1.1                          A bill for an act 
  1.2             relating to real property; local planning and zoning; 
  1.3             authorizing municipalities to require the dedication 
  1.4             of land for public purposes; providing certain terms 
  1.5             and conditions for the dedication; amending Minnesota 
  1.6             Statutes 2002, section 462.358, subdivision 2b, by 
  1.7             adding a subdivision; Minnesota Statutes 2003 
  1.8             Supplement, section 462.353, subdivision 4. 
  1.9   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.10     Section 1.  Minnesota Statutes 2003 Supplement, section 
  1.11  462.353, subdivision 4, is amended to read: 
  1.12     Subd. 4.  [FEES.] (a) Based upon a showing of direct and 
  1.13  essential nexus between a proposed fee or dedication, a 
  1.14  municipality may prescribe fees sufficient to defray the costs 
  1.15  incurred by it in reviewing, investigating, and administering an 
  1.16  application for an amendment to an official control established 
  1.17  pursuant to sections 462.351 to 462.364 or an application for a 
  1.18  permit or other approval required under an official control 
  1.19  established pursuant to those sections.  
  1.20     (b) New and increased fees must not be imposed until the 
  1.21  municipality issues a statement of need and reasonableness 
  1.22  regarding the need for the fee or dedication.  The statement 
  1.23  must include the cost of the service or demand in relation to 
  1.24  the need created by the project or program and the need created 
  1.25  by the general public.  The statement must also include whether 
  1.26  the new or increased fee is necessary and cost effective and 
  1.27  what portion of the costs of the service or demand should be 
  2.1   borne by the municipality's general fund.  
  2.2      (c) Except as provided in subdivision 4a, fees as 
  2.3   prescribed must be by ordinance and must be conspicuously posted 
  2.4   or otherwise made readily available to the public.  Fees must be 
  2.5   fair, reasonable, and proportionate to the actual cost of the 
  2.6   service for which the fee is imposed.  A municipality must give 
  2.7   notice by first class mail to any person requesting notice of a 
  2.8   new or amended fee at least 180 days prior to the intended 
  2.9   effective date.  Fees must not be applied retroactively and are 
  2.10  effective 180 days after final approval by the municipality's 
  2.11  governing body or January 1, whichever is longer.  
  2.12     (d) A municipality must adopt management and accounting 
  2.13  procedures to ensure that fees are maintained and used only for 
  2.14  the purpose for which they are collected and subject to public 
  2.15  review.  A municipality must provide an annual accounting to the 
  2.16  applicant for multiphase development projects. 
  2.17     (e) A municipality must not condition the approval of any 
  2.18  proposed subdivision or development on an agreement to waive the 
  2.19  right to challenge the validity of a fee or dedication nor does 
  2.20  payment or dedication preclude a party's right to challenge the 
  2.21  validity of a fee or dedication. 
  2.22     (f) If a dispute arises over a specific fee imposed by a 
  2.23  municipality related to a specific application, the amount of 
  2.24  the fee must be deposited and held in escrow, and the person 
  2.25  aggrieved by the fee may appeal under section 462.361.  An 
  2.26  approved application may proceed as if the fee had been paid, 
  2.27  pending a decision on the appeal.  If the municipality fails to 
  2.28  prove the reasonableness of the fees or dedication, the court 
  2.29  shall award reasonable attorney fees and other costs and 
  2.30  disbursements to the developer.  
  2.31     Sec. 2.  Minnesota Statutes 2002, section 462.358, 
  2.32  subdivision 2b, is amended to read: 
  2.33     Subd. 2b.  [DEDICATION.] (a) The regulations may require 
  2.34  that a reasonable portion part of any proposed subdivision must 
  2.35  be dedicated to the public or preserved kept for public use as 
  2.36  streets,; roads,; sewers,; electric, gas, and water 
  3.1   facilities,; storm water drainage and holding areas; or ponds, 
  3.2   conservation areas, wetlands, and similar utilities and 
  3.3   improvements.  In addition, the regulations may require that a 
  3.4   reasonable portion of any proposed subdivision be dedicated to 
  3.5   the public or preserved for conservation purposes or for public 
  3.6   use as parks, recreational facilities as defined and outlined in 
  3.7   section 471.191, playgrounds, trails, wetlands, or open space; 
  3.8   provided that (a) the municipality may choose to accept an 
  3.9   equivalent amount in cash from the applicant for part or all of 
  3.10  the portion required to be dedicated to such public uses or 
  3.11  purposes based on the fair market value of the land no later 
  3.12  than at the time of final approval, (b) any cash payments 
  3.13  received shall be placed in a special fund by the municipality 
  3.14  used only for the purposes for which the money was obtained, (c) 
  3.15  in establishing the reasonable portion to be dedicated, the 
  3.16  regulations may consider the open space, park, recreational, or 
  3.17  common areas and facilities which the applicant proposes to 
  3.18  reserve for the subdivision, and (d) the municipality reasonably 
  3.19  determines that it will need to acquire that portion of land for 
  3.20  the purposes stated in this paragraph as a result of approval of 
  3.21  the subdivision. 
  3.22     (b) The local government unit must reasonably determine 
  3.23  that as a result of approval of the subdivision it is necessary 
  3.24  to dedicate or preserve that part of land for the purposes 
  3.25  stated in this subdivision.  In establishing the portion to be 
  3.26  dedicated or preserved or the per lot cash fee, the controls 
  3.27  must consider the areas and facilities that the applicant 
  3.28  proposes to reserve for the subdivision.  For part or all of the 
  3.29  part required to be dedicated or preserved for such purposes, 
  3.30  the local government unit may choose to accept an amount in 
  3.31  cash, based on a reasonable fee schedule or per lot basis, from 
  3.32  the applicant based on the fair market value of the land at the 
  3.33  time of final approval.  The fee schedule must be established by 
  3.34  ordinance.  Any cash payments received must be used only for the 
  3.35  acquisition and development or improvement of areas or 
  3.36  facilities.  Cash payments must not be used for ongoing 
  4.1   operation, maintenance, or redevelopment of existing areas or 
  4.2   facilities.  The local government unit shall place all cash 
  4.3   payments in a special fund to be used only to buy or improve 
  4.4   property for the purposes for which the money was obtained.  If 
  4.5   dedication or preservation is required and the local government 
  4.6   unit approving the plan is different from the local government 
  4.7   unit receiving the dedication or preservation, the property must 
  4.8   be accepted by resolution of the receiving local government 
  4.9   before the subdivision plan may be filed for recording. 
  4.10     Sec. 3.  Minnesota Statutes 2002, section 462.358, is 
  4.11  amended by adding a subdivision to read: 
  4.12     Subd. 2c.  [NEXUS.] (a) The municipality must show a direct 
  4.13  and essential nexus between the fees or dedication under 
  4.14  subdivisions 2a and 2b, and a specific and uniquely attributable 
  4.15  need created by the project.  The fees or dedication must be 
  4.16  fair, reasonable, and proportionate to the need created. 
  4.17     (b) A municipality must not condition the approval of any 
  4.18  proposed subdivision or development on an agreement to waive the 
  4.19  right to challenge the validity of a fee or dedication nor does 
  4.20  payment or dedication preclude a party's right to challenge the 
  4.21  validity of a fee or dedication. 
  4.22     (c) If a dispute arises over a specific fee imposed by a 
  4.23  municipality related to a specific application, the amount of 
  4.24  the fee must be deposited and held in escrow, and the person 
  4.25  aggrieved by the fee may appeal under section 462.361.  An 
  4.26  approved application may proceed as if the fee had been paid, 
  4.27  pending a decision on the appeal.  If the municipality fails to 
  4.28  prove the reasonableness of the fees or dedication, the court 
  4.29  shall award reasonable attorney fees and other costs and 
  4.30  disbursements to the developer.