Senate Counsel, Research and Fiscal Analysis

G-17 State Capitol 75 Rev. Dr. Martin Luther King Jr. Blvd. St. Paul, MN 55155-1606 (651) 296-4791 Fax: (651) 296-7747 Tom Bottern Director

Senate
State of Minnesota

S.F. No. 607 - Municipal Street Improvement Districts (First Engrossment)

Author: Prepared By: Date: Senator Jim Carlson Alexis C. Stangl, Senate Counsel (651/296-4397) March 19, 2013

S.F. No. 607 allows cities to create street improvement districts and impose street improvement fees to pay for street improvements in the district. Section 1, subdivision 1 provides definitions for the section. A street improvement district is defined as a geographical area designated by a municipality and located within the municipality within which street improvements and maintenance may be undertaken and financed according to this section. Subdivision 2 authorizes a city to establish a municipal street improvement district by adopting an ordinance. The city may defray the costs of municipal street improvements and maintenance by charging fees to all property located in the district. A street improvement district must not include property already in another street improvement district. Subdivision 3 requires that the total costs of street improvements and maintenance must be uniformly apportioned to all property located in the district based on the classification of the property. Subdivision 4 provides the process for a city to adopt a street improvement district. Before establishing a district or authorizing a street improvement fee, the city must

propose and adopt a street improvement plan that identifies the location of the district and estimates the costs of the proposed improvements. The fees may be collected for a period of 5 to 20 years. Notice of a public hearing on the proposed plan must be mailed to all affected landowners at least 30 days before the hearing. Notice must also be posted for at least 30 days before the hearing. At the public hearing, the city council must present the plan and affected landowners must have the opportunity to comment before the council considers adopting the plan. Subdivision 5 provides that revenue from street improvement fees must be placed in a separate account and be used only for projects located in the district and identified in the street improvement plan. Subdivision 6 provides that the ordinance must provide for billing and payment of the fee on a specified basis. Unpaid fees may be certified to the county auditor for collection as a special assessment. Subdivision 7 requires a municipality to impose a municipal improvement fee by ordinance. The ordinance must not be voted on or adopted until after public notice and a hearing. Subdivision 8 provides that imposing a street improvement fee does not restrict the city from using other methods to pay costs of local street improvements or maintenance, except that a city must not impose special assessments for projects funded with street improvement fees. Subdivision 9 prohibits a city from imposing a street improvement fee on an undeveloped parcel until the later of either three years after (1) the date of substantial completion of paving the street; or (2) the date which a previously unoccupied structure is first occupied. This section is effective on July 1, 2013. ACS/syl