This bill, Minnesota Senate File No. 2196, proposes amendments to Minnesota Statutes 2024, section 462.358, allowing municipalities to impose a street impact fee on new subdivisions and developments.

Key Provisions:

1. Street Impact Fee Authorization (Subd. 12)

   • Municipalities may charge a fee set by ordinance based on:
     • Net buildable acreage of a subdivision.
     • Impact on the local transportation system or municipal transportation plan.
   • Fees collected must be placed in a special fund and used only for:
     • Acquisition, construction, maintenance, or improvement of streets, roads, intersections, and related infrastructure.
   • Municipalities may deny subdivision approval if the transportation system is inadequate.
   • Properties previously charged a street impact fee are exempt if resubdivided with the same number of lots.
     
     • If the number of lots increases, the fee applies only to the new lots.

2. Nexus Requirement for Fees (Subd. 13)

   • There must be a direct connection between the fee and the municipal purpose it serves.
   • Fees must be proportionate to the impact of the subdivision or development.
   • Developers may challenge the validity of the fee without waiving their rights by filing a dispute before final municipal approval.
   • If a dispute arises:
     • The developer must place the fee in escrow before the final decision.
     • Development may proceed as if paid, pending resolution.
     • The developer must appeal within 60 days under section 462.361.
     • If no appeal is filed or the appeal fails, escrowed funds go to the municipality.

Summary:

This bill allows Minnesota municipalities to charge developers a street impact fee to support transportation infrastructure needs. The fee must be proportionate to the development's impact and developers have the right to challenge it through an appeal process while continuing their projects.

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