1.1                                        A bill for an act&#10;1.2     relating to local government; modifying municipal and county planning and &#10;1.3     zoning provisions; providing standards for preliminary plat approval in a &#10;1.4     proposed development; modifying municipal boundary adjustment provisions; &#10;1.5     establishing a municipal boundary adjustment task force; requiring a report; &#10;1.6     making certain funds available to the task force;amending Minnesota Statutes &#10;1.7     2004, sections 204B.14, subdivision 5; 394.25, subdivision 7; 394.36, &#10;1.8     subdivision 1, by adding a subdivision; 414.01, subdivision 1a; 414.02, by &#10;1.9     adding a subdivision; 414.031, subdivision 4, by adding a subdivision; 414.0325, &#10;1.10    subdivision 1, by adding a subdivision; 414.033, subdivisions 2, 12; 414.036; &#10;1.11    414.061, subdivision 5; 462.358, subdivision 3b; proposing coding for new law &#10;1.12    in Minnesota Statutes, chapter 414.&#10;1.13    BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:&#10;&#10;<a id="go.1.0.0"></a>1.14                                           <b>ARTICLE 1</b>&#10;1.15                      <b>MUNICIPAL AND COUNTY PLANNING AND ZONING PROVISIONS</b>&#10;&#10;<a id="go.1.1.0"></a>1.16        Section 1. Minnesota Statutes 2004, section 204B.14, subdivision 5, is amended to read:&#10;1.17         Subd. 5. <b>Precinct boundaries; description; maps.</b> <del>When </del><ins>If </ins> a precinct boundary &#10;1.18    has been changed<del>,</del><ins> or an annexation has occurred affecting a precinct boundary,</ins> the &#10;1.19    municipal clerk shall immediately notify the <ins>county auditor and </ins>secretary of state.  &#10;1.20    The <ins>municipal </ins>clerk shall file a corrected base map with the secretary of state <ins>and </ins>&#10;1.21    <ins>county auditor </ins>within 30 days after the boundary change was made <ins>or, in the case of an </ins>&#10;1.22    <ins>annexation, the later of:  (1) 30 days after the approval of the annexation order; or (2) the </ins>&#10;1.23    <ins>effective date of the annexation order</ins>.  Upon request, the <del>secretary of state </del><ins>county auditor </ins>&#10;1.24    shall provide a base map <ins>and precinct finder </ins>to the municipal clerk. <del>The secretary of </del>&#10;1.25    <del>state shall update the precinct boundary database, prepare a corrected precinct map, and </del>&#10;1.26    <del>provide the corrected precinct map to the county auditor and the municipal clerk who shall </del>&#10;1.27    <del>make them available for public inspection.</del><ins> The municipal clerk shall prepare a corrected </ins>&#10;2.1     <ins>precinct map and provide the corrected map to the county auditor, who shall correct the </ins>&#10;2.2     <ins>precinct finder in the statewide voter registration system and make the corrected map and </ins>&#10;2.3     <ins>precinct finder available for public inspection, and to the secretary of state, who shall </ins>&#10;2.4     <ins>update the precinct boundary database.</ins> The county auditor shall prepare and file precinct &#10;2.5     boundary maps for precincts in unorganized territories in the same manner as provided &#10;2.6     for precincts in municipalities.  For every election held in the municipality the election &#10;2.7     judges shall be furnished precinct maps as provided in section 201.061, subdivision 6.  If a &#10;2.8     municipality changes the boundary of an election precinct, <ins>or if an annexation affecting a </ins>&#10;2.9     <ins>precinct boundary occurs, </ins>the county auditor shall notify each school district with territory &#10;2.10    affected by the boundary change at least 30 days before the effective date of the change.&#10;&#10;<a id="go.1.2.0"></a>2.11        Sec. 2. Minnesota Statutes 2004, section 394.25, subdivision 7, is amended to read:&#10;2.12        Subd. 7. <b>Specific controls; other subjects.</b> (a) Specific controls pertaining to other &#10;2.13    subjects incorporated in the comprehensive plan or establishing standards and procedures &#10;2.14    to be employed in land development including, but not limited to, subdividing of land and &#10;2.15    the approval of land plats and the preservation and dedication of streets and land for other &#10;2.16    public purposes and the general design of physical improvement.&#10;2.17    <ins>(b) A county must approve a preliminary plat that meets the applicable standards </ins>&#10;2.18    <ins>and criteria contained in the county's zoning and subdivision regulations unless the </ins>&#10;2.19    <ins>county adopts written findings based on a record from the public proceedings why the </ins>&#10;2.20    <ins>application shall not be approved.</ins>&#10;2.21    <del>(b)</del><ins> (c)</ins> The controls may require that a portion of any proposed subdivision be &#10;2.22    dedicated to the public or preserved for public use as parks, recreational facilities, &#10;2.23    playgrounds, trails, wetlands, or open space. The requirement must be imposed by &#10;2.24    ordinance.&#10;2.25    <del>(c)</del><ins> (d)</ins> If a county adopts the ordinance required by paragraph <del>(b)</del><ins> (c)</ins>, the county &#10;2.26    must adopt a capital improvement program and adopt a parks and open space plan or have &#10;2.27    a parks, trails, and open space component in its comprehensive plan subject to the terms &#10;2.28    and conditions in this paragraph and in paragraphs <del>(d)</del><ins> (e)</ins> through <del>(o)</del><ins> (p)</ins>.&#10;2.29    <del>(d)</del><ins> (e)</ins> The county may choose to accept a per lot cash fee as set by ordinance from &#10;2.30    the applicant for some or all of the new lots created in the subdivision.&#10;2.31    <del>(e)</del><ins> (f)</ins> In establishing the portion to be dedicated or preserved or the per lot cash &#10;2.32    fee, the controls must consider the open space, park, recreational, or common areas and &#10;2.33    facilities that the applicant proposes to reserve for the subdivision.&#10;2.34    <del>(f)</del><ins> (g)</ins> The county must reasonably determine that it will need to acquire that portion &#10;2.35    of land for the purposes stated in this subdivision as a result of approval of the subdivision.&#10;3.1     <del>(g)</del><ins> (h)</ins> The fees or dedication must be fair, reasonable, and proportionate to the &#10;3.2     need created.&#10;3.3     <del>(h)</del><ins> (i)</ins> Any cash payments received must be placed by the county in a special fund to &#10;3.4     be used only for the purposes for which the money was obtained.&#10;3.5     <del>(i)</del><ins> (j)</ins> Any cash payments received must be used only for the acquisition and &#10;3.6     development or improvement of parks, recreational facilities, playgrounds, trails, &#10;3.7     wetlands, or open space. Cash payments must not be used for ongoing operation, &#10;3.8     maintenance, or redevelopment of parks, recreational facilities, playgrounds, trails, &#10;3.9     wetlands, or open space.&#10;3.10    <del>(j)</del><ins> (k)</ins> The county must not deny the approval of a subdivision based on an &#10;3.11    inadequate supply of parks, open spaces, trails, or recreational areas within the county.&#10;3.12    <del>(k)</del><ins> (l)</ins> The county must not condition the approval of any proposed subdivision &#10;3.13    or development on an agreement to waive the right to challenge the validity of a fee &#10;3.14    or dedication.&#10;3.15    <del>(l)</del><ins> (m)</ins> The county must use at least 75 percent of the funds collected under this &#10;3.16    subdivision according to the plan required in paragraph <del>(c)</del><ins> (d)</ins> in the township or city &#10;3.17    where the collection of funds occurs. However, the township board or city council may &#10;3.18    agree to allow the county to use these funds outside of the township or city in a manner &#10;3.19    consistent with the county parks, trails, and open space capital improvement plan or the &#10;3.20    county parks and open space component in its comprehensive plan. The remainder of the &#10;3.21    funds may be used by the county only for parks and trails connectivity and accessibility &#10;3.22    purposes. The county must annually report to cities and townships on where funds were &#10;3.23    collected and where funds were expended in the past year.&#10;3.24    <del>(m)</del><ins> (n)</ins> Previously subdivided property from which a park dedication has been &#10;3.25    received, being resubdivided with the same number of lots, is exempt from park dedication &#10;3.26    requirements. If, as a result of resubdividing the property, the number of lots is increased, &#10;3.27    then the park dedication or per lot cash fee must apply only to the net increase of lots.&#10;3.28    <del>(n)</del><ins> (o)</ins> A county must not require a dedication of a portion of a proposed subdivision &#10;3.29    or a payment in lieu of dedication in a town or city that has adopted a requirement &#10;3.30    to dedicate or a payment in place of dedication as a provision of the town or city's &#10;3.31    subdivision regulations under section  462.358, subdivision 2b, or chapter 366. &#10;3.32    <del>(o)</del><ins> (p)</ins> A county may negotiate an agreement with a town or city to share the &#10;3.33    revenue generated by dedicating a portion of a proposed subdivision or a payment in &#10;3.34    place of dedication.&#10;&#10;<a id="go.1.3.0"></a>3.35        Sec. 3. Minnesota Statutes 2004, section 394.36, subdivision 1, is amended to read:&#10;4.1         Subdivision 1. <b>Continuous or it ends.</b> <ins>Except as provided in subdivision 2 or 3, </ins>&#10;4.2     any<ins> seasonal recreational property</ins> nonconformity<ins>,</ins> including the lawful use or occupation &#10;4.3     of land or premises existing at the time of the adoption of an official control <del>hereunder </del>&#10;4.4     <ins> under this chapter,</ins> may be continued, <del>except as regulated, terminated or acquired by </del>&#10;4.5     <del>the board as provided in subdivisions 2 or 3, although such use or occupation does not </del>&#10;4.6     <del>conform to the provisions thereof, but </del><ins>including through repair, replacement, restoration, </ins>&#10;4.7     <ins>maintenance, or improvement, but not including expansion. </ins>If such nonconformity or &#10;4.8     occupancy is discontinued for a period of more than one year, or any nonconforming &#10;4.9     building or structure is destroyed by fire or other peril to the extent of 50 percent of its &#10;4.10    market value, <ins>and no building permit has been applied for within 180 days of when the </ins>&#10;4.11    <ins>property is damaged, </ins>any subsequent use or occupancy of the land or premises shall be a &#10;4.12    conforming use or occupancy. <ins>If a seasonal recreational property nonconforming building </ins>&#10;4.13    <ins>or structure is destroyed by fire or other peril to the extent of 50 percent of its market </ins>&#10;4.14    <ins>value, the board may impose reasonable conditions upon a building permit in order to </ins>&#10;4.15    <ins>mitigate any newly created impact on adjacent property.</ins>&#10;4.16    <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective retroactively from August 1, 2004.</ins>&#10;&#10;<a id="go.1.4.0"></a>4.17        Sec. 4. Minnesota Statutes 2004, section 394.36, is amended by adding a subdivision &#10;4.18    to read:&#10;4.19        <ins>Subd. 1b.</ins> <ins><b>Designated floodplains.</b></ins> <ins>Notwithstanding subdivision 1, a county </ins>&#10;4.20    <ins>shall regulate the repair, replacement, maintenance, improvement, or expansion of </ins>&#10;4.21    <ins>nonconforming uses and structures in floodplain areas to the extent necessary to maintain </ins>&#10;4.22    <ins>eligibility in the National Flood Insurance Program and not increase flood damage </ins>&#10;4.23    <ins>potential or increase the degree of obstruction to flood flows in the floodway.</ins>&#10;4.24    <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective retroactively from August 1, 2004.</ins>&#10;&#10;<a id="go.1.5.0"></a>4.25        Sec. 5. Minnesota Statutes 2004, section 462.358, subdivision 3b, is amended to read:&#10;4.26        Subd. 3b. <b>Review procedures.</b> The regulations shall include provisions regarding &#10;4.27    the content of applications for proposed subdivisions, the preliminary and final review and &#10;4.28    approval or disapproval of applications, and the coordination of such reviews with affected &#10;4.29    political subdivisions and state agencies. Subdivisions including lands abutting upon any &#10;4.30    existing or proposed trunk highway, county road or highway, or county state-aid highway &#10;4.31    shall also be subject to review. The regulations may provide for the consolidation of the &#10;4.32    preliminary and final review and approval or disapproval of subdivisions. Preliminary &#10;4.33    or final approval may be granted or denied for parts of subdivision applications. The &#10;5.1     regulations may delegate the authority to review proposals to the planning commission, &#10;5.2     but final approval or disapproval shall be the decision of the governing body of the &#10;5.3     municipality unless otherwise provided by law or charter. <ins>A municipality must approve </ins>&#10;5.4     <ins>a preliminary plat that meets the applicable standards and criteria contained in the </ins>&#10;5.5     <ins>municipality's zoning and subdivision regulations unless the municipality adopts written </ins>&#10;5.6     <ins>findings based on a record from the public proceedings why the application shall not </ins>&#10;5.7     <ins>be approved.</ins> The regulations shall require that a public hearing shall be held on all &#10;5.8     subdivision applications prior to preliminary approval, unless otherwise provided by law &#10;5.9     or charter. The hearing shall be held following publication of notice of the time and &#10;5.10    place thereof in the official newspaper at least ten days before the day of the hearing. At &#10;5.11    the hearing, all persons interested shall be given an opportunity to make presentations. &#10;5.12    A subdivision application shall be preliminarily approved or disapproved within 120 &#10;5.13    days following delivery of an application completed in compliance with the municipal &#10;5.14    ordinance by the applicant to the municipality, unless an extension of the review period has &#10;5.15    been agreed to by the applicant. When a division or subdivision to which the regulations &#10;5.16    of the municipality do not apply is presented to the city, the clerk of the municipality &#10;5.17    shall within ten days certify that the subdivision regulations of the municipality do not &#10;5.18    apply to the particular division.&#10;5.19    If the municipality or the responsible agency of the municipality fails to preliminarily &#10;5.20    approve or disapprove an application within the review period, the application shall &#10;5.21    be deemed preliminarily approved, and upon demand the municipality shall execute &#10;5.22    a certificate to that effect. Following preliminary approval the applicant may request &#10;5.23    final approval by the municipality, and upon such request the municipality shall certify &#10;5.24    final approval within 60 days if the applicant has complied with all conditions and &#10;5.25    requirements of applicable regulations and all conditions and requirements upon which &#10;5.26    the preliminary approval is expressly conditioned either through performance or the &#10;5.27    execution of appropriate agreements assuring performance. If the municipality fails to &#10;5.28    certify final approval as so required, and if the applicant has complied with all conditions &#10;5.29    and requirements, the application shall be deemed finally approved, and upon demand the &#10;5.30    municipality shall execute a certificate to that effect. After final approval a subdivision &#10;5.31    may be filed or recorded.&#10;&#10;<a id="go.2.0.0"></a>5.32                                           <b>ARTICLE 2</b>&#10;5.33                                 <b>MUNICIPAL BOUNDARY ADJUSTMENT</b>&#10;&#10;<a id="go.2.1.0"></a>5.34        Section 1. <ins><b>MUNICIPAL BOUNDARY ADJUSTMENT ADVISORY TASK </b></ins>&#10;5.35    <ins><b>FORCE ESTABLISHED.</b></ins>&#10;6.1         <ins>Subdivision 1.</ins> <ins><b>Membership.</b></ins> <ins>An advisory task force on municipal boundary </ins>&#10;6.2     <ins>adjustments is established to study and make recommendations on what, if any, changes </ins>&#10;6.3     <ins>should be made to the law governing municipal boundary adjustments. The task force </ins>&#10;6.4     <ins>shall develop recommendations regarding best practices annexation training for city and </ins>&#10;6.5     <ins>township officials to better communicate and jointly plan potential annexations. The task </ins>&#10;6.6     <ins>force is comprised of the following members:</ins>&#10;6.7     <ins>(1) two members of the senate, one appointed by the majority leader and one </ins>&#10;6.8     <ins>appointed by the minority leader;</ins>&#10;6.9     <ins>(2) two members of the house of representatives, one appointed by the speaker of the </ins>&#10;6.10    <ins>house and one appointed by the minority leader;</ins>&#10;6.11    <ins>(3) three representatives of city interests, appointed by the League of Minnesota </ins>&#10;6.12    <ins>Cities in consultation with the Association of Metropolitan Municipalities, the Coalition </ins>&#10;6.13    <ins>of Greater Minnesota Cities, and the Minnesota Association of Small Cities;</ins>&#10;6.14    <ins>(4) three representatives of township interests, appointed by the Minnesota </ins>&#10;6.15    <ins>Association of Townships; and</ins>&#10;6.16    <ins>(5) one person appointed jointly by the senate majority leader and the speaker of the </ins>&#10;6.17    <ins>house of representatives to serve as chair of the task force, selected based on knowledge </ins>&#10;6.18    <ins>and experience in municipal boundary adjustment issues and who could serve without bias </ins>&#10;6.19    <ins>towards either side of the issue of annexation.</ins>&#10;6.20    <ins>All appointing authorities shall provide for balance of geographic areas of the state and </ins>&#10;6.21    <ins>city and town interests.</ins>&#10;6.22        <ins>Subd. 2.</ins> <ins><b>Report by January 2007.</b></ins> <ins>The task force shall report its recommendations </ins>&#10;6.23    <ins>to the chairs and members of the house of representatives and senate committees with </ins>&#10;6.24    <ins>jurisdiction over municipal boundary adjustments by January 1, 2007. The task force shall </ins>&#10;6.25    <ins>also provide a copy of its recommendations to the Legislative Reference Library.</ins>&#10;6.26        <ins>Subd. 3.</ins> <ins><b>Funds available. </b></ins> <ins>Any funds remaining in the committee budgets for the </ins>&#10;6.27    <ins>house local government committee or the senate state and local government operations </ins>&#10;6.28    <ins>committee as of the 2006 adjournment of the legislature will be available to pay for the </ins>&#10;6.29    <ins>administrative expenses of the task force, including per diems and expenses of members </ins>&#10;6.30    <ins>and the services of a facilitator from the management analysis division of the Department </ins>&#10;6.31    <ins>of Administration.</ins>&#10;&#10;<a id="go.2.2.0"></a>6.32        Sec. 2. Minnesota Statutes 2004, section 414.01, subdivision 1a, is amended to read:&#10;6.33        Subd. 1a. <b>Legislative findings.</b> The legislature finds that:&#10;6.34    (1) sound urban development and preservation of agricultural land and open spaces &#10;6.35    through land use planning is essential to the continued economic growth of this state;&#10;7.1     (2) municipal government most efficiently provides governmental services in areas &#10;7.2     intensively developed for residential, commercial, industrial, and governmental purposes; &#10;7.3     and township government most efficiently provides governmental services in areas used or &#10;7.4     developed for agricultural, open space, and rural residential purposes;&#10;7.5     (3) the public interest requires that municipalities be formed when there exists or will &#10;7.6     likely exist the necessary resources to provide for their economical and efficient operation;&#10;7.7     (4) annexation to existing municipalities of unincorporated areas unable to supply &#10;7.8     municipal services should be facilitated; and&#10;7.9     (5) <del>the consolidation of municipalities should be encouraged.</del><ins> long-range joint </ins>&#10;7.10    <ins>powers planning or other cooperative efforts among counties, cities, and towns should </ins>&#10;7.11    <ins>be encouraged.</ins>&#10;&#10;<a id="go.2.3.0"></a>7.12        Sec. 3. Minnesota Statutes 2004, section 414.02, is amended by adding a subdivision &#10;7.13    to read:&#10;7.14        <ins>Subd. 1a.</ins> <ins><b>Notice of intent to incorporate.</b></ins> <ins>At least 30 days before submitting to the </ins>&#10;7.15    <ins>director the petition or resolution under this section, the township must serve the clerk of </ins>&#10;7.16    <ins>each municipality and each township that is contiguous to the township by certified mail a </ins>&#10;7.17    <ins>notice of the township's intent to incorporate.</ins>&#10;&#10;<a id="go.2.4.0"></a>7.18        Sec. 4. Minnesota Statutes 2004, section 414.031, is amended by adding a subdivision &#10;7.19    to read:&#10;7.20        <ins>Subd. 1a.</ins> <ins><b>Notice of intent to annex.</b></ins> <ins>At least 30 days before submitting to the </ins>&#10;7.21    <ins>director a petition or resolution under this section, the municipality must serve the </ins>&#10;7.22    <ins>township clerk of the affected township by certified mail a notice of the municipality's </ins>&#10;7.23    <ins>intent to annex property within the township. The notice must clearly identify the </ins>&#10;7.24    <ins>boundaries of the area proposed to be annexed.</ins>&#10;&#10;<a id="go.2.5.0"></a>7.25        Sec. 5. Minnesota Statutes 2004, section 414.031, subdivision 4, is amended to read:&#10;7.26        Subd. 4. <b>Relevant factors, order.</b> (a) In arriving at a decision, the director shall &#10;7.27    consider the following <ins>sources and </ins>factors:&#10;7.28    <ins>(1) recordings and public documents from joint informational meetings under </ins>&#10;7.29    <ins>section 414.0333 relevant to other factors listed in this subdivision;</ins>&#10;7.30    <del>(1)</del><ins> (2)</ins> present population and number of households, past population and projected &#10;7.31    population growth of the<ins> annexing municipality and</ins> subject area and adjacent units of &#10;7.32    local government;&#10;8.1     <del>(2)</del><ins> (3)</ins> quantity of land within the subject area and adjacent units of local government; &#10;8.2     and natural terrain including recognizable physical features, general topography, major &#10;8.3     watersheds, soil conditions and such natural features as rivers, lakes and major bluffs;&#10;8.4     <del>(3)</del><ins> (4)</ins> degree of contiguity of the boundaries between the annexing municipality &#10;8.5     and the subject area;&#10;8.6     <del>(4)</del><ins> (5)</ins> present pattern of physical development, planning, and intended land &#10;8.7     uses in the subject area and the annexing municipality including residential, industrial, &#10;8.8     commercial, agricultural and institutional land uses and the impact of the proposed action &#10;8.9     on those land uses;&#10;8.10    <del>(5)</del><ins> (6)</ins> the present transportation network and potential transportation issues, &#10;8.11    including proposed highway development;&#10;8.12    <del>(6)</del><ins> (7)</ins> land use controls and planning presently being utilized in the annexing &#10;8.13    municipality and the subject area, including comprehensive plans for development in &#10;8.14    the area and plans and policies of the Metropolitan Council, and whether there are &#10;8.15    inconsistencies between proposed development and existing land use controls and the &#10;8.16    reasons therefore;&#10;8.17    <del>(7)</del><ins> (8)</ins> existing levels of governmental services being provided in the annexing &#10;8.18    municipality and the subject area, including water and sewer service, fire rating and &#10;8.19    protection, law enforcement, street improvements and maintenance, administrative &#10;8.20    services, and recreational facilities and the impact of the proposed action on the delivery &#10;8.21    of said services;&#10;8.22    <ins>(9) the implementation of previous annexation agreements and orders;</ins>&#10;8.23    <del>(8)</del><ins> (10)</ins> existing or potential environmental problems and whether the proposed &#10;8.24    action is likely to improve or resolve these problems;&#10;8.25    <del>(9)</del><ins> (11)</ins> plans and programs by the annexing municipality for providing needed<ins> and </ins>&#10;8.26    <ins>enhanced</ins> governmental services to the subject area<ins> in a cost-effective and feasible manner </ins>&#10;8.27    <ins>within a reasonable time from the date of the annexation</ins>;&#10;8.28    <del>(10)</del><ins> (12)</ins> an analysis of the fiscal impact on the annexing municipality, the subject &#10;8.29    area, and adjacent units of local government, including net tax capacity and the present &#10;8.30    bonded indebtedness, and the local tax rates of the county, school district, and township;&#10;8.31    <del>(11)</del><ins> (13)</ins> relationship and effect of the proposed action on affected and adjacent &#10;8.32    school districts and communities;&#10;8.33    <del>(12)</del><ins> (14)</ins> adequacy of town government to deliver services to the subject area;&#10;8.34    <del>(13)</del><ins> (15)</ins> analysis of whether necessary governmental services can best be provided &#10;8.35    through the proposed action or another type of boundary adjustment; and&#10;9.1     <del>(14)</del><ins> (16)</ins> if only a part of a township is annexed, the ability of the remainder of the &#10;9.2     township to continue or the feasibility of it being incorporated separately or being annexed &#10;9.3     to another municipality.&#10;9.4     (b) Based upon the factors, the director may order the annexation on finding:&#10;9.5     (1) that the subject area is now, or is about to become, urban or suburban in character;&#10;9.6     (2) that municipal government in the area proposed for annexation is required to &#10;9.7     protect the public health, safety, and welfare; or&#10;9.8     (3) that the annexation would be in the best interest of the subject area.&#10;9.9     (c) If only a part of a township is to be annexed, the director shall consider whether &#10;9.10    the remainder of the township can continue to carry on the functions of government &#10;9.11    without undue hardship.&#10;9.12    (d) The director shall deny the annexation on finding that the increase in revenues for &#10;9.13    the annexing municipality bears no reasonable relation to the monetary value of benefits &#10;9.14    conferred upon the annexed area.&#10;9.15    (e) The director may deny the annexation on finding:&#10;9.16    (1) that annexation of all or a part of the property to an adjacent municipality would &#10;9.17    better serve the interests of the residents of the property; or&#10;9.18    (2) that the remainder of the township would suffer undue hardship.&#10;9.19    (f) The director may alter the boundaries of the area to be annexed by increasing or &#10;9.20    decreasing the area so as to include only that property which is now or is about to become &#10;9.21    urban or suburban in character or to add property of such character abutting the area &#10;9.22    proposed for annexation in order to preserve or improve the symmetry of the area, or to &#10;9.23    exclude property that may better be served by another unit of government.&#10;9.24    (g) The director may also alter the boundaries of the proposed annexation so as to &#10;9.25    follow visible, clearly recognizable physical features.&#10;9.26    (h) If the director determines that part of the area would be better served by another &#10;9.27    municipality or township, the director may initiate and approve annexation by conducting &#10;9.28    further hearings and issuing orders pursuant to subdivisions 3 and 4.&#10;9.29    (i) In all cases, the director shall set forth the factors which are the basis for the &#10;9.30    decision.&#10;&#10;<a id="go.2.6.0"></a>9.31        Sec. 6. Minnesota Statutes 2004, section 414.0325, subdivision 1, is amended to read:&#10;9.32        Subdivision 1. <b>Initiating the proceeding.</b> (a) One or more townships and one or &#10;9.33    more municipalities, by joint resolution, may designate an unincorporated area as in &#10;9.34    need of orderly annexation.<ins> One or more municipalities, by joint resolution with the </ins>&#10;10.1    <ins>county, may designate an unincorporated area in which there is no organized township </ins>&#10;10.2    <ins>government as in need of orderly annexation.</ins>&#10;10.3    (b) The joint resolution will confer jurisdiction on the director over annexations in &#10;10.4    the designated area and over the various provisions in said agreement by submission of &#10;10.5    said joint resolution to the director.&#10;10.6    (c) The resolution shall include a description of the designated area and the reasons &#10;10.7    for designation.&#10;10.8    (d) Thereafter, an annexation of any part of the designated area may be initiated by:&#10;10.9    (1) submitting to the director a resolution of any signatory to the joint resolution; or&#10;10.10   (2) the director.&#10;10.11   (e) Whenever a state agency, other than the pollution control agency, orders a &#10;10.12   municipality to extend a municipal service to an area, the order confers jurisdiction on the &#10;10.13   director to consider designation of the area for orderly annexation.&#10;10.14   (f) If a joint resolution designates an area as in need of orderly annexation and states &#10;10.15   that no alteration of its stated boundaries is appropriate, the director may review and &#10;10.16   comment, but may not alter the boundaries.&#10;10.17   (g) If a joint resolution designates an area as in need of orderly annexation, provides &#10;10.18   for the conditions for its annexation, and states that no consideration by the director is &#10;10.19   necessary, the director may review and comment, but shall, within 30 days, order the &#10;10.20   annexation in accordance with the terms of the resolution.&#10;&#10;<a id="go.2.7.0"></a>10.21       Sec. 7. Minnesota Statutes 2004, section 414.0325, is amended by adding a subdivision &#10;10.22   to read:&#10;10.23       <ins>Subd. 1b.</ins> <ins><b>Notice of intent to designate an area.</b></ins> <ins>At least ten days before the </ins>&#10;10.24   <ins>municipality or township adopts an orderly annexation agreement, a notice of the intent to </ins>&#10;10.25   <ins>include property in an orderly annexation area must be published in a newspaper of general </ins>&#10;10.26   <ins>circulation in both the township and municipality. The notice must clearly identify the </ins>&#10;10.27   <ins>boundaries of the area proposed to be included in the orderly annexation agreement and the </ins>&#10;10.28   <ins>date, time, and place of the public informational meeting to be held as provided in section </ins>&#10;10.29   <ins>414.0333. The cost of providing notice must be equally divided between the municipality </ins>&#10;10.30   <ins>and the township, unless otherwise agreed upon by the municipality and the township.</ins>&#10;&#10;<a id="go.2.8.0"></a>10.31       Sec. 8. Minnesota Statutes 2004, section 414.033, subdivision 2, is amended to read:&#10;10.32       Subd. 2. <b>Conditions.</b> A municipal council may by ordinance declare land annexed &#10;10.33   to the municipality and any such land is deemed to be urban or suburban in character &#10;10.34   or about to become so if:&#10;11.1    (1) the land is owned by the municipality;&#10;11.2    (2) the land is completely surrounded by land within the municipal limits;&#10;11.3    (3) the land abuts the municipality and the area to be annexed is <del>60</del><ins> 120</ins> acres or less, &#10;11.4    and the area to be annexed is not presently served by public <del>sewer</del><ins> wastewater</ins> facilities &#10;11.5    or public <del>sewer</del><ins> wastewater</ins> facilities are not otherwise available, and the municipality &#10;11.6    receives a petition for annexation from all the property owners of the land<ins>. Except as </ins>&#10;11.7    <ins>provided for by an orderly annexation agreement, the director must not accept a petition </ins>&#10;11.8    <ins>from a property owner for more than one annexation per year of property contiguous to </ins>&#10;11.9    <ins>the parcel previously annexed under this clause</ins>; or&#10;11.10   (4) the land has been approved after August 1, 1995, by a preliminary plat or final &#10;11.11   plat for subdivision to provide residential lots that average 21,780 square feet or less in &#10;11.12   area and the land is located within two miles of the municipal limits.&#10;11.13   <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective until July 1, 2007.</ins>&#10;&#10;<a id="go.2.9.0"></a>11.14       Sec. 9. Minnesota Statutes 2004, section 414.033, subdivision 12, is amended to read:&#10;11.15       Subd. 12. <b>Property taxes.</b> When a municipality annexes land under subdivision 2, &#10;11.16   clause (2), (3), or (4), property taxes payable on the annexed land shall continue to be paid &#10;11.17   to the affected town or towns for the year in which the annexation becomes effective. If &#10;11.18   the annexation becomes effective on or before August 1 of a levy year, the municipality &#10;11.19   may levy on the annexed area beginning with that same levy year. If the annexation &#10;11.20   becomes effective after August 1 of a levy year, the town may continue to levy on the &#10;11.21   annexed area for that levy year, and the municipality may not levy on the annexed area &#10;11.22   until the following levy year. <del>In the first year following the year when the municipality </del>&#10;11.23   <del>could first levy on the annexed area under this subdivision, and thereafter, property taxes </del>&#10;11.24   <del>on the annexed land shall be paid to the municipality. In the first year following the year </del>&#10;11.25   <del>the municipality could first levy on the annexed area, the municipality shall make a cash </del>&#10;11.26   <del>payment to the affected town or towns in an amount equal to 90 percent of the property </del>&#10;11.27   <del>taxes distributed to the town in regard to the annexed area in the last year the property </del>&#10;11.28   <del>taxes from the annexed area were payable to the town; in the second year, an amount </del>&#10;11.29   <del>equal to 70 percent; in the third year, an amount equal to 50 percent; in the fourth year, </del>&#10;11.30   <del>an amount equal to 30 percent; and in the fifth year, an amount equal to ten percent. The </del>&#10;11.31   <del>municipality and the affected township may agree to a different payment.</del>&#10;&#10;<a id="go.2.10.0"></a>11.32       Sec. 10. <ins><b>[414.0333] JOINT INFORMATIONAL MEETING.</b></ins>&#10;11.33   <ins>There must be a joint informational meeting of the municipal council of the annexing </ins>&#10;11.34   <ins>municipality and the town board of supervisors of the township containing the land </ins>&#10;12.1    <ins>proposed to be annexed or included in annexation proceedings under section  414.031. For </ins>&#10;12.2    <ins>an annexation under section 414.031, the joint information meeting must be held after the </ins>&#10;12.3    <ins>final mediation meeting or the final meeting held pursuant to section 414.01, subdivision </ins>&#10;12.4    <ins>16, if any, and before the hearing on the matter is held. If no mediation meetings are held, </ins>&#10;12.5    <ins>the joint informational meeting must be held after the initiating documents have been filed </ins>&#10;12.6    <ins>and before the hearing on the matter. The time, date, and place of the public informational </ins>&#10;12.7    <ins>meeting must be determined jointly by the chair of the town board of supervisors and the </ins>&#10;12.8    <ins>mayor of the annexing municipality. The chair of the town board of supervisors and </ins>&#10;12.9    <ins>the mayor must serve as the cochairs for the informational meeting. Notice of the time, </ins>&#10;12.10   <ins>date, place, and purpose of the informational meeting must be posted by the town clerk </ins>&#10;12.11   <ins>in the township's designated place for posting notices, and by the municipal clerk in the </ins>&#10;12.12   <ins>municipality's designated place for posting notices. A joint notice shall be published </ins>&#10;12.13   <ins>in a newspaper of general circulation within both the municipality and the township. </ins>&#10;12.14   <ins>All notice required by this section must be provided at least ten days before the date </ins>&#10;12.15   <ins>for the public informational meeting. At the public informational meeting, all persons </ins>&#10;12.16   <ins>appearing must have an opportunity to be heard. The municipal council, the town board of </ins>&#10;12.17   <ins>supervisors, and any resident or affected property owner may be represented by counsel </ins>&#10;12.18   <ins>and introduce evidence including, but not limited to, expert testimony into the record of the </ins>&#10;12.19   <ins>informational meeting. The clerk of the township must record minutes of the proceedings </ins>&#10;12.20   <ins>of the informational meeting and the municipal clerk must make an audio recording of </ins>&#10;12.21   <ins>the informational meeting. The township must provide the director and the municipality </ins>&#10;12.22   <ins>with a copy of the printed minutes and the municipality must provide the director and the </ins>&#10;12.23   <ins>township with a copy of the audio recording. The record of the informational meeting for </ins>&#10;12.24   <ins>a proceeding under section 414.031 is admissible in any proceeding under this chapter and </ins>&#10;12.25   <ins>shall be taken into consideration by the director or the director's designee.</ins>&#10;&#10;<a id="go.2.11.0"></a>12.26       Sec. 11. Minnesota Statutes 2004, section 414.036, is amended to read:&#10;12.27   <b>414.036 CITY REIMBURSEMENT TO TOWN TO ANNEX TAXABLE </b>&#10;12.28   <b>PROPERTY.</b>&#10;12.29   <ins>Unless otherwise agreed to by the annexing municipality and the affected town, </ins>when &#10;12.30   an order<ins> or other approval</ins> under <del>section  </del><del>414.0325</del><ins> this chapter</ins> annexes part of a town to a &#10;12.31   municipality, the <del>orderly annexation agreement between the town and municipality may</del><ins> </ins>&#10;12.32   <ins>order or other approval must</ins> provide a reimbursement from the municipality to the town &#10;12.33   for all or part of the taxable property annexed as part of the order. The reimbursement shall &#10;12.34   be completed in substantially equal payments over not less than two nor more than <del>six</del><ins> </ins>&#10;12.35   <ins>eight</ins> years from the time of annexation. <ins>The municipality must reimburse the township </ins>&#10;13.1    <ins>for all special assessments assigned by the township to the annexed property, and any </ins>&#10;13.2    <ins>portion of debt incurred by the town prior to the annexation and attributable to the property </ins>&#10;13.3    <ins>to be annexed but for which no special assessments are outstanding, in substantially equal </ins>&#10;13.4    <ins>payments over a period of not less than two or no more than eight years.</ins>&#10;&#10;<a id="go.2.12.0"></a>13.5        Sec. 12. Minnesota Statutes 2004, section 414.061, subdivision 5, is amended to read:&#10;13.6        Subd. 5. <b>Property owners may initiate.</b> Property owners may initiate proceedings &#10;13.7    for the concurrent detachment of their property from one municipality and its annexation &#10;13.8    to an adjacent municipality by a petition signed by all of them that they submit to the &#10;13.9    director accompanied by a resolution of the city council of <del>at least one</del><ins> each</ins> of the affected &#10;13.10   municipalities. The director shall conduct hearings and issue an order pursuant to section  &#10;13.11   414.09. In arriving at a decision, the director shall consider the factors in section  414.02, &#10;13.12   subdivision 3. The director shall order the proposed action on finding that it will be for the &#10;13.13   best interests of the municipalities and the property owner. In all cases, the director shall &#10;13.14   set forth the factors which are the basis for the decision. &#10;&#10;<a id="go.2.13.0"></a>13.15       Sec. 13. <ins><b>EFFECTIVE DATE.</b></ins>&#10;13.16   <ins>Section 8 is effective until July 1, 2007.</ins>&#10;