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    Subdivision 1. Initiating the proceeding. (a) One or more townships and one or more
municipalities, by joint resolution, may designate an unincorporated area as in need of orderly
annexation. One or more municipalities, by joint resolution with the county, may designate an
unincorporated area in which there is no organized township government as in need of orderly
(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
(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. 1b. Notice of intent to designate an area. At least ten days before the municipality or
township adopts an orderly annexation agreement, a notice of the intent to include property in
an orderly annexation area must be published in a newspaper of general circulation in both the
township and municipality. The notice must clearly identify the boundaries of the area proposed
to be included in the orderly annexation agreement and the date, time, and place of the public
informational meeting to be held as provided in section 414.0333. The cost of providing notice
must be equally divided between the municipality and the township, unless otherwise agreed upon
by the municipality and the township. This subdivision applies only to the initial designation to
include property in an orderly annexation area subject to the orderly annexation agreement and not
to any subsequent annexation of any property from within the designated orderly annexation area.
This subdivision also does not apply when the orderly annexation agreement only designates for
immediate annexation property for which all of the property owners have petitioned to be annexed.
    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
    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
(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
(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 State 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 State 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.
History: 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; 2005 c 136 art 9 s 14; 2006 c 270 art 2 s 6,7; 2007 c 90 s 1