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Senate Counsel, Research

and Fiscal Analysis

G-17 State Capitol

5 Rev. Dr. Martin Luther King Jr. Blvd.

St. Paul, MN 55155-1606

(651) 296-4791

Fax: (651) 296-7747

Tom Bottern

Director

SenateState of Minnesota

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

Engrossment)

Author: Senator Jim Carlson

Prepared By: Alexis C. Stangl, Senate Counsel (651/296-4397)

Date: 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 districtis 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 improvementsand 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

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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 mailedto 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 commentbefore the council considers adopting the plan.

Subdivision 5 provides that revenue from street improvement fees must be placed in aseparate 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 byordinance. The ordinance must not be voted on or adopted until after public notice and ahearing.

Subdivision 8 provides that imposing a street improvement fee does not restrict the cityfrom 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 structureis first occupied.

This section is effective on July 1, 2013.

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