Purpose

This bill updates how Minnesota municipalities handle land dedication when approving new subdivisions. It aims to provide flexible options for creating or funding public parks, trails, and other open spaces, while also ensuring necessary public utilities and streets are planned and financed through local regulations and plans.

Main Provisions

• Buildable land dedication for public use

  • Municipal regulations may require a reasonable portion of buildable land in a proposed subdivision to be dedicated to the public or preserved for public use. Uses include streets, roads, sidewalks, utilities (stewers, electric, gas, water), stormwater facilities, parks, playgrounds, trails, wetlands, and open space.
  • The dedication can be required by ordinance or through applicable procedures in state law.

• Planning requirements for dedication

  • If a municipality adopts the dedication ordinance, it must also adopt a capital improvement budget and have a parks and open space plan or a parks/trails/open space component in its comprehensive plan, subject to specified terms.

• Cash in lieu (in-lieu fees)

  • A municipality may accept cash fees in place of land for all or part of the dedication, based on the average fair market value (FMV) of the unplatted land not already paid for with park fees, or as allowed by state law.
  • For redevelopment on developed land, cash fees may be based on FMV at final approval.
  • FMV is determined annually by the municipality; if the applicant objects, value is negotiated or set by an independent appraisal.
  • Regulations must consider the applicant’s proposed open space or public areas when setting the dedication portion or cash fee.

• Use and management of cash payments

  • Cash payments must be placed in a special fund and used only for purposes for which the money was collected (e.g., parks, recreational facilities, trails, open space) and must align with an approved park system plan.
  • The municipality must keep records showing how funds were obtained and spent, and those records must be available to the applicant.

• Limits and prohibitions

  • Cash payments may not be used for ongoing operation or maintenance of parks or related facilities.
  • A subdivision cannot be denied solely because there is an inadequate park or open space supply within the municipality.

• Exemptions and net increases

  • Previously subdivided properties that already paid park dedication are exempt from further dedication requirements unless the new subdivision adds lots; in that case, the dedication or cash fee applies only to the net increase in lots.

• Mix of land and cash

  • Municipalities can require a combination of buildable land and cash fees, with the total value not exceeding 10% of the proposed subdivision’s FMV.
  • Non-buildable land may be dedicated and is not counted toward the 10% limit; land dedicated for regional trails can count unless it’s already dedicated for streets.

• Streets and right-of-way

  • Land dedication for streets/rights-of-way must not exceed the minimum engineering standards for urban roadways as set by state transportation rules.
  • For streets that are not collectors or arterials, dedication cannot exceed what is needed to construct the street with a curb-to-curb width of 32 feet, plus utilities and sidewalks if included in the plan.
  • Guidance from national traffic engineering organizations should be used when designing streets.

Changes to Existing Law

• Expands and clarifies when and how municipalities can require land dedication or cash fees in lieu of land for subdivisions.
• Codifies use restrictions of in-lieu funds (restricts to parks/open space-related purposes per park system plans and prohibitions on funding ongoing operations).
• Introduces a 10% cap on the combined value of land and cash in relation to the subdivision’s FMV and specifies treatment of non-buildable land and regional trails in calculating that cap.
• Adds procedural and planning prerequisites (capital improvement budgets and parks/open space components in comprehensive plans) tied to the dedication authority.

Administration and Oversight

• Cash in lieu funds must be tracked with detailed records and be accessible to applicants upon request.
• Municipalities must reasonably determine the need to acquire the dedicated land or funds for the stated purposes.

Effects on Applicants and Subdividers

• Applicants can choose a mix of land and cash fees up to the 10% cap to satisfy dedication requirements.
• Applicants have access to records showing how in-lieu funds are used and can contest FMV determinations through negotiation or independent appraisal.
• The process allows for in-lieu options to support open space, trails, and park development rather than relying solely on land dedication.

Relevant Terms - buildable land, dedication, public use, streets, roads, sidewalks, sewers, electric, gas, water facilities, stormwater drainage and holding areas, ponds, parks, recreational facilities, playgrounds, trails, wetlands, open space - capital improvement budget, parks and open space plan, comprehensive plan, park systems plan - cash fee, in-lieu fee, fair market value, net increase of lots, unplatted land, per-lot cash fee - regional trails, minimum engineering standards for urban roadways, curb-to-curb width, 32 feet - national traffic engineering organizations, open space - special fund, records, operations and maintenance (O&M) prohibition - subdivision, rezoning, resubdivision, lot, lot increase