief administrative law judge may issue a subpoena for the attendance of a witness or the production of books, papers, records, or other documents material to any proceeding under this chapter. The subpoenas shall be enforceable through the district court in the district in which the subpoena is issued.

Sec. 4.

Minnesota Statutes 2006, section 414.01, subdivision 16, is amended to read:

Subd. 16.

Compelled meetings; report.

In any proceeding under this chapter, the director chief administrative law judge or conductor of the proceeding may at any time in the process require representatives from the any petitioning property owner or involved city, town, county, political subdivision, or other governmental entity to meet together to discuss resolution of issues raised by the petition or order that confers jurisdiction on the director chief administrative law judge and other issues of mutual concern. The chief administrative law judge or conductor of the proceeding may determine which entities are required to participate in these discussions. The director chief administrative law judge 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 director chief administrative law judge or conductor of the proceeding on the results of the meetings immediately after the last meeting. The parties may be granted additional time at the discretion of the chief administrative law judge or conductor of the proceedings.

Any proposed resolution or settlement of contested issues that results in a municipal boundary change, places conditions on any future municipal boundary change, or results in the withdrawal of an objection to a pending proceeding or the withdrawal of a pending proceeding must be filed with the chief administrative law judge and is subject to the applicable procedures and statutory criteria of this chapter.

Sec. 5.

Minnesota Statutes 2006, section 414.011, is amended by adding a subdivision to read:

Subd. 12.

Chief administrative law judge.

"Chief administrative law judge" means the chief administrative law judge of the state Office of Administrative Hearings or the delegate of the chief administrative law judge under section 14.48.

Sec. 6.

Minnesota Statutes 2006, section 414.02, subdivision 1a, is amended to read:

Subd. 1a.

Notice of intent to incorporate.

(a) At least 30 days before submitting to the director the petition or resolution to the chief administrative law judge under this section, the township must serve the clerk of each municipality and each township that is contiguous to the township by certified mail a notice of the township's intent to incorporate.

(b) If the proceedings for incorporation are initiated by the requisite number of property owners, the notice of intent to incorporate must be served by the property owner or owners or designee in the manner required under this paragraph. The property owner or owners or designee must serve a notice of intent to incorporate on the town board of the township containing the area proposed for incorporation. The property owner or owners or designee must also serve the clerk of each municipality and each township that is contiguous to the area proposed for incorporation by certified mail a notice of intent to incorporate.

Sec. 7.

Minnesota Statutes 2006, section 414.031, subdivision 1a, is amended to read:

Subd. 1a.

Notice of intent to annex.

At least 30 days before submitting to the director a petition or resolution to the chief administrative law judge under this section, the petitioning municipality or petitioning property owner or supporting municipality must serve the township clerk of the affected township by certified mail a notice of the petitioning municipality's or the petitioning property owner's intent to annex property within the township. The notice must clearly identify the boundaries of the area proposed to be annexed.

Sec. 8.

Minnesota Statutes 2006, section 414.031, is amended by adding a subdivision to read:

Subd. 3a.

Presiding administrative law judge; tour.

During the evidentiary hearing process, the presiding administrative law judge shall tour the proposed annexation area along with at least one representative of each of the affected towns and municipalities. Prior to the tour of the proposed annexation area, the affected towns and municipalities shall agree on the route or the administrative law judge shall determine the route for the affected towns and municipalities and resolve all disputes regarding the tour.

Sec. 9.

Minnesota Statutes 2006, section 414.031, subdivision 4, is amended to read:

Subd. 4.

Relevant factors, order.

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

(1) recordings and public documents from joint informational meetings under section 414.0333 relevant to other factors listed in this subdivision;

(2) present population and number of households, past population and projected population growth of the annexing municipality and subject area and adjacent units of local government;

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

(4) degree of contiguity of the boundaries between the annexing municipality and the subject area;

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

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

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

(8) existing levels of governmental services being provided in the annexing municipality and the subject area, including water and sewer service, fire rating and protection, law enforcement, street improvements and maintenance, administrative services, and recreational facilities and the impact of the proposed action on the delivery of said services;

(9) the implementation of previous annexation agreements and orders;

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

(11) plans and programs by the annexing municipality for providing needed and enhanced governmental services to the subject area in a cost-effective and feasible manner within a reasonable time from the date of the annexation;

(12) an analysis of the fiscal impact on the annexing municipality, the subject area, and adjacent units of local government, including net tax capacity and the present bonded indebtedness, and the local tax rates of the county, school district, and township;

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

(14) adequacy of town government to deliver services to the subject area;

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

(16) if only a part of a township is annexed, the ability of the remainder of the township to continue or the feasibility of it being incorporated separately or being annexed to another municipality; and

(17) information received by the presiding administrative law judge from the tour required under subdivision 3a.

(b) Based upon the factors, the director presiding administrative law judge may order the annexation on finding:

(1) that the subject area is now, or is about to become, urban or suburban in character;

(2) that municipal government in the area proposed for annexation is required to protect the public health, safety, and welfare; or

(3) that the annexation would be in the best interest of the subject area.

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

(d) The director presiding administrative law judge shall deny the annexation 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 director presiding administrative law judge may deny the annexation 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

(2) that the remainder of the township would suffer undue hardship.

(f) The director presiding administrative law judge may alter the boundaries of the area to be annexed by increasing or decreasing the area so as to include only that property which is now or is about to become urban or suburban in character or to add property of such character abutting the area proposed for annexation in order to preserve or improve the symmetry of the area, or to exclude property that may better be served by another unit of government.

(g) The director presiding administrative law judge may also alter the boundaries of the proposed annexation so as to follow visible, clearly recognizable physical features.

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

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

Sec. 10.

Minnesota Statutes 2006, section 414.0325, subdivision 1, is amended to read:

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. One or more municipalities, by joint resolution with the county, may designate an unincorporated area in which there is no organized township government as in need of orderly annexation.

(b) A designated area is any area which the signatories to a joint resolution for orderly annexation have identified as being appropriate for annexation, either currently or at some point in the future, pursuant to the negotiated terms and conditions set forth in the joint resolution. Land described as a designated area is not, by virtue of being so described, considered also to be annexed for purposes of this chapter.

(c) The joint resolution will confer jurisdiction on the director chief administrative law judge over annexations in the designated area and over the various provisions in said agreement by submission of said joint resolution to the director chief administrative law judge.

(c) (d) The resolution shall include a description of the designated area and the reasons for designation.

(d) (e) Thereafter, an annexation of any part of the designated area may be initiated by:

(1) submitting to the director chief administrative law judge a resolution of any signatory to the joint resolution; or

(2) the director chief administrative law judge.

(e) (f) Whenever a state agency, other than the pollution control agency, orders a municipality to extend a municipal service to an area, the order confers jurisdiction on the director chief administrative law judge to consider designation of the area for orderly annexation.

(f) (g) If a joint resolution designates an area as in need of orderly annexation and states that no alteration of its stated boundaries is appropriate, the director chief administrative law judge may review and comment, but may not alter the boundaries.

(g) (h) 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 director chief administrative law judge is necessary, the director chief administrative law judge may review and comment, but shall, within 30 days, order the annexation in accordance with the terms of the resolution.

Sec. 11.

Minnesota Statutes 2007 Supplement, section 414.0325, subdivision 1b, is amended to read:

Subd. 1b.

Notice of intent to designate an area.

At least ten days before the municipality or township adopts an orderly annexation agreement, a notice of the intent to include property in an orderly annexation area must be published in a newspaper of general circulation in both the township and municipality. The notice must clearly identify the boundaries of the area proposed to be included in the orderly annexation agreement and the date, time, and place of the public informational meeting to be held as provided in section 414.0333. The cost of providing notice must be equally divided between the municipality and the township, unless otherwise agreed upon by the municipality and the township. This subdivision applies only to the initial designation to include property in an orderly annexation area subject to the orderly annexation agreement, or any expansion of the orderly annexation area subject to the agreement, and not to any subsequent annexation of any property from within the designated orderly annexation area. This subdivision also does not apply when the orderly annexation agreement only designates for immediate annexation property for which all of the property owners have petitioned to be annexed.

Sec. 12.

Minnesota Statutes 2006, section 414.0325, subdivision 5, is amended to read:

Subd. 5.

Planning in orderly annexation area.

(a) A joint resolution An orderly annexation agreement 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 section 471.59, subdivisions 2 to 8, inclusive. The orderly annexation agreement may also delegate planning and land use authority to the municipalities or towns or may establish some other process within the orderly annexation agreement to accomplish planning and land use control of the designated area.

(b) A board or other planning authority designated or established pursuant to a joint resolution an orderly annexation agreement shall have all of the powers contained in sections 462.351 to 462.364, and shall have the authority to adopt and enforce the State Fire Code promulgated pursuant to section 299F.011.

(c) The joint resolution orderly annexation agreement may provide that joint planning and land use controls shall apply to any or all parts of the area designated for orderly annexation as well as to any adjacent unincorporated or incorporated area, provided that the area to be included shall be described in the joint resolution.

(d) If the joint resolution orderly annexation agreement does not provide for joint planning and land use control, delegate planning and land use control to the municipalities or towns, or establish some other process for planning and land use authority, the following procedures shall govern:

(1) if the county and townships agree to exclude the area from their zoning and subdivision ordinances, the municipality may extend its zoning and subdivision regulations to include the entire orderly annexation area as provided in section 462.357, subdivision 1, 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) 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) have all of the powers contained in sections 462.351 to 462.364, and the authority to adopt and enforce the State Fire Code promulgated pursuant to section 299F.011.

Sec. 13.

Minnesota Statutes 2006, section 414.0333, is amended to read:

414.0333 JOINT INFORMATIONAL MEETING.

There must be a joint informational meeting of the municipal council of the annexing municipality and the town board of supervisors of the township containing the land proposed to be annexed or included in annexation proceedings under section 414.031. For an annexation under section 414.031, the joint informational meeting must be held after the final mediation meeting or the final meeting held pursuant to section 414.01, subdivision 16, if any, and before the hearing on the matter is held. If no mediation meetings are held, the joint informational meeting must be held after the initiating documents have been filed and before the hearing on the matter. The time, date, and place of the public informational meeting must be determined jointly by the chair of the town board of supervisors and the mayor of the annexing municipality. The chair of the town board of supervisors and the mayor must serve as the cochairs for the informational meeting. Notice of the time, date, place, and purpose of the informational meeting must be posted by the town clerk in the township's designated place for posting notices, and by the municipal clerk in the municipality's designated place for posting notices. A joint notice shall be published in a newspaper of general circulation within both the municipality and the township. In addition, both the city and town shall publish, at their own expense, notice in their respective official newspapers. If the city and town use the same official newspaper, a joint notice may be published and the costs evenly divided. All notice required by this section must be provided at least ten days before the date for the public informational meeting. At the public informational meeting, all persons appearing must have an opportunity to be heard, but the co-chairs may, by mutual agreement, establish the amount of time allowed for each speaker. The municipal council, the town board of supervisors, and any resident or affected property owner may be represented by counsel and introduce evidence including, but not limited to, expert testimony into the record of the informational meeting may place into the record of the informational meeting documents, expert opinions, or other materials supporting their positions on issues raised by the proposed annexation proceeding. The clerk of the township must record minutes of the proceedings of the informational meeting and the municipal clerk must make an audio recording of the informational meeting. The township must provide the director chief administrative law judge and the municipality with a copy of the printed minutes and the municipality must provide the director chief administrative law judge and the township with a copy of the audio recording. The record of the informational meeting for a proceeding under section 414.031 is admissible in any proceeding under this chapter and shall be taken into consideration by the director chief administrative law judge or the director's chief administrative law judge's designee.

Sec. 14.

Minnesota Statutes 2006, section 414.035, is amended to read:

414.035 DIFFERENTIAL TAXATION FOR UP TO SIX YEARS.

Whenever an order, under section 414.031, 414.0325, or 414.033, annexes part or all of a township to a municipality, the order may provide that the tax rate of the annexing municipality on the area annexed shall be increased in substantially equal proportions over not more than six years to equality with the tax rate on the property already within the municipality. The appropriate period, if any, shall be based on the time reasonably required to effectively provide full property-tax-supported municipal services to the annexed area. Nothing in this section prohibits a differential tax provision from being included in an orderly annexation agreement.

Sec. 15.

Minnesota Statutes 2006, section 414.067, subdivision 1, is amended to read:

Subdivision 1.

Township or municipality divided.

Whenever the director chief administrative law judge divides an existing governmental unit, the director chief administrative law judge, or other qualified person designated by the chief administrative law judge with the concurrence of the parties, 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. 16.

Minnesota Statutes 2006, 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 414.09, before assigning a matter to an administrative law judge for hearing, the director chief administrative law judge, upon consultation with affected parties and considering the procedures and principles established in sections 414.01 to 414.09, and Laws 1997, chapter 202, article 4, sections 1 to 13, may require that disputes over proposed boundary adjustments be resolved addressed in whole or in part by means of alternative dispute resolution processes in place of, or in connection with, 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 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.

(b) In all proceedings, the chief administrative law judge has the authority and responsibility to conduct hearings and issue final orders related to the hearings under sections 414.01 to 414.09.

Sec. 17.

Minnesota Statutes 2006, section 414.12, subdivision 3, is amended to read:

Subd. 3.

Cost of proceedings.

(a) The parties to any matter directed to alternative dispute resolution under subdivision 1 or delegated to the Office of Administrative Hearings under subdivision 2 must pay the costs of the alternative dispute resolution process or hearing in the proportions that they agree to.

(b) Notwithstanding section 14.53 or other law, the Office of strategic and long-range planning Administrative Hearings is not liable for the costs.

(c) If the parties do not agree to a division of the costs before the commencement of mediation, arbitration, or hearing, the costs must be allocated on an equitable basis by the mediator, arbitrator, or chief administrative law judge.

(d) The chief administrative law judge may contract with the parties to a matter directed or delegated to the Office of Administrative Hearings under subdivisions 1 and 2 for the purpose of providing administrative law judges and reporters for an administrative proceeding or alternative dispute resolution.

(e) The chief administrative law judge shall assess the cost of services rendered by the Office of Administrative Hearings as provided by section 14.53.

Sec. 18.

Minnesota Statutes 2006, section 414.12, subdivision 4, is amended to read:

Subd. 4.

Parties.

In this section, "party" means:

(1) a property owner, group of property owners, municipality, or township that files an initiating document or timely objection under this chapter;

(2) the municipality or township within which the subject area is located;

(3) a municipality abutting the subject area; and

(4) any other person, group of persons, or governmental agency residing in, owning property in, or exercising jurisdiction over the subject area that files with the director a notice of appearance within 14 days of publication of the notice required by section 414.09. submits a timely request, and is determined by the presiding administrative law judge to have a direct legal interest that will be affected by the outcome of the proceeding.

Sec. 19.

Minnesota Statutes 2006, section 414.12, is amended by adding a subdivision to read:

Subd. 5.

Effectuation of agreements.

Matters resolved or agreed to by the parties as a result of an alternative dispute resolution process, or otherwise, may be incorporated into a joint resolution adopted pursuant to section 414.0325, subdivision 1, or into one or more stipulations for purposes of further proceedings in accordance with the applicable procedures and statutory criteria of this chapter.

Sec. 20.

Minnesota Statutes 2006, section 414.12, is amended by adding a subdivision to read:

Subd. 6.

Limitations on authority.

Nothing in this section shall be construed to permit any municipality, town, or other political subdivision to take, or agree to take, any action that is not otherwise authorized by this chapter.

Sec. 21.

Laws 2006, chapter 270, article 2, section 1, as amended by Laws 2007, chapter 90, section 4, is amended to read:

Section 1.

MUNICIPAL BOUNDARY ADJUSTMENT ADVISORY TASK FORCE ESTABLISHED.

Subdivision 1.

Membership.

An advisory task force on municipal boundary adjustments is established to study and make recommendations on what, if any, changes should be made to the law governing municipal boundary adjustments. The task force shall develop recommendations regarding best practices annexation training for city and township officials to better communicate and jointly plan potential annexations. The task force is comprised of the following members:

(1) two members of the senate, one appointed by the majority leader and one appointed by the minority leader;

(2) two members of the house of representatives, one appointed by the speaker of the house and one appointed by the minority leader;

(3) three representatives of city interests, appointed by the League of Minnesota Cities in consultation with the Association of Metropolitan Municipalities, the Coalition of Greater Minnesota Cities, and the Minnesota Association of Small Cities;

(4) three representatives of township interests, appointed by the Minnesota Association of Townships; and

(5) one person appointed jointly by the senate majority leader and the speaker of the house of representatives to serve as chair of the task force, selected based on knowledge and experience in municipal boundary adjustment issues and who could serve without bias towards either side of the issue of annexation. The chair must convene the first meeting of the task force no later than August 1, 2007.

All appointing authorities must make the appointments to the task force within 30 days of the effective date of this section and shall provide for balance of geographic areas of the state and city and town interests.

Subd. 2.

Report by January 2008 January 16, 2009.

The task force shall report its interim recommendations to the chairs and members of the house of representatives and senate committees with jurisdiction over municipal boundary adjustments by January 15 March 1, 2008, and its final recommendations by January 16, 2009. The task force shall also provide a copy of its recommendations to the Legislative Reference Library.

Subd. 3.

Expenses.

The cost of preparing the report must be divided among the League of Minnesota Cities, the Coalition of Greater Minnesota Cities, and the Minnesota Association of Townships.

EFFECTIVE DATE.

This section is effective the day following final enactment. The Municipal Boundary Adjustment Advisory Task Force expires on June 30, 2008 January 16, 2009, or the day after the report required by subdivision 2 is submitted, whichever is later.

Sec. 22.

REPEALER.

Minnesota Statutes 2006, sections 414.01, subdivision 7a; 414.011, subdivision 11; and 414.12, subdivision 2, are repealed.

Sec. 23.

EFFECTIVE DATE.

This article is effective the day following final enactment.

ARTICLE 2

CONFORMING CHANGES

Section 1.

Minnesota Statutes 2006, section 4A.02, is amended to read:

4A.02 STATE DEMOGRAPHER.

(a) The director shall appoint a state demographer. The demographer must be professionally competent in demography and must possess demonstrated ability based upon past performance.

(b) The demographer shall:

(1) continuously gather and develop demographic data relevant to the state;

(2) design and test methods of research and data collection;

(3) periodically prepare population projections for the state and designated regions and periodically prepare projections for each county or other political subdivision of the state as necessary to carry out the purposes of this section;

(4) review, comment on, and prepare analysis of population estimates and projections made by state agencies, political subdivisions, other states, federal agencies, or nongovernmental persons, institutions, or commissions;

(5) serve as the state liaison with the United States Bureau of the Census, coordinate state and federal demographic activities to the fullest extent possible, and aid the legislature in preparing a census data plan and form for each decennial census;

(6) compile an annual study of population estimates on the basis of county, regional, or other political or geographical subdivisions as necessary to carry out the purposes of this section and section 4A.03;

(7) by January 1 of each year, issue a report to the legislature containing an analysis of the demographic implications of the annual population study and population projections;

(8) prepare maps for all counties in the state, all municipalities with a population of 10,000 or more, and other municipalities as needed for census purposes, according to scale and detail recommended by the United States Bureau of the Census, with the maps of cities showing precinct boundaries;

(9) prepare an estimate of population and of the number of households for each governmental subdivision for which the Metropolitan Council does not prepare an annual estimate, and convey the estimates to the governing body of each political subdivision by June 1 of each year;

(10) direct, under section 414.01, subdivision 14, and certify population and household estimates of annexed or detached areas of municipalities or towns after being notified of the order or letter of approval by the director chief administrative law judge of the State Office of Administrative Hearings;

(11) prepare, for any purpose for which a population estimate is required by law or needed to implement a law, a population estimate of a municipality or town whose population is affected by action under section 379.02 or 414.01, subdivision 14; and

(12) prepare an estimate of average household size for each statutory or home rule charter city with a population of 2,500 or more by June 1 of each year.

(c) A governing body may challenge an estimate made under paragraph (b) by filing their specific objections in writing with the state demographer by June 24. If the challenge does not result in an acceptable estimate, the governing body may have a special census conducted by the United States Bureau of the Census. The political subdivision must notify the state demographer by July 1 of its intent to have the special census conducted. The political subdivision must bear all costs of the special census. Results of the special census must be received by the state demographer by the next April 15 to be used in that year's June 1 estimate to the political subdivision under paragraph (b).

(d) The state demographer shall certify the estimates of population and household size to the commissioner of revenue by July 15 each year, including any estimates still under objection.

Sec. 2.

Minnesota Statutes 2006, section 40A.121, subdivision 1, is amended to read:

Subdivision 1.

Annexation prohibited.

Land within an agricultural preserve that is within a township may not be annexed to a municipality under chapter 414, unless the director of the Office of Strategic and Long-Range Planning chief administrative law judge of the state Office of Administrative Hearings finds that either:

(1) the owner or the county has initiated termination of the zone under section 40A.11;

(2) because of size, tax base, population or other relevant factors, the township would not be able to provide normal governmental functions and services; or

(3) the zone would be completely surrounded by lands within a municipality.

Sec. 3.

Minnesota Statutes 2006, section 272.67, subdivision 1, is amended to read:

Subdivision 1.

City powers.

Any city however organized, except in those counties situated in a metropolitan area as defined in Minnesota Statutes 1961, section 473.02, subdivision 5, which contain cities of the first class, may by ordinance adopted in the manner provided in this section divide its area into an urban service district and a rural service district, constituting separate taxing districts for the purpose of all municipal property taxes except those levied for the payment of bonds and judgments and interest thereon. In proceedings for annexation, incorporation, or consolidation being conducted pursuant to chapter 414, the director of the Office of Strategic and Long-Range Planning chief administrative law judge of the state Office of Administrative Hearings may divide a municipality into an urban service district and a rural service district, such districts to be designated in accordance with the criteria set out in subdivision 2. Thereafter, said urban service district and rural service district may be changed in the same manner that an ordinance or amendment is changed in accordance with this section.

Sec. 4.

Minnesota Statutes 2006, section 276A.09, is amended to read:

276A.09 CHANGE IN STATUS OF MUNICIPALITY.

If a municipality is dissolved, is consolidated with all or part of another municipality, annexes territory, has a portion of its territory detached from it, or is newly incorporated, the secretary of state shall immediately certify that fact to the commissioner of revenue. The secretary of state shall also certify to the commissioner of revenue the current population of the new, enlarged, or successor municipality, if determined by the director of the Office of Strategic and Long-Range Planning chief administrative law judge of the state Office of Administrative Hearings incident to consolidation, annexation, or incorporation proceedings. The population so certified shall govern for purposes of sections 276A.01 to 276A.09 until the state demographer files the first population estimate as of a later date with the commissioner of revenue. If an annexation of unincorporated land occurs without proceedings before the director of the Office of Strategic and Long-Range Planning chief administrative law judge of the state Office of Administrative Hearings, the population of the annexing municipality as previously determined shall continue to govern for purposes of sections 276A.01 to 276A.09 until the state demographer files the first population estimate as of a later date with the commissioner of revenue.

Sec. 5.

Minnesota Statutes 2006, section 365.46, subdivision 2, is amended to read:

Subd. 2.

Copies.

The county auditor shall also send a copy of the notice of the dissolution to: (1) the state demographer, (2) the Land Management Information Center, (3) the director of the Office of Strategic and Long-Range Planning chief administrative law judge of the state Office of Administrative Hearings, and (4) the commissioner of transportation.

Sec. 6.

Minnesota Statutes 2006, section 379.05, is amended to read:

379.05 AUDITOR TO SUM UP REPORT FOR STATE, MAKE TOWN RECORD.

Each county auditor shall within 30 days after any such town is organized transmit by mail to the commissioner of revenue, the secretary of state, the state demographer, the Land Management Information Center, the director of the Office of Strategic and Long-Range Planning chief administrative law judge of the state Office of Administrative Hearings, and the commissioner of transportation an abstract of such report, giving the name and boundaries of such town and record in a book kept for that purpose a full description of each such town.

Sec. 7.

Minnesota Statutes 2006, section 412.021, subdivision 1, is amended to read:

Subdivision 1.

Election.

Upon the filing of the certificate with the secretary of state, if the vote is in favor of incorporation, the judges of election appointed by the director of the Office of Strategic and Long-Range Planning chief administrative law judge of the state Office of Administrative Hearings or the county board as the case may be, shall fix a day at least 15 and not more than 30 days thereafter and a place for the holding of an election for officers. The judges shall also fix the time, not less than three hours, during which the polls shall remain open at the election and shall post a notice setting forth the time and place of such election in three public places in the city for at least ten days preceding the election.

Sec. 8.

Minnesota Statutes 2006, section 412.091, is amended to read:

412.091 DISSOLUTION.

Whenever a number of voters equal to one-third of those voting at the last preceding city election petition the director of the Office of Strategic and Long-Range Planning therefor chief administrative law judge of the state Office of Administrative Hearings to dissolve the city, a special election shall be called to vote upon the question of dissolving the city. Before the election, the director chief administrative law judge shall designate a time and place for a hearing in accordance with section 414.09. After the hearing, the director chief administrative law judge shall issue an order which shall include a date for the election, a determination of what town or towns the territory of the city shall belong to if the voters favor dissolution, and other necessary provisions. The ballots used at such election shall bear the printed words, "For Dissolution" and "Against Dissolution," with a square before each phrase in which the voter may express a preference by a cross. If a majority of those voting on the question favor dissolution, the clerk shall file a certificate of the result with the director chief administrative law judge, the secretary of state, and the county auditor of the county in which the city is situated. Six months after the date of such election, the city shall cease to exist. Within such six months, the council shall audit all claims against the city, settle with the treasurer, and other city officers, and apply the assets of the city to the payment of its debts. If any debts remain unpaid, other than bonds, the city clerk shall file a schedule of such debts with the county treasurer and the council shall levy a tax sufficient for their payment, the proceeds of which, when collected, shall be paid by the county treasurer to the creditors in proportion to their several claims until all are discharged. The principal and interest on outstanding bonds shall be paid when due by the county treasurer from a tax annually spread by the county auditor against property formerly included within the city until the bonds are fully paid. All city property and all rights of the city shall, upon dissolution, inure in the town or towns designated as the legal successor to the city. If the city territory goes to more than one town, surplus cash assets and unsold city property shall be distributed as provided by the order for the election.

Sec. 9.

Minnesota Statutes 2006, section 462.3535, subdivision 5, is amended to read:

Subd. 5.

Urban growth area boundary adjustment process.

(a) After an urban growth area has been identified in a county or city plan, a city shall negotiate, as part of the comprehensive planning process and in coordination with the county, an orderly annexation agreement with the townships containing the affected unincorporated areas located within the identified urban growth area. The agreement shall contain a boundary adjustment staging plan that establishes a sequencing plan over the subsequent 20-year period for the orderly growth of the city based on its reasonably anticipated development pattern and ability to extend municipal services into designated unincorporated areas located within the identified urban growth area. The city shall include the staging plan agreed upon in the orderly annexation agreement in its comprehensive plan. Upon agreement by the city and town, prior adopted orderly annexation agreements may be included as part of the boundary adjustment plan and comprehensive plan without regard to whether the prior adopted agreement is consistent with this section. When either the city or town requests that an existing orderly annexation agreement affecting unincorporated areas located within an identified or proposed urban growth area be renegotiated, the renegotiated plan shall be consistent with this section.

(b) After a city's community-based comprehensive plan is approved under this section, the orderly annexation agreement shall be filed with the municipal board chief administrative law judge of the state Office of Administrative Hearings or its any successor agency. Thereafter, the city may orderly annex the part or parts of the designated unincorporated area according to the sequencing plan and conditions contained in the negotiated orderly annexation agreement by submitting a resolution to the municipal board or its successor agency chief administrative law judge. The resolution shall specify the legal description of the area designated pursuant to the staging plan contained in the agreement, a map showing the new boundary and its relation to the existing city boundary, a description of and schedule for extending municipal services to the area, and a determination that all applicable conditions in the agreement have been satisfied. Within 30 days of receipt of the resolution, the municipal board or its successor chief administrative law judge shall review the resolution and if it finds that the terms and conditions of the orderly annexation agreement have been met, shall order the annexation. The boundary adjustment shall become effective upon issuance of an order by the municipal board or its successor chief administrative law judge. The municipal board or its successor chief administrative law judge shall cause copies of the boundary adjustment order to be mailed to the secretary of state, Department of Revenue, state demographer, and Department of Transportation. No further proceedings under chapter 414 or 572A shall be required to accomplish the boundary adjustment. This section provides the sole method for annexing unincorporated land within an urban growth area, unless the parties agree otherwise.

(c) If a community-based comprehensive plan is updated, the parties shall renegotiate the orderly annexation agreement as needed to incorporate the adjustments and shall refile the agreement with the municipal board or its successor chief administrative law judge.

Sec. 10.

Minnesota Statutes 2006, section 473F.13, subdivision 1, is amended to read:

Subdivision 1.

Certification of change in status.

If a municipality is dissolved, is consolidated with all or part of another municipality, annexes territory, has a portion of its territory detached from it, or is newly incorporated, the secretary of state shall immediately certify that fact to the commissioner of revenue. The secretary of state shall also certify to the commissioner of revenue the current population of the new, enlarged, or successor municipality, if determined by the director of the Office of Strategic and Long-Range Planning chief administrative law judge of the state Office of Administrative Hearings incident to consolidation, annexation, or incorporation proceedings. The population so certified shall govern for purposes of sections 473F.01 to 473F.13 until the Metropolitan Council files its first population estimate as of a later date with the commissioner of revenue. If an annexation of unincorporated land occurs without proceedings before the director chief administrative law judge, the population of the annexing municipality as previously determined shall continue to govern for purposes of sections 473F.01 to 473F.13 until the Metropolitan Council files its first population estimate as of a later date with the commissioner of revenue.

Sec. 11.

Minnesota Statutes 2006, section 473H.14, is amended to read:

473H.14 ANNEXATION PROCEEDINGS.

Agricultural preserve land within a township shall not be annexed to a municipality pursuant to chapter 414, without a specific finding by the director of the Office of Strategic and Long-Range Planning chief administrative law judge of the state Office of Administrative Hearings that either (a) the expiration period as provided for in section 473H.08 has begun; (b) the township due to size, tax base, population or other relevant factors would not be able to provide normal governmental functions and services; or (c) the agricultural preserve would be completely surrounded by lands within a municipality.

This section shall not apply to annexation agreements approved under proceedings authorized by chapter 414 prior to creation of the preserve.

Sec. 12.

Minnesota Statutes 2006, section 572A.01, subdivision 2, is amended to read:

Subd. 2.

Mediation.

Within ten days of receiving a request for mediation in subdivision 1, the Bureau of Mediation Services shall provide written notice of the request for mediation to the parties and provide a list of neutrals experienced in land use planning or local government issues obtained from the Supreme Court, Minnesota Municipal Board chief administrative law judge of the state Office of Administrative Hearings, Bureau of Mediation Services, Minnesota State Bar Association, Hennepin County Bar Association, Office of Dispute Resolution, and others. Within 30 days thereafter, the affected parties shall select a mediator from the list of neutrals or someone else acceptable to the parties and submit to mediation for a period of 30 days facilitated by the bureau. If the dispute remains unresolved after the close of the 30-day mediation period, the bureau shall prepare a report of its recommendations and transmit the report within 30 days to the parties. Within 60 days after the date of issuance of the mediator's report, the dispute shall be submitted to binding arbitration as provided in this chapter. The mediator's report submitted to the parties is informational only and is not admissible in arbitration.

Sec. 13.

Minnesota Statutes 2006, section 572A.015, subdivision 2, is amended to read:

Subd. 2.

Mediation.

Within ten days of receiving a request for mediation that the director of the Office of Strategic and Long-Range Planning chief administrative law judge of the state Office of Administrative Hearings has required under section 414.12, subdivision 1, the bureau shall provide written notice of the request for mediation to the parties and provide a list of neutrals experienced in land use planning and local government issues obtained from the Supreme Court, Bureau of Mediation Services, Minnesota State Bar Association, Hennepin County Bar Association, Office of Dispute Resolution, and others. Within 30 days thereafter, the affected parties, shall select a mediator from the list of neutrals or someone else acceptable to the parties and submit to mediation for a period of 30 days facilitated by the bureau. If the dispute remains unresolved after the close of the 30-day mediation period, the bureau shall prepare a report of its recommendations and transmit the report within 30 days to the parties. Within 60 days after the date of issuance of the mediator's report, the dispute shall be submitted to binding arbitration as provided in this chapter. The mediator's report submitted to the parties is informational only and is not admissible in arbitration.

Sec. 14.

Minnesota Statutes 2006, section 572A.02, subdivision 6, is amended to read:

Subd. 6.

Decision.

The arbitrators, after a hearing on the matter, shall make a decision regarding the dispute within 60 days and transmit an order to the parties and to the Office of Strategic and Long-Range Planning in comprehensive planning disputes or to the chief administrative law judge in chapter 414 disputes. Unless appealed by an aggrieved party within 30 days of receipt of the arbitration panel's order by the office, the office shall execute an order in accordance with the arbitration panel's order and shall cause copies of the same to be mailed to all parties entitled to mailed notice, the secretary of state, the Department of Revenue, the state demographer, individual property owners if initiated in that manner, the affected county auditor, and any other party of record. The affected county auditor shall record the order against the affected property.

Sec. 15.

REVISOR INSTRUCTION.

The revisor of statutes shall change the word "director" or "director's" to "chief administrative law judge" or "chief administrative law judge's," as appropriate, wherever the words appear in the following sections of Minnesota Statutes: 414.01, subdivisions 1b, 5, 8, 10, 11, 12, 14, and 17; 414.012; 414.02, subdivisions 1, 2, and 3; 414.031, subdivisions 1, 3, 4a, and 7; 414.0325, subdivisions 2, 3, 4, and 4a; 414.033, subdivisions 3, 5, 6, 7, and 10; 414.0335, subdivisions 1 and 2; 414.041, subdivisions 1, 2, 3, 4, 5, 6, and 7; 414.051; 414.06, subdivisions 1, 2, 3, and 5; 414.061, subdivisions 1, 2, 3a, 4, and 5; 414.063; 414.067, subdivision 3; 414.07, subdivision 2; 414.08; and 414.09, subdivisions 1, 2, and 3.

Sec. 16.

EFFECTIVE DATE.

This article is effective the day following final enactment.

Presented to the governor April 16, 2008

Signed by the governor April 17, 2008, 8:19 a.m.