This bill, Senate File No. 2196, proposes amendments to Minnesota Statutes 2024, section 462.358, authorizing municipalities to impose a street impact fee on new subdivisions to fund transportation infrastructure improvements.

Key Provisions:

1. Street Impact Fee (Subd. 12):

   • Municipalities may charge a fee, determined by ordinance, based on the net buildable acreage of a subdivision or its impact on the local transportation system.
   • Funds collected must be placed in a special fund and used exclusively for transportation-related expenses, such as road construction, maintenance, and improvements.
   • Municipalities can deny a subdivision application if the transportation system is deemed inadequate.
   • If previously subdivided property is resubdivided without increasing the number of lots, no additional fee is required. If the number of lots increases, fees apply only to the additional lots.

2. Street Impact Fee Nexus (Subd. 13):

   • There must be a clear connection (“nexus”) between the fee imposed and the municipality's transportation needs, ensuring the fee is proportional to the impact of the development.
   • If an applicant disputes the fee before final municipal approval, the municipality cannot require a waiver of the right to challenge it.
   • If a dispute arises:
     • The applicant must notify the municipality in writing.
     • The disputed fee must be placed in escrow before final approval.
     • The applicant must appeal the fee under section 462.361 within 60 days.
     • If the appeal fails or is not filed, the escrow funds go to the municipality.

Purpose:

The bill seeks to ensure that new developments contribute fairly to the cost of expanding and maintaining municipal transportation infrastructure, while also providing a mechanism for developers to challenge excessive or unfair fees.