Street Improvement District Bill Meets Key Deadlines

Throughout the committee process, numerous legislators have noted that their city officials persuaded them to support the bill.
(Published Mar 25, 2013)

A League initiative that would allow cities to create street improvement districts has advanced through several committees and remains viable as the Legislature prepares for the post-break home stretch.

The Senate version of the bill, SF 607 (Sen. Jim Carlson, DFL-Eagan), was heard and passed in the Senate State and Local Government Committee on March 18. On March 20, it was heard and passed in the Senate Transportation and Public Safety Committee.

Technically, the bill is now in the jurisdiction of the Senate Taxes Committee; however, it may move as a component of an omnibus transportation finance bill if Sen. Scott Dibble (DFL-Minneapolis), chair of the Transportation and Public Safety Division of the Finance Committee, decides to include it in his bill when it is unveiled in April.

The House companion bill, HF 745 (Rep. Ron Erhardt, DFL-Edina), has been passed by the House Government Operations Committee and the House Transportation Policy Committee.

It initially was rejected by the House Transportation Finance Committee on a roll call vote of seven to eight late in the evening of March 20. One of the members voting no, Rep. Clark Johnson (DFL-North Mankato), changed his mind after being contacted by several of his city officials. At a hearing of the House Transportation Finance Committee on March 21, Rep. Johnson made a motion to reconsider the vote. Upon reconsideration, the bill passed on a roll call vote of nine to six. The additional vote came from Rep. Tim Mahoney (DFL-St. Paul), who was absent from the March 20 hearing.

HF 745, like its Senate companion, is awaiting a hearing in the Taxes Committee, but may be included as a provision in an omnibus transportation finance bill that will be carried by Rep. Frank Hornstein (DFL-Minneapolis).

This bill would allow cities to collect fees from property owners within a district to fund municipal street maintenance, construction, reconstruction, and facility upgrades. If enacted, this legislation would provide cities with an additional tool to build and maintain city streets. Both bills have a mix of Republican and DFL co-authors.

The street improvement district initiative has been a high legislative priority for the League in recent years, and it may have renewed momentum in 2013 due to its endorsement by the Governor’s Transportation Finance Advisory Committee and the growing likelihood of passage of a meaningful transportation funding package this year.

We need your help
Throughout the committee process, numerous legislators have noted that their city officials persuaded them to support the bill. During committee meetings, legislators have even read aloud portions of email messages they have received from city officials. The League continues to encourage city officials to ask their legislators to support this initiative as it moves through the process. League policies LE-6 and LE-30 (pages 46 and 62 in the 2013 City Policies [pdf]) reference the League's support for this tool.

In advocating for this tool, the League is stressing the following points:

  • This is enabling legislation. No city would be required to create a municipal street improvement district.
  • The street improvement district authority legislation is modeled after Minnesota Statutes, section 435.44, which allows cities to establish sidewalk improvement districts.
  • This authority would provide a funding mechanism that is fair. It establishes a clear relationship between who pays fees and where projects occur, but stops short of the benefit test that sometimes makes special assessments vulnerable to legal challenges. It also does not prohibit cities from collecting fees from tax-exempt properties within a district.
  • This tool allows cities to perform maintenance and reconstruction on schedule. Timely maintenance is essential to preserving streets and thereby protecting taxpayer investments.
  • This tool would allow property owners to fund expensive projects by paying relatively small fees over time. The tool could be used to mitigate or eliminate the need for special assessments.

—View the League’s fact sheet on this issue, containing background information and talking points (pdf)
—Access contact information for your legislators.

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