1.1                          A bill for an act 
  1.2             relating to local government; providing for joint 
  1.3             planning in certain instances; providing aid for 
  1.4             certain joint planning annexations; amending Minnesota 
  1.5             Statutes 1996, section 273.1398, subdivision 2; 
  1.6             proposing coding for new law in Minnesota Statutes, 
  1.7             chapter 414; repealing Minnesota Statutes 1996, 
  1.8             sections 368.01; 368.015; 368.85; and 394.33, 
  1.9             subdivision 2. 
  1.10  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.11     Section 1.  Minnesota Statutes 1996, section 273.1398, 
  1.12  subdivision 2, is amended to read: 
  1.13     Subd. 2.  [HOMESTEAD AND AGRICULTURAL CREDIT AID.] 
  1.14  Homestead and agricultural credit aid for each unique taxing 
  1.15  jurisdiction equals (a) the product of (1) the homestead and 
  1.16  agricultural credit aid base, and (2) the growth adjustment 
  1.17  factor, plus (b) the net tax capacity adjustment ~~and~~, plus (c) 
  1.18  the fiscal disparity adjustment, plus (d) for cities and towns 
  1.19  only, the annexation impact adjustment determined under section 
  1.20  414.038.  
  1.21     The amount of aid payable under clause (d) is not added to 
  1.22  the homestead and agricultural credit aid base. 
  1.23     Sec. 2.  [414.0321] [LAND OUTSIDE OF MUNICIPALITIES; 
  1.24  LIMITATIONS ON DEVELOPMENT.] 
  1.25     Subdivision 1.  [DEFINITIONS.] The definitions in this 
  1.26  subdivision apply to this section. 
  1.27     (a) "Agricultural development" means improvements, 
  2.1   buildings, structures, or fixtures suitable for use in farming 
  2.2   located on agricultural land, including a single-family dwelling 
  2.3   located on agricultural land that is or will be occupied by a 
  2.4   farmer and structures attached to or incidental to the use of 
  2.5   the dwelling. 
  2.6      (b) "Agricultural land" means land suitable for use in 
  2.7   farming. 
  2.8      (c) "Farming" means the cultivation of land for the 
  2.9   production of agricultural crops, the raising of poultry, the 
  2.10  production of eggs, the production of milk, the production of 
  2.11  fruit or other horticultural crops, grazing, the production of 
  2.12  livestock, aquaculture, hydroponics, or the production of forest 
  2.13  products. 
  2.14     (d) "Urban, nonfarm development" means any development that 
  2.15  is not agricultural development as defined in paragraph (a). 
  2.16     Subd. 2.  [LIMITATIONS ON DEVELOPMENT.] Urban, nonfarm 
  2.17  development, except that permitted under subdivision 3, is 
  2.18  prohibited on all unincorporated land within six miles of a 
  2.19  municipality, unless the land proposed to be developed and any 
  2.20  adjacent necessary land is first annexed to a municipality or is 
  2.21  first annexed to a municipality in accordance with joint 
  2.22  planning board approved land use plans and official controls for 
  2.23  the area developed pursuant to section 414.037.  For the 
  2.24  purposes of this subdivision, "any adjacent necessary land" 
  2.25  means (1) any unincorporated land lying between the municipality 
  2.26  and the area proposed to be developed, and (2) any 
  2.27  unincorporated land adjacent to the municipality or the area 
  2.28  proposed to be developed that is necessary to effectively 
  2.29  provide service to the unincorporated area to be developed.  
  2.30     Upon application being made for a building permit on 
  2.31  unincorporated land within six miles of a municipality, a town 
  2.32  having jurisdiction to issue the building permit shall, within 
  2.33  30 days of receipt of the application, notify the adjacent 
  2.34  municipality of the application.  The permitting authority, 
  2.35  except as provided under subdivision 3, shall deny the building 
  2.36  permit unless the land proposed for development and any adjacent 
  3.1   necessary land is first annexed to the adjacent municipality.  
  3.2   If a joint planning board has been established under section 
  3.3   414.037, the procedures established in subdivisions 4 and 5 
  3.4   apply. 
  3.5      Subd. 3.  [EXCEPTIONS.] The following categories of 
  3.6   development are excepted from subdivision 2: 
  3.7      (1) agricultural development; 
  3.8      (2) repair or limited expansion of structures in existence 
  3.9   on the effective date of this act.  For purposes of this 
  3.10  section, "repair or limited expansion of structures in existence 
  3.11  on the effective date of this act" means repair or limited 
  3.12  expansion of less than a cumulative 50 percent increase in 
  3.13  square footage of structures in existence on the effective date 
  3.14  of this act; 
  3.15     (3) construction of seasonal one- or two-family dwellings 
  3.16  located at least six miles from a municipality, if a variance or 
  3.17  other permission to construct is granted by the government 
  3.18  having jurisdiction over building permits in the area, giving 
  3.19  due consideration to septic regulations, lot size, and proximity 
  3.20  to any water basin or watercourse; or 
  3.21     (4) development which is approved by both the town where 
  3.22  the development is proposed and the nearest municipality.  If no 
  3.23  incorporated town exists in the area where the development is 
  3.24  proposed, the county must approve. 
  3.25     Subd. 4.  [ANNEXATION OF PLANNED AREAS.] Areas planned by a 
  3.26  joint planning board established under section 414.037 for 
  3.27  urban, nonfarm development proposed within two years within 
  3.28  three miles of a city of less than 5,000 or within six miles of 
  3.29  a city of 5,000 or more, may be annexed along with any adjacent 
  3.30  necessary land by the participating city by the city adopting 
  3.31  and filing a resolution so providing with the Minnesota 
  3.32  municipal board.  The municipal board may review and comment but 
  3.33  shall order the annexation within 30 days of receipt of the 
  3.34  resolution. 
  3.35     Subd. 5.  [APPEAL.] If a comprehensive plan, land use plan, 
  3.36  or other official controls approved by a joint planning board 
  4.1   established under section 414.037 do not provide for development 
  4.2   and annexation of an area which is being proposed for urban, 
  4.3   nonfarm development, and the joint planning board cannot agree 
  4.4   to amend the plan or controls to so provide, any governing body 
  4.5   participating on the joint planning board or an aggrieved 
  4.6   developer may submit a petition to the Minnesota municipal board 
  4.7   for annexation of the area proposed for urban, nonfarm 
  4.8   development.  The Minnesota municipal board shall make a 
  4.9   decision regarding annexation of the area in question within 30 
  4.10  days of receipt of the petition.  The Minnesota municipal board 
  4.11  shall conduct hearings and issue its order in accordance with 
  4.12  section 414.0325, subdivisions 3 and 4.  
  4.13     Sec. 3.  [414.037] [JOINT PLANNING; SUBDIVISION 
  4.14  REGULATIONS.] 
  4.15     Subdivision 1.  [LOCAL GOVERNMENT UNIT DEFINED.] For 
  4.16  purposes of this section, "local government unit" means a 
  4.17  statutory or home rule charter city, a town, or a county.  
  4.18  "Director" means the director of the Minnesota office of 
  4.19  strategic and long-range planning. 
  4.20     Subd. 2.  [DESIGNATED AREA DEFINED.] For purposes of this 
  4.21  section, "designated area" means unincorporated area within the 
  4.22  participating town within six miles of the corporate boundaries 
  4.23  of the municipality.  
  4.24     Subd. 3.  [JOINT PLANNING BOARD.] Upon request of the city 
  4.25  council of a home rule charter or statutory city or of a town 
  4.26  board, by resolution presented to the director of the office of 
  4.27  strategic and long-range planning under chapter 4A, a joint 
  4.28  planning board must be established for a designated area.  The 
  4.29  joint planning board must be made up of the city and the 
  4.30  adjacent towns that are referred to in the initiating 
  4.31  resolution.  Within 30 days of receipt of the initiating 
  4.32  resolution, the director shall notify the named city and towns 
  4.33  that they must appoint members to the joint planning board. 
  4.34     The director shall determine and state in the notice the 
  4.35  number of representatives that each participating local 
  4.36  government unit must appoint to serve on the joint planning 
  5.1   board.  The director's determination of each participating local 
  5.2   government unit's representation on the joint planning board 
  5.3   shall be based on the participating city's or town's proportion 
  5.4   of the total population of all participating local government 
  5.5   units.  The total combined representation of all participating 
  5.6   local government units on the joint planning board must not 
  5.7   exceed ten members, except as provided for in this subdivision.  
  5.8   The director shall state in the notice the maximum number of 
  5.9   members that each participating local government unit must 
  5.10  appoint, based on the proportion of total population, which when 
  5.11  taken collectively do not exceed ten members.  The director's 
  5.12  notice shall also state that all participating local government 
  5.13  units shall also appoint the number of representatives as stated 
  5.14  in the notice within 60 days of receipt of the notice from the 
  5.15  director.  
  5.16     At any time after appointment of all members to the joint 
  5.17  planning board by the participating local government units, the 
  5.18  governing bodies of the participating local government units may 
  5.19  by joint resolution include the counties containing the 
  5.20  designated unincorporated area.  
  5.21     If the participating local government units on the joint 
  5.22  planning board agree that the county may act as a participant, 
  5.23  the county may appoint one county commissioner from the affected 
  5.24  area to serve on the joint planning board.  If more than one 
  5.25  county is designated, each county represented on the joint 
  5.26  planning board shall appoint one county commissioner from the 
  5.27  affected area to serve on the joint planning board.  The county 
  5.28  commissioners appointed to the joint planning board do not count 
  5.29  against and are in addition to the ten-member limit.  If a 
  5.30  representative member serving on the joint planning board dies 
  5.31  or resigns, the local government unit originally appointing that 
  5.32  member shall appoint a replacement representative. 
  5.33     Subd. 4.  [POWERS OF JOINT PLANNING BOARD.] The joint 
  5.34  planning board shall exercise all planning and land use control 
  5.35  authority in the designated area and has all the powers of 
  5.36  sections 462.351 to 462.364 within the designated area.  The 
  6.1   joint planning board shall act as the governing body to exercise 
  6.2   the powers within the designated area. 
  6.3      Subd. 5.  [ADOPTION, ENFORCEMENT, AND IMPLEMENTATION OF 
  6.4   OFFICIAL CONTROLS.] The joint planning board shall adopt 
  6.5   official controls and take any other actions by a majority vote 
  6.6   authorized by sections 462.351 to 462.364 within the designated 
  6.7   area.  The participating city shall implement and enforce the 
  6.8   official controls in the designated area. 
  6.9      Subd. 6.  [COST.] The city shall provide staff for the 
  6.10  joint planning board unless otherwise agreed by the parties.  
  6.11  The cost of providing staffing for the joint planning board and 
  6.12  the cost of implementation, administration, and enforcement of 
  6.13  comprehensive plans, land use plans, and official controls 
  6.14  developed by the joint planning board shall be spread, 
  6.15  proportionately by population, among the participating local 
  6.16  government units.  Unless otherwise agreed, the city shall bill 
  6.17  each participating local government unit for its proportionate 
  6.18  share of the cost.  Unless otherwise agreed, the city shall keep 
  6.19  records of the costs associated with staffing, implementation, 
  6.20  administration, and enforcement.  Billing shall be periodic, as 
  6.21  determined by the billing authority.  
  6.22     Subd. 7.  [EXTRATERRITORIAL REGULATION.] A city may extend 
  6.23  its zoning and subdivision regulations into an adjacent 
  6.24  township, within three miles of a city of less than 5,000 and 
  6.25  within six miles of a city of 5,000 or more.  If the extension 
  6.26  is done before creation of a joint planning board, the extended 
  6.27  regulations shall continue to apply and shall supersede any 
  6.28  other such regulations in effect within the designated area 
  6.29  until the joint planning board adopts official controls.  Then, 
  6.30  the official controls adopted by the joint planning board are 
  6.31  the official controls within the designated area until amended, 
  6.32  replaced, or repealed by the joint planning board. 
  6.33     Subd. 8.  [DISSOLUTION OF JOINT PLANNING BOARD.] A joint 
  6.34  planning board may be dissolved by its filing a joint 
  6.35  resolution, that has been passed and adopted by each governing 
  6.36  body represented on the joint planning board, with the director. 
  7.1      Sec. 4.  [414.038] [AID; JOINT PLANNING BOARD ANNEXATION.] 
  7.2      Subdivision 1.  [POLICY.] The state has a responsibility to 
  7.3   encourage and promote good land use planning and, as a result, 
  7.4   the state has a responsibility to provide aid to affected 
  7.5   political subdivisions to accommodate the transition.  Each city 
  7.6   and town that is a member of a joint planning board shall 
  7.7   receive aid as provided in subdivision 2 from the state for 
  7.8   those areas that are annexed.  Each participating town's 
  7.9   homestead and agricultural credit aid is increased to compensate 
  7.10  the town for the loss of tax base due to the annexation.  Each 
  7.11  participating city's homestead and agricultural aid is increased 
  7.12  to compensate the city for the cost of extending services to the 
  7.13  annexed area. 
  7.14     Subd. 2.  [AID FORMULA.] If an area located in a town is 
  7.15  annexed to a city as planned by a joint planning board under 
  7.16  section 414.0321, homestead and agricultural credit aid under 
  7.17  section 273.1398 for that city or town includes the amount of 
  7.18  the annexation impact adjustment determined under this 
  7.19  subdivision.  The annexation impact adjustment for the city or 
  7.20  town is the product of (1) the net tax capacity of the area 
  7.21  annexed, in the case of a city, or lost to annexation, in the 
  7.22  case of a town, for taxes payable in the year the annexation is 
  7.23  completed; and (2) the city's or town's local tax rate for taxes 
  7.24  payable in the year the annexation is completed.  The amount of 
  7.25  the annexation impact adjustment must be included in homestead 
  7.26  and agricultural credit aid and paid beginning the year 
  7.27  following the year the area is annexed.  In succeeding calendar 
  7.28  years, the annexation impact adjustment is proportionally 
  7.29  reduced annually so the annexation impact adjustment in the 
  7.30  sixth year, and thereafter, is zero.  
  7.31     The county assessor shall certify to the commissioner of 
  7.32  revenue on a form prescribed by the commissioner the information 
  7.33  necessary to determine the aid. 
  7.34     Sec. 5.  [REPEALER.] 
  7.35     Minnesota Statutes 1996, sections 368.01; 368.015; 368.85; 
  7.36  and 394.33, subdivision 2, are repealed. 
  8.1      Sec. 6.  [EFFECTIVE DATE.] 
  8.2      Sections 1 to 5 are effective July 1, 1997.