2004 Minnesota Statutes

CHAPTER 414. Municipal boundary adjustments

     414.01 Enabling provisions for municipal boundary 
  adjustments. 

    Subdivision 1.    A duty of planning director.  Among 
 the duties of the director of the Office of Strategic and 
 Long-Range Planning is the duty to conduct proceedings, make 
 determinations, and issue orders for the creation of a 
 municipality, the combination of two or more governmental units, 
 or the alteration of a municipal boundary. 

    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) the consolidation of municipalities should be 
 encouraged.  

    Subd. 1b.    Goals in promoting, regulating municipal 
 development.  The director may promote and regulate 
 development of municipalities: 

    (1) to provide for the extension of municipal government to 
 areas which are developed or are in the process of being 
 developed for intensive use for residential, commercial, 
 industrial, institutional, and governmental purposes or are 
 needed for such purposes; and 

    (2) to protect the stability of unincorporated areas which 
 are used or developed for agricultural, open space, and rural 
 residential purposes and are not presently needed for more 
 intensive uses; and 

    (3) to protect the integrity of land use planning in 
 municipalities and unincorporated areas so that the public 
 interest in efficient local government will be properly 
 recognized and served. 

    Subd. 2. Repealed, 2002 c 223 s 29 

    Subd. 3. Repealed, 1996 c 303 s 19 

    Subd. 3a. Repealed, 1996 c 303 s 19 

    Subd. 4. Repealed, 1996 c 303 s 19 

    Subd. 5.    Consolidation of proceedings.  The director 
 may order the consolidation of separate proceedings in the 
 interest of economy and expedience.  

    Subd. 6.  Repealed, 1969 c 1139 s 87 subd 2 

    Subd. 6a. Repealed, 2002 c 223 s 29 

    Subd. 7.  Repealed, 1969 c 1139 s 88 subd 2 

    Subd. 7a.    Director's delegation like commissioner's.  
 A power or duty of the director under this chapter may be 
 delegated by the director as provided in section 15.06, 
 subdivision 6, clause (1), for commissioners.  

    Subd. 8.    Planning commission contracts, consultants.  
 The director may contract with regional, state, county, or local 
 planning commissions and hire expert consultants to provide 
 specialized information and assistance. 

    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 testimony of witnesses, and the production of papers, books, 
 and documents; examine witnesses; and receive and report 
 evidence. 

    Subd. 9.  Repealed, 1969 c 1146 s 20 

    Subd. 10.    Rulemaking authority.  To carry out the 
 duties and powers imposed upon the director under this chapter, 
 the director may adopt the rules, that are reasonably necessary, 
 in accordance with the procedure prescribed in the general laws 
 relating to departments and agencies of the state. 

    Subd. 11.    Schedule of filing fees.  The director may 
 prescribe a schedule of filing fees for any petitions, 
 resolutions or ordinances filed pursuant to this chapter by an 
 appropriate rule promulgated in accordance with the procedure 
 prescribed in the general laws relating to departments and 
 agencies of the state for the issuance of administrative rules. 

    Subd. 12.    Request for hearing transcripts; costs.  
 Any party may request the director to cause a transcript of the 
 hearing to be made.  Any party requesting a copy of the 
 transcript is responsible for its costs. 

    Subd. 13.  Repealed, 1969 c 1146 s 20 

    Subd. 14.    Population of changed territory, new 
 municipality.  (a) When an order or approval letter under this 
 chapter enlarges or diminishes the area of an existing 
 municipality or town, the director shall communicate the order 
 or approval letter to the municipality and the state 
 demographer.  The municipality shall prepare an estimate of 
 population and of the number of households for the annexed or 
 detached area of the municipality or town.  The estimate shall 
 be certified by the state demographer.  The estimate must 
 estimate the population as of the effective date of the order or 
 approval letter and must be so dated. 

    (b) When a new municipality is created by an order under 
 this chapter, the municipality shall request a separation census 
 from the United States Bureau of the Census and bear any costs 
 incurred.  

    Subd. 15.    Increased costs, levy period.  When an 
 order under this chapter enlarges an existing municipality or 
 creates a new municipality, the order may indicate the estimated 
 increased costs to the municipality as the result of the 
 boundary adjustment, and the time period that the municipality 
 would be allowed a levy for these increased costs. 

    Subd. 16.    Compelled meetings; report.  In any 
 proceeding under this chapter, the director or conductor of the 
 proceeding may at any time in the process require 
 representatives from the involved city, town, county, political 
 subdivision, or other governmental entity to meet together to 
 discuss resolution of issues raised by the petition or order 
 that confers jurisdiction on the director and other issues of 
 mutual concern.  The director or conductor of the proceeding may 
 require that the parties meet at least three times during a 
 60-day period.  The parties shall designate a person to report 
 to the director or conductor of the proceeding on the results of 
 the meetings immediately after the last meeting. 

    Subd. 17.    Data from state agencies.  The director may 
 request information from any state department or agency in order 
 to assist in carrying out the director's duties under this 
 chapter.  The department or agency shall promptly furnish the 
 requested information. 

    HIST: 1959 c 686 s 1; 1961 c 645 s 1; 1963 c 807 s 1-5; 1965 c 
 45 s 58; 1965 c 899 s 1-5; 1965 c 901 s 22; 1969 c 1139 s 87 
 subd 1,88 subd 1; 1969 c 1146 s 1-6; 1973 c 123 art 5 s 7; 1973 
 c 621 s 1; 1973 c 650 art 4 s 18; 1975 c 271 s 6; 1976 c 134 s 
 70-72; 1977 c 57 s 1; 1978 c 705 s 1-8; 1980 c 487 s 22; 1981 c 
 268 s 1; 1983 c 305 s 24; 1985 c 79 s 1; 1985 c 248 s 70; 1986 c 
 444; 1987 c 384 art 2 s 1; 1Sp1989 c 1 art 5 s 29; 1994 c 511 s 
 1,2; 1996 c 303 s 1-7; 1997 c 87 s 3; 2002 c 223 s 1 

     414.011 Definitions. 

    Subdivision 1.    Application.  For the purposes of this 
 chapter, the terms defined in this section have the meanings 
 given them. 

    Subd. 2.    Municipality.  "Municipality" means any 
 city, however organized. 

    Subd. 3.    Incorporated land.  "Incorporated land" 
 means land within a municipality; "unincorporated land" means 
 land outside a municipality. 

    Subd. 4.    Property, area, land.  The terms "property," 
 "area," and "land" mean geographical units of land within or 
 outside a municipality, depending upon the context in which the 
 term is used. 

    Subd. 5.    Property owner.  "Property owner" means the 
 fee owner of land, or the beneficial owner of land whose 
 interest is primarily one of possession and enjoyment.  The term 
 includes, but is not limited to, vendees under a contract for 
 deed, and mortgagors.  Any reference to a percentage of property 
 owners shall mean in number. 

    Subd. 6.    Abut, abuts, abutting.  The terms "abut," 
 "abuts," and "abutting" refer to areas whose boundaries at least 
 touch one another at a single point, including areas whose 
 boundaries would touch but for an intervening roadway, railroad, 
 waterway or parcel of publicly owned land. 

    Subd. 7.    Boundary adjustment.  "Boundary adjustment" 
 means any proceeding authorized by this chapter. 

    Subd. 8. Repealed, 2002 c 223 s 29 

    Subd. 9.    Corporate boundary map.  "Corporate boundary 
 map" means a map which accurately describes the boundaries of a 
 municipality. 

    Subd. 10.    Plat map.  "Plat map" means that document 
 recorded in the office of the county recorder in the county 
 where the area is located. 

    Subd. 11.    Director.  "Director" means the director of 
 the Office of Strategic and Long-Range Planning. 

    HIST: 1969 c 1146 s 7; 1973 c 123 art 5 s 7; 1978 c 705 s 9,10; 2002 
 c 223 s 2,3 

     414.012 Filing of maps in boundary adjustment 
  proceedings. 

    Subdivision 1.    Corporate boundary map.  A 
 municipality initiating any boundary adjustment authorized by 
 this chapter shall file with the director a corporate boundary 
 map.  Any proposed boundary adjustment shall be delineated on a 
 copy of the corporate boundary map. 

    Subd. 2.    Plat maps.  Any party initiating a boundary 
 adjustment, which includes platted land, shall file with the 
 director maps which are necessary to support and identify the 
 land description.  The maps shall include copies of plats. 

    HIST: 1978 c 705 s 11; 2002 c 223 s 4 

     414.02 Exclusive method of municipal incorporation. 

    Subdivision 1.    Initiating the proceedings.  This 
 section provides the exclusive method of incorporating a 
 municipality in Minnesota.  Proceedings for incorporation of a 
 municipality may be initiated by petition of 100 or more 
 property owners or by resolution of the town board within an 
 area which is not included within the limits of any incorporated 
 municipality and which area includes land that has been platted 
 into lots and blocks in the manner provided by law.  The 
 petition or resolution shall be submitted to the director and 
 shall state the proposed name of the municipality, the names of 
 all parties entitled to mailed notice under section 414.09, the 
 reason for requesting incorporation, and shall include a 
 proposed corporate boundary map. 

    Subd. 2.    Hearing time, place.  Upon receipt of a 
 petition or resolution made pursuant to subdivision 1, the 
 director shall designate a time and place for a hearing in 
 accordance with section 414.09. 

    Subd. 3.    Relevant factors, order.  (a) In arriving at 
 a decision, the director shall consider the following factors: 

    (1) present population and number of households, past 
 population and projected population growth for the subject area; 

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

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

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

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

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

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

    (8) fiscal impact on the subject area and adjacent units of 
 local government, including present bonded indebtedness; local 
 tax rates of the county, school district, and other governmental 
 units, including, where applicable, the net tax capacity of 
 platted and unplatted lands and the division of homestead and 
 nonhomestead property; and other tax and governmental aid 
 issues; 

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

    (10) whether delivery of services to the subject area can 
 be adequately and economically delivered by the existing 
 government; 

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

    (12) degree of contiguity of the boundaries of the subject 
 area and adjacent units of local government; and 

    (13) analysis of the applicability of the State Building 
 Code. 

    (b) Based upon these factors, the director may order the 
 incorporation on finding that: 

    (1) the property to be incorporated is now, or is about to 
 become, urban or suburban in character; or 

    (2) that the existing township form of government is not 
 adequate to protect the public health, safety, and welfare; or 

    (3) the proposed incorporation would be in the best 
 interests of the area under consideration. 

    (c) The director may deny the incorporation if the area, or 
 a part thereof, would be better served by annexation to an 
 adjacent municipality. 

    (d) The director may alter the boundaries of the proposed 
 incorporation by increasing or decreasing the area to be 
 incorporated so as to include only that property which is now, 
 or is about to become, urban or suburban in character, or may 
 exclude property that may be better served by another unit of 
 government.  The director may also alter the boundaries of the 
 proposed incorporation so as to follow visible, clearly 
 recognizable physical features for municipal boundaries. 

    (e) In all cases, the director shall set forth the factors 
 which are the basis for the decision. 

    (f) Notwithstanding any other provision of law to the 
 contrary relating to the number of wards which may be 
 established, the director may provide for election of council 
 members by wards, not less than three nor more than seven in 
 number, whose limits are prescribed in the director's order upon 
 a finding that area representation is required to accord proper 
 representation in the proposed incorporated area because of 
 uneven population density in different parts thereof or the 
 existence of agricultural lands therein which are in the path of 
 suburban development, but after four years from the effective 
 date of an incorporation the council of the municipality may by 
 resolution adopted by a four-fifths vote abolish the ward system 
 and provide for the election of all council members at large as 
 in other municipalities. 

    (g) The director's order for incorporation shall provide 
 for the election of municipal officers in accordance with 
 section 414.09.  The plan of government shall be "Optional Plan 
 A", provided that an alternate plan may be adopted pursuant to 
 section 412.551, at any time. 

    (h) The ordinances of the township in which the new 
 municipality is located shall continue in effect until repealed 
 by the governing body of the new municipality. 

    Subd. 4.    Effective date of incorporation.  The 
 incorporation shall be effective upon the election and 
 qualification of new municipal officers or on such later date as 
 is fixed by the director's order. 

    HIST: 1959 c 686 s 2; 1961 c 645 s 2; 1963 c 807 s 6,7; 1965 c 
 899 s 6-11; 1969 c 1146 s 8; 1973 c 123 art 4 s 5; 1975 c 271 s 
 6; 1978 c 705 s 12; 1986 c 444; 1988 c 719 art 5 s 84; 1989 c 
 329 art 13 s 20; 1Sp1989 c 1 art 2 s 11; 1996 c 303 s 8; 2002 c 
 223 s 5 

  414.021 Repealed, 1978 c 705 s 33 

  414.03 Repealed, 1969 c 1146 s 20 

     414.031 Annexing unincorporated property by director's 
  order. 

    Subdivision 1.    Initiating the proceeding.  (a) A 
 proceeding for the annexation of unincorporated property 
 abutting a municipality may be initiated by submitting to the 
 director and the affected township one of the following: 

    (1) a resolution of the annexing municipality; 

    (2) a resolution of the township containing the area 
 proposed for annexation; 

    (3) a petition of 20 percent of the property owners or 100 
 property owners, whichever is less, in the area to be annexed; 

    (4) a resolution of the municipal council together with a 
 resolution of the township board stating their desire to have 
 the entire township annexed to the municipality. 

    (b) The petition, or resolution shall set forth the 
 boundaries of the territory proposed for annexation, the names 
 of all parties entitled to notice under section 414.09, and the 
 reasons for requesting annexation. 

    (c) If the proceeding is initiated by a petition of 
 property owners, the petition shall be accompanied by a 
 resolution of the annexing municipality supporting the petition. 

    Subd. 2.  Repealed, 1973 c 621 s 9 

    Subd. 3.    Hearing time, place.  Upon receipt of a 
 petition or resolution initiating an annexation, the director 
 shall designate a time and a place for a hearing in accordance 
 with section 414.09. 

    Subd. 4.    Relevant factors, order.  (a) In arriving at 
 a decision, the director shall consider the following factors: 

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

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

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

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

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

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

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

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

    (9) plans and programs by the annexing municipality for 
 providing needed governmental services to the subject area; 

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

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

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

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

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

    (b) Based upon the factors, the director 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 shall consider whether the remainder of the township 
 can continue to carry on the functions of government without 
 undue hardship.  

    (d) The director 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 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 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 may also alter the boundaries of the 
 proposed annexation so as to follow visible, clearly 
 recognizable physical features.  

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

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

    Subd. 4a.    Providing for election of new municipal 
 officers.  (a) Any annexation order under this section for 
 annexation by a single municipality of an entire township shall 
 include a provision for the election of new municipal officers 
 in accordance with section 414.09.  The director of the office 
 of strategic and long-range planning, or the director's 
 designee, may also order an election of new municipal officers 
 in accordance with section 414.09 as part of any other 
 annexation order under this section if the director or the 
 director's designee determines that such an election would be 
 equitable.  

    (b) The expanded municipality shall be governed by the home 
 rule charter or statutory form which governs the annexing 
 municipality, except that any ward system for the election of 
 council members shall be inoperable.  

    (c) The ordinances of both the annexing municipality and 
 the township shall continue in effect within the former 
 boundaries until repealed by the governing body of the new 
 municipality. 

    (d) Notwithstanding any other provision of law to the 
 contrary, the director of the Office of Strategic and Long-Range 
 Planning, or the director's designee, may provide for election 
 of council members by wards, not less than three nor more than 
 seven in number, whose limits are prescribed in the director's 
 order, upon a finding that area representation is required to 
 accord proper representation in the municipality because of 
 uneven population density in different parts thereof or the 
 existence of agricultural lands therein which are in the path of 
 suburban development; but after four years from the effective 
 date of an annexation the council of the municipality may by 
 resolution adopted by a four-fifths vote abolish the ward system 
 and provide for the election of all council members at large. 

    (e) Until the effective date of the annexation order, the 
 town board and other officers of the town shall continue to 
 exercise their powers and duties under the town laws in that 
 portion of the municipality that was formerly the town, and the 
 council and other officers of the annexing municipality shall 
 continue to exercise their powers and duties in that portion of 
 the expanded municipality that was formerly the municipality.  
 Thereafter the town board and the council of the annexing 
 municipality shall have no jurisdiction within the municipality, 
 and the new municipal council and other new officers shall act 
 in respect to any matters previously undertaken by the town 
 board of supervisors or municipal council within the limits of 
 the expanded municipality, including the making of any 
 improvement and the levying of any special assessments therefor 
 in the same manner and to the same effect as if such improvement 
 had been undertaken by the municipality. 

    (f) The new municipal council may continue or discontinue 
 any board that may have previously existed in the town or former 
 municipality. 

    Subd. 5. Repealed, 1992 c 556 s 12 

    Subd. 6.    Effective date of annexation.  The 
 annexation shall be effective as of the date fixed in the 
 annexation order or on a later date fixed in the annexation 
 order. 

    Subd. 7.    Copy to county auditors.  A copy of the 
 annexation order must be delivered immediately by the director 
 to the appropriate county auditors. 

    Subd. 8.    Timing for tax levy.  For the purposes of 
 taxation, if the annexation becomes effective on or before 
 August 1 of a levy year, the municipality may levy on the 
 annexed area beginning with that same levy year.  If the 
 annexation becomes effective after August 1 of a levy year, the 
 town may continue to levy on the annexed area for that levy 
 year, and the municipality may not levy on the annexed area 
 until the following levy year. 

    HIST: 1969 c 1146 s 10; 1973 c 123 art 5 s 7; 1973 c 621 s 11; 
 1975 c 271 s 6; 1978 c 705 s 13; 1986 c 444; 1988 c 719 art 5 s 
 84; 1989 c 329 art 13 s 20; 1Sp1989 c 1 art 2 s 11; 1991 c 291 
 art 12 s 22; 1996 c 303 s 9; 2002 c 223 s 6; 2002 c 235 s 1 

  414.032 Repealed, 1978 c 705 s 33 

     414.0325 Orderly annexation in designated 
  unincorporated area. 

    Subdivision 1.    Initiating the proceeding.  (a) One or 
 more townships and one or more municipalities, by joint 
 resolution, may designate an unincorporated area as in need of 
 orderly annexation.  

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

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

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

    (1) submitting to the director a resolution of any 
 signatory to the joint resolution; or 

    (2) the director. 

    (e) 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 to consider designation of the area for orderly 
 annexation. 

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

    (g) If a joint resolution designates an area as in need of 
 orderly annexation, provides for the conditions for its 
 annexation, and states that no consideration by the director is 
 necessary, the director may review and comment, but shall, 
 within 30 days, order the annexation in accordance with the 
 terms of the resolution.  

    Subd. 1a.    Electric utility service notice.  At least 
 60 days before a petition is filed under this section or section 
 414.033, the petitioner must notify the municipality that the 
 petitioner intends to file a petition for annexation.  At least 
 30 days before a petition is filed for annexation, the 
 petitioner must be notified by the municipality that the cost of 
 electric utility service to the petitioner may change if the 
 land is annexed to the municipality.  The notice must include an 
 estimate of the cost impact of any change in electric utility 
 services, including rate changes and assessments, resulting from 
 the annexation. 

    Subd. 2.    Hearing time, place.  Upon receipt of a 
 resolution for annexation of a part of the designated area, the 
 director shall set a time and place for a hearing in accordance 
 with section 414.09. 

    Subd. 3.    Relevant factors, order.  (a) In arriving at 
 a decision, the director shall consider the factors in section 
 414.031, subdivision 4. 

    (b) Based upon factors in section 414.031, subdivision 4, 
 the director may order the annexation: 

    (1) on finding that the subject area is now or is about to 
 become urban or suburban in character and that the annexing 
 municipality is capable of providing the services required by 
 the area within a reasonable time; or 

    (2) on finding that the existing township form of 
 government is not adequate to protect the public health, safety, 
 and welfare; or 

    (3) on finding that annexation would be in the best 
 interests of the subject area.  

    (c) The director may deny the annexation if it conflicts 
 with any provision of the joint agreement.  

    (d) The director may alter the boundaries of the proposed 
 annexation by increasing or decreasing the area so as to include 
 that property within the designated area which is in need of 
 municipal services or will be in need of municipal services. 

    (e) If the annexation is denied, no proceeding for the 
 annexation of substantially the same area may be initiated 
 within two years from the date of the denial order unless the 
 new proceeding is initiated by a majority of the area's property 
 owners and the petition is supported by affected parties to the 
 resolution.  

    (f) In all cases, the director shall set forth the factors 
 which are the basis for the decision. 

    Subd. 4.    Effective date of annexation.  The 
 director's order shall be effective upon the issuance of the 
 order or at such later time as is provided in the order. 

    Subd. 4a.    Copy to county auditors.  A copy of the 
 annexation order must be delivered immediately by the director 
 to the appropriate county auditors. 

    Subd. 4b.    Timing for tax levy.  For the purposes of 
 taxation, if the annexation becomes effective on or before 
 August 1 of a levy year, the municipality may levy on the 
 annexed area beginning with that same levy year.  If the 
 annexation becomes effective after August 1 of a levy year, the 
 town may continue to levy on the annexed area for that levy 
 year, and the municipality may not levy on the annexed area 
 until the following levy year. 

    Subd. 5.    Planning in orderly annexation area.  (a) A 
 joint resolution may provide for the establishment of a board to 
 exercise planning and land use control authority within any area 
 designated as an orderly annexation area pursuant to this 
 section, in the manner prescribed by section 471.59, 
 subdivisions 2 to 8, inclusive. 

    (b) A board established pursuant to a joint resolution 
 shall have all of the powers contained in sections 462.351 to 
 462.364, and shall have the authority to adopt and enforce the 
 Uniform Fire Code promulgated pursuant to section 299F.011. 

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

    (d) If the joint resolution does not provide for joint 
 planning and land use control, the following procedures shall 
 govern: 

    (1) if the county and townships agree to exclude the area 
 from their zoning and subdivision ordinances, the municipality 
 may extend its zoning and subdivision regulations to include the 
 entire orderly annexation area as provided in section 462.357, 
 subdivision 1, and section 462.358, subdivision 1; or 

    (2) if the county and township do not agree to such 
 extraterritorial zoning and subdivision regulation by the 
 municipality, zoning and subdivision regulation within the 
 orderly annexation area shall be controlled by a three-member 
 committee with one member appointed from each of the municipal, 
 town, and county governing bodies.  

    (e) 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 Uniform Fire 
 Code promulgated pursuant to section 299F.011. 

    Subd. 6.    Validity, effect of orderly annexation 
 agreement.  An orderly annexation agreement is a binding 
 contract upon all parties to the agreement and is enforceable in 
 the district court in the county in which the unincorporated 
 property in question is located.  The provisions of an orderly 
 annexation agreement are not preempted by any provision of this 
 chapter unless the agreement specifically provides so.  If an 
 orderly annexation agreement provides the exclusive procedures 
 by which the unincorporated property identified in the agreement 
 may be annexed to the municipality, the municipality shall not 
 annex that property by any other procedure. 

    HIST: 1978 c 705 s 14; 1Sp1981 c 4 art 1 s 171,172; 1982 c 424 
 s 116; 1983 c 18 s 1; 1988 c 719 art 5 s 84; 1989 c 329 art 13 s 
 20; 1Sp1989 c 1 art 2 s 11; 1991 c 291 art 12 s 23; 1992 c 556 s 
 4; 1994 c 511 s 3; 1996 c 303 s 10-12; 1997 c 202 art 5 s 2; 
 2002 c 223 s 7; 2002 c 236 s 1 

     414.033 Annexation by ordinance. 

    Subdivision 1.    Unincorporated property.  
 Unincorporated property abutting a municipality may be annexed 
 to the municipality by ordinance as provided for in this section.

    Subd. 2.    Conditions.  A municipal council may by 
 ordinance declare land annexed to the municipality and any such 
 land is deemed to be urban or suburban in character or about to 
 become so if: 

    (1) the land is owned by the municipality; 

    (2) the land is completely surrounded by land within the 
 municipal limits; 

    (3) the land abuts the municipality and the area to be 
 annexed is 60 acres or less, and the area to be annexed is not 
 presently served by public sewer facilities or public sewer 
 facilities are not otherwise available, and the municipality 
 receives a petition for annexation from all the property owners 
 of the land; or 

    (4) the land has been approved after August 1, 1995, by a 
 preliminary plat or final plat for subdivision to provide 
 residential lots that average 21,780 square feet or less in area 
 and the land is located within two miles of the municipal limits.

    Subd. 2a. Repealed, 1997 c 202 art 5 s 9 

    Subd. 2b.    Notice, hearing required.  Before a 
 municipality may adopt an ordinance under subdivision 2, clause 
 (2), (3), or (4), a municipality must hold a public hearing and 
 give 30 days' written notice by certified mail to the town or 
 towns affected by the proposed ordinance and to all landowners 
 within and contiguous to the area to be annexed.  

    Subd. 3.    60 percent bordered and 40 acres or less.  If the 
 perimeter of the area to be annexed by a municipality is 60 
 percent or more bordered by the municipality and if the area to 
 be annexed is 40 acres or less, the municipality shall serve 
 notice of intent to annex upon the town board and the director, 
 unless the area is appropriate for annexation by ordinance under 
 subdivision 2, clause (3).  The town 
 board shall have 90 days from the date of 
 service to serve objections with the director.  If no objections 
 are forthcoming within the said 90-day period, such land may be 
 annexed by ordinance.  If objections are filed with the 
 director, the director shall conduct hearings and issue an order 
 as in the case of annexations under section 414.031, 
 subdivisions 3 and 4. 

    Subd. 4.  Repealed, 1978 c 705 s 33 

    Subd. 5.    Petition by property owners; objections; 
 procedure.  If the land is platted, or, if unplatted, does not 
 exceed 200 acres, a majority of the property owners in number 
 may petition the municipal council to have such land included 
 within the abutting municipality and, within ten days 
 thereafter, shall file copies of the petition with the director, 
 the town board, the county board and the municipal council of 
 any other municipality which borders the land to be annexed.  
 Within 90 days from the date of service, the town board or the 
 municipal council of such abutting municipality may submit 
 written objections to the annexation to the director and the 
 annexing municipality.  Upon receipt of such objections, the 
 director shall proceed to hold a hearing and issue an order in 
 accordance with section 414.031, subdivisions 3 and 4.  If 
 written objections are not submitted within the time specified 
 in this section and if the municipal council determines that 
 property proposed for the annexation is now or is about to 
 become urban or suburban in character, it may by ordinance 
 declare such land annexed to the municipality.  If the petition 
 is not signed by all the property owners of the land proposed to 
 be annexed, the ordinance shall not be enacted until the 
 municipal council has held a hearing on the proposed annexation 
 after at least 30 days' mailed notice to all property owners 
 within the area to be annexed. 

    Subd. 6.    If pending proceeding; waivers from parties. 
  Whenever a proceeding for annexation is initiated under this 
 section and all or any part of the land is included in another 
 boundary adjustment proceeding pending before the director, no 
 action thereon shall be taken by the municipality, unless 
 otherwise provided by an order of the director, until final 
 disposition has been made of the pending petition.  Under this 
 section, the director will accept a waiver from all parties 
 having a right to object, stating they have no objections to the 
 proposed annexation and waiving the 90 day period before an 
 annexation ordinance may be adopted. 

    Subd. 7.    Filing; effective date; copy to auditors.  
 Any annexation ordinance provided for in this section must be 
 filed with the director, the township, the county auditor and 
 the secretary of state and is final on the date the ordinance is 
 approved by the director.  A copy of the annexation ordinance 
 must be delivered immediately by the governing body of the 
 municipality to the appropriate county auditors.  

    Subd. 8. Repealed, 1980 c 487 s 23 

    Subd. 9. Repealed, 1997 c 87 s 4 

    Subd. 10.    Director may require additional information. 
  The director may require the city or property owners to 
 furnish additional information concerning an annexation by 
 ordinance to inform the director about the extent to which the 
 proposed annexation conforms to the statutory criteria set forth 
 in sections 414.01, subdivision 1, and 414.031, subdivision 4. 

    Subd. 11.    When annexed land is in floodplain or 
 shoreland area.  When a municipality declares land annexed to 
 the municipality under subdivision 2, clause (3), and the land 
 is within a designated floodplain, as provided by section 
 103F.111, subdivision 4, or a shoreland area, as provided by 
 section 103F.205, subdivision 4, the municipality shall adopt or 
 amend its land use controls to conform to chapter 103F, and any 
 new development of the annexed land shall be subject to chapter 
 103F. 

    Subd. 12.    Property taxes.  When a municipality 
 annexes land under subdivision 2, clause (2), (3), or (4), 
 property taxes payable on the annexed land shall continue to be 
 paid to the affected town or towns for the year in which the 
 annexation becomes effective.  If the annexation becomes 
 effective on or before August 1 of a levy year, the municipality 
 may levy on the annexed area beginning with that same levy 
 year.  If the annexation becomes effective after August 1 of a 
 levy year, the town may continue to levy on the annexed area for 
 that levy year, and the municipality may not levy on the annexed 
 area until the following levy year.  In the first year following 
 the year when the municipality could first levy on the annexed 
 area under this subdivision, and thereafter, property taxes on 
 the annexed land shall be paid to the municipality.  In the 
 first year following the year the municipality could first levy 
 on the annexed area, the municipality shall make a cash payment 
 to the affected town or towns in an amount equal to 90 percent 
 of the property taxes distributed to the town in regard to the 
 annexed area in the last year the property taxes from the 
 annexed area were payable to the town; in the second year, an 
 amount equal to 70 percent; in the third year, an amount equal 
 to 50 percent; in the fourth year, an amount equal to 30 
 percent; and in the fifth year, an amount equal to ten percent.  
 The municipality and the affected township may agree to a 
 different payment. 

    Subd. 13.    Electric utility service notice; cost impact. 
  At least 60 days before a petition is filed under section 
 414.0325 or this section, the petitioner must notify the 
 municipality that the petitioner intends to file a petition for 
 annexation.  At least 30 days before a petition is filed for 
 annexation, the petitioner must be notified by the municipality 
 that the cost of electric utility service to the petitioner may 
 change if the land is annexed to the municipality.  The notice 
 must include an estimate of the cost impact of any change in 
 electric utility services, including rate changes and 
 assessments, resulting from the annexation.  

    HIST: 1969 c 1146 s 12; 1975 c 271 s 6; 1978 c 705 s 15-21; 
 1979 c 50 s 52; 1985 c 30 s 2,3; 1991 c 291 art 12 s 24; 1992 c 
 556 s 5-8; 1994 c 511 s 4-8; 1996 c 303 s 13,14; 1997 c 31 art 3 
 s 14,15; 1997 c 202 art 5 s 3-5; 2002 c 223 s 8-12 

     414.0335 If PCA-ordered governmental service extension. 

    Subdivision 1.    Annexation-by-ordinance alternative.  
 If a determination or order by the pollution control agency, 
 under section 115.49 or other similar statute is made, that 
 cooperation by contract is necessary and feasible between a 
 municipality and an unincorporated area located outside the 
 existing corporate limits of a municipality, the municipality 
 required to provide or extend through a contract a governmental 
 service to an unincorporated area, during the statutory 90-day 
 period provided in section 115.49 to formulate a contract, may 
 in the alternative to formulating a service contract to provide 
 or extend the service, declare the unincorporated area described 
 in the Pollution Control Agency's determination letter or order 
 annexed to the municipality by adopting an ordinance and 
 submitting it to the director.  

    Subd. 2.    Director's role.  The director may review 
 and comment on the ordinance but shall approve the ordinance 
 within 30 days of receipt.  The ordinance is final and the 
 annexation is effective on the date the director approves the 
 ordinance.  

    Subd. 3.    City to amend plan and controls.  
 Thereafter, the city shall amend its comprehensive plan and 
 official controls in accordance with chapter 462. 

    HIST: 1997 c 202 art 5 s 6; 2002 c 223 s 13 

  414.034 Repealed, 1978 c 705 s 33 

     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 
 municipal services to the annexed area. 

    HIST: 1978 c 705 s 22; 1979 c 50 s 53; 1987 c 50 s 1; 1989 c 
 277 art 4 s 46; 2002 c 223 s 14 

     414.036 City reimbursement to town to annex 
  taxable property. 

    When an order under section 414.0325 annexes part of a town 
 to a municipality, the orderly annexation agreement between the 
 town and municipality may provide a reimbursement from the 
 municipality to the town for all or part of the taxable property 
 annexed as part of the order.  The reimbursement shall be 
 completed in substantially equal payments over not less than two 
 nor more than six years from the time of annexation. 

    HIST: 1981 c 189 s 1; 2002 c 223 s 15 

     414.038 Effect of annexation on township roads. 

    Whenever a municipality annexes property abutting one side 
 of a township road, the segment of road abutting the annexed 
 property must be treated as a line road and is subject to 
 section 164.14.  Whenever a municipality annexes the property on 
 both sides of a township road, that portion of road abutting the 
 annexed property ceases to be a town road and becomes the 
 obligation of the annexing municipality.  This section does not 
 prohibit the annexing municipality from contracting with the 
 township for continued maintenance of the road.  Any portion of 
 a township road that ceases to be a township road pursuant to 
 this section may still be counted as a township road for the 
 road-and-bridge account revenues for the year in which the 
 annexation occurs. 

    HIST: 1Sp2003 c 19 art 2 s 60 

     414.039 Effect of annexation on easements. 

    If a municipality annexes property in which the affected 
 township holds any easement for the benefit of the public, the 
 township's easement interest continues unless otherwise agreed 
 to by the township.  

    HIST: 1Sp2003 c 19 art 2 s 61 

  414.04 Repealed, 1969 c 1146 s 20 

     414.041 Consolidation of municipalities. 

    Subdivision 1.    Initiating the proceeding.  (a) Two or 
 more municipalities may be the subject of a single proceeding 
 provided that each municipality abuts at least one of the 
 included municipalities.  

    (b) The proceeding shall be initiated in one of the 
 following ways:  

    (1) submitting to the director a resolution of the city 
 council of each affected municipality; 

    (2) submitting to the director a petition signed by a 
 number of residents eligible to vote equivalent to five percent 
 or more of the resident voters of a municipality who voted for 
 governor at the last general election; or 

    (3) by the director.  

    (c) The petition or resolution shall set forth the 
 following information about each included municipality:  name, 
 description of boundaries, the reasons for requesting the 
 consolidation and the names of all parties entitled to mailed 
 notice under section 414.09.  

    (d) The party initiating the proceeding shall serve copies 
 of the petition or resolution on all of the included 
 municipalities. 

    Subd. 2.    Consolidation commission.  Upon receipt of a 
 petition or a resolution requesting consolidation or upon the 
 director's own motion, the director shall appoint a 
 consolidation commission from a list of ten candidates submitted 
 by each affected city council.  The commission shall be composed 
 of not fewer than five members from each affected municipality.  
 From a separate list of three persons submitted by each affected 
 city council, the director shall appoint a commission chair who 
 is not a resident of an affected municipality but who resides in 
 an affected county.  

    No person is disqualified from serving on a consolidation 
 commission by reason of holding other elected or appointed 
 office.  Consolidation commission members shall hold office 
 until a consolidation report has been issued by the commission.  
 The director shall fill vacancies in the commission by 
 appointment.  The consolidation commission shall make rules with 
 reference to its operation and procedures including quorum 
 requirements with reference to its operations and procedures.  

    Subd. 3.    Commission's hearing and report.  (a) The 
 consolidation commission shall conduct hearings regarding the 
 proposed consolidation.  

    (b) The hearings shall include, but are not limited to, the 
 following subjects:  

    (1) the contents of any city charter for the proposed 
 consolidated city or the form of government of the proposed 
 consolidated city; 

    (2) analysis of whether a ward system shall be included in 
 the form of government of the proposed consolidated city; and 

    (3) each factor considered by the director under section 
 414.02, subdivision 3. 

    (c) Based on these factors and upon other matters which 
 come before the consolidation commission, the commission shall 
 issue a report to the director with findings and recommendations 
 within two years from the date of the director's initial 
 appointment of the commission.  

    Subd. 4.    Director's hearing and notice.  Upon receipt 
 of the commission's report, the director shall designate a time 
 and a place for a hearing in accordance with section 414.09. 

    Subd. 5.    Relevant factors, order.  (a) In arriving at 
 a decision, the director shall consider the factors in section 
 414.02, subdivision 3. 

    (b) The director shall consider and may accept, amend, 
 return to the commission for amendment or further study, or 
 reject the commission's findings and recommendations based upon 
 the director's written determination of what is in the best 
 interests of the affected municipalities.  

    (c) The director shall order the consolidation on finding 
 that consolidation will be for the best interests of the 
 municipalities.  In all cases, the director shall set forth the 
 factors which are the basis for the decision.  

    (d) If the director orders consolidation, the order shall 
 provide for election of new municipal officers in accordance 
 with section 414.09. 

    (e) If the most populous of the included municipalities is 
 a statutory city, the new municipality shall be a statutory city 
 and the plan of government shall be Optional Plan A, provided 
 that an alternate plan may be adopted pursuant to section 
 412.551, at any time.  If the most populous of the included 
 municipalities is a home rule charter city or organized under a 
 statute other than chapter 412, the new municipality shall be 
 governed by its home rule charter or the statutory form under 
 which it is governed except that any ward system for the 
 election of council members shall be inoperable. 

    (f) If the commission's findings and recommendations 
 include a proposed home rule charter for the new municipality, 
 the order may combine the issue of the adoption of the charter 
 and the vote on approval of the order for consolidation into one 
 question on the ballot, and shall submit it in a special or 
 general election as provided in section 410.10. 

    (g) The ordinances of all of the included municipalities 
 shall continue in effect within their former boundaries until 
 repealed by the governing body of the new municipality. 

    (h) Notwithstanding any other provision of law to the 
 contrary, the order may establish a ward system in the new 
 municipality, in which event the order shall establish not less 
 than three nor more than seven wards, each of which shall elect 
 one council member.  When more than two years have elapsed after 
 consolidation, the governing body may, by a four-fifths vote, 
 abolish the ward system. 

    (i) The new municipality shall assume the name of the most 
 populous municipality unless previous to the election another 
 name is chosen by joint resolution of a majority of the included 
 municipalities or by the consolidation commission. 

    (j) The number of license privileges existing in the 
 included municipalities prior to consolidation and pursuant to 
 state law shall not be diminished as a result of the 
 consolidation. 

    (k) If the consolidation is denied or defeated in a 
 referendum, no proceeding for the consolidation of the same 
 municipalities may be initiated within two years from the date 
 of the order unless authorized by the director. 

    Subd. 6.    Final approval; petition; referenda.  (a) If 
 the consolidation was initiated by a petition of the resident 
 voters of a municipality, the order for consolidation shall be 
 final upon approval by resolution of the city councils in each 
 of the affected municipalities unless ten percent or more of the 
 resident voters of an affected municipality who voted for 
 governor at the last general election petition the city council 
 for a referendum on the consolidation.  The petition must be 
 submitted within 90 days of the final date of the order or the 
 date of final approval of the order by the city councils, 
 whichever is later. 

    (b) Upon receipt and verification of the petition, the 
 director shall order the municipalities to conduct separate 
 referenda at a general or special election in each municipality 
 on the same day, and the referenda shall be held within six 
 months of the receipt of the petition. 

    (c) Costs of the respective referenda shall be borne by the 
 respective municipality.  A majority of those voting in each 
 city must approve the proposed consolidation.  The results of 
 the referenda shall be certified to the director by the chief 
 election judge within ten days after the referenda.  The 
 director shall upon receipt of the certificate notify all 
 parties of the election results. 

    (d) If the consolidation was initiated by a city council 
 resolution of each affected municipality, the order for 
 consolidation shall be final unless ten percent or more of the 
 resident voters of an affected municipality petition for a 
 referendum as provided in paragraph (a).  

    (e) If the consolidation was initiated by the director, no 
 director's consolidation order involving existing municipalities 
 shall become effective unless adopted by the council of each 
 affected municipality by a majority vote and unless the 
 consolidation order is approved by the qualified voters of the 
 affected municipalities at a general or special election set 
 according to law.  The form of the ballot shall be fixed by the 
 director; and, if a majority of the votes cast on the question 
 in each municipality are in favor of its adoption, the order 
 shall become effective as provided herein.  

    (f) Notwithstanding a disapproval of the order for 
 consolidation by a city council of an affected municipality 
 required to approve the order in paragraph (a) or (e), the order 
 for consolidation shall nevertheless be deemed approved by that 
 city council if ten percent or more of the resident voters of 
 that municipality who voted for governor at the last general 
 election petition the city council for a referendum on the 
 consolidation as provided in paragraph (a), and a majority of 
 those voting in that municipality approve the order for 
 consolidation.  

    Subd. 7.    Differential taxation for up to five years.  
 Where one municipality is receiving substantially fewer 
 municipal services, the director may provide that the tax rate 
 of the municipality shall be increased in substantially equal 
 proportions over a period of not more than five years to 
 equality with the tax rate in the remainder of the new 
 municipality.  The period shall be determined by the director on 
 the basis of the period reasonably required to provide 
 substantially equal municipal services. 

    Subd. 8.    Effective date of consolidation.  The 
 consolidation shall be effective upon the election and 
 qualification of new municipal officers, or at such later date 
 as set by the order. 

    HIST: 1969 c 1146 s 13; 1973 c 123 art 5 s 7; 1973 c 621 s 5; 
 1975 c 271 s 6; 1978 c 705 s 23; 1979 c 287 s 1; 1986 c 444; 
 1989 c 277 art 4 s 47; 1996 c 303 s 15,16; 2002 c 223 s 16; 2004 
 c 293 art 2 s 47 

  414.05 Repealed, 1969 c 1146 s 20 

     414.051 Review of townships of more than 2,000 
  population. 

    After each federal census the director may determine the 
 townships which have a population in excess of 2,000 exclusive 
 of any municipality or part of a municipality within the 
 township and make recommendations which the director considers 
 necessary and reasonable to the board of any such township. 

    HIST: 1969 c 1146 s 14; 1975 c 271 s 6; 1981 c 357 s 106; 2002 
 c 223 s 17 

     414.06 Detachment of property from a municipality. 

    Subdivision 1.    Initiating the proceeding.  Property 
 which is situated within a municipality and abutting the 
 municipal boundary, rural in character and not developed for 
 urban residential, commercial, or industrial purposes may be 
 detached from the municipality according to the following 
 procedure.  The proceeding may be initiated by submitting to the 
 director a resolution of the municipality to which the land is 
 attached or by submitting to the director a petition of all of 
 the property owners of the land to be detached if the area is 
 less than 40 acres or of 75 percent of the property owners if 
 over 40 acres.  The petition or resolution shall set forth the 
 boundaries and the area of the land to be detached, the number 
 and character of the buildings, the resident population, and the 
 municipal improvements, if any, in the area. 

    Subd. 2.    Hearing, if needed.  If both a resolution of 
 the municipality and a petition by all the property owners are 
 submitted, no hearing is necessary.  In any other case, upon 
 receipt of a petition or resolution, the director shall 
 designate a time and place for a hearing in accordance with 
 section 414.09. 

    Subd. 3.    Order.  Upon completion of the hearing, the 
 director may order the detachment on finding that the requisite 
 number of property owners have signed the petition if initiated 
 by the property owners, that the property is rural in character 
 and not developed for urban residential, commercial or 
 industrial purposes, that the property is within the boundaries 
 of the municipality and abuts a boundary, that the detachment 
 would not unreasonably affect the symmetry of the detaching 
 municipality, and that the land is not needed for reasonably 
 anticipated future development.  The director may deny the 
 detachment on finding that the remainder of the municipality 
 cannot continue to carry on the functions of government without 
 undue hardship.  The director may decrease the area of property 
 to be detached and may include only a part of the proposed area 
 to be detached.  If the tract abuts more than one township, it 
 shall become a part of each township, being divided by 
 projecting through it the boundary line between the townships.  
 The detached area may be relieved of the primary responsibility 
 for existing indebtedness of the municipality and be required to 
 assume the indebtedness of the township of which it becomes a 
 part, in such proportion as the director shall deem just and 
 equitable having in view the amount of taxes due and delinquent 
 and the indebtedness of each township and the municipality 
 affected, if any, and for what purpose the same was incurred, 
 all in relation to the benefit inuring to the detached area as a 
 result of the indebtedness and the last net tax capacity of the 
 taxable property in each township and municipality. 

    Subd. 4.    Effective date of detachment.  The 
 detachment shall be effective upon the issuance of the order, or 
 at such later date, as provided by the order. 

    Subd. 5.    Copy to county auditors.  A copy of the 
 detachment order must be delivered immediately by the director 
 to the appropriate county auditors. 

    Subd. 6.    Timing of tax levy.  For the purposes of 
 taxation, if the detachment becomes effective on or before 
 August 1 of a levy year, the towns acquiring the detached area 
 may levy on it beginning with that same levy year.  If the 
 detachment becomes effective after August 1 of a levy year, the 
 municipality may continue to levy on the detached area for that 
 levy year, and the towns acquiring the detached area may not 
 levy on it until the following levy year. 

    HIST: 1959 c 686 s 6; 1961 c 645 s 6; 1963 c 807 s 11; 1965 c 
 899 s 15; 1969 c 1146 s 15; 1975 c 271 s 6; 1978 c 705 s 24; 
 1988 c 719 art 5 s 84; 1989 c 329 art 13 s 20; 1991 c 291 art 12 
 s 25; 2002 c 223 s 18 

     414.061 Incorporated land; concurrent detachment, annexation. 

    Subdivision 1.    Both municipalities may initiate the 
 proceeding.  Property of one municipality which abuts another 
 may be concurrently detached and annexed by the procedure set 
 forth in this section.  The proceeding shall be initiated by 
 submitting to the director resolutions of both municipalities 
 describing the land and stating their desire to detach and annex 
 the land. 

    Subd. 2.    Order.  If the resolutions are in order, the 
 director may order the detachment and annexation. 

    Subd. 3.    Effective date of order.  The concurrent 
 detachment and annexation shall be effective upon the issuance 
 of the order, or at such later date as provided by the order.  

    Subd. 3a.    Copy to county auditors.  A copy of the 
 annexation order must be delivered immediately by the director 
 to the appropriate county auditors.  

    Subd. 3b.    Timing of tax levies.  For the purposes of 
 taxation, if the annexation becomes effective on or before 
 August 1 of a levy year, the municipality acquiring the detached 
 area of another municipality may levy on it beginning with that 
 same levy year.  If the annexation becomes effective after 
 August 1 of a levy year, the municipality losing the detached 
 area may continue to levy on it for that levy year, and the 
 municipality acquiring the detached area may not levy on it 
 until the following levy year. 

    Subd. 4.    Director's initiative.  The director (1) may 
 initiate proceedings for the concurrent detachment and 
 annexation of portions of one municipality completely surrounded 
 by another municipality, or (2) may act upon the petition of all 
 of the owners of property in the completely surrounded area.  In 
 such cases the director shall conduct hearings and issue an 
 order pursuant to section 414.09.  In arriving at a decision, 
 the director shall consider the factors in section 414.02, 
 subdivision 3.  The director shall order the proposed action on 
 finding that it will be for the best interests of the 
 municipalities and the property owners.  In all cases, the 
 director shall set forth the factors which are the basis for the 
 decision. 

    Subd. 4a. Repealed, 1996 c 303 s 19 

    Subd. 5.    Property owners may initiate.  Property 
 owners may initiate proceedings for the concurrent detachment of 
 their property from one municipality and its annexation to an 
 adjacent municipality by a petition signed by all of them that 
 they submit to the director accompanied by a resolution of the 
 city council of at least one of the affected municipalities.  
 The director shall conduct hearings and issue an order pursuant 
 to section 414.09.  In arriving at a decision, the director 
 shall consider the factors in section 414.02, subdivision 3.  
 The director shall order the proposed action on finding that it 
 will be for the best interests of the municipalities and the 
 property owner.  In all cases, the director shall set forth the 
 factors which are the basis for the decision. 

    HIST: 1969 c 1146 s 16; 1973 c 621 s 6; 1975 c 271 s 6; 1978 c 
 705 s 25-27; 1985 c 30 s 4; 1Sp1986 c 3 art 1 s 53-55; 1991 c 
 291 art 12 s 26; 1994 c 511 s 9; 1996 c 303 s 17,18; 2002 c 223 
 s 19 

     414.063 Part of joint agreements may be put in orders. 

    After notice and hearing as provided in section 414.09, the 
 director may include provisions of joint agreements between 
 political subdivisions in the orders. 

    HIST: 1978 c 705 s 28; 2002 c 223 s 20 

     414.065 If state is fee owner of proposed boundary 
  adjustment land. 

    In any case in which the state is the fee owner of land 
 partly or wholly within any area proposed to be part of a 
 boundary adjustment, the executive council of the state of 
 Minnesota may petition for, or consent to, any action proceeding 
 under this chapter, if the council deems such action to be in 
 the best interests of the state. 

    HIST: 1965 c 899 s 16; 1978 c 705 s 29 

     414.067 Apportioned assets and obligations.

    Subdivision 1.    Township or municipality divided.  
 Whenever the director divides an existing governmental unit, the 
 director may apportion the property and obligations between the 
 governmental unit adding territory and the governmental unit 
 from which the territory was obtained.  The apportionment shall 
 be made in a just and equitable manner having in view the value 
 of the existing township or municipal property located in the 
 area to be added, the assets, value, and location of all the 
 taxable property in the existing township or municipality, the 
 indebtedness, the taxes due and delinquent, other revenue 
 accrued but not paid to the existing township or municipality 
 and the ability of any remainder of the township or municipality 
 to function as an effective governmental unit.  The order shall 
 not relieve any property from any tax liability for payment for 
 any bonded obligation, but the taxable property in the new 
 municipality may be made primarily liable thereon. 

    Subd. 2.    Entire town or consolidated cities.  
 When an entire township is annexed by an existing municipality, 
 or an entire township is incorporated into a new municipality, 
 or a municipality is consolidated into a new municipality, all 
 money, claims, or properties, including real estate owned, held, 
 or possessed by the annexed, incorporated township or 
 municipality, and any proceeds or taxes levied by such town or 
 municipality, collected or uncollected, shall become and be the 
 property of the new or annexing municipality with full power and 
 authority to use and dispose of the same for public purposes as 
 the council or new annexing municipality may deem best, subject 
 to the rights of creditors.  Any taxes levied to pay bonded 
 indebtedness of a town or former municipality annexed to an 
 existing municipality or incorporated or consolidated into a new 
 municipality shall be borne only by that taxable property within 
 the boundaries of the former town or municipality, provided, 
 however, the units of government concerned may by resolution of 
 their governing bodies agree that taxes levied to pay the 
 indebtedness must be levied upon all taxable property within the 
 boundaries of the new municipality.  Notwithstanding that the 
 bonded indebtedness may be payable from taxes levied on only a 
 portion of the taxable property in the new or surviving 
 municipality, the full faith and credit of the new or surviving 
 municipality must secure any outstanding bonded indebtedness to 
 which the full faith and credit of the annexed or consolidated 
 township or municipality was pledged.  If any general funds of 
 the new or surviving municipality are used to pay debt service 
 on the bonded indebtedness, the general funds must be 
 reimbursed, with or without interest, from taxes levied on 
 taxable property in the former township or municipality. 

    Subd. 3.    Revision of tax records; redistribution of 
 levies.  In an apportionment made under this section, the 
 director may order the county auditor to revise tax records and 
 respread levies at any time prior to December 15 or order the 
 county treasurer to redistribute taxes levied and receivable. 

    HIST: 1969 c 1146 s 17; 1971 c 62 s 1; 1973 c 621 s 7; 1975 c 
 271 s 6; 1978 c 705 s 30; 1997 c 219 s 4; 2002 c 223 s 21,22 

  414.068 Repealed, 1978 c 705 s 33 

     414.07 Appeals. 

    Subdivision 1.    Orders, time limit.  All orders in 
 proceedings under this chapter shall be issued within one year 
 from the date of the day of the first hearing thereon provided 
 that the time may be extended for a fixed additional period upon 
 consent of all parties of record.  Failure to so order shall be 
 deemed to be an order denying the matter.  An appeal may be 
 taken from such failure to so order in the same manner as an 
 appeal from an order as provided in subdivision 2. 

    Subd. 2.    Grounds for appeal.  (a) Any person 
 aggrieved by any order issued under this chapter may appeal to 
 the district court upon the following grounds: 

    (1) that the order was issued without jurisdiction to act; 

    (2) that the order exceeded the orderer's jurisdiction; 

    (3) that the order is arbitrary, fraudulent, capricious or 
 oppressive or in unreasonable disregard of the best interests of 
 the territory affected; or 

    (4) that the order is based upon an erroneous theory of law.

    (b) The appeal shall be taken in the district court in the 
 county in which the majority of the area affected is located.  
 The appeal shall not stay the effect of the order.  All notices 
 and other documents shall be served on both the director and the 
 attorney general's assistant assigned to the director for 
 purposes of this chapter. 

    (c) If the court determines that the action involved is 
 unlawful or unreasonable or is not warranted by the evidence in 
 case an issue of fact is involved, the court may vacate or 
 suspend the action involved, in whole or in part, as the case 
 requires.  The matter shall then be remanded for further action 
 in conformity with the decision of the court. 

    (d) To render a review of an order effectual, the aggrieved 
 person shall file with the court administrator of the district 
 court of the county in which the majority of the area is 
 located, within 30 days of the order, an application for review 
 together with the grounds upon which the review is sought. 

    (e) An appeal lies from the district court as in other 
 civil cases. 

    HIST: 1959 c 686 s 7; 1961 c 645 s 7; 1969 c 1146 s 18; 1975 c 
 271 s 6; 1976 c 239 s 42; 1978 c 705 s 31; 1983 c 247 s 150; 
 1Sp1986 c 3 art 1 s 82; 1994 c 511 s 10; 2002 c 223 s 23 

     414.08 Director may appeal from district court. 

    An appeal may be taken under the Rules of Civil Appellate 
 Procedure by the director from a final order or judgment made or 
 rendered by the district court when the director determines that 
 the final order or judgment adversely affects the public 
 interest. 

    HIST: 1965 c 834 s 1; 1975 c 271 s 6; 1976 c 239 s 43; 1983 c 
 247 s 151; 2002 c 223 s 24 

     414.09 Uniform procedures. 

    Subdivision 1.    Hearings.  (a) Proceedings initiated 
 by the submission of an initiating document or by the director 
 shall come on for hearing within 30 to 60 days from receipt of 
 the document by the director or from the date of the director's 
 action and the person conducting the hearing must submit an 
 order no later than one year from the date of the day of the 
 first hearing. 

    (b) The place of the hearing shall be in the county where a 
 majority of the affected territory is situated, and shall be 
 established for the convenience of the parties. 

    (c) The director shall mail notice of the hearing to the 
 following parties:  the township or municipality presently 
 governing the affected territory; any township or municipality 
 abutting the affected territory; the county where the affected 
 territory is situated; and each planning agency which has 
 jurisdiction over the affected area. 

    (d) The director shall see that notice of the hearing is 
 published for two successive weeks in a legal newspaper of 
 general circulation in the affected area. 

    (e) When the director exercises authority to change the 
 boundaries of the affected area so as to increase the quantity 
 of the land, the hearing shall be recessed and reconvened upon 
 two weeks' published notice in a legal newspaper of general 
 circulation in the affected area. 

    Subd. 2.    Transmittal of order.  The director shall 
 see that copies of the order are mailed to all parties entitled 
 to mailed notice of hearing under subdivision 1, the secretary 
 of state, the Department of Revenue, the state demographer, 
 individual property owners if initiated in that manner, affected 
 county auditor, and any other party of record.  The affected 
 county auditor shall record the order against the affected 
 property. 

    Subd. 3.    Elections of municipal officers.  (a) An 
 order approving an incorporation or consolidation pursuant to 
 this chapter, or an order requiring an election under section 
 414.031, subdivision 4a, shall set a date for an election of new 
 municipal officers not less than 45 days nor more than 60 days 
 after the issuance of such order.  

    (b) The director shall appoint an acting clerk for election 
 purposes, at least three election judges who shall be residents 
 of the new municipality, and shall designate polling places 
 within the new municipality. 

    (c) The acting clerk shall prepare the official election 
 ballot. 

    (d) Any person eligible to hold municipal office may file 
 an affidavit of candidacy not more than four weeks nor less than 
 two weeks before the date designated in the order for the 
 election.  

    (e) The election shall be conducted in conformity with the 
 charter and the laws for conducting municipal elections insofar 
 as applicable. 

    (f) Any person eligible to vote at a township or municipal 
 election within the area of the new municipality, is eligible to 
 vote at such election. 

    (g) Any excess in the expense of conducting the election 
 over receipts from filing fees shall be a charge against the new 
 municipality; any excess of receipts shall be deposited in the 
 treasury of the new municipality. 

    HIST: 1969 c 1146 s 19; 1973 c 123 art 5 s 7; 1975 c 271 s 6; 
 1976 c 44 s 31; 1978 c 705 s 32; 1984 c 543 s 48; 1994 c 511 s 
 11,12; 2002 c 223 s 25; 2002 c 235 s 2; 2003 c 2 art 5 s 10,17 

  414.10 Repealed, 2000 c 446 s 4 

  414.11 Repealed, 2002 c 223 s 29 

     414.12 Director's powers. 

    Subdivision 1.    Alternative dispute resolution.  (a) 
 Notwithstanding anything to the contrary in sections 414.01 to 
 414.09, the director, 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 by means of alternative dispute 
 resolution processes in place of hearings that would otherwise 
 be required pursuant to sections 414.01 to 414.09, including 
 those provided in chapter 14, in the execution of the 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. 

    Subd. 2.    Delegation of authority.  (a) The director 
 may, with the agreement of the chief administrative law judge, 
 delegate to the office of administrative hearings, in any 
 individual case or group of cases, the director's authority and 
 responsibility to conduct hearings and issue final orders 
 related to the hearings under sections 414.01 to 414.09. 

    (b) In the case of detachment of lands from a municipality, 
 if the parties do not agree to resolve a boundary adjustment 
 matter by mediation or arbitration, then the case shall be 
 referred to an administrative law judge to conduct hearings and 
 issue final orders related to the hearings under sections 414.01 
 to 414.09. 

    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 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 as provided by section 14.53. 

    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. 

    HIST: 1999 c 243 art 16 s 25; 2000 c 446 s 1; 2002 c 223 s 
 26,27