1.1                          A bill for an act 
  1.2             relating to local government; transferring authority 
  1.3             for incorporations, detachments, and annexations to 
  1.4             the office of strategic and long-range planning and 
  1.5             the office of administrative hearings; appropriating 
  1.6             money; amending Minnesota Statutes 1996, sections 
  1.7             14.03, subdivision 2; 414.01, subdivisions 1, 14, 15, 
  1.8             16, 17, and by adding a subdivision; 414.011, 
  1.9             subdivisions 7 and 8; 414.012; 414.02; 414.031; 
  1.10            414.0325; 414.033; 414.035; 414.036; 414.041; 414.051; 
  1.11            414.06; 414.061; 414.063; 414.067; 414.07; and 414.09; 
  1.12            repealing Minnesota Statutes 1996, sections 414.01, 
  1.13            subdivisions 2, 5, 6a, 7a, 8, 10, 11, and 12; 
  1.14            414.0325, subdivision 1a; 414.033, subdivision 3; and 
  1.15            414.08. 
  1.16  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.17     Section 1.  [TRANSFER OF AUTHORITY AND DUTIES.] 
  1.18     The authority and duties of the Minnesota municipal board 
  1.19  are transferred to the office of strategic and long-range 
  1.20  planning and to the office of administrative hearings, as 
  1.21  provided in sections 2 to 25.  The transfers are subject to 
  1.22  Minnesota Statutes, section 15.039, with the exception of 
  1.23  subdivision 7, which does not apply. 
  1.24     Sec. 2.  Minnesota Statutes 1996, section 14.03, 
  1.25  subdivision 2, is amended to read: 
  1.26     Subd. 2.  [CONTESTED CASE PROCEDURES.] The contested case 
  1.27  procedures of the administrative procedure act provided in 
  1.28  sections 14.57 to 14.69 do not apply to (a) the Minnesota 
  1.29  municipal board, (b) the commissioner of corrections, (c) (b) 
  1.30  the unemployment insurance program and the social security 
  2.1   disability determination program in the department of economic 
  2.2   security, (d) (c) the commissioner of mediation services, 
  2.3   (e) (d) the workers' compensation division in the department of 
  2.4   labor and industry, (f) (e) the workers' compensation court of 
  2.5   appeals, or (g) (f) the board of pardons.  
  2.6      Sec. 3.  Minnesota Statutes 1996, section 414.01, 
  2.7   subdivision 1, is amended to read: 
  2.8      Subdivision 1.  [PURPOSE.] The Minnesota municipal board is 
  2.9   hereby created to conduct proceedings, make determinations and 
  2.10  issue orders for the creation of a municipality, the combination 
  2.11  of two or more governmental units, or the alteration of a 
  2.12  municipal boundary. 
  2.13     The legislature finds that:  (1) sound urban development 
  2.14  and preservation of agricultural land and open spaces through 
  2.15  land use planning is essential to the continued economic growth 
  2.16  of this state; (2) municipal government most efficiently 
  2.17  provides governmental services in areas intensively developed 
  2.18  for residential, commercial, industrial, and governmental 
  2.19  purposes; and township government most efficiently provides 
  2.20  governmental services in areas used or developed for 
  2.21  agricultural, open space, and rural residential purposes; (3) 
  2.22  the public interest requires that municipalities be formed when 
  2.23  there exists or will likely exist the necessary resources to 
  2.24  provide for their economical and efficient operation; (4) 
  2.25  annexation to existing municipalities of unincorporated areas 
  2.26  unable to supply municipal services should be facilitated; and, 
  2.27  (5) the consolidation of municipalities should be encouraged.  
  2.28  The Minnesota municipal board is empowered to The purposes of 
  2.29  this chapter are as follows:  (i) promote and regulate 
  2.30  development of municipalities to provide for the extension of 
  2.31  municipal government to areas which are developed or are in the 
  2.32  process of being developed for intensive use for residential, 
  2.33  commercial, industrial, institutional, and governmental purposes 
  2.34  or are needed for such purposes; and to (ii) protect the 
  2.35  stability of unincorporated areas which are used or developed 
  2.36  for agricultural, open space, and rural residential purposes and 
  3.1   are not presently needed for more intensive uses; and to (iii) 
  3.2   protect the integrity of land use planning in municipalities and 
  3.3   unincorporated areas so that the public interest in efficient 
  3.4   local government will be properly recognized and served. 
  3.5      Sec. 4.  Minnesota Statutes 1996, section 414.01, is 
  3.6   amended by adding a subdivision to read: 
  3.7      Subd. 12a.  [ORDERS.] If no objection is made to the office 
  3.8   of strategic and long-range planning to a proposed detachment or 
  3.9   annexation under this chapter within 30 days from the office's 
  3.10  receipt of a petition or resolution, the office shall order 
  3.11  action as requested in the petition or resolution.  If an 
  3.12  objection is made, or if a matter has been referred pursuant to 
  3.13  law to the office of administrative hearings, the matter shall 
  3.14  be determined by order of an administrative law judge.  The 
  3.15  order of the administrative law judge is final, subject to 
  3.16  judicial review as provided in section 414.07.  The office of 
  3.17  administrative hearings shall, when hearing a matter under this 
  3.18  chapter, proceed as in a contested case subject to chapter 14, 
  3.19  except as is necessary to conform to the requirements of this 
  3.20  chapter. 
  3.21     Sec. 5.  Minnesota Statutes 1996, section 414.01, 
  3.22  subdivision 14, is amended to read: 
  3.23     Subd. 14.  [POPULATION OF CHANGED TERRITORY.] When a board 
  3.24  an order enlarges or diminishes the area of an existing 
  3.25  municipality or town, the population of the annexed or detached 
  3.26  area shall be as found by the board at its the hearing or, in 
  3.27  cases in which no hearing by the board for the boundary change 
  3.28  is required, as stated in the resolution or ordinance.  The 
  3.29  effective date of the population change shall be the same as the 
  3.30  effective date of the order whether or not the order is from a 
  3.31  hearing or from the approval of an annexation resolution or 
  3.32  ordinance.  The board office of strategic and long-range 
  3.33  planning or the administrative law judge shall communicate its 
  3.34  the population finding to the state demographer who shall 
  3.35  incorporate that data into the population estimate for the 
  3.36  municipality or town.  When a new municipality is created by an 
  4.1   order of the board, the municipality shall request a separation 
  4.2   census from the United States bureau of the census and bear any 
  4.3   costs incurred.  
  4.4      Sec. 6.  Minnesota Statutes 1996, section 414.01, 
  4.5   subdivision 15, is amended to read: 
  4.6      Subd. 15.  [INCREASED COSTS, LEVY PERIOD.] When a board an 
  4.7   order enlarges an existing municipality or creates a new 
  4.8   municipality, the board office of strategic and long-range 
  4.9   planning or the administrative law judge may indicate in its the 
  4.10  order the estimated increased costs to the municipality as the 
  4.11  result of the boundary adjustment, and the time period that the 
  4.12  municipality would be allowed a levy for these increased costs. 
  4.13     Sec. 7.  Minnesota Statutes 1996, section 414.01, 
  4.14  subdivision 16, is amended to read: 
  4.15     Subd. 16.  [COMPELLED MEETINGS; REPORT.] In any 
  4.16  proceeding before the board, the board administrative law judge 
  4.17  may at any time in the process require representatives from the 
  4.18  involved city, town, county, political subdivision, or other 
  4.19  governmental entity to meet together to discuss resolution of 
  4.20  issues raised by said petition or order which confers 
  4.21  jurisdiction on the board and other issues of mutual concern.  
  4.22  The board judge may require that the parties meet at least three 
  4.23  times during a 60-day period.  The parties shall designate a 
  4.24  person to report to the board judge on the results of the 
  4.25  meetings immediately after the last meeting. 
  4.26     Sec. 8.  Minnesota Statutes 1996, section 414.01, 
  4.27  subdivision 17, is amended to read: 
  4.28     Subd. 17.  [DATA FROM STATE AGENCIES.] The board office of 
  4.29  strategic and long-range planning or the office of 
  4.30  administrative hearings may request information from any state 
  4.31  department or agency in order to assist it to carry out its an 
  4.32  office in the performance of its duties.  The department or 
  4.33  agency shall promptly furnish the requested information to 
  4.34  the board requesting office. 
  4.35     Sec. 9.  Minnesota Statutes 1996, section 414.011, 
  4.36  subdivision 7, is amended to read: 
  5.1      Subd. 7.  [BOUNDARY ADJUSTMENT.] "Boundary adjustment" 
  5.2   means any proceeding by the municipal board authorized by this 
  5.3   chapter. 
  5.4      Sec. 10.  Minnesota Statutes 1996, section 414.011, 
  5.5   subdivision 8, is amended to read: 
  5.6      Subd. 8.  [MEETINGS, HEARINGS.] "Meetings" and or "hearings"
  5.7   includes, but is not limited to, board deliberations by 
  5.8   electronic media. 
  5.9      Sec. 11.  Minnesota Statutes 1996, section 414.012, is 
  5.10  amended to read: 
  5.11     414.012 [MAPS.] 
  5.12     Subdivision 1.  [CORPORATE BOUNDARY MAP.] A municipality 
  5.13  initiating any boundary adjustment authorized by this chapter 
  5.14  shall file with the municipal board office of strategic and 
  5.15  long-range planning a corporate boundary map.  Any proposed 
  5.16  boundary adjustment shall be delineated on a copy of the 
  5.17  corporate boundary map. 
  5.18     Subd. 2.  [PLAT MAPS.] Any party initiating a boundary 
  5.19  adjustment, which includes platted land, shall file with the 
  5.20  municipal board office maps which are necessary to support and 
  5.21  identify the land description.  The maps shall include copies of 
  5.22  plats. 
  5.23     Sec. 12.  Minnesota Statutes 1996, section 414.02, is 
  5.24  amended to read: 
  5.25     414.02 [MUNICIPAL INCORPORATION.] 
  5.26     Subdivision 1.  [INITIATING THE PROCEEDINGS.] This section 
  5.27  provides the exclusive method of incorporating a municipality in 
  5.28  Minnesota.  Proceedings for incorporation of a municipality may 
  5.29  be initiated by petition of 100 or more property owners or by 
  5.30  resolution of the town board within an area which is not 
  5.31  included within the limits of any incorporated municipality and 
  5.32  which area includes land that has been platted into lots and 
  5.33  blocks in the manner provided by law.  The petition or 
  5.34  resolution shall be submitted to the executive director office 
  5.35  of strategic and long-range planning and shall state the 
  5.36  proposed name of the municipality, the names of all parties 
  6.1   entitled to mailed notice under section 414.09, the reason for 
  6.2   requesting incorporation, and shall include a proposed corporate 
  6.3   boundary map. 
  6.4      Subd. 2.  [HEARING TIME, PLACE.] Upon receipt of a petition 
  6.5   or resolution made pursuant to subdivision 1, the executive 
  6.6   director of the board office shall inform the office of 
  6.7   administrative hearings which shall designate a time and place 
  6.8   for a hearing in accordance with section 414.09. 
  6.9      Subd. 3.  [BOARD FACTORS, ORDER.] In arriving at its a 
  6.10  decision, the board administrative law judge shall consider the 
  6.11  following factors: 
  6.12     (a) Present population and number of households, past 
  6.13  population and projected population growth for the subject area; 
  6.14     (b) Quantity of land within the subject area; the natural 
  6.15  terrain including recognizable physical features, general 
  6.16  topography, major watersheds, soil conditions and such natural 
  6.17  features as rivers, lakes and major bluffs; 
  6.18     (c) Present pattern of physical development, planning, and 
  6.19  intended land uses in the subject area including residential, 
  6.20  industrial, commercial, agricultural, and institutional land 
  6.21  uses and the impact of the proposed action on those uses; 
  6.22     (d) The present transportation network and potential 
  6.23  transportation issues, including proposed highway development; 
  6.24     (e) Land use controls and planning presently being utilized 
  6.25  in the subject area, including comprehensive plans, policies of 
  6.26  the metropolitan council; and whether there are inconsistencies 
  6.27  between proposed development and existing land use controls; 
  6.28     (f) Existing levels of governmental services being provided 
  6.29  to the subject area, including water and sewer service, fire 
  6.30  rating and protection, law enforcement, street improvements and 
  6.31  maintenance, administrative services, and recreational 
  6.32  facilities and the impact of the proposed action on the delivery 
  6.33  of the services; 
  6.34     (g) Existing or potential environmental problems and 
  6.35  whether the proposed action is likely to improve or resolve 
  6.36  these problems; 
  7.1      (h) Fiscal impact on the subject area and adjacent units of 
  7.2   local government, including present bonded indebtedness; local 
  7.3   tax rates of the county, school district, and other governmental 
  7.4   units, including, where applicable, the net tax capacity of 
  7.5   platted and unplatted lands and the division of homestead and 
  7.6   nonhomestead property; and other tax and governmental aid 
  7.7   issues; 
  7.8      (i) Relationship and effect of the proposed action on 
  7.9   affected and adjacent school districts and communities; 
  7.10     (j) Whether delivery of services to the subject area can be 
  7.11  adequately and economically delivered by the existing 
  7.12  government; 
  7.13     (k) Analysis of whether necessary governmental services can 
  7.14  best be provided through the proposed action or another type of 
  7.15  boundary adjustment; 
  7.16     (1) Degree of contiguity of the boundaries of the subject 
  7.17  area and adjacent units of local government; and 
  7.18     (m) Analysis of the applicability of the state building 
  7.19  code. 
  7.20     Based upon these factors, the board may judge shall order 
  7.21  the incorporation if it finds upon finding that (a) the property 
  7.22  to be incorporated is now, or is about to become, urban or 
  7.23  suburban in character, or (b) that the existing township form of 
  7.24  government is not adequate to protect the public health, safety, 
  7.25  and welfare, or (c) the proposed incorporation would be in the 
  7.26  best interests of the area under consideration.  The board judge 
  7.27  may deny the incorporation if the area, or a part thereof, would 
  7.28  be better served by annexation to an adjacent municipality. 
  7.29     The board judge may alter the boundaries of the proposed 
  7.30  incorporation by increasing or decreasing the area to be 
  7.31  incorporated so as to include only that property which is now, 
  7.32  or is about to become, urban or suburban in character, or may 
  7.33  exclude property that may be better served by another unit of 
  7.34  government.  The board may also alter the boundaries of the 
  7.35  proposed incorporation so as to follow visible, clearly 
  7.36  recognizable physical features for municipal boundaries.  In all 
  8.1   cases, the board judge shall set forth the factors which are the 
  8.2   basis for the decision. 
  8.3      Notwithstanding any other provision of law to the contrary 
  8.4   relating to the number of wards which may be established, the 
  8.5   board judge may provide for election of council members by 
  8.6   wards, not less than three nor more than seven in number, whose 
  8.7   limits are prescribed in the board order upon a finding that 
  8.8   area representation is required to accord proper representation 
  8.9   in the proposed incorporated area because of uneven population 
  8.10  density in different parts thereof or the existence of 
  8.11  agricultural lands therein which are in the path of suburban 
  8.12  development, but after four years from the effective date of an 
  8.13  incorporation the council of the municipality may by resolution 
  8.14  adopted by a four-fifths vote abolish the ward system and 
  8.15  provide for the election of all council members at large as in 
  8.16  other municipalities. 
  8.17     The board's order for incorporation shall provide for the 
  8.18  election of municipal officers in accordance with section 
  8.19  414.09.  The plan of government shall be "Optional Plan A", 
  8.20  provided that an alternate plan may be adopted pursuant to 
  8.21  section 412.551, at any time.  The ordinances of the township in 
  8.22  which the new municipality is located shall continue in effect 
  8.23  until repealed by the governing body of the new municipality. 
  8.24     Subd. 4.  [EFFECTIVE DATE.] The incorporation shall be 
  8.25  effective upon the election and qualification of new municipal 
  8.26  officers or on such later date as is fixed by the board in its 
  8.27  order. 
  8.28     Sec. 13.  Minnesota Statutes 1996, section 414.031, is 
  8.29  amended to read: 
  8.30     414.031 [ANNEXATION OF UNINCORPORATED PROPERTY BY BOARD 
  8.31  ORDER.] 
  8.32     Subdivision 1.  [INITIATING THE PROCEEDING.] A proceeding 
  8.33  for the annexation of unincorporated property abutting a 
  8.34  municipality may be initiated by submitting to the executive 
  8.35  director office of strategic and long-range planning and the 
  8.36  affected township one of the following: 
  9.1      (a) A resolution of the annexing municipality; 
  9.2      (b) A resolution of the township containing the area 
  9.3   proposed for annexation; 
  9.4      (c) A petition of 20 percent of the property owners or 100 
  9.5   property owners, whichever is less, in the area to be annexed; 
  9.6      (d) A resolution of the municipal council together with a 
  9.7   resolution of the township board stating their desire to have 
  9.8   the entire township annexed to the municipality. 
  9.9      The petition, or resolution shall set forth the boundaries 
  9.10  of the territory proposed for annexation, the names of all 
  9.11  parties entitled to notice under section 414.09, and the reasons 
  9.12  for requesting annexation.  If the proceeding is initiated by a 
  9.13  petition of property owners, the petition shall be accompanied 
  9.14  by a resolution of the annexing municipality supporting the 
  9.15  petition. 
  9.16     Subd. 3.  [HEARING TIME, PLACE.] Upon receipt of a timely 
  9.17  objection to a petition or resolution initiating an annexation, 
  9.18  the executive director office of strategic and long-range 
  9.19  planning shall designate a time and a place for a hearing in 
  9.20  accordance with section 414.09.  If no timely objection is 
  9.21  received, the office shall order the annexation as requested by 
  9.22  the petition or resolution. 
  9.23     Subd. 4.  [BOARD FACTORS, ORDER.] In arriving at its a 
  9.24  decision, the board administrative law judge shall consider the 
  9.25  following factors: 
  9.26     (a) Present population and number of households, past 
  9.27  population and projected population growth of the subject area 
  9.28  and adjacent units of local government; 
  9.29     (b) Quantity of land within the subject area and adjacent 
  9.30  units of local government; and natural terrain including 
  9.31  recognizable physical features, general topography, major 
  9.32  watersheds, soil conditions and such natural features as rivers, 
  9.33  lakes and major bluffs; 
  9.34     (c) Degree of contiguity of the boundaries between the 
  9.35  annexing municipality and the subject area; 
  9.36     (d) Present pattern of physical development, planning, and 
 10.1   intended land uses in the subject area and the annexing 
 10.2   municipality including residential, industrial, commercial, 
 10.3   agricultural and institutional land uses and the impact of the 
 10.4   proposed action on those land uses; 
 10.5      (e) The present transportation network and potential 
 10.6   transportation issues, including proposed highway development; 
 10.7      (f) Land use controls and planning presently being utilized 
 10.8   in the annexing municipality and the subject area, including 
 10.9   comprehensive plans for development in the area and plans and 
 10.10  policies of the metropolitan council, and whether there are 
 10.11  inconsistencies between proposed development and existing land 
 10.12  use controls and the reasons therefore; 
 10.13     (g) Existing levels of governmental services being provided 
 10.14  in the annexing municipality and the subject area, including 
 10.15  water and sewer service, fire rating and protection, law 
 10.16  enforcement, street improvements and maintenance, administrative 
 10.17  services, and recreational facilities and the impact of the 
 10.18  proposed action on the delivery of said services; 
 10.19     (h) Existing or potential environmental problems and 
 10.20  whether the proposed action is likely to improve or resolve 
 10.21  these problems; 
 10.22     (i) Plans and programs by the annexing municipality for 
 10.23  providing needed governmental services to the subject area; 
 10.24     (j) An analysis of the fiscal impact on the annexing 
 10.25  municipality, the subject area, and adjacent units of local 
 10.26  government, including net tax capacity and the present bonded 
 10.27  indebtedness, and the local tax rates of the county, school 
 10.28  district, and township; 
 10.29     (k) Relationship and effect of the proposed action on 
 10.30  affected and adjacent school districts and communities; 
 10.31     (l) Adequacy of town government to deliver services to the 
 10.32  subject area; 
 10.33     (m) Analysis of whether necessary governmental services can 
 10.34  best be provided through the proposed action or another type of 
 10.35  boundary adjustment; and 
 10.36     (n) If only a part of a township is annexed, the ability of 
 11.1   the remainder of the township to continue or the feasibility of 
 11.2   it being incorporated separately or being annexed to another 
 11.3   municipality. 
 11.4      Based upon the factors, the board may judge shall order the 
 11.5   annexation upon finding that (a) if it finds that the subject 
 11.6   area is now, or is about to become, urban or suburban in 
 11.7   character, or (b) if it finds that municipal government in the 
 11.8   area proposed for annexation is required to protect the public 
 11.9   health, safety, and welfare, or (c) if it finds that the 
 11.10  annexation would be in the best interest of the subject 
 11.11  area.  If only a part of a township is to be annexed, the board 
 11.12  shall consider whether the remainder of the township can 
 11.13  continue to carry on the functions of government without undue 
 11.14  hardship.  The board shall deny the annexation if it finds that 
 11.15  the increase in revenues for the annexing municipality bears no 
 11.16  reasonable relation to the monetary value of benefits conferred 
 11.17  upon the annexed area.  The board judge may deny the annexation 
 11.18  (a) if it appears that annexation of all or a part of the 
 11.19  property to an adjacent municipality would better serve the 
 11.20  interests of the residents of the property or (b) if the 
 11.21  remainder of the township would suffer undue hardship. 
 11.22     The board judge may alter the boundaries of the area to be 
 11.23  annexed by increasing or decreasing the area so as to include 
 11.24  only that property which is now or is about to become urban or 
 11.25  suburban in character or to add property of such character 
 11.26  abutting the area proposed for annexation in order to preserve 
 11.27  or improve the symmetry of the area, or to exclude property that 
 11.28  may better be served by another unit of government.  The board 
 11.29  judge may also alter the boundaries of the proposed annexation 
 11.30  so as to follow visible, clearly recognizable physical 
 11.31  features.  If the board judge determines that part of the area 
 11.32  would be better served by another municipality or township, 
 11.33  the board judge may initiate and approve annexation on its the 
 11.34  judge's own motion by conducting further hearings and issuing 
 11.35  orders pursuant to subdivisions 3 and 4.  In all cases, 
 11.36  the board judge shall set forth the factors which are the basis 
 12.1   for the decision. 
 12.2      Subd. 4a.  [PROCEEDINGS INITIATED BY JOINT RESOLUTION.] If 
 12.3   the proceeding has been initiated under subdivision 1, clause 
 12.4   (d), any annexation order shall include a provision for the 
 12.5   election of new municipal officers in accordance with section 
 12.6   414.09.  The expanded municipality shall be governed by the home 
 12.7   rule charter or statutory form which governs the annexing 
 12.8   municipality, except that any ward system for the election of 
 12.9   council members shall be inoperable.  The ordinances of both the 
 12.10  annexing municipality and the township shall continue in effect 
 12.11  within the former boundaries until repealed by the governing 
 12.12  body of the new municipality. 
 12.13     Notwithstanding any other provision of law to the contrary 
 12.14  the board judge may provide for election of council members by 
 12.15  wards, not less than three nor more than seven in number, whose 
 12.16  limits are prescribed in the board order, upon a finding that 
 12.17  area representation is required to accord proper representation 
 12.18  in the municipality because of uneven population density in 
 12.19  different parts thereof or the existence of agricultural lands 
 12.20  therein which are in the path of suburban development; but after 
 12.21  four years from the effective date of an annexation the council 
 12.22  of the municipality may by resolution adopted by a four-fifths 
 12.23  vote abolish the ward system and provide for the election of all 
 12.24  council members at large. 
 12.25     Until the effective date of the annexation order, the town 
 12.26  board and other officers of the town shall continue to exercise 
 12.27  their powers and duties under the town laws in that portion of 
 12.28  the municipality that was formerly the town, and the council and 
 12.29  other officers of the annexing municipality shall continue to 
 12.30  exercise their powers and duties in that portion of the expanded 
 12.31  municipality that was formerly the municipality.  Thereafter the 
 12.32  town board and the council of the annexing municipality shall 
 12.33  have no jurisdiction within the municipality, and the new 
 12.34  municipal council and other new officers shall act in respect to 
 12.35  any matters previously undertaken by the town board of 
 12.36  supervisors or municipal council within the limits of the 
 13.1   expanded municipality, including the making of any improvement 
 13.2   and the levying of any special assessments therefor in the same 
 13.3   manner and to the same effect as if such improvement had been 
 13.4   undertaken by the municipality. 
 13.5      The new municipal council may continue or discontinue any 
 13.6   board that may have previously existed in the town or former 
 13.7   municipality. 
 13.8      Subd. 6.  [EFFECTIVE DATE.] The annexation shall be 
 13.9   effective as of the date fixed in the annexation order or on 
 13.10  such later date as is fixed in the annexation order.  A copy of 
 13.11  the annexation order must be delivered immediately by the 
 13.12  executive director of the Minnesota municipal board office of 
 13.13  strategic and long-range planning or the administrative law 
 13.14  judge to the appropriate county auditor or auditors.  For the 
 13.15  purposes of taxation, if the annexation becomes effective on or 
 13.16  before August 1 of a levy year, the municipality may levy on the 
 13.17  annexed area beginning with that same levy year.  If the 
 13.18  annexation becomes effective after August 1 of a levy year, the 
 13.19  town may continue to levy on the annexed area for that levy 
 13.20  year, and the municipality may not levy on the annexed area 
 13.21  until the following levy year. 
 13.22     Sec. 14.  Minnesota Statutes 1996, section 414.0325, is 
 13.23  amended to read: 
 13.24     414.0325 [ORDERLY ANNEXATIONS WITHIN A DESIGNATED AREA.] 
 13.25     Subdivision 1.  [INITIATING THE PROCEEDING.] One or more 
 13.26  townships and one or more municipalities, by joint resolution, 
 13.27  may designate an unincorporated area as in need of orderly 
 13.28  annexation.  The joint resolution will and may confer 
 13.29  jurisdiction:  (1) on the board office of strategic and 
 13.30  long-range planning, or (2) if the resolution is adopted before 
 13.31  July 1, 1997, and the resolution requests a hearing but is not 
 13.32  heard before July 1, 1997, on the office of administrative 
 13.33  hearings, 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 executive director office of strategic and 
 13.36  long-range planning.  The resolution shall include a description 
 14.1   of the designated area and the reasons for designation.  
 14.2   Thereafter, an annexation of any part of the designated area may 
 14.3   be initiated by: 
 14.4      (1) submitting to the executive director office of 
 14.5   strategic and long-range planning or, if the joint resolution 
 14.6   requests a hearing, to the office of administrative hearings, a 
 14.7   resolution of any signatory to the joint resolution; or 
 14.8      (2) the board office of strategic and long-range planning 
 14.9   on its own motion; or 
 14.10     (3) as provided in section 414.033, subdivision 2a. 
 14.11     Whenever the pollution control agency or other state agency 
 14.12  pursuant to sections 115.03, 115.071, 115.49, or any law giving 
 14.13  a state agency similar powers, orders a municipality to extend a 
 14.14  municipal service to an area, such an order will confer 
 14.15  jurisdiction on the Minnesota municipal board office of 
 14.16  strategic and long-range planning to consider refer the matter 
 14.17  to the office of administrative hearings for determination, by 
 14.18  order of an administrative law judge, of the designation of the 
 14.19  area for orderly annexation. 
 14.20     If a joint resolution designates an area as in need of 
 14.21  orderly annexation and states that no alteration of its stated 
 14.22  boundaries is appropriate, the board office of strategic and 
 14.23  long-range planning or the administrative law judge may review 
 14.24  and comment, but may not alter the boundaries.  
 14.25     If a joint resolution designates an area as in need of 
 14.26  orderly annexation, provides for the conditions for its 
 14.27  annexation, and states that no consideration by the board office 
 14.28  of strategic and long-range planning is necessary, the board 
 14.29  office of strategic and long-range planning may review and 
 14.30  comment, but shall, within 30 days, order the annexation in 
 14.31  accordance with the terms of the resolution. 
 14.32     Subd. 1a.  [ELECTRIC UTILITY SERVICE NOTICE.] At least 60 
 14.33  days before a petition is filed under this section or section 
 14.34  414.033, the petitioner must notify the municipality that the 
 14.35  petitioner intends to file a petition for annexation.  At least 
 14.36  30 days before a petition is filed for annexation, the 
 15.1   petitioner must be notified by the municipality that the cost of 
 15.2   electric utility service to the petitioner may change if the 
 15.3   land is annexed to the municipality.  The notice must include an 
 15.4   estimate of the cost impact of any change in electric utility 
 15.5   services, including rate changes and assessments, resulting from 
 15.6   the annexation. 
 15.7      Subd. 2.  [HEARING TIME, PLACE.] Upon receipt of a joint 
 15.8   resolution for annexation of a part of the designated area under 
 15.9   this section that is adopted before July 1, 1995, and the 
 15.10  resolution requests a hearing but the matter is not heard before 
 15.11  July 1, 1995, the executive director office of strategic and 
 15.12  long-range planning shall inform the office of administrative 
 15.13  hearings which shall set a time and place for a hearing in 
 15.14  accordance with section 414.09.  No joint resolution adopted 
 15.15  under this section after June 30, 1995, may request a hearing. 
 15.16     Subd. 3.  [BOARD FACTORS, ORDER.] In arriving at its a 
 15.17  decision, the board administrative law judge shall consider the 
 15.18  factors in section 414.031, subdivision 4. 
 15.19     Based upon factors in section 414.031, subdivision 4, the 
 15.20  board may judge shall order the annexation upon finding: 
 15.21     (a) if it finds (1) that the subject area is now or is 
 15.22  about to become urban or suburban in character and that the 
 15.23  annexing municipality is capable of providing the services 
 15.24  required by the area within a reasonable time; or (b) if it 
 15.25  finds (2) that the existing township form of government is not 
 15.26  adequate to protect the public health, safety, and welfare; 
 15.27  or (c) if it finds (3) that annexation would be in the best 
 15.28  interests of the subject area.  The board judge may deny the 
 15.29  annexation if it conflicts with any provision of the joint 
 15.30  agreement.  The board judge may alter the boundaries of the 
 15.31  proposed annexation by increasing or decreasing the area so as 
 15.32  to include that property within the designated area which is in 
 15.33  need of municipal services or will be in need of municipal 
 15.34  services. 
 15.35     If the annexation is denied, no proceeding for the 
 15.36  annexation of substantially the same area may be initiated 
 16.1   within two years from the date of the board's judge's order 
 16.2   unless the new proceeding is initiated by a majority of the 
 16.3   area's property owners and the petition is supported by affected 
 16.4   parties to the resolution.  In all cases, the board judge shall 
 16.5   set forth the factors which are the basis for the decision. 
 16.6      Subd. 4.  [EFFECTIVE DATE OF ANNEXATION.] The board's order 
 16.7   shall be effective upon the issuance of the order or at such 
 16.8   later time as is provided by the board in its the order.  A copy 
 16.9   of the annexation order must be delivered immediately by 
 16.10  the executive director of the Minnesota municipal board office 
 16.11  of strategic and long-range planning or the administrative law 
 16.12  judge to the appropriate county auditor or auditors.  For the 
 16.13  purposes of taxation, if the annexation becomes effective on or 
 16.14  before August 1 of a levy year, the municipality may levy on the 
 16.15  annexed area beginning with that same levy year.  If the 
 16.16  annexation becomes effective after August 1 of a levy year, the 
 16.17  town may continue to levy on the annexed area for that levy 
 16.18  year, and the municipality may not levy on the annexed area 
 16.19  until the following levy year. 
 16.20     Subd. 5.  [PLANNING IN THE AREA DESIGNATED FOR ORDERLY 
 16.21  ANNEXATION.] A joint resolution may provide for the 
 16.22  establishment of a board to exercise planning and land use 
 16.23  control authority within any area designated as an orderly 
 16.24  annexation area pursuant to this section, in the manner 
 16.25  prescribed by Minnesota Statutes 1976, section 471.59, 
 16.26  subdivisions 2 to 8, inclusive. 
 16.27     (a) A board established pursuant to a joint resolution 
 16.28  shall have all of the powers contained in sections 462.351 to 
 16.29  462.364, and shall have the authority to adopt and enforce the 
 16.30  uniform fire code promulgated pursuant to section 299F.011. 
 16.31     (b) The joint resolution may provide that joint planning 
 16.32  and land use controls shall apply to any or all parts of the 
 16.33  area designated for orderly annexation as well as to any 
 16.34  adjacent unincorporated or incorporated area, provided that the 
 16.35  area to be included shall be described in the joint resolution. 
 16.36     (c) If the joint resolution does not provide for joint 
 17.1   planning and land use control, the following procedures shall 
 17.2   govern: 
 17.3      If the county and townships agree to exclude the area from 
 17.4   their zoning and subdivision ordinances, the municipality may 
 17.5   extend its zoning and subdivision regulations to include the 
 17.6   entire orderly annexation area as provided in section 462.357, 
 17.7   subdivision 1, and section 462.358, subdivision 1. 
 17.8      If the county and township do not agree to such 
 17.9   extraterritorial zoning and subdivision regulation by the 
 17.10  municipality, zoning and subdivision regulation within the 
 17.11  orderly annexation area shall be controlled by a three-member 
 17.12  committee with one member appointed from each of the municipal, 
 17.13  town, and county governing bodies.  This committee shall serve 
 17.14  as the "governing body" and "board of appeals and adjustments", 
 17.15  for purposes of sections 462.357 and 462.358, within the orderly 
 17.16  annexation area.  The committee shall have all of the powers 
 17.17  contained in sections 462.351 to 462.364, and shall have the 
 17.18  authority to adopt and enforce the uniform fire code promulgated 
 17.19  pursuant to section 299F.011. 
 17.20     Sec. 15.  Minnesota Statutes 1996, section 414.033, is 
 17.21  amended to read: 
 17.22     414.033 [ANNEXATION BY ORDINANCE.] 
 17.23     Subdivision 1.  [UNINCORPORATED PROPERTY.] Unincorporated 
 17.24  property abutting a municipality may be annexed to the 
 17.25  municipality by ordinance as provided for in this section. 
 17.26     Subd. 2.  [CONDITIONS.] A municipal council may by 
 17.27  ordinance declare land annexed to the municipality and any such 
 17.28  land is deemed to be urban or suburban in character or about to 
 17.29  become so if: 
 17.30     (1) the land is owned by the municipality; 
 17.31     (2) the land is completely surrounded by land within the 
 17.32  municipal limits; 
 17.33     (3) the land abuts the municipality and the area to be 
 17.34  annexed is 60 acres or less, and the area to be annexed is not 
 17.35  presently served by public sewer facilities or public sewer 
 17.36  facilities are not otherwise available, and the municipality 
 18.1   receives a petition for annexation from all the property owners 
 18.2   of the land; or 
 18.3      (4) the land has been approved after August 1, 1995, by a 
 18.4   preliminary plat or final plat for subdivision to provide 
 18.5   residential lots that average 21,780 square feet or less in area 
 18.6   and the land is located within two miles of the municipal 
 18.7   limits; or 
 18.8      (5) the perimeter of the area to be annexed by a 
 18.9   municipality is 60 percent or more bordered by the municipality 
 18.10  and the area to be annexed is 40 acres or less. 
 18.11     Subd. 2a.  [MUNICIPALITY MAY ANNEX.] Notwithstanding the 
 18.12  abutting requirement of subdivision 1, if land is owned by a 
 18.13  municipality or if all of the landowners petition for 
 18.14  annexation, and the land is within an existing orderly 
 18.15  annexation area as provided by section 414.0325, then the 
 18.16  municipality may declare the land annexed.  This municipal 
 18.17  action does not otherwise affect the other terms and conditions 
 18.18  of existing orderly annexation agreements entered into pursuant 
 18.19  to section 414.0325. 
 18.20     Subd. 2b.  [NOTICE REQUIRED.] Before a municipality may 
 18.21  adopt an ordinance under subdivision 2, clause (2), (3), or (4), 
 18.22  or subdivision 2a, a municipality must hold a public hearing and 
 18.23  give 30 days' written notice by certified mail to the town or 
 18.24  towns affected by the proposed ordinance and to all landowners 
 18.25  within and contiguous to the area to be annexed.  
 18.26     Subd. 3.  [PERIMETER, ACREAGE REQUIREMENTS.] If the 
 18.27  perimeter of the area to be annexed by a municipality is 60 
 18.28  percent or more bordered by the municipality and if the area to 
 18.29  be annexed is 40 acres or less, the municipality shall serve 
 18.30  notice of intent to annex upon the town board and the municipal 
 18.31  board, unless the area is appropriate for annexation by 
 18.32  ordinance under subdivision 2, clause (3).  The town board shall 
 18.33  have 90 days from the date of service to serve objections with 
 18.34  the board.  If no objections are forthcoming within the said 90 
 18.35  day period, such land may be annexed by ordinance.  If 
 18.36  objections are filed with the board, the board shall conduct 
 19.1   hearings and issue its order as in the case of annexations under 
 19.2   section 414.031, subdivisions 3 and 4. 
 19.3      Subd. 5.  [PETITION, OBJECTIONS.] If the land is platted, 
 19.4   or, if unplatted, does not exceed 200 acres, a majority of the 
 19.5   property owners in number may petition the municipal council to 
 19.6   have such land included within the abutting municipality and, 
 19.7   within ten days thereafter, shall file copies of the petition 
 19.8   with the board office of strategic and long-range planning, the 
 19.9   town board, the county board and the municipal council of any 
 19.10  other municipality which borders the land to be annexed.  Within 
 19.11  90 days from the date of service, the town board or the 
 19.12  municipal council of such abutting municipality may submit 
 19.13  written objections to the annexation to the board office and the 
 19.14  annexing municipality.  Upon receipt of such objections, 
 19.15  the board shall proceed to hold a hearing and issue its 
 19.16  order matter shall be heard and determined by order of an 
 19.17  administrative law judge in accordance with section 414.031, 
 19.18  subdivisions 3 and 4.  If written objections are not submitted 
 19.19  within the time specified in this section and if the municipal 
 19.20  council determines that property proposed for the annexation is 
 19.21  now or is about to become urban or suburban in character, it may 
 19.22  by ordinance declare such land annexed to the municipality.  If 
 19.23  the petition is not signed by all the property owners of the 
 19.24  land proposed to be annexed, the ordinance shall not be enacted 
 19.25  until the municipal council has held a hearing on the proposed 
 19.26  annexation after at least 30 days mailed notice to all property 
 19.27  owners within the area to be annexed. 
 19.28     Subd. 6.  [IF ALSO IN BOARD OTHER PROCEEDING.] Whenever a 
 19.29  proceeding for annexation is initiated under this section and 
 19.30  all or any part of the land is included in another boundary 
 19.31  adjustment proceeding pending before the board office of 
 19.32  strategic and long-range planning or an administrative law 
 19.33  judge, no action thereon shall be taken by the municipality, 
 19.34  unless otherwise provided by an order of the board authority 
 19.35  before which the other proceeding is pending, until final 
 19.36  disposition has been made of the petition pending before the 
 20.1   board other authority.  Under this section the board authority 
 20.2   before which the other proceeding is pending will accept a 
 20.3   waiver from all parties having a right to object, stating they 
 20.4   have no objections to the proposed annexation and waiving the 90 
 20.5   day period before an annexation ordinance may be adopted. 
 20.6      Subd. 7.  [FILING; EFFECTIVE DATE; COPY, LEVIES.] Any 
 20.7   annexation ordinance provided for in this section must be filed 
 20.8   with the board office of strategic and long-range planning, the 
 20.9   township, the county auditor and the secretary of state and is 
 20.10  final on the date the ordinance is approved by the board.  A 
 20.11  copy of the annexation ordinance must be delivered immediately 
 20.12  by the governing body of the municipality to the appropriate 
 20.13  county auditor or auditors.  For the purposes of taxation, if 
 20.14  the annexation becomes effective on or before August 1 of a levy 
 20.15  year, the municipality may levy on the annexed area beginning 
 20.16  with that same levy year.  If the annexation becomes effective 
 20.17  after August 1 of a levy year, the town may continue to levy on 
 20.18  the annexed area for that levy year, and the municipality may 
 20.19  not levy on the annexed area until the following levy year. 
 20.20     Subd. 9.  [POPULATION.] The municipal board office of 
 20.21  strategic and long-range planning or the administrative law 
 20.22  judge in its the approval letter may state the population of the 
 20.23  area annexed by ordinance.  The stated population shall be 
 20.24  effective on the date of the letter or at a later date set in 
 20.25  the letter.  If population information is not contained in the 
 20.26  petition or notice of intent for annexation and the annexation 
 20.27  ordinance, the board approval letter shall not state the 
 20.28  population. 
 20.29     Subd. 10.  [INFORMATION TO BOARD OFFICE.] The municipal 
 20.30  board office of strategic and long-range planning or the 
 20.31  administrative law judge may, at its the discretion of the 
 20.32  office or the judge, require the city or property owners to 
 20.33  furnish additional information concerning an annexation by 
 20.34  ordinance to inform the board requesting authority about the 
 20.35  extent to which the proposed annexation conforms to the 
 20.36  statutory criteria set forth in sections 414.01, subdivision 1 
 21.1   and 414.031, subdivision 4. 
 21.2      Subd. 11.  [FLOODPLAIN; SHORELAND AREA.] When a 
 21.3   municipality declares land annexed to the municipality under 
 21.4   subdivision 2, clause (3), or subdivision 2a, and the land is 
 21.5   within a designated floodplain, as provided by section 103F.111, 
 21.6   subdivision 4, or a shoreland area, as provided by section 
 21.7   103F.205, subdivision 4, the municipality shall adopt or amend 
 21.8   its land use controls to conform to chapter 103F, and any new 
 21.9   development of the annexed land shall be subject to chapter 103F.
 21.10     Subd. 12.  [PROPERTY TAXES.] When a municipality annexes 
 21.11  land under subdivision 2, clause (2), (3), or (4), or 
 21.12  subdivision 2a, property taxes payable on the annexed land shall 
 21.13  continue to be paid to the affected town or towns for the year 
 21.14  in which the annexation becomes effective.  Thereafter, property 
 21.15  taxes on the annexed land shall be paid to the municipality.  In 
 21.16  the first year following the year the land was annexed, the 
 21.17  municipality shall make a cash payment to the affected town or 
 21.18  towns in an amount equal to 90 percent of the property taxes 
 21.19  paid in the year the land was annexed; in the second year, an 
 21.20  amount equal to 70 percent of the property taxes paid in the 
 21.21  year the land was annexed; in the third year, an amount equal to 
 21.22  50 percent of the property taxes paid in the year the land was 
 21.23  annexed; in the fourth year, an amount equal to 30 percent of 
 21.24  the property taxes paid in the year the land was annexed; and in 
 21.25  the fifth year, an amount equal to ten percent of the property 
 21.26  taxes paid in the year the land was annexed.  The municipality 
 21.27  and the affected township may agree to a different payment. 
 21.28     Subd. 13.  [ELECTRIC UTILITY SERVICE NOTICE.] At least 60 
 21.29  days before a petition is filed under section 414.0325 or this 
 21.30  section, the petitioner must notify the municipality that the 
 21.31  petitioner intends to file a petition for annexation.  At least 
 21.32  30 days before a petition is filed for annexation, the 
 21.33  petitioner must be notified by the municipality that the cost of 
 21.34  electric utility service to the petitioner may change if the 
 21.35  land is annexed to the municipality.  The notice must include an 
 21.36  estimate of the cost impact of any change in electric utility 
 22.1   services, including rate changes and assessments, resulting from 
 22.2   the annexation.  
 22.3      Sec. 16.  Minnesota Statutes 1996, section 414.035, is 
 22.4   amended to read: 
 22.5      414.035 [DIFFERENTIAL TAXATION.] 
 22.6      Whenever a board an order, under section 414.031, 414.0325, 
 22.7   or 414.033, annexes part or all of a township to a municipality, 
 22.8   the board order may provide that the tax rate of the annexing 
 22.9   municipality on the area annexed shall be increased in 
 22.10  substantially equal proportions over not more than six years to 
 22.11  equality with the tax rate on the property already within the 
 22.12  municipality.  The appropriate period, if any, shall be based on 
 22.13  the time reasonably required to effectively provide full 
 22.14  municipal services to the annexed area. 
 22.15     Sec. 17.  Minnesota Statutes 1996, section 414.036, is 
 22.16  amended to read: 
 22.17     414.036 [MUNICIPAL REIMBURSEMENT.] 
 22.18     When a board an order under section 414.0325 annexes part 
 22.19  of a town to a municipality, the orderly annexation agreement 
 22.20  between the town and municipality may provide a reimbursement 
 22.21  from the municipality to the town for all or part of the taxable 
 22.22  property annexed as part of the board order.  The reimbursement 
 22.23  shall be completed in substantially equal payments over not less 
 22.24  than two nor more than six years from the time of annexation. 
 22.25     Sec. 18.  Minnesota Statutes 1996, section 414.041, is 
 22.26  amended to read: 
 22.27     414.041 [CONSOLIDATION OF MUNICIPALITIES.] 
 22.28     Subdivision 1.  [INITIATING THE PROCEEDING.] Two or more 
 22.29  municipalities may be the subject of a single proceeding 
 22.30  provided that each municipality abuts at least one of the 
 22.31  included municipalities.  The proceeding shall be initiated in 
 22.32  one of the following ways:  
 22.33     (a) Submitting to the executive director office of 
 22.34  strategic and long-range planning a resolution of the city 
 22.35  council of each affected municipality; 
 22.36     (b) Submitting to the executive director office a petition 
 23.1   signed by five percent or more of the resident voters of a 
 23.2   municipality who voted for governor at the last general 
 23.3   election; or 
 23.4      (c) By the board office on its own motion.  
 23.5      The petition or resolution shall set forth the following 
 23.6   information about each included municipality: name, description 
 23.7   of boundaries, the reasons for requesting the consolidation and 
 23.8   the names of all parties entitled to mailed notice under section 
 23.9   414.09.  The party initiating the proceeding shall serve copies 
 23.10  of the petition or resolution on all of the included 
 23.11  municipalities. 
 23.12     Subd. 2.  [CONSOLIDATION COMMISSION.] Upon receipt of a 
 23.13  petition or a resolution requesting consolidation or upon 
 23.14  the board's office's own motion, the board office shall appoint 
 23.15  a consolidation commission from a list of ten candidates 
 23.16  submitted by each affected city council.  The commission shall 
 23.17  be composed of not fewer than five members from each affected 
 23.18  municipality.  From a separate list of three persons submitted 
 23.19  by each affected city council, the board office shall appoint a 
 23.20  commission chair who is not a resident of an affected 
 23.21  municipality but who resides in an affected county.  
 23.22     No person is disqualified from serving on a consolidation 
 23.23  commission by reason of holding other elected or appointed 
 23.24  office.  Consolidation commission members shall hold office 
 23.25  until a consolidation report has been issued by the commission.  
 23.26  The board office shall fill vacancies in the commission by 
 23.27  appointment.  The consolidation commission shall make rules with 
 23.28  reference to its operation and procedures including quorum 
 23.29  requirements with reference to its operations and procedures. 
 23.30     Subd. 3.  [COMMISSION'S HEARING AND REPORT.] The 
 23.31  consolidation commission shall conduct hearings regarding the 
 23.32  proposed consolidation.  The hearings shall include, but are not 
 23.33  limited to, the following subjects:  
 23.34     (a) The contents of any city charter for the proposed 
 23.35  consolidated city or the form of government of the proposed 
 23.36  consolidated city; 
 24.1      (b) Analysis of whether a ward system shall be included in 
 24.2   the form of government of the proposed consolidated city; and 
 24.3      (c) Each factor considered by the board under section 
 24.4   414.02, subdivision 3.  
 24.5      Based on these factors and upon other matters which come 
 24.6   before the consolidation commission, the commission shall issue 
 24.7   a report to the municipal board office with findings and 
 24.8   recommendations within two years from the date of the board's 
 24.9   initial appointment of the commission.  
 24.10     Subd. 4.  [BOARD'S HEARING AND NOTICE.] Upon receipt of the 
 24.11  commission's report, the executive director office of strategic 
 24.12  and long-range planning shall inform the office of 
 24.13  administrative hearings which shall designate a time and a place 
 24.14  for a hearing in accordance with section 414.09. 
 24.15     Subd. 5.  [BOARD'S FACTORS, ORDER.] In arriving at its a 
 24.16  decision, the board administrative law judge shall consider the 
 24.17  factors in section 414.02, subdivision 3. 
 24.18     The board administrative law judge shall consider and may 
 24.19  accept, amend, return to the commission for amendment or further 
 24.20  study, or reject the commission's findings and recommendations 
 24.21  based upon the board's judge's written determination of what is 
 24.22  in the best interests of the affected municipalities.  
 24.23     The board judge shall order the consolidation if it 
 24.24  finds on finding that consolidation will be for the best 
 24.25  interests of the municipalities.  In all cases, the board judge 
 24.26  shall set forth the factors which are the basis for the decision.
 24.27     If the board judge orders consolidation, it the judge shall 
 24.28  provide for election of new municipal officers in accordance 
 24.29  with section 414.09.  If the most populous of the included 
 24.30  municipalities is a statutory city, the new municipality shall 
 24.31  be a statutory city and the plan of government shall be Optional 
 24.32  Plan A, provided that an alternate plan may be adopted pursuant 
 24.33  to section 412.551, at any time.  If the most populous of the 
 24.34  included municipalities is a home rule charter city or organized 
 24.35  under a statute other than chapter 412, the new municipality 
 24.36  shall be governed by its home rule charter or the statutory form 
 25.1   under which it is governed except that any ward system for the 
 25.2   election of council members shall be inoperable.  If the 
 25.3   commission's findings and recommendations include a proposed 
 25.4   home rule charter for the new municipality, the board judge may 
 25.5   in its the order combine the issue of the adoption of the 
 25.6   charter and the vote on approval of the order for consolidation 
 25.7   into one question on the ballot, and shall submit it in a 
 25.8   special or general election as provided in section 410.10.  The 
 25.9   ordinances of all of the included municipalities shall continue 
 25.10  in effect within their former boundaries until repealed by the 
 25.11  governing body of the new municipality. 
 25.12     Notwithstanding any other provision of law to the contrary, 
 25.13  the board judge may in its the order establish a ward system in 
 25.14  the new municipality, in which event it shall establish not less 
 25.15  than three nor more than seven wards, each of which shall elect 
 25.16  one council member.  When more than two years have elapsed after 
 25.17  consolidation, the governing body may, by a four-fifths vote, 
 25.18  abolish the ward system. 
 25.19     The new municipality shall assume the name of the most 
 25.20  populous municipality unless previous to the election another 
 25.21  name is chosen by joint resolution of a majority of the included 
 25.22  municipalities or by the consolidation commission. 
 25.23     The number of license privileges existing in the included 
 25.24  municipalities prior to consolidation and pursuant to state law 
 25.25  shall not be diminished as a result of the consolidation. 
 25.26     If the consolidation is denied or defeated in a referendum, 
 25.27  no proceeding for the consolidation of the same municipalities 
 25.28  may be initiated within two years from the date of the board's 
 25.29  order unless authorized by the board judge. 
 25.30     Subd. 6.  [FINAL APPROVAL.] (a) If the consolidation was 
 25.31  initiated by a petition of the resident voters of a 
 25.32  municipality, the board's judge's order for consolidation shall 
 25.33  be final upon approval by resolution of the city councils in 
 25.34  each of the affected municipalities unless ten percent or more 
 25.35  of the resident voters of an affected municipality who voted for 
 25.36  governor at the last general election petition the city council 
 26.1   for a referendum on the consolidation.  The petition must be 
 26.2   submitted within 90 days of the final date of the board's order 
 26.3   or the date of final approval of the board's order by the city 
 26.4   councils, whichever is later.  Upon receipt and verification of 
 26.5   the petition, the board judge shall order the municipalities to 
 26.6   conduct separate referenda at a general or special election in 
 26.7   each municipality on the same day, and the referenda shall be 
 26.8   held within six months of the receipt of the petition.  Costs of 
 26.9   the respective referenda shall be borne by the respective 
 26.10  municipality.  A majority of those voting in each city must 
 26.11  approve the proposed consolidation.  The results of the 
 26.12  referenda shall be certified to the executive director of the 
 26.13  municipal board judge and the office of strategic and long-range 
 26.14  planning by the chief election judge within ten days after the 
 26.15  referenda.  The executive director office shall upon receipt of 
 26.16  the certificate notify all parties of the election results. 
 26.17     (b) If the consolidation was initiated by a city council 
 26.18  resolution of each affected municipality, the board's order for 
 26.19  consolidation shall be final unless ten percent or more of the 
 26.20  resident voters of an affected municipality petition for a 
 26.21  referendum as provided in clause (a).  
 26.22     (c) If the consolidation was initiated by the board's 
 26.23  office's own motion, no consolidation order of the board 
 26.24  involving existing municipalities shall become effective unless 
 26.25  adopted by the council of each affected municipality by a 
 26.26  majority vote and unless the consolidation order of the board is 
 26.27  approved by the qualified voters of the affected municipalities 
 26.28  at a general or special election set according to law.  The form 
 26.29  of the ballot shall be fixed by the board judge; and, if a 
 26.30  majority of the votes cast on the question in each municipality 
 26.31  are in favor of its adoption, the order of the board shall 
 26.32  become effective as provided herein.  
 26.33     (d) Notwithstanding a disapproval of the board's order for 
 26.34  consolidation by a city council of an affected municipality 
 26.35  required to approve the board's order in clause (a) or (c), the 
 26.36  board's order for consolidation shall nevertheless be deemed 
 27.1   approved by that city council if ten percent or more of the 
 27.2   resident voters of that municipality who voted for governor at 
 27.3   the last general election petition the city council for a 
 27.4   referendum on the consolidation as provided in clause (a), and a 
 27.5   majority of those voting in that municipality approve the 
 27.6   board's order for consolidation.  
 27.7      Subd. 7.  [DIFFERENTIAL TAXATION.] Where one municipality 
 27.8   is receiving substantially fewer municipal services, the board 
 27.9   judge may provide that the tax rate of the municipality shall be 
 27.10  increased in substantially equal proportions over a period of 
 27.11  not more than five years to equality with the tax rate in the 
 27.12  remainder of the new municipality.  The period shall be 
 27.13  determined by the board judge on the basis of the period 
 27.14  reasonably required to provide substantially equal municipal 
 27.15  services. 
 27.16     Subd. 8.  [EFFECTIVE DATE.] The consolidation shall be 
 27.17  effective upon the election and qualification of new municipal 
 27.18  officers, or at such later date as set by the board in its order.
 27.19     Sec. 19.  Minnesota Statutes 1996, section 414.051, is 
 27.20  amended to read: 
 27.21     414.051 [BOARD'S OFFICE'S REVIEW OF TOWNSHIPS ACCORDING TO 
 27.22  POPULATION.] 
 27.23     After each federal census, the board office of strategic 
 27.24  and long-range planning may determine the townships which have a 
 27.25  population in excess of 2,000 exclusive of any municipality or 
 27.26  part of a municipality within the township and make 
 27.27  recommendations which it deems necessary and reasonable to the 
 27.28  board of any such township. 
 27.29     Sec. 20.  Minnesota Statutes 1996, section 414.06, is 
 27.30  amended to read: 
 27.31     414.06 [DETACHMENT OF PROPERTY FROM A MUNICIPALITY.] 
 27.32     Subdivision 1.  [INITIATING THE PROCEEDING.] Property which 
 27.33  is situated within a municipality and abutting the municipal 
 27.34  boundary, rural in character and not developed for urban 
 27.35  residential, commercial, or industrial purposes may be detached 
 27.36  from the municipality according to the following procedure.  The 
 28.1   proceeding may be initiated by submitting to the board office of 
 28.2   strategic and long-range planning a resolution of the 
 28.3   municipality to which the land is attached or by submitting to 
 28.4   the board a petition of all of the property owners of the land 
 28.5   to be detached if the area is less than 40 acres or of 75 
 28.6   percent of the property owners if over 40 acres.  The petition 
 28.7   or resolution shall set forth the boundaries and the area of the 
 28.8   land to be detached, the number and character of the buildings, 
 28.9   the resident population, and the municipal improvements, if any, 
 28.10  in the area. 
 28.11     Subd. 2.  [HEARING, IF NEEDED.] If both a resolution of the 
 28.12  municipality and a petition by all the property owners are 
 28.13  submitted, no hearing is necessary.  In any other case, upon 
 28.14  receipt of a timely objection to a petition or resolution, 
 28.15  the executive director of the board office of strategic and 
 28.16  long-range planning shall inform the office of administrative 
 28.17  hearings which shall designate a time and place for a hearing in 
 28.18  accordance with section 414.09.  If no timely objection is 
 28.19  received, the office of strategic and long-range planning shall 
 28.20  order the detachment as requested in the petition or resolution. 
 28.21     Subd. 3.  [BOARD'S ORDER.] Upon completion of the hearing, 
 28.22  the board judge may order the detachment if it finds on finding 
 28.23  that the requisite number of property owners have signed the 
 28.24  petition if initiated by the property owners, that the property 
 28.25  is rural in character and not developed for urban residential, 
 28.26  commercial or industrial purposes, that the property is within 
 28.27  the boundaries of the municipality and abuts a boundary, that 
 28.28  the detachment would not unreasonably affect the symmetry of the 
 28.29  detaching municipality, and that the land is not needed for 
 28.30  reasonably anticipated future development.  The board judge may 
 28.31  deny the detachment if it the judge finds that the remainder of 
 28.32  the municipality cannot continue to carry on the functions of 
 28.33  government without undue hardship. The board judge shall have 
 28.34  authority to decrease the area of property to be detached and 
 28.35  may include only a part of the proposed area to be detached.  If 
 28.36  the tract abuts more than one township, it shall become a part 
 29.1   of each township, being divided by projecting through it the 
 29.2   boundary line between the townships.  The detached area may be 
 29.3   relieved of the primary responsibility for existing indebtedness 
 29.4   of the municipality and be required to assume the indebtedness 
 29.5   of the township of which it becomes a part, in such proportion 
 29.6   as the board judge shall deem just and equitable having in view 
 29.7   the amount of taxes due and delinquent and the indebtedness of 
 29.8   each township and the municipality affected, if any, and for 
 29.9   what purpose the same was incurred, all in relation to the 
 29.10  benefit inuring to the detached area as a result of the 
 29.11  indebtedness and the last net tax capacity of the taxable 
 29.12  property in each township and municipality. 
 29.13     Subd. 4.  [EFFECTIVE DATE.] The detachment shall be 
 29.14  effective upon the issuance of the board's order, or at such 
 29.15  later date, as provided by the board in its order.  A copy of 
 29.16  the detachment order must be delivered immediately by 
 29.17  the executive director of the Minnesota municipal board office 
 29.18  of strategic and long-range planning or the administrative law 
 29.19  judge to the appropriate county auditor or auditors.  For the 
 29.20  purposes of taxation, if the detachment becomes effective on or 
 29.21  before August 1 of a levy year, the town or towns acquiring the 
 29.22  detached area may levy on it beginning with that same levy 
 29.23  year.  If the detachment becomes effective after August 1 of a 
 29.24  levy year, the municipality may continue to levy on the detached 
 29.25  area for that levy year, and the town or towns acquiring the 
 29.26  detached area may not levy on it until the following levy year. 
 29.27     Sec. 21.  Minnesota Statutes 1996, section 414.061, is 
 29.28  amended to read: 
 29.29     414.061 [CONCURRENT DETACHMENT AND ANNEXATION OF 
 29.30  INCORPORATED LAND.] 
 29.31     Subdivision 1.  [INITIATING THE PROCEEDING.] Property of 
 29.32  one municipality which abuts another may be concurrently 
 29.33  detached and annexed by the procedure set forth in this 
 29.34  section.  The proceeding shall be initiated by submitting to the 
 29.35  executive director office of strategic and long-range planning 
 29.36  resolutions of both municipalities describing the land and 
 30.1   stating their desire to detach and annex the land. 
 30.2      Subd. 2.  [BOARD'S ORDER.] If the resolutions are in order, 
 30.3   the board office may order the detachment and annexation. 
 30.4      Subd. 3.  [EFFECTIVE DATE.] The concurrent detachment and 
 30.5   annexation shall be effective upon the issuance of the board's 
 30.6   order, or at such later date as provided by the board in its 
 30.7   order.  A copy of the annexation order must be delivered 
 30.8   immediately by the executive director of the Minnesota municipal 
 30.9   board office of strategic and long-range planning to the 
 30.10  appropriate county auditor or auditors.  For the purposes of 
 30.11  taxation, if the annexation becomes effective on or before 
 30.12  August 1 of a levy year, the municipality acquiring the detached 
 30.13  area of another municipality may levy on it beginning with that 
 30.14  same levy year.  If the annexation becomes effective after 
 30.15  August 1 of a levy year, the municipality losing the detached 
 30.16  area may continue to levy on it for that levy year, and the 
 30.17  municipality acquiring the detached area may not levy on it 
 30.18  until the following levy year. 
 30.19     Subd. 4.  [BOARD OFFICE INITIATION.] The board office may 
 30.20  initiate proceedings for the concurrent detachment and 
 30.21  annexation of portions of one municipality completely surrounded 
 30.22  by another municipality, on its own motion or upon the petition 
 30.23  of all of the owners of property in the completely surrounded 
 30.24  area.  In such cases the board office of administrative hearings 
 30.25  shall conduct hearings and issue its order pursuant to section 
 30.26  414.09.  In arriving at its decision, the board office shall 
 30.27  consider the factors in section 414.02, subdivision 3.  
 30.28  The board office shall order the proposed action if it finds 
 30.29  that it will be for the best interests of the municipalities and 
 30.30  the property owners.  In all cases, the board office shall set 
 30.31  forth the factors which are the basis for the decision. 
 30.32     Subd. 5.  [PROPERTY OWNER INITIATION.] Property owners may 
 30.33  initiate proceedings for the concurrent detachment of their 
 30.34  property from one municipality and its annexation to an adjacent 
 30.35  municipality by a petition signed by all of them that they 
 30.36  submit to the board office of strategic and long-range planning 
 31.1   accompanied by a resolution of the city council of at least one 
 31.2   of the affected municipalities.  The board office of strategic 
 31.3   and long-range planning shall inform the office of 
 31.4   administrative hearings which shall conduct hearings and issue 
 31.5   its order pursuant to section 414.09.  In arriving at its 
 31.6   decision, the board shall consider the factors in section 
 31.7   414.02, subdivision 3.  The board shall order the proposed 
 31.8   action if it finds that it will be for the best interests of the 
 31.9   municipalities and the property owner.  In all cases, the board 
 31.10  shall set forth the factors which are the basis for the decision.
 31.11     Sec. 22.  Minnesota Statutes 1996, section 414.063, is 
 31.12  amended to read: 
 31.13     414.063 [JOINT AGREEMENTS.] 
 31.14     After notice and hearing as provided in section 414.09, the 
 31.15  board administrative law judge may include provisions of joint 
 31.16  agreements between political subdivisions in its the orders. 
 31.17     Sec. 23.  Minnesota Statutes 1996, section 414.067, is 
 31.18  amended to read: 
 31.19     414.067 [APPORTIONMENT OF ASSETS AND OBLIGATIONS.] 
 31.20     Subdivision 1.  [TOWNSHIP OR MUNICIPALITY DIVIDED.] 
 31.21  Whenever the board a judge divides an existing governmental 
 31.22  unit, the board judge may apportion the property and obligations 
 31.23  between the governmental unit adding territory and the 
 31.24  governmental unit from which the territory was obtained.  The 
 31.25  apportionment shall be made in a just and equitable manner 
 31.26  having in view the value of the existing township or municipal 
 31.27  property located in the area to be added, the assets, value, and 
 31.28  location of all the taxable property in the existing township or 
 31.29  municipality, the indebtedness, the taxes due and delinquent, 
 31.30  other revenue accrued but not paid to the existing township or 
 31.31  municipality and the ability of any remainder of the township or 
 31.32  municipality to function as an effective governmental unit.  The 
 31.33  order shall not relieve any property from any tax liability for 
 31.34  payment for any bonded obligation, but the taxable property in 
 31.35  the new municipality may be made primarily liable thereon. 
 31.36     Subd. 2.  [ENTIRE TOWNSHIP OR MUNICIPALITY.] When an entire 
 32.1   township is annexed by an existing municipality, or an entire 
 32.2   township is incorporated into a new municipality, or a 
 32.3   municipality is consolidated into a new municipality, all money, 
 32.4   claims, or properties, including real estate owned, held, or 
 32.5   possessed by the annexed, incorporated township or municipality, 
 32.6   and any proceeds or taxes levied by such town or municipality, 
 32.7   collected or uncollected, shall become and be the property of 
 32.8   the new or annexing municipality with full power and authority 
 32.9   to use and dispose of the same for public purposes as the 
 32.10  council or new annexing municipality may deem best, subject to 
 32.11  the rights of creditors.  Any bonded indebtedness of a town or 
 32.12  former municipality annexed to an existing municipality or 
 32.13  incorporated or consolidated into a new municipality shall be 
 32.14  borne only by that property within the boundaries of the former 
 32.15  town or municipality, provided, however, the units of government 
 32.16  concerned may by resolution of their governing bodies agree that 
 32.17  the new municipality shall assume the bonded indebtedness of the 
 32.18  former units of government existing and outstanding at the time 
 32.19  of annexation, incorporation, or consolidation. 
 32.20     Subd. 3.  [REVISION OF TAX RECORDS; REDISTRIBUTION OF 
 32.21  LEVIES.] In an apportionment made under this section, the board 
 32.22  judge may order the county auditor to revise tax records and 
 32.23  respread levies at any time prior to December 15 or order the 
 32.24  county treasurer to redistribute taxes levied and receivable. 
 32.25     Sec. 24.  Minnesota Statutes 1996, section 414.07, is 
 32.26  amended to read: 
 32.27     414.07 [APPEALS.] 
 32.28     Subdivision 1.  [ORDERS OF BOARD JUDGE, TIME LIMITATION.] 
 32.29  All orders of the board administrative law judge shall be issued 
 32.30  within one year from the date of the day of the first hearing 
 32.31  thereon provided that the time may be extended for a fixed 
 32.32  additional period upon consent of all parties of record.  
 32.33  Failure to so order shall be deemed to be an order denying the 
 32.34  matter before the board.  An appeal may be taken from Judicial 
 32.35  review of such failure to so order may be taken in the same 
 32.36  manner as an appeal from judicial review of an order as provided 
 33.1   in subdivision 2. 
 33.2      Subd. 2.  [GROUNDS FOR APPEAL.] Any person aggrieved by any 
 33.3   order of the board may appeal to the district court upon the 
 33.4   following grounds: 
 33.5      (a) that the board had no jurisdiction to act; 
 33.6      (b) that the board exceeded its jurisdiction; 
 33.7      (c) that the order of the board is arbitrary, fraudulent, 
 33.8   capricious or oppressive or in unreasonable disregard of the 
 33.9   best interests of the territory affected; or 
 33.10     (d) that the order is based upon an erroneous theory of law.
 33.11     The appeal shall be taken in the district court in the 
 33.12  county in which the majority of the area affected is located.  
 33.13  The appeal shall not stay the effect of the order.  All notices 
 33.14  and other documents shall be served on both the executive 
 33.15  director and the attorney general's assistant assigned to the 
 33.16  board. 
 33.17     If the court determines that the action of the board 
 33.18  involved is unlawful or unreasonable or is not warranted by the 
 33.19  evidence in case an issue of fact is involved, the court may 
 33.20  vacate or suspend the action of the board involved, in whole or 
 33.21  in part, as the case requires.  The matter shall then be 
 33.22  remanded to the board for further action in conformity with the 
 33.23  decision of the court. 
 33.24     To render a review of a board order effectual, the 
 33.25  aggrieved person shall file with the court administrator of the 
 33.26  district court of the county in which the majority of the area 
 33.27  is located, within 30 days of the order, an application for 
 33.28  review together with the grounds upon which the review is sought.
 33.29     An appeal lies from the district court as in other civil 
 33.30  cases administrative law judge is entitled to judicial review of 
 33.31  the order as provided in sections 14.636 to 14.69. 
 33.32     Sec. 25.  Minnesota Statutes 1996, section 414.09, is 
 33.33  amended to read: 
 33.34     414.09 [UNIFORM HEARING PROCEDURES OF BOARD.] 
 33.35     Subdivision 1.  [HEARINGS.] Proceedings initiated by the 
 33.36  submission of an initiating document or by the board of office 
 34.1   of strategic and long-range planning on its own motion shall 
 34.2   come on for hearing within 30 to 60 days from receipt of the 
 34.3   document by the board office or from the date of board office 
 34.4   action and the board office or administrative law judge must 
 34.5   submit its an order no later than one year from the date of the 
 34.6   day of the first hearing.  In any proceeding before the board 
 34.7   and upon the request of any party, the board shall meet 
 34.8   physically rather than by means of electronic media.  The place 
 34.9   of the hearing shall be in the county where a majority of the 
 34.10  affected territory is situated, and shall be established for the 
 34.11  convenience of the parties.  The executive director office or 
 34.12  judge shall mail notice of the hearing to the following 
 34.13  parties:  the township or municipality presently governing the 
 34.14  affected territory; any township or municipality abutting the 
 34.15  affected territory; the county where the affected territory is 
 34.16  situated; and each planning agency which has jurisdiction over 
 34.17  the affected area.  The executive director office or judge shall 
 34.18  cause notice of the hearing to be published for two successive 
 34.19  weeks in a legal newspaper of general circulation in the 
 34.20  affected area.  When the board administrative law judge 
 34.21  exercises its authority to change the boundaries of the affected 
 34.22  area so as to increase the quantity of the land, the hearing 
 34.23  shall be recessed and reconvened upon two weeks published notice 
 34.24  in a legal newspaper of general circulation in the affected area.
 34.25     Subd. 2.  [TRANSMITTAL OF BOARD'S ORDER.] The executive 
 34.26  director office or judge shall cause copies of the board's order 
 34.27  to be mailed to all parties entitled to mailed notice of hearing 
 34.28  under subdivision 1, the secretary of state, the department of 
 34.29  revenue, the state demographer, individual property owners if 
 34.30  initiated in that manner, affected county auditor, and any other 
 34.31  party of record.  The affected county auditor shall record the 
 34.32  order against the affected property. 
 34.33     Subd. 3.  [ELECTIONS OF MUNICIPAL OFFICERS.] An order 
 34.34  approving an incorporation or consolidation pursuant to this 
 34.35  chapter shall set a date for this election of new municipal 
 34.36  officers not less than 45 days nor more than 60 days after the 
 35.1   issuance of such order.  The board office shall appoint an 
 35.2   acting clerk for election purposes, at least three election 
 35.3   judges who shall be residents of the new municipality, and shall 
 35.4   designate polling places within the new municipality. 
 35.5      The acting clerk shall prepare the official election 
 35.6   ballot.  Affidavits of candidacy may be filed by any person 
 35.7   eligible to hold municipal office not more than four weeks nor 
 35.8   less than two weeks before the date designated by the board for 
 35.9   the election.  
 35.10     The election shall be conducted in conformity with the 
 35.11  charter and the laws for conducting municipal elections insofar 
 35.12  as applicable.  Any person eligible to vote at a township or 
 35.13  municipal election within the area of the new municipality, is 
 35.14  eligible to vote at such election. 
 35.15     Any excess in the expense of conducting the election over 
 35.16  receipts from filing fees shall be a charge against the new 
 35.17  municipality; any excess of receipts shall be deposited in the 
 35.18  treasury of the new municipality. 
 35.19     Sec. 26.  [APPROPRIATION.] 
 35.20     The following sums are appropriated from the general fund 
 35.21  to the office named to perform the powers and duties transferred 
 35.22  by sections 2 to 25, for the biennium ending June 30, 1999: 
 35.23     $....... to the office of strategic and long-range 
 35.24  planning; 
 35.25     $....... to the office of administrative hearings. 
 35.26     Sec. 27.  [REVISOR INSTRUCTION.] 
 35.27     In the next edition of Minnesota Statutes, the revisor of 
 35.28  statutes shall substitute any of the following, as appropriate, 
 35.29  for "municipal board" or "board" where those terms are used to 
 35.30  refer to duties of the abolished municipal board:  
 35.31     (1) "office of strategic and long-range planning" or 
 35.32  "office"; or 
 35.33     (2) "office of administrative hearings" or "office" or 
 35.34  "administrative law judge" or "judge." 
 35.35     Sec. 28.  [REPEALER.] 
 35.36     Minnesota Statutes 1996, sections 414.01, subdivisions 2, 
 36.1   5, 6a, 7a, 8, 10, 11, and 12; 414.0325, subdivision 1a; 414.033, 
 36.2   subdivision 3; and 414.08, are repealed. 
 36.3      Sec. 29.  [EFFECTIVE DATE.] 
 36.4      This act is effective July 1, 1997.