1.1 	A bill for an act
1.2 	relating to local government; providing for an
1.3 	alternative annexation process; amending Minnesota
1.4 	Statutes 2004, sections 414.031, subdivisions 1, 3, 4,
1.5 	by adding subdivisions; 414.0325, subdivision 1;
1.6 	414.033, subdivision 2; 414.036; proposing coding for
1.7 	new law in Minnesota Statutes, chapter 414.
1.8 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.9 	Section 1. [414.025] ALTERNATIVE ANNEXATION PROCESS.
1.10 		Subdivision 1.Alternative to orderly annexation. A
1.11 	municipality that determines that orderly annexation under
1.12 	section 414.0325 is not feasible may proceed under this section
1.13 	to establish a growth area for the purpose of future annexation
1.14 	of unincorporated territory which is contiguous to the
1.15 	municipality and not subject to an orderly annexation agreement
1.16 	under section 414.0325 and which the city believes is or is
1.17 	about to become developed in such a way as to require municipal
1.18 	services the city is able and willing to provide and that are
1.19 	not being provided by the town.  The growth area sought by a
1.20 	municipality under this section may be divided into multiple
1.21 	sections along the municipality's boundaries, but in no case
1.22 	shall the total growth area exceed an amount of land equal in
1.23 	size to the amount of property developed and serviced by
1.24 	municipal services, including water and wastewater, within the
1.25 	city over the immediate preceding five years, unless the total
1.26 	is less than 120 acres, in which case the growth area sought may
2.1 	be up to 120 acres.  Nothing in this section shall authorize any
2.2 	annexation of property subject to an orderly annexation
2.3 	agreement under section 414.0325 except as provided by the terms
2.4 	of that agreement.
2.5 		Subd. 2.Petition. The municipality shall file with the
2.6 	director of the office of boundary adjustments, the clerk of the
2.7 	affected town, and the clerk of any other municipality abutting
2.8 	the town, a petition for the establishment of a growth area.
2.9 	The petition shall provide the proposed boundaries for the
2.10 	growth area, copies of all documentation used to determine the
2.11 	size and location of the proposed growth area, and an outline of
2.12 	the city's plan to provide municipal services to all property
2.13 	annexed from the growth area.  The petition must also state the
2.14 	city's intended land use designation for the property when
2.15 	annexed.
2.16 		Subd. 3.Town objection. Within 60 days of receiving the
2.17 	petition, the town board may file a written objection with the
2.18 	director of the office of boundary adjustments outlining why the
2.19 	town believes the amount of property subject to the petition
2.20 	exceeds the maximum amount to which the city is entitled, or why
2.21 	the area within the boundaries identified in the city's petition
2.22 	is not the appropriate location for the growth area.  The town
2.23 	shall submit a copy of its written objection to the petitioning
2.24 	municipality.  If no objection is filed by the town, the
2.25 	municipality's petition shall become an order establishing the
2.26 	growth area described in the petition.
2.27 		Subd. 4.Other municipality objection. Within 60 days of
2.28 	receiving the petition, any other municipality abutting the town
2.29 	may file an objection to the proposed growth area with the
2.30 	director of the office of boundary adjustments.  The objection
2.31 	shall state the basis for the other municipality's concern
2.32 	regarding the proposed growth area.
2.33 		Subd. 5.Hearing. If a town files an objection under
2.34 	subdivision 3, the director of the office of boundary
2.35 	adjustments shall schedule a 60-day negotiating period between
2.36 	the municipality and the town.  If the municipality and town
3.1 	resolve all disputes regarding the petition, they shall submit a
3.2 	joint petition for the establishment of a growth area consistent
3.3 	with the agreement reached.  The joint petition shall be entered
3.4 	by the director as an order establishing a growth area for the
3.5 	purposes of this section.  If no agreement is reached, the
3.6 	director shall order the dispute to be resolved according to the
3.7 	procedures allowed under section 414.12.  If the decision maker
3.8 	finds that the city's petition is for an amount of land not in
3.9 	excess of the maximum provided for under subdivision 1, and that
3.10 	any objection to the location of the area is unwarranted, an
3.11 	order shall be issued establishing the growth area for which the
3.12 	city petitioned.  If the decision maker determines that the
3.13 	growth area sought by the city exceeds the maximum allowed under
3.14 	this section, an order shall be issued only for that portion of
3.15 	the growth area that does not exceed the maximum area allowed
3.16 	under this section.  If the decision maker determines that a
3.17 	town's objection to the location of all or a portion of the
3.18 	proposed growth area is with merit, the city's petition shall be
3.19 	denied with regard to the area inappropriately sited by the city.
3.20 	Nothing in this section shall prohibit a city from filing a new
3.21 	petition relocating any area of a growth area denied under this
3.22 	section based on an objection to the original proposed location
3.23 	for the growth area.
3.24 	If another municipality files an objection under this
3.25 	section, the director shall order a 60-day negotiating period
3.26 	between the municipalities.  If the municipalities reach an
3.27 	agreement, they shall file with the director and the affected
3.28 	town a joint petition for the establishment of a revised growth
3.29 	area.  If no agreement is reached, the director shall order the
3.30 	municipalities to settle the dispute by any means authorized by
3.31 	section 414.12.  The decision maker may deny the original
3.32 	petition, deny the objections of the objecting municipalities,
3.33 	or order the reduction in size of the proposed growth area to
3.34 	accommodate the concerns of the objecting municipality.
3.35 	No revised growth area resulting from an objection filed by
3.36 	another municipality may be larger than the one requested in the
4.1 	original petition, nor shall any area not subject to the
4.2 	original petition become subject to a growth area without a new
4.3 	petition being filed under this section.  Nothing in this
4.4 	section shall allow an objecting municipality from establishing
4.5 	a growth area of its own without filing a petition under this
4.6 	section.
4.7 		Subd. 6.Annexation by ordinance. At any time following
4.8 	the establishment of a growth area under this section, the
4.9 	municipality may annex by ordinance any property in the urban
4.10 	growth area for which all of the property's owners have
4.11 	petitioned for annexation.  In the case of a proposed platted
4.12 	residential subdivision, the municipality may annex all property
4.13 	subject to the subdivision upon receipt of a petition for
4.14 	annexation signed by all the owners of at least 51 percent of
4.15 	the property.  Prior to the adoption of an ordinance under this
4.16 	section, the municipality shall hold a public hearing following
4.17 	at least 30 days' notice by certified mail to the town and all
4.18 	directly affected land owners.
4.19 		Subd. 7.Joint planning. Within 90 days of any order
4.20 	establishing a growth area under this section, the municipality
4.21 	and town shall establish a joint planning board which shall have
4.22 	sole jurisdiction to exercise all planning and land use
4.23 	authority, including serving as the governing body and board of
4.24 	appeals, under chapter 462, for the property subject to the
4.25 	growth area prior to that property being annexed.  Until the
4.26 	time the joint planning board shall adopt new regulations, any
4.27 	property subject to a growth area shall be subject to any town
4.28 	or county land use regulation in place prior to the
4.29 	establishment of the growth area.  Following annexation, the
4.30 	property shall be subject to the annexing municipality's zoning
4.31 	classifications and land use regulations.  The joint planning
4.32 	board shall consist of two representatives appointed by the city
4.33 	council, two representatives appointed by the town board of
4.34 	supervisors, and one representative appointed by the county
4.35 	board of commissioners.  The county delegate shall not be a
4.36 	resident of either the municipality or town unless agreed to by
5.1 	a joint resolution of the city council and town board.  Members
5.2 	of an appointing authority's governing body or planning
5.3 	commission are eligible for appointment to the joint planning
5.4 	board.  Members shall serve for a two-year term, unless removed
5.5 	earlier by the governing body which appointed them.  Members may
5.6 	be reappointed to the joint planning board at the sole
5.7 	discretion of the governing body having made the original
5.8 	appointment.  Unless otherwise jointly agreed to by the
5.9 	respective governing bodies for both the city and town, the city
5.10 	shall, at city expense, be responsible for providing any staff
5.11 	determined necessary by the joint planning board.  Unless
5.12 	otherwise agreed to by the joint planning board, any fees
5.13 	adopted and imposed by the joint planning board shall be paid to
5.14 	the city if the city provides the staff under this section.
5.15 		Subd. 8.Alteration of growth area boundaries. A
5.16 	municipality may at any time after the establishment of a growth
5.17 	area under this section file a petition in compliance with
5.18 	subdivision 3 to remove a portion of the established growth area
5.19 	and replace it with an equal or lesser amount of land located
5.20 	elsewhere in the city.  A municipality shall also have the right
5.21 	to petition to add additional land to an established growth area
5.22 	after any or all of the original growth area has been developed
5.23 	and provided municipal services, including sewer and water.
5.24 	However, at no time may a municipality's growth area exceed a
5.25 	total area equal to the average amount of land developed and
5.26 	serviced over the immediate preceding five years.  The affected
5.27 	town and any other abutting municipality shall have the same
5.28 	right to object to any alteration of a growth area as provided
5.29 	for in subdivision 4.
5.30 		Subd. 9.Orderly annexation. At any time, the
5.31 	municipality may abandon the alternative annexation process
5.32 	under this section and enter into an orderly annexation
5.33 	agreement for any or all of the area subject to this section.

5.34 	Sec. 2. Minnesota Statutes 2004, section 414.031,
5.35 	subdivision 1, is amended to read:
5.36 		Subdivision 1.Initiating the proceeding. (a) A
6.1 	proceeding for the annexation of unincorporated property
6.2 	abutting a municipality outside of a growth area under section
6.3 	414.025 or an orderly annexation agreement under section
6.4 	414.0325 may be initiated by submitting to the director and the
6.5 	affected township one any of the following methods:
6.6 	(a) by submitting to the director and the affected township
6.7 	one of the following:
6.8 	(1) a resolution of the annexing municipality;
6.9 	(2) a resolution of the township containing the area
6.10 	proposed for annexation;
6.11 	(3) a petition of 20 percent of the property owners or 100
6.12 	property owners, whichever is less, in the area to be annexed,
6.13 	accompanied by a resolution of the annexing municipality
6.14 	supporting the petition;
6.15 	(4) a resolution of the municipal council together with a
6.16 	resolution of the township board stating their desire to have
6.17 	the entire township annexed to the municipality.
6.18 	(b) by submitting to the director and the proposed annexing
6.19 	municipality a resolution by the town board of the township
6.20 	containing the area proposed for annexation;
6.21 	(c) by submitting to the director a joint resolution
6.22 	adopted by both the municipal council and the township board
6.23 	stating their mutual desire to have the entire township annexed
6.24 	to the municipality.
6.25 	(b) Subd. 1a.[PETITION FORMAT.] The Any petition,or
6.26 	resolution submitted under subdivision 1 shall set forth the
6.27 	boundaries of the territory proposed for annexation, the names
6.28 	of all parties entitled to notice under section 414.09, and the
6.29 	reasons for requesting annexation.
6.30 	(c) If the proceeding is initiated by a petition of
6.31 	property owners, the petition shall be accompanied by a
6.32 	resolution of the annexing municipality supporting the petition.

6.33 	Sec. 3. Minnesota Statutes 2004, section 414.031, is
6.34 	amended by adding a subdivision to read:
6.35 		Subd. 1b.Supporting documents. Except for annexations
6.36 	initiated under subdivision 1, paragraph (b), in addition to the
7.1 	petition or resolution required in subdivision 1, the annexing
7.2 	municipality must also submit to the director the following
7.3 	information:
7.4 	(a) a map showing the area proposed to be annexed and its
7.5 	relation to the current municipal boundaries;
7.6 	(b) a report detailing the urban characteristics of the
7.7 	area subject to the proposed annexation and the reasons for the
7.8 	proposed annexation;
7.9 	(c) a proposed update to the municipality's comprehensive
7.10 	land use plan to include the area subject to the proposed
7.11 	annexation;
7.12 	(d) a report describing, as applicable to both the annexing
7.13 	municipality and the area proposed to be annexed, the general
7.14 	physical land use pattern, current and proposed land uses,
7.15 	current and proposed land use controls, projected growth,
7.16 	service needs applicable to both the current and expected growth
7.17 	status, environmental impact issues, and transportation impact
7.18 	issues;
7.19 	(e) a service provision plan.  At a minimum the service
7.20 	provision plan must include an outline of the annexing
7.21 	municipality's intent and ability to provide the following
7.22 	services to the area proposed to be annexed:
7.23 	(1) law enforcement;
7.24 	(2) fire protection;
7.25 	(3) water and wastewater services, including a map showing
7.26 	existing and proposed service boundaries; a summary of the
7.27 	current capacity of any municipal treatment plant; a listing and
7.28 	map indicating areas currently within the municipality but not
7.29 	serviced by municipal water and wastewater services and the
7.30 	amount of capacity necessary to service such areas; and an
7.31 	estimate of the amount of capacity needed to fully service the
7.32 	area proposed to be annexed;
7.33 	(4) street maintenance; and 
7.34 	(5) other municipal services currently being or proposed to
7.35 	be offered by the annexing municipality.
7.36 	The plan must discuss how such services will differ from the way
8.1 	the services are currently provided within the township,
8.2 	including a cost comparison, and must provide a time line not to
8.3 	exceed two years during which each component of the service plan
8.4 	is implemented;
8.5 	(f) a property tax comparison between current and expected
8.6 	municipal levies as they would apply to the area proposed to be
8.7 	annexed and the area's existing township levy; and 
8.8 	(g) a report and map showing the quantity of undeveloped
8.9 	land existing within the annexing municipality and the intended
8.10 	use, including a service extension plan, for each area.

8.11 	Sec. 4. Minnesota Statutes 2004, section 414.031, is
8.12 	amended by adding a subdivision to read:
8.13 		Subd. 1c.Notice of intent to annex. Except for
8.14 	annexations initiated under subdivision 1, paragraph (b), at
8.15 	least ten days before submitting to the director a petition or
8.16 	resolution under subdivision 1, the annexing municipality shall
8.17 	provide written notice of the intent to annex to the township
8.18 	and the county by mailing or delivering the notice to the town
8.19 	clerk and county auditor.  The notice must clearly identify the
8.20 	boundaries of the area proposed to be annexed and must be
8.21 	accompanied by a copy of each of the supporting documents
8.22 	required under subdivision 1b.
8.23 	At least ten days before submitting to the director a
8.24 	petition or resolution under subdivision 1, a notice of the
8.25 	intent to annex must also be mailed or delivered to each
8.26 	property owner within the area subject to the proposed
8.27 	annexation.  The notice must clearly identify the boundaries of
8.28 	the area proposed to be annexed, explain how a copy of the
8.29 	supporting documents required under subdivision 1b can be
8.30 	obtained, and the right of the property owner to participate in
8.31 	a contested case proceeding.  At least ten days before
8.32 	submitting a petition or resolution to the director, a copy of
8.33 	the notice mailed to each property owner must also be published
8.34 	in a qualified newspaper of general circulation within the
8.35 	township.
8.36 	The annexing municipality must provide all required notices
9.1 	except for annexations initiated by subdivision 1, paragraph
9.2 	(b), in which case the town board must provide the notice.

9.3 	Sec. 5. Minnesota Statutes 2004, section 414.031,
9.4 	subdivision 3, is amended to read:
9.5 		Subd. 3.public hearing time, place, manner.  Upon
9.6 	receipt of a petition or resolution initiating an
9.7 	annexation under subdivision 1, the director shall designate a
9.8 	time and a place for a hearing in accordance with section
9.9 	414.09.order a joint public hearing of the city council of the
9.10 	annexing municipality and the town board of the township
9.11 	containing the land proposed to be annexed.  The time, date, and
9.12 	place of the public hearing must be determined jointly by the
9.13 	town chair and the annexing municipality's mayor.  The hearing
9.14 	must be scheduled not earlier than 20 days and not later than 60
9.15 	days after the director's receipt of the petition or
9.16 	resolution.  The chair of the affected township and the mayor of
9.17 	the annexing municipality must serve as the cochairs for the
9.18 	hearing.  Notice of the time, date, place, and purpose of the
9.19 	hearing must be posted by the town clerk in the township's
9.20 	designated posting place, and by the city clerk in the city's
9.21 	designated posting place.  In addition, except for annexations
9.22 	initiated under subdivision 1, paragraph (b), the city must also
9.23 	be responsible for publishing notice of the time, date, place,
9.24 	and purpose of the hearing in a qualified newspaper of general
9.25 	circulation within both the city and the township.  For
9.26 	annexations initiated under subdivision 1, paragraph (b), the
9.27 	township must provide published notice of the time, date, place,
9.28 	and purpose of the hearing in a qualified newspaper of general
9.29 	circulation in both the city and the township.  All notice
9.30 	required by this subdivision must be provided at least ten days
9.31 	before the date for the public hearing.
9.32 	At the public hearing, all persons appearing must have an
9.33 	opportunity to be heard.  The city council for the annexing
9.34 	municipality, the town board for the affected township, and any
9.35 	resident or affected property owner may be represented by
9.36 	counsel and introduce any evidence, including but not limited to
10.1 	expert testimony, into the record of the hearing.  The township
10.2 	clerk must record minutes of the proceedings of the hearing and
10.3 	the city must tape record the hearing.  The township must
10.4 	provide the director and the city with a copy of the printed
10.5 	minutes and the city must provide the director and the township
10.6 	with a copy of the tape recording.  The record of the hearing
10.7 	shall be admissible in any proceeding under subdivision 4 and
10.8 	shall be taken into consideration by the director or the
10.9 	director's designee.

10.10 	Sec. 6. Minnesota Statutes 2004, section 414.031,
10.11 	subdivision 4, is amended to read:
10.12 		Subd. 4.relevant factors, order administrative hearing.
 10.13 	(a) For all annexation proceedings under this section, the
10.14 	director must designate a time and place for a hearing in
10.15 	accordance with section 414.09.
10.16 	(b) In arriving at a decision, the director or the
10.17 	director's designee shall consider the following factors:
10.18 	(1) present population and number of households, past
10.19 	population and projected population growth of the subject area
10.20 	and adjacent units of local government;
10.21 	(2) quantity of land within the subject area and adjacent
10.22 	units of local government; quantity of available land within the
10.23 	annexing municipality;and natural terrain including
10.24 	recognizable physical features, general topography, major
10.25 	watersheds, soil conditions and such natural features as rivers,
10.26 	lakes and major bluffs;
10.27 	(3) degree of contiguity of the boundaries between the
10.28 	annexing municipality and the subject area;
10.29 	(4) present pattern of physical development, planning, and
10.30 	intended land uses in the subject area and the annexing
10.31 	municipality including residential, industrial, commercial,
10.32 	agricultural and institutional land uses and the impact of the
10.33 	proposed action on those land uses;
10.34 	(5) the present transportation network and potential
10.35 	transportation issues, including proposed highway development;
10.36 	(6) land use controls and planning presently being utilized
11.1 	in the annexing municipality and the subject area, including
11.2 	comprehensive plans for development in the area and plans and
11.3 	policies of the Metropolitan Council, and whether there are
11.4 	inconsistencies between proposed development and existing land
11.5 	use controls and the reasons therefore;
11.6 	(7) existing levels of governmental services being provided
11.7 	in the annexing municipality and the subject area, including
11.8 	water and sewer service, fire rating and protection, law
11.9 	enforcement, street improvements and maintenance, administrative
11.10 	services, and recreational facilities and the impact of the
11.11 	proposed action on the delivery of said services;
11.12 	(8) existing or potential environmental problems and
11.13 	whether the proposed action is likely to improve or resolve
11.14 	these problems in a more cost-effective method than could be
11.15 	achieved without the proposed annexation;
11.16 	(9) plans and programs by the annexing municipality for
11.17 	providing needed governmental services to the subject area and
11.18 	the actual ability of the annexing municipality to provide the
11.19 	services, including but not limited to wastewater treatment at a
11.20 	level equal to all applicable state and federal discharge
11.21 	standards, in a timely and cost-effective manner;
11.22 	(10) an analysis of the fiscal impact on the annexing
11.23 	municipality, the subject area, and adjacent units of local
11.24 	government, including net tax capacity and the present bonded
11.25 	indebtedness, and the local tax rates of the county, school
11.26 	district, and township;
11.27 	(11) relationship and effect of the proposed action on
11.28 	affected and adjacent school districts and communities;
11.29 	(12) adequacy of town government to deliver services to the
11.30 	subject area;
11.31 	(13) analysis of whether necessary governmental services
11.32 	can best be provided through the proposed action or another type
11.33 	of boundary adjustment; and 
11.34 	(14) if only a part of a township is annexed, the ability
11.35 	of the remainder of the township to continue or the feasibility
11.36 	of it being incorporated separately or being annexed to another
12.1 	municipality; and 
12.2 	(15) all testimony and evidence made a part of record at
12.3 	the public hearing conducted under subdivision 3.
12.4 	(b) Based upon the factors, the director may order the
12.5 	annexation on finding:
12.6 	(1) that the subject area is now, or is about to become,
12.7 	urban or suburban in character;
12.8 	(2) that municipal government in the area proposed for
12.9 	annexation is required to protect the public health, safety, and
12.10 	welfare; or 
12.11 	(3) that the annexation would be in the best interest of
12.12 	the subject area; or 
12.13 	(4) the subject township initiated or supported the
12.14 	proposed annexation under subdivision 1.
12.15 	(c) If only a part of a township is to be annexed, the
12.16 	director shall consider whether the remainder of the township
12.17 	can continue to carry on the functions of government without
12.18 	undue hardship and may deny the annexation if an undue hardship
12.19 	would be created.
12.20 	(d) The director shall deny the annexation on finding that
12.21 	the increase in revenues for the annexing municipality bears no
12.22 	reasonable relation to the monetary value of benefits conferred
12.23 	upon the annexed area, or that the annexing municipality cannot
12.24 	or likely will not be able to extend municipal services,
12.25 	including water and wastewater treatment services that comply
12.26 	with all applicable state and federal regulations, in a timely
12.27 	and cost-effective manner, or that the municipality is currently
12.28 	not providing such services to at least 95 percent of its
12.29 	existing properties.
12.30 	(e) The director may deny the annexation on finding:
12.31 	(1) that annexation of all or a part of the property to an
12.32 	adjacent municipality would better serve the interests of the
12.33 	residents of the property; or 
12.34 	(2) that the remainder of the township would suffer undue
12.35 	hardship proposed annexation will not significantly increase the
12.36 	protection of the public health, safety, and welfare; or 
13.1 	(3) that the city has sufficient existing areas of
13.2 	undeveloped or underdeveloped land to meet current growth and
13.3 	land use plans.
13.4 	(f) The director may alter the boundaries of the area to be
13.5 	annexed by increasing or decreasing the area so as to include
13.6 	only that property which is now or is about to become urban or
13.7 	suburban in character or to add property of such character
13.8 	abutting the area proposed for annexation in order to preserve
13.9 	or improve the symmetry of the area, or to exclude property that
13.10 	may better be served by another unit of government.
13.11 	(g) The director may also alter the boundaries of the
13.12 	proposed annexation so as to follow visible, clearly
13.13 	recognizable physical features.
13.14 	(h) If the director determines that part of the area would
13.15 	be better served by another municipality or township, the
13.16 	director may initiate and approve annexation by conducting
13.17 	further hearings and issuing orders pursuant to subdivisions 3
13.18 	and 4 this section.
13.19 	(i) In all cases, the director shall set forth the factors
13.20 	which are the basis for the decision.
13.21 	(j) If an annexation is ordered or approved under this
13.22 	section, the order must include a listing of all services to be
13.23 	extended into the annexed area and a time line not to exceed two
13.24 	years for the extension.  At a minimum, the order must address
13.25 	how water and wastewater services are to be provided.

13.26 	Sec. 7. Minnesota Statutes 2004, section 414.0325,
13.27 	subdivision 1, is amended to read:
13.28 		Subdivision 1.Initiating the proceeding.  (a) One or
13.29 	more townships and one or more municipalities, by joint
13.30 	resolution, may designate an unincorporated area as in need of
13.31 	orderly annexation.
13.32 	(b) The joint resolution will confer jurisdiction on the
13.33 	director over annexations in the designated area and over the
13.34 	various provisions in said agreement by submission of said joint
13.35 	resolution to the director.
13.36 	(c) The resolution shall include a description of the
14.1 	designated area and the reasons for designation.
14.2 	(d) Thereafter, an annexation of any part of the designated
14.3 	area may be initiated by:
14.4 	(1) submitting to the director a resolution of any
14.5 	signatory to the joint resolution; or
14.6 	(2) the director.
14.7 	(e) Whenever a state agency, other than the pollution
14.8 	control agency, orders a municipality to extend a municipal
14.9 	service to an area, the order confers jurisdiction on the
14.10 	director to consider designation of the area for orderly
14.11 	annexation.
14.12 	(f) If a joint resolution designates an area as in need of
14.13 	orderly annexation and states that no alteration of its stated
14.14 	boundaries is appropriate, the director may review and comment,
14.15 	but may not alter the boundaries.
14.16 	(g) If a joint resolution designates an area as in need of
14.17 	orderly annexation, provides for the conditions for its
14.18 	annexation, and states that no consideration by the director is
14.19 	necessary, the director may review and comment, but shall,
14.20 	within 30 days, order the annexation in accordance with the
14.21 	terms of the resolution.
14.22 	(h) In a county in which there is no organized township, a
14.23 	municipality may negotiate with the county.  In such a case, the
14.24 	county takes the place of the township in this section and
14.25 	elsewhere in this chapter where this section applies.

14.26 	Sec. 8. Minnesota Statutes 2004, section 414.033,
14.27 	subdivision 2, is amended to read:
14.28 		Subd. 2.Conditions.  A municipal council may by
14.29 	ordinance declare land annexed to the municipality and any such
14.30 	land is deemed to be urban or suburban in character or about to
14.31 	become so if:
14.32 	(1) the land is owned by the municipality.  Property
14.33 	annexed under this section must not be transferred to private
14.34 	ownership during the first ten years following the annexation;
14.35 	(2) before June 1, 2005,the land is completely surrounded
14.36 	by land within the municipal limits and is land not owned by the
15.1 	township; or 
15.2 	(3) the land abuts the municipality and the area to be
15.3 	annexed is 60 acres or less, and the area to be annexed is not
15.4 	presently served by public sewer wastewater facilities or public
15.5 	sewer wastewater facilities are not otherwise available, and the
15.6 	municipality receives a petition for annexation from all the
15.7 	property owners of the land; or .  A property owner must not
15.8 	petition for more than one annexation every two years under this
15.9 	provision for any contiguous parcels of land of 60 acres or
15.10 	less, nor for any noncontiguous parcels of 60 acres or less that
15.11 	had been part of a larger parcel within the past two years.
15.12 	(4) the land has been approved after August 1, 1995, by a
15.13 	preliminary plat or final plat for subdivision to provide
15.14 	residential lots that average 21,780 square feet or less in area
15.15 	and the land is located within two miles of the municipal limits.

15.16 	Sec. 9. Minnesota Statutes 2004, section 414.036, is
15.17 	amended to read:
15.18 	414.036 MUNICIPAL REIMBURSEMENT TO TOWN FOR ANNEXED
15.19 	TAXABLE PROPERTY.
15.20 	When an order or other approval under section 414.0325this
15.21 	chapter annexes part of a town to a municipality, the orderly
15.22 	annexation agreement between the town and order or approval must
15.23 	provide that the municipality may provide a reimbursement from
15.24 	the municipality to the town for all or part of the taxable
15.25 	property annexed as part of the order and also the outstanding
15.26 	value of all special assessments assigned by the township to the
15.27 	annexed property, and for the property's equitable share of
15.28 	payment as determined by the director towards all outstanding
15.29 	debt instruments held by the township for which payment is not
15.30 	covered by the special assessments.  The director must also
15.31 	order reimbursement for the proportionate value, including
15.32 	construction or installation costs, for any infrastructure,
15.33 	including but not limited to roads and wastewater treatment
15.34 	services, constructed or installed by or under the direction of
15.35 	the township when the infrastructure primarily benefits the
15.36 	municipality after the annexation.  The reimbursement shall be
16.1 	completed in substantially equal payments over not less than two
16.2 	nor more than six years from the time of annexation the
16.3 	remaining terms of the applicable special assessment or debt
16.4 	instrument.  This section does not prohibit an annexing
16.5 	municipality and an affected township from negotiating a
16.6 	different reimbursement agreement that must then be included in
16.7 	the order or approval in place of the director's reimbursement
16.8 	assignment.