HF 2299

as introduced - 79th Legislature (1995 - 1996) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to taxation; providing for allocation among 
  1.3             governmental units of increases in the assessed 
  1.4             valuation of commercial-industrial property within the 
  1.5             taconite tax relief area; providing a formula for the 
  1.6             distribution of additional revenues to municipalities 
  1.7             within the taconite tax relief area; amending 
  1.8             Minnesota Statutes 1994, sections 469.177, subdivision 
  1.9             3; 477A.011, subdivisions 20, 27, 32, and 35; and 
  1.10            477A.013, subdivision 6; Minnesota Statutes 1995 
  1.11            Supplement, sections 275.065, subdivision 3; 428A.05; 
  1.12            465.82, subdivision 2; and 469.175, subdivision 5; 
  1.13            proposing coding for new law as Minnesota Statutes, 
  1.14            chapter 276A. 
  1.15  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.16     Section 1.  Minnesota Statutes 1995 Supplement, section 
  1.17  275.065, subdivision 3, is amended to read: 
  1.18     Subd. 3.  [NOTICE OF PROPOSED PROPERTY TAXES.] (a) The 
  1.19  county auditor shall prepare and the county treasurer shall 
  1.20  deliver after November 10 and on or before November 24 each 
  1.21  year, by first class mail to each taxpayer at the address listed 
  1.22  on the county's current year's assessment roll, a notice of 
  1.23  proposed property taxes and, in the case of a town, final 
  1.24  property taxes.  
  1.25     (b) The commissioner of revenue shall prescribe the form of 
  1.26  the notice. 
  1.27     (c) The notice must inform taxpayers that it contains the 
  1.28  amount of property taxes each taxing authority other than a town 
  1.29  proposes to collect for taxes payable the following year and, 
  1.30  for a town, the amount of its final levy.  It must clearly state 
  2.1   that each taxing authority, including regional library districts 
  2.2   established under section 134.201, and including the 
  2.3   metropolitan taxing districts as defined in paragraph (i), but 
  2.4   excluding all other special taxing districts and towns, will 
  2.5   hold a public meeting to receive public testimony on the 
  2.6   proposed budget and proposed or final property tax levy, or, in 
  2.7   case of a school district, on the current budget and proposed 
  2.8   property tax levy.  It must clearly state the time and place of 
  2.9   each taxing authority's meeting and an address where comments 
  2.10  will be received by mail.  
  2.11     (d) The notice must state for each parcel: 
  2.12     (1) the market value of the property as determined under 
  2.13  section 273.11, and used for computing property taxes payable in 
  2.14  the following year and for taxes payable in the current year; 
  2.15  and, in the case of residential property, whether the property 
  2.16  is classified as homestead or nonhomestead.  The notice must 
  2.17  clearly inform taxpayers of the years to which the market values 
  2.18  apply and that the values are final values; 
  2.19     (2) by county, city or town, school district excess 
  2.20  referenda levy, remaining school district levy, regional library 
  2.21  district, if in existence, the total of the metropolitan special 
  2.22  taxing districts as defined in paragraph (i) and the sum of the 
  2.23  remaining special taxing districts, and as a total of the taxing 
  2.24  authorities, including all special taxing districts, the 
  2.25  proposed or, for a town, final net tax on the property for taxes 
  2.26  payable the following year and the actual tax for taxes payable 
  2.27  the current year.  For the purposes of this subdivision, "school 
  2.28  district excess referenda levy" means school district taxes for 
  2.29  operating purposes approved at referendums, including those 
  2.30  taxes based on net tax capacity as well as those based on market 
  2.31  value.  "School district excess referenda levy" does not include 
  2.32  school district taxes for capital expenditures approved at 
  2.33  referendums or school district taxes to pay for the debt service 
  2.34  on bonds approved at referenda.  In the case of the city of 
  2.35  Minneapolis, the levy for the Minneapolis library board and the 
  2.36  levy for Minneapolis park and recreation shall be listed 
  3.1   separately from the remaining amount of the city's levy.  In the 
  3.2   case of a parcel where tax increment or the fiscal disparities 
  3.3   areawide tax under chapter 276A or 473F applies, the proposed 
  3.4   tax levy on the captured value or the proposed tax levy on the 
  3.5   tax capacity subject to the areawide tax must each be stated 
  3.6   separately and not included in the sum of the special taxing 
  3.7   districts; and 
  3.8      (3) the increase or decrease in the amounts in clause (2) 
  3.9   from taxes payable in the current year to proposed or, for a 
  3.10  town, final taxes payable the following year, expressed as a 
  3.11  dollar amount and as a percentage. 
  3.12     (e) The notice must clearly state that the proposed or 
  3.13  final taxes do not include the following: 
  3.14     (1) special assessments; 
  3.15     (2) levies approved by the voters after the date the 
  3.16  proposed taxes are certified, including bond referenda, school 
  3.17  district levy referenda, and levy limit increase referenda; 
  3.18     (3) amounts necessary to pay cleanup or other costs due to 
  3.19  a natural disaster occurring after the date the proposed taxes 
  3.20  are certified; 
  3.21     (4) amounts necessary to pay tort judgments against the 
  3.22  taxing authority that become final after the date the proposed 
  3.23  taxes are certified; and 
  3.24     (5) the contamination tax imposed on properties which 
  3.25  received market value reductions for contamination. 
  3.26     (f) Except as provided in subdivision 7, failure of the 
  3.27  county auditor to prepare or the county treasurer to deliver the 
  3.28  notice as required in this section does not invalidate the 
  3.29  proposed or final tax levy or the taxes payable pursuant to the 
  3.30  tax levy. 
  3.31     (g) If the notice the taxpayer receives under this section 
  3.32  lists the property as nonhomestead and the homeowner provides 
  3.33  satisfactory documentation to the county assessor that the 
  3.34  property is owned and has been used as the owner's homestead 
  3.35  prior to June 1 of that year, the assessor shall reclassify the 
  3.36  property to homestead for taxes payable in the following year. 
  4.1      (h) In the case of class 4 residential property used as a 
  4.2   residence for lease or rental periods of 30 days or more, the 
  4.3   taxpayer must either: 
  4.4      (1) mail or deliver a copy of the notice of proposed 
  4.5   property taxes to each tenant, renter, or lessee; or 
  4.6      (2) post a copy of the notice in a conspicuous place on the 
  4.7   premises of the property.  
  4.8      The notice must be mailed or posted by the taxpayer by 
  4.9   November 27 or within three days of receipt of the notice, 
  4.10  whichever is later.  A taxpayer may notify the county treasurer 
  4.11  of the address of the taxpayer, agent, caretaker, or manager of 
  4.12  the premises to which the notice must be mailed in order to 
  4.13  fulfill the requirements of this paragraph. 
  4.14     (i) For purposes of this subdivision, subdivisions 5a and 
  4.15  6, "metropolitan special taxing districts" means the following 
  4.16  taxing districts in the seven-county metropolitan area that levy 
  4.17  a property tax for any of the specified purposes listed below: 
  4.18     (1) metropolitan council under section 473.132, 473.167, 
  4.19  473.249, 473.325, 473.446, 473.521, 473.547, or 473.834; 
  4.20     (2) metropolitan airports commission under section 473.667, 
  4.21  473.671, or 473.672; and 
  4.22     (3) metropolitan mosquito control commission under section 
  4.23  473.711. 
  4.24     For purposes of this section, any levies made by the 
  4.25  regional rail authorities in the county of Anoka, Carver, 
  4.26  Dakota, Hennepin, Ramsey, Scott, or Washington under chapter 
  4.27  398A shall be included with the appropriate county's levy and 
  4.28  shall be discussed at that county's public hearing. 
  4.29     Sec. 2.  [276A.01] [DEFINITIONS.] 
  4.30     Subdivision 1.  [APPLICABILITY.] In sections 2 to 10, the 
  4.31  terms defined in this section have the meanings given them 
  4.32  unless the context indicates otherwise. 
  4.33     Subd. 2.  [AREA.] "Area" means the territory included 
  4.34  within all tax relief areas defined in section 273.134. 
  4.35     Subd. 3.  [COMMERCIAL-INDUSTRIAL PROPERTY.] 
  4.36  "Commercial-industrial property" means the following categories 
  5.1   of property, as defined in section 273.13, excluding that 
  5.2   portion of the property (1) that may, by law, constitute the tax 
  5.3   base for a tax increment pledged pursuant to section 469.042 or 
  5.4   469.162, certification of which was requested prior to May 1, 
  5.5   1996, to the extent and while the tax increment is so pledged; 
  5.6   or (2) that is exempt from taxation under section 272.02:  
  5.7      (1) that portion of class 5b property consisting of tools, 
  5.8   implements, and machinery, except the portion of high voltage 
  5.9   transmission lines, the value of which is deducted from net tax 
  5.10  capacity under section 273.425; and 
  5.11     (2) that portion of class 3 and class 5 property which is 
  5.12  either used or zoned for use for any commercial or industrial 
  5.13  purpose, except for such property which is, or, in the case of 
  5.14  property under construction, will when completed be used 
  5.15  exclusively for residential occupancy and the provision of 
  5.16  services to residential occupants thereof.  Property must be 
  5.17  considered as used exclusively for residential occupancy only if 
  5.18  each of not less than 80 percent of its occupied residential 
  5.19  units is, or, in the case of property under construction, will 
  5.20  when completed be occupied under an oral or written agreement 
  5.21  for occupancy over a continuous period of not less than 30 days. 
  5.22     If the classification of property prescribed by section 
  5.23  273.13 is modified by legislative amendment, the references in 
  5.24  this subdivision are to the successor class or classes of 
  5.25  property, or portions thereof, that include the kinds of 
  5.26  property designated in this subdivision.  
  5.27     Subd. 4.  [RESIDENTIAL PROPERTY.] "Residential property" 
  5.28  means the following categories of property, as defined in 
  5.29  section 273.13, excluding that portion of the property that is 
  5.30  exempt from taxation pursuant to section 272.02: 
  5.31     (1) class 1a, 1b, and 2a property, limited to the homestead 
  5.32  dwelling, a garage, and the one acre of land on which the 
  5.33  dwelling is located; 
  5.34     (2) that portion of class 3 property used exclusively for 
  5.35  residential occupancy; and 
  5.36     (3) property valued and assessed under section 273.13, 
  6.1   subdivision 25, except for hospitals and property valued and 
  6.2   assessed under paragraph (c), clauses (5) and (6).  
  6.3      Subd. 5.  [GOVERNMENTAL UNIT.] "Governmental unit" means a 
  6.4   county, city, town, school district, or other taxing unit or 
  6.5   body which levies ad valorem taxes in whole or in part within 
  6.6   the area. 
  6.7      Subd. 6.  [ADMINISTRATIVE AUDITOR.] "Administrative auditor"
  6.8   means the person selected under section 3. 
  6.9      Subd. 7.  [POPULATION.] "Population" means the most recent 
  6.10  estimate of the population of a municipality made by the state 
  6.11  demographer and filed with the commissioner of revenue.  The 
  6.12  state demographer shall annually estimate the population of each 
  6.13  municipality and, in the case of a municipality which is located 
  6.14  partly within and partly without the area, the proportion of the 
  6.15  total which resides within the area, and shall file the 
  6.16  estimates with the commissioner of revenue. 
  6.17     Subd. 8.  [MUNICIPALITY.] "Municipality" means a city, 
  6.18  town, or township located in whole or part within the area.  If 
  6.19  a municipality is located partly within and partly without the 
  6.20  area, the references in sections 2 to 10 to property or any 
  6.21  portion thereof subject to taxation or taxing jurisdiction 
  6.22  within the municipality are to the property or portion thereof 
  6.23  that is located in that portion of the municipality within the 
  6.24  area, except that the fiscal capacity of the municipality must 
  6.25  be computed upon the basis of the valuation and population of 
  6.26  the entire municipality.  A municipality shall be excluded from 
  6.27  the area if its municipal comprehensive zoning and planning 
  6.28  policies conscientiously exclude most commercial-industrial 
  6.29  development, for reasons other than preserving an agricultural 
  6.30  use.  The Iron Range Resources and Rehabilitation Board and the 
  6.31  commissioner of revenue shall jointly make this determination 
  6.32  annually and shall notify those municipalities that are 
  6.33  ineligible to participate in the tax base sharing program 
  6.34  provided in this chapter for the following year. 
  6.35     Subd. 9.  [COUNTY.] "County" means each county in which a 
  6.36  governmental unit is located in whole or in part. 
  7.1      Subd. 10.  [MARKET VALUE.] "Market value" of real and 
  7.2   personal property within a municipality means the assessor's 
  7.3   estimated market value of all real and personal property, 
  7.4   including the value of manufactured housing, within the 
  7.5   municipality.  For purposes of sections 2 to 10, the 
  7.6   commissioner of revenue shall annually make determinations and 
  7.7   reports with respect to each municipality which are comparable 
  7.8   to those it makes for school districts under section 124.2131, 
  7.9   subdivision 1, in the same manner and at the same times 
  7.10  prescribed by the subdivision.  The commissioner of revenue 
  7.11  shall annually determine, for each municipality, information 
  7.12  comparable to that required by section 475.53, subdivision 4, 
  7.13  for school districts, as soon as practicable after it becomes 
  7.14  available.  The commissioner of revenue shall then compute the 
  7.15  equalized market value of property within each municipality. 
  7.16     Subd. 11.  [VALUATION.] "Valuation" means the market value 
  7.17  of real and personal property within a municipality as defined 
  7.18  in subdivision 10. 
  7.19     Subd. 12.  [FISCAL CAPACITY.] "Fiscal capacity" of a 
  7.20  municipality means its valuation, determined as of January 2 of 
  7.21  any year, divided by its population, determined as of a date in 
  7.22  the same year. 
  7.23     Subd. 13.  [AVERAGE FISCAL CAPACITY.] "Average fiscal 
  7.24  capacity" of municipalities means the sum of the valuations of 
  7.25  all municipalities, determined as of January 2 of any year, 
  7.26  divided by the sum of their populations, determined as of a date 
  7.27  in the same year. 
  7.28     Subd. 14.  [LEVY.] "Levy" means the amount certified to the 
  7.29  county auditor pursuant to chapter 275, less all reductions made 
  7.30  by the auditor pursuant to any provision of law in determining 
  7.31  the amount to be spread against taxable property. 
  7.32     Subd. 15.  [NET TAX CAPACITY.] "Net tax capacity" means the 
  7.33  market value of real and personal property multiplied by its net 
  7.34  tax capacity rates in section 273.13. 
  7.35     Subd. 16.  [LOCAL TAX RATE.] "Local tax rate" means a 
  7.36  governmental unit's levy, including any portion levied against 
  8.1   market value under section 124A.03, subdivision 2a, divided by 
  8.2   its net tax capacity. 
  8.3      Sec. 3.  [276A.02] [ADMINISTRATIVE AUDITOR.] 
  8.4      Subdivision 1.  [ELECTION.] On or before July 1, 1997, and 
  8.5   each subsequent odd-numbered year, the auditors of the counties 
  8.6   within the area shall meet at the call of the auditor of St. 
  8.7   Louis county and elect from among themselves one auditor to 
  8.8   serve as administrative auditor for a period of two years and 
  8.9   until a successor is elected.  If a majority is unable to agree 
  8.10  upon a person to serve as administrative auditor, the 
  8.11  commissioner of revenue shall appoint one from among the 
  8.12  auditors of the counties in the area.  If the administrative 
  8.13  auditor ceases to serve as a county auditor within the area 
  8.14  during the term for which he was elected or appointed, a 
  8.15  successor must be chosen in the manner provided for the original 
  8.16  selection to serve for the unexpired term.  
  8.17     Subd. 2.  [STAFF; EXPENSES.] The administrative auditor 
  8.18  shall utilize the staff and facilities of the auditor's office 
  8.19  of the county the administrative auditor serves to perform the 
  8.20  functions imposed upon the administrative auditor by sections 2 
  8.21  to 10.  That county shall be reimbursed for the marginal 
  8.22  expenses incurred by its county auditor and staff under this 
  8.23  section by contributions from each other county in the area in 
  8.24  an amount which bears the same proportion to the total expenses 
  8.25  that the population of the other county bears to the total 
  8.26  population of the area.  By February 1 each year, the 
  8.27  administrative auditor shall certify the amounts of total 
  8.28  expense for the preceding calendar year, and the share of each 
  8.29  county, to the treasurer of each other county.  Payment must be 
  8.30  made by the treasurer of each other county to the treasurer of 
  8.31  the county incurring expense by the succeeding March 1. 
  8.32     Sec. 4.  [276A.03] [NET TAX CAPACITY OF 
  8.33  COMMERCIAL-INDUSTRIAL PROPERTY.] 
  8.34     By August 5 of 1996 and each subsequent year, the assessors 
  8.35  within each county in the area shall determine and certify to 
  8.36  the county auditor the net tax capacity in that year of 
  9.1   commercial-industrial property subject to taxation within each 
  9.2   municipality in the county, determined without regard to section 
  9.3   469.177, subdivision 3.  By August 5 of 1996 only, the assessor 
  9.4   within each county in the area shall also determine and certify 
  9.5   to the county auditor the net tax capacity for the 1995 
  9.6   assessment of commercial industrial property subject to taxation 
  9.7   within each municipality within the county determined without 
  9.8   regard to section 469.177, subdivision 3. 
  9.9      Sec. 5.  [276A.04] [INCREASE IN NET TAX CAPACITY.] 
  9.10     By July 15 of 1997 and each subsequent year, the auditor of 
  9.11  each county in the area shall determine the amount, if any, by 
  9.12  which the net tax capacity determined in the preceding year 
  9.13  pursuant to section 4, of commercial-industrial property subject 
  9.14  to taxation within each municipality in the county exceeds the 
  9.15  assessed valuation in 1995 of commercial-industrial property 
  9.16  subject to taxation within that municipality.  If a municipality 
  9.17  is located in two or more counties within the area, the auditors 
  9.18  of those counties shall certify the data required by section 4 
  9.19  to the county auditor responsible for allocating the levies of 
  9.20  that municipality between or among the affected counties.  That 
  9.21  county auditor shall determine the amount of the net excess, if 
  9.22  any, for the municipality under this section, and certify that 
  9.23  amount under section 6.  The increase in total net tax capacity 
  9.24  determined by this section must be reduced by the amount of any 
  9.25  decreases in the net tax capacity of commercial-industrial 
  9.26  property resulting from any court decisions, court-related 
  9.27  stipulation agreements, or abatements for a prior year, and only 
  9.28  in the amount of such decreases made during the 12-month period 
  9.29  ending on May 1 of the current assessment year, where the 
  9.30  decreases, if originally reflected in the determination of a 
  9.31  prior year's net tax capacity under section 4, would have 
  9.32  resulted in a smaller contribution from the municipality in that 
  9.33  year.  An adjustment for the decreases shall be made only if the 
  9.34  municipality made a contribution in a prior year based on the 
  9.35  higher net tax capacity of the commercial-industrial property. 
  9.36     Sec. 6.  [276A.05] [COMPUTATION OF AREAWIDE TAX BASE.] 
 10.1      Subdivision 1.  [AREAWIDE NET TAX CAPACITY.] Each county 
 10.2   auditor shall certify the determinations under sections 4 and 5 
 10.3   to the administrative auditor on or before August 1 of each 
 10.4   year.  The administrative auditor shall determine an amount 
 10.5   equal to 40 percent of the sum of the amounts certified pursuant 
 10.6   to section 5.  The resulting amount shall be known as the 
 10.7   "areawide net tax capacity for ........(year)."  
 10.8      Subd. 2.  [POPULATION AND FISCAL CAPACITY 
 10.9   CERTIFICATIONS.] The commissioner of revenue shall certify to 
 10.10  the administrative auditor, on or before August 10 of each year, 
 10.11  the population of each municipality for the preceding year, the 
 10.12  proportion of that population which resides within the area, the 
 10.13  average fiscal capacity of municipalities for the preceding 
 10.14  year, and the fiscal capacity of each municipality for the 
 10.15  preceding year. 
 10.16     Subd. 3.  [AREAWIDE TAX BASE DISTRIBUTION INDEX.] The 
 10.17  administrative auditor shall determine, for each municipality, 
 10.18  the product of (1) its population, (2) the proportion which the 
 10.19  average fiscal capacity of municipalities for the preceding year 
 10.20  bears to the fiscal capacity of that municipality for the 
 10.21  preceding year.  The product shall be the areawide tax base 
 10.22  distribution index for that municipality.  If a municipality is 
 10.23  located partly within and partly without the area, its index is 
 10.24  that which is otherwise determined hereunder, multiplied by the 
 10.25  proportion which its population residing within the area bears 
 10.26  to its total population as of the preceding year. 
 10.27     Subd. 4.  [DISTRIBUTION NET TAX CAPACITY.] The 
 10.28  administrative auditor shall determine the proportion which the 
 10.29  index of each municipality bears to the sum of the indices of 
 10.30  all municipalities and shall then multiply this proportion in 
 10.31  the case of each municipality, by the areawide net tax capacity. 
 10.32     Subd. 5.  [CERTIFICATION.] The product of the procedure 
 10.33  prescribed by subdivision 4 shall be known as the "areawide net 
 10.34  tax capacity for ......(year) attributable to 
 10.35  ..........(municipality)."  The administrative auditor shall 
 10.36  certify the product to the auditor of the county in which the 
 11.1   municipality is located on or before August 15. 
 11.2      Sec. 7.  [276A.06] [NET TAX CAPACITY OF GOVERNMENTAL UNIT.] 
 11.3      Subdivision 1.  [GENERALLY.] The county auditor shall 
 11.4   determine the net tax capacity of each governmental unit within 
 11.5   the county in the manner prescribed by this section. 
 11.6      Subd. 2.  [DEFINITION.] The net tax capacity of a 
 11.7   governmental unit is its net tax capacity as determined in 
 11.8   accordance with other provisions of law including section 
 11.9   469.177, subdivision 3, subject to the following adjustments:  
 11.10     (a) There must be subtracted from its net tax capacity, in 
 11.11  each municipality in which the governmental unit exercises ad 
 11.12  valorem taxing jurisdiction, an amount that bears the same 
 11.13  proportion to 40 percent of the amount certified in that year 
 11.14  pursuant to sections 5 and 6 for the municipality as the total 
 11.15  preceding year's net tax capacity of commercial-industrial 
 11.16  property which is subject to the taxing jurisdiction of the 
 11.17  governmental unit within the municipality, determined without 
 11.18  regard to section 469.177, subdivision 3, bears to the total 
 11.19  preceding year's net tax capacity of commercial-industrial 
 11.20  property within the municipality, determined without regard to 
 11.21  section 469.177, subdivision 3.  
 11.22     (b) There must be added to its net tax capacity, in each 
 11.23  municipality in which the governmental unit exercises ad valorem 
 11.24  taxing jurisdiction, an amount which bears the same proportion 
 11.25  to the areawide net tax capacity for the year attributable to 
 11.26  that municipality as the total preceding year's net tax capacity 
 11.27  of residential property which is subject to the taxing 
 11.28  jurisdiction of the governmental unit within the municipality 
 11.29  bears to the total preceding year's net tax capacity of 
 11.30  residential property of the municipality.  
 11.31     Subd. 3.  [APPORTIONMENT OF LEVY.] The county auditor shall 
 11.32  apportion the levy of each governmental unit in the county in 
 11.33  the manner prescribed by this subdivision.  The auditor shall: 
 11.34     (a) by August 20 of 1997 and each subsequent year, 
 11.35  determine the areawide portion of the levy for each governmental 
 11.36  unit by multiplying the local tax rate of the governmental unit 
 12.1   for the preceding levy year times the distribution value set 
 12.2   forth in subdivision 2, clause (b); and 
 12.3      (b) by September 5 of 1997 and each subsequent year, 
 12.4   determine the local portion of the current year's levy by 
 12.5   subtracting the resulting amount from clause (a) from the 
 12.6   governmental unit's current year's levy. 
 12.7      Subd. 4.  [TAX RATE NONCOMMERCIAL PROPERTY.] In 1997 and 
 12.8   subsequent years, the county auditor shall divide that portion 
 12.9   of the levy determined pursuant to subdivision 3, clause (b), by 
 12.10  the net tax capacity of the governmental unit, taking section 
 12.11  469.177, subdivision 3, into account, less that portion 
 12.12  subtracted from net tax capacity pursuant to subdivision 2, 
 12.13  clause (a).  The resulting rate applies to all taxable property 
 12.14  except commercial-industrial property, which must be taxed in 
 12.15  accordance with subdivision 7. 
 12.16     Subd. 5.  [AREAWIDE TAX RATE.] On or before August 25 of 
 12.17  1997 and each subsequent year, the county auditor shall certify 
 12.18  to the administrative auditor that portion of the levy of each 
 12.19  governmental unit determined pursuant to subdivision 3, clause 
 12.20  (a).  The administrative auditor shall then determine the 
 12.21  areawide tax rate sufficient to yield an amount equal to the sum 
 12.22  of the levies from the areawide net tax capacity.  On or before 
 12.23  September 1, the administrative auditor shall certify the 
 12.24  areawide tax rate to each of the county auditors. 
 12.25     Subd. 6.  [GOVERNMENTAL UNIT IN TWO OR MORE COUNTIES.] If a 
 12.26  governmental unit is located in two or more counties, the 
 12.27  computations and certifications required by subdivisions 3 to 5 
 12.28  with respect to it must be made by the county auditor who is 
 12.29  responsible for allocating its levies between or among the 
 12.30  affected counties. 
 12.31     Subd. 7.  [APPLICATION TO COMMERCIAL-INDUSTRIAL 
 12.32  PROPERTY.] The areawide tax rate determined in accordance with 
 12.33  subdivision 5 applies to each commercial-industrial property 
 12.34  subject to taxation within a municipality, including property 
 12.35  located within any tax increment financing district, as defined 
 12.36  in section 469.174, subdivision 9, to that portion of the net 
 13.1   tax capacity of the item which bears the same proportion to its 
 13.2   total net tax capacity as 40 percent of the amount determined 
 13.3   pursuant to sections 5 and 6 is to the amount determined 
 13.4   pursuant to section 4.  The rate of taxation determined in 
 13.5   accordance with subdivision 4 applies in the taxation of the 
 13.6   remainder of the net tax capacity of the item. 
 13.7      Subd. 8.  [CERTIFICATION OF VALUES; PAYMENT.] The 
 13.8   administrative auditor shall determine for each county the 
 13.9   difference between the total levy on distribution value pursuant 
 13.10  to subdivision 3, clause (a), within the county and the total 
 13.11  tax on contribution value pursuant to subdivision 7, within the 
 13.12  county.  On or before May 16 of each year, the administrative 
 13.13  auditor shall certify the differences so determined to each 
 13.14  county auditor.  In addition, the administrative auditor shall 
 13.15  certify to those county auditors for whose county the total tax 
 13.16  on contribution value exceeds the total levy on distribution 
 13.17  value the settlement the county is to make to the other counties 
 13.18  of the excess of the total tax on contribution value over the 
 13.19  total levy on distribution value in the county.  On or before 
 13.20  June 15 and November 15 of each year, each county treasurer in a 
 13.21  county having a total tax on contribution value in excess of the 
 13.22  total levy on distribution value shall pay one-half of the 
 13.23  excess to the other counties in accordance with the 
 13.24  administrative auditor's certification. 
 13.25     Subd. 9.  [FISCAL DISPARITIES ADJUSTMENT.] In any year in 
 13.26  which the highest class rate for class 3a property changes from 
 13.27  the rate in the previous year, the following adjustments shall 
 13.28  be made to the procedures described in sections 5 to 7: 
 13.29     (1) An initial contribution tax capacity shall be 
 13.30  determined for each municipality based on the previous year's 
 13.31  class rates. 
 13.32     (2) Each jurisdiction's distribution tax capacity shall be 
 13.33  determined based upon the areawide tax base determined by 
 13.34  summing the tax capacities computed under clause (1) for all 
 13.35  municipalities and apportioning the resulting sum pursuant to 
 13.36  section 6, subdivision 5. 
 14.1      (3) Each jurisdiction's distribution levy shall be 
 14.2   determined by applying the procedures described in subdivision 
 14.3   3, clause (a), to the distribution tax capacity determined 
 14.4   pursuant to clause (2). 
 14.5      (4) Each municipality's final contribution tax capacity 
 14.6   shall be determined equal to its initial contribution tax 
 14.7   capacity multiplied by the ratio of the new highest class rate 
 14.8   for class 3a property to the previous year's highest class rate 
 14.9   for class 3a property. 
 14.10     (5) For the purposes of computing education aids and any 
 14.11  other state aids requiring the addition of the fiscal 
 14.12  disparities distribution tax capacity to the local tax capacity, 
 14.13  each municipality's final distribution tax capacity shall be 
 14.14  determined equal to its initial distribution tax capacity 
 14.15  multiplied by the ratio of the new highest class rate for class 
 14.16  3a property to the previous year's highest class rate for class 
 14.17  3a property. 
 14.18     (6) The areawide tax rate shall be determined by dividing 
 14.19  the sum of the amounts determined in clause (3) by the sum of 
 14.20  the values determined in clause (4). 
 14.21     (7) The final contribution tax capacity determined in 
 14.22  clause (4) shall also be used to determined the portion of each 
 14.23  commercial-industrial property's tax capacity subject to the 
 14.24  areawide tax rate pursuant to subdivision 7. 
 14.25     Subd. 10.  [ADJUSTMENT OF VALUES FOR OTHER COMPUTATIONS.] 
 14.26  For the purpose of computing the amount or rate of any salary, 
 14.27  aid, tax, or debt authorized, required, or limited by any 
 14.28  provision of any law or charter, where the authorization, 
 14.29  requirement, or limitation is related to any value or valuation 
 14.30  of taxable property within any governmental unit, the value or 
 14.31  net tax capacity must be adjusted to reflect the adjustments to 
 14.32  net tax capacity effected by subdivision 2, provided that:  (1) 
 14.33  in determining the market value of commercial-industrial 
 14.34  property or any class thereof within a governmental unit for any 
 14.35  purpose other than section 6, (a) the reduction required by this 
 14.36  subdivision is that amount which bears the same proportion to 
 15.1   the amount subtracted from the governmental unit's net tax 
 15.2   capacity pursuant to subdivision 2, clause (a), as the market 
 15.3   value of commercial-industrial property, or such class thereof, 
 15.4   located within the governmental unit bears to the assessed 
 15.5   valuation of commercial-industrial property, or such class 
 15.6   thereof, located within the governmental unit, and (b) the 
 15.7   increase required by this subdivision is that amount which bears 
 15.8   the same proportion to the amount added to the governmental 
 15.9   unit's net tax capacity pursuant to subdivision 2, clause (b), 
 15.10  as the market value of commercial-industrial property, or such 
 15.11  class thereof, located within the governmental unit bears to the 
 15.12  net tax capacity of commercial-industrial property, or such 
 15.13  class thereof, located within the governmental unit; and (2) in 
 15.14  determining the market value of real property within a 
 15.15  municipality for purposes of section 6, the adjustment 
 15.16  prescribed by clause (1)(a) must be made and that prescribed by 
 15.17  clause (1)(b) must not be made. 
 15.18     Sec. 8.  [276A.07] [ADJUSTMENTS IN DATES.] 
 15.19     If, because of the enactment of any other law, the date by 
 15.20  which the commissioner of revenue is required to certify to the 
 15.21  county auditors the records of proceedings affecting the 
 15.22  assessed valuation of property is advanced to a date earlier 
 15.23  than June 30, the dates specified in sections 4 to 7 and 9 may 
 15.24  be modified in the years to which the other law applies in the 
 15.25  manner and to the extent prescribed by the administrative 
 15.26  auditor.  
 15.27     Sec. 9.  [276A.08] [REASSESSMENTS AND OMITTED PROPERTY.] 
 15.28     Subdivision 1.  [REASSESSMENT ORDERS.] If the commissioner 
 15.29  of revenue orders a reassessment of all or any portion of the 
 15.30  property in a municipality other than in the form of a 
 15.31  mathematically prescribed adjustment of valuation, or if omitted 
 15.32  property is placed upon the tax rolls, and the reassessment has 
 15.33  not been completed or the property placed upon the rolls by 
 15.34  November 15, the net tax capacity of the affected property must, 
 15.35  for purposes of sections 3 to 7, be determined from the 
 15.36  abstracts filed by the county auditor with the commissioner of 
 16.1   revenue.  
 16.2      Subd. 2.  [ADJUSTMENT OF VALUE.] If the reassessment, when 
 16.3   completed and incorporated in the commissioner's certification 
 16.4   of the net tax capacity of the municipality, or the listing of 
 16.5   omitted property, when placed on the rolls, results in an 
 16.6   increase in the net tax capacity of commercial-industrial 
 16.7   property in the municipality which differs from that used, 
 16.8   pursuant to subdivision 1, for purposes of sections 3 to 7, the 
 16.9   increase in the net tax capacity of commercial-industrial 
 16.10  property in that municipality in the succeeding year, as 
 16.11  otherwise computed under section 5, must be adjusted in a like 
 16.12  amount, by an increase if the reassessment or listing discloses 
 16.13  a larger increase than was used for purposes of sections 3 to 7, 
 16.14  or by a decrease if the reassessment or listing discloses a 
 16.15  smaller increase than was used for those purposes, provided that 
 16.16  no adjustment shall reduce the amount determined under section 5 
 16.17  to an amount less than zero.  
 16.18     Subd. 3.  [EXCEPTIONS.] Subdivisions 1 and 2 do not apply 
 16.19  to the determination of the tax rate under section 7, 
 16.20  subdivision 4, or to the determination of the net tax capacity 
 16.21  of commercial-industrial property and each item thereof for 
 16.22  purposes of section 7, subdivision 7.  
 16.23     Sec. 10.  [276A.09] [CHANGE IN STATUS OF MUNICIPALITY.] 
 16.24     If a municipality is dissolved, is consolidated with all or 
 16.25  part of another municipality, annexes territory, has a portion 
 16.26  of its territory detached from it, or is newly incorporated, the 
 16.27  secretary of state shall immediately certify that fact to the 
 16.28  commissioner of revenue.  The secretary of state shall also 
 16.29  certify to the commissioner of revenue the current population of 
 16.30  the new, enlarged, or successor municipality, if determined by 
 16.31  the Minnesota municipal board incident to consolidation, 
 16.32  annexation, or incorporation proceedings.  The population so 
 16.33  certified shall govern for purposes of sections 2 to 10 until 
 16.34  the state demographer files the first population estimate as of 
 16.35  a later date with the commissioner of revenue.  If an annexation 
 16.36  of unincorporated land occurs without proceedings before the 
 17.1   Minnesota municipal board, the population of the annexing 
 17.2   municipality as previously determined shall continue to govern 
 17.3   for purposes of sections 2 to 10 until the state demographer 
 17.4   files the first population estimate as of a later date with the 
 17.5   commissioner of revenue. 
 17.6      Sec. 11.  Minnesota Statutes 1995 Supplement, section 
 17.7   428A.05, is amended to read: 
 17.8      428A.05 [COLLECTION OF SERVICE CHARGES.] 
 17.9      Service charges may be imposed on the basis of the net tax 
 17.10  capacity of the property on which the service charge is imposed 
 17.11  but must be spread only upon the net tax capacity of the taxable 
 17.12  property located in the geographic area described in the 
 17.13  ordinance.  Service charges based on net tax capacity may be 
 17.14  payable and collected at the same time and in the same manner as 
 17.15  provided for payment and collection of ad valorem taxes.  When 
 17.16  made payable in the same manner as ad valorem taxes, service 
 17.17  charges not paid on or before the applicable due date shall be 
 17.18  subject to the same penalty and interest as in the case of ad 
 17.19  valorem tax amounts not paid by the respective due date.  The 
 17.20  due date for a service charge payable in the same manner as ad 
 17.21  valorem taxes is the due date given in law for the real or 
 17.22  personal property tax for the property on which the service 
 17.23  charge is imposed.  Service charges imposed on net tax capacity 
 17.24  which are to become payable in the following year must be 
 17.25  certified to the county auditor by the date provided in section 
 17.26  429.061, subdivision 3, for the annual certification of special 
 17.27  assessment installments.  Other service charges imposed must be 
 17.28  collected as provided by ordinance.  Service charges based on 
 17.29  net tax capacity collected under sections 428A.01 to 428A.10 are 
 17.30  not included in computations under section 469.177, chapter 276A 
 17.31  or 473F, or any other law that applies to general ad valorem 
 17.32  levies.  For the purpose of this section, "net tax capacity" 
 17.33  means the net tax capacity most recently determined at the time 
 17.34  that tax rates are determined under section 275.08. 
 17.35     Sec. 12.  Minnesota Statutes 1995 Supplement, section 
 17.36  465.82, subdivision 2, is amended to read: 
 18.1      Subd. 2.  [CONTENTS OF PLAN.] The plan must state:  
 18.2      (1) the specific cooperative activities the units will 
 18.3   engage in during the first two years of the venture; 
 18.4      (2) the steps to be taken to effect the merger of the 
 18.5   governmental units, with completion no later than four years 
 18.6   after the process begins; 
 18.7      (3) the steps by which a single governing body will be 
 18.8   created; 
 18.9      (4) changes in services provided, facilities used, 
 18.10  administrative operations and staffing to effect the preliminary 
 18.11  cooperative activities and the final merger and a two-, five-, 
 18.12  and ten-year projection of expenditures for each unit if it 
 18.13  combined and if it remained separate; 
 18.14     (5) treatment of employees of the merging governmental 
 18.15  units, specifically including provisions for reassigning 
 18.16  employees, dealing with unions, and providing financial 
 18.17  incentives to encourage early retirements; 
 18.18     (6) financial arrangements for the merger, specifically 
 18.19  including responsibility for debt service on outstanding 
 18.20  obligations of the merging entities; 
 18.21     (7) one- and two-year impact analysis, prepared by the 
 18.22  granting state agency at the request of the local government 
 18.23  unit, of major state aid revenues received for each unit if it 
 18.24  combined and if it remained separate.  This would also include 
 18.25  an impact analysis, prepared by the department of revenue, of 
 18.26  property tax revenue implications, if any, associated with tax 
 18.27  increment financing districts and fiscal disparities under 
 18.28  chapter 276A or 473F resulting from the merger; 
 18.29     (8) procedures for a referendum to be held before the 
 18.30  proposed combination to approve combining the local government 
 18.31  units, specifically stating whether a majority of those voting 
 18.32  in each district proposed for combination or a majority of those 
 18.33  voting on the question in the entire area proposed for 
 18.34  combination would be needed to pass the referendum; and 
 18.35     (9) a time schedule for implementation. 
 18.36     Notwithstanding clause (3) or any other law to the 
 19.1   contrary, all current members of the governing bodies of the 
 19.2   local governmental units that propose to combine under sections 
 19.3   465.81 to 465.88 may serve on the initial governing body of the 
 19.4   combined unit until a gradual reduction in membership is 
 19.5   achieved by foregoing election of new members when terms expire 
 19.6   until the number permitted by other law is reached. 
 19.7      Sec. 13.  Minnesota Statutes 1995 Supplement, section 
 19.8   469.175, subdivision 5, is amended to read: 
 19.9      Subd. 5.  [ANNUAL DISCLOSURE.] For all tax increment 
 19.10  financing districts, whether created prior or subsequent to 
 19.11  August 1, 1979, on or before July 1 of each year, the authority 
 19.12  shall submit to the county board, the county auditor, the school 
 19.13  board, state auditor and, if the authority is other than the 
 19.14  municipality, the governing body of the municipality, a report 
 19.15  of the status of the district.  The report shall include the 
 19.16  following information:  the amount and the source of revenue in 
 19.17  the account, the amount and purpose of expenditures from the 
 19.18  account, the amount of any pledge of revenues, including 
 19.19  principal and interest on any outstanding bonded indebtedness, 
 19.20  the original net tax capacity of the district, the captured net 
 19.21  tax capacity retained by the authority, the captured net tax 
 19.22  capacity shared with other taxing districts, the tax increment 
 19.23  received, and any additional information necessary to 
 19.24  demonstrate compliance with any applicable tax increment 
 19.25  financing plan.  An annual statement showing the tax increment 
 19.26  received and expended in that year, the original net tax 
 19.27  capacity, captured net tax capacity, amount of outstanding 
 19.28  bonded indebtedness, the amount of the district's increments 
 19.29  paid to other governmental bodies, the amount paid for 
 19.30  administrative costs, the sum of increments paid, directly or 
 19.31  indirectly, for activities and improvements located outside of 
 19.32  the district, and any additional information the authority deems 
 19.33  necessary shall be published in a newspaper of general 
 19.34  circulation in the municipality.  If the fiscal disparities 
 19.35  contribution under chapter 276A or 473F for the district is 
 19.36  computed under section 469.177, subdivision 3, paragraph (a), 
 20.1   the annual statement must disclose that fact and indicate the 
 20.2   amount of increased property tax imposed on other properties in 
 20.3   the municipality as a result of the fiscal disparities 
 20.4   contribution.  The commissioner of revenue shall prescribe the 
 20.5   form of this statement and the method for calculating the 
 20.6   increased property taxes. 
 20.7      Sec. 14.  Minnesota Statutes 1994, section 469.177, 
 20.8   subdivision 3, is amended to read: 
 20.9      Subd. 3.  [TAX INCREMENT, RELATIONSHIP TO CHAPTER CHAPTERS 
 20.10  276A AND 473F.] (a) Unless the governing body elects pursuant to 
 20.11  clause (b) the following method of computation shall apply: 
 20.12     (1) The original net tax capacity and the current net tax 
 20.13  capacity shall be determined before the application of the 
 20.14  fiscal disparity provisions of chapter 276A or 473F.  Where the 
 20.15  original net tax capacity is equal to or greater than the 
 20.16  current net tax capacity, there is no captured net tax capacity 
 20.17  and no tax increment determination.  Where the original net tax 
 20.18  capacity is less than the current net tax capacity, the 
 20.19  difference between the original net tax capacity and the current 
 20.20  net tax capacity is the captured net tax capacity.  This amount 
 20.21  less any portion thereof which the authority has designated, in 
 20.22  its tax increment financing plan, to share with the local taxing 
 20.23  districts is the retained captured net tax capacity of the 
 20.24  authority.  
 20.25     (2) The county auditor shall exclude the retained captured 
 20.26  net tax capacity of the authority from the net tax capacity of 
 20.27  the local taxing districts in determining local taxing district 
 20.28  tax rates.  The local tax rates so determined are to be extended 
 20.29  against the retained captured net tax capacity of the authority 
 20.30  as well as the net tax capacity of the local taxing districts.  
 20.31  The tax generated by the extension of the lesser of (A) the 
 20.32  local taxing district tax rates or (B) the original local tax 
 20.33  rate to the retained captured net tax capacity of the authority 
 20.34  is the tax increment of the authority.  
 20.35     (b) The governing body may, by resolution approving the tax 
 20.36  increment financing plan pursuant to section 469.175, 
 21.1   subdivision 3, elect the following method of computation: 
 21.2      (1) The original net tax capacity shall be determined 
 21.3   before the application of the fiscal disparity provisions of 
 21.4   chapter 276A or 473F.  The current net tax capacity shall 
 21.5   exclude any fiscal disparity commercial-industrial net tax 
 21.6   capacity increase between the original year and the current year 
 21.7   multiplied by the fiscal disparity ratio determined pursuant to 
 21.8   section 276A.06, subdivision 7, or 473F.08, subdivision 6.  
 21.9   Where the original net tax capacity is equal to or greater than 
 21.10  the current net tax capacity, there is no captured net tax 
 21.11  capacity and no tax increment determination.  Where the original 
 21.12  net tax capacity is less than the current net tax capacity, the 
 21.13  difference between the original net tax capacity and the current 
 21.14  net tax capacity is the captured net tax capacity.  This amount 
 21.15  less any portion thereof which the authority has designated, in 
 21.16  its tax increment financing plan, to share with the local taxing 
 21.17  districts is the retained captured net tax capacity of the 
 21.18  authority.  
 21.19     (2) The county auditor shall exclude the retained captured 
 21.20  net tax capacity of the authority from the net tax capacity of 
 21.21  the local taxing districts in determining local taxing district 
 21.22  tax rates.  The local tax rates so determined are to be extended 
 21.23  against the retained captured net tax capacity of the authority 
 21.24  as well as the net tax capacity of the local taxing districts.  
 21.25  The tax generated by the extension of the lesser of (A) the 
 21.26  local taxing district tax rates or (B) the original local tax 
 21.27  rate to the retained captured net tax capacity of the authority 
 21.28  is the tax increment of the authority.  
 21.29     (3) An election by the governing body pursuant to paragraph 
 21.30  (b) shall be submitted to the county auditor by the authority at 
 21.31  the time of the request for certification pursuant to 
 21.32  subdivision 1. 
 21.33     (c) The method of computation of tax increment applied to a 
 21.34  district pursuant to paragraph (a) or (b) shall remain the same 
 21.35  for the duration of the district, except that the governing body 
 21.36  may elect to change its election from the method of computation 
 22.1   in paragraph (a) to the method in paragraph (b). 
 22.2      Sec. 15.  Minnesota Statutes 1994, section 477A.011, 
 22.3   subdivision 20, is amended to read: 
 22.4      Subd. 20.  [CITY NET TAX CAPACITY.] "City net tax capacity" 
 22.5   means (1) the net tax capacity computed using the net tax 
 22.6   capacity rates in section 273.13, and the market values for 
 22.7   taxes payable in the year prior to the aid distribution plus (2) 
 22.8   a city's fiscal disparities distribution tax capacity under 
 22.9   section 276A.06, subdivision 2, paragraph (b), or 473F.08, 
 22.10  subdivision 2, paragraph (b), for taxes payable in the year 
 22.11  prior to that for which aids are being calculated.  The market 
 22.12  value utilized in computing city net tax capacity shall be 
 22.13  reduced by the sum of (1) a city's market value of commercial 
 22.14  industrial property as defined in section 276A.01, subdivision 
 22.15  3, or 473F.02, subdivision 3, multiplied by the ratio determined 
 22.16  pursuant to section 276A.06, subdivision 2, paragraph (a), or 
 22.17  473F.08, subdivision 2, paragraph (a), (2) the market value of 
 22.18  the captured value of tax increment financing districts as 
 22.19  defined in section 469.177, subdivision 2, and (3) the market 
 22.20  value of transmission lines deducted from a city's total net tax 
 22.21  capacity under section 273.425.  The city net tax capacity will 
 22.22  be computed using equalized market values.  
 22.23     Sec. 16.  Minnesota Statutes 1994, section 477A.011, 
 22.24  subdivision 27, is amended to read: 
 22.25     Subd. 27.  [REVENUE BASE.] "Revenue base" means the amount 
 22.26  levied for taxes payable in the previous year, including the 
 22.27  levy on the fiscal disparity distribution under section 276A.06, 
 22.28  subdivision 3, paragraph (a), or 473F.08, subdivision 3, 
 22.29  paragraph (a), and before reduction for the homestead and 
 22.30  agricultural credit aid under section 273.1398, subdivision 2, 
 22.31  equalization aid under section 477A.013, subdivision 5, and 
 22.32  disparity reduction aid under section 273.1398, subdivision 3; 
 22.33  plus the originally certified local government aid in the 
 22.34  previous year under sections 477A.011, 477A.012, and 477A.013, 
 22.35  except for 477A.013, subdivision 5; and the taconite aids 
 22.36  received in the previous year under sections 298.28 and 298.282. 
 23.1      Sec. 17.  Minnesota Statutes 1994, section 477A.011, 
 23.2   subdivision 32, is amended to read: 
 23.3      Subd. 32.  [COMMERCIAL INDUSTRIAL PERCENTAGE.] "Commercial 
 23.4   industrial percentage" for a city is 100 times the sum of the 
 23.5   estimated market values of all real property in the city 
 23.6   classified as class 3 under section 273.13, subdivision 24, 
 23.7   excluding public utility property, to the total market value of 
 23.8   all taxable real and personal property in the city.  The market 
 23.9   values are the amounts computed before any adjustments for 
 23.10  fiscal disparities under section 276A.06 or 473F.08.  The market 
 23.11  values used for this subdivision are not equalized. 
 23.12     Sec. 18.  Minnesota Statutes 1994, section 477A.011, 
 23.13  subdivision 35, is amended to read: 
 23.14     Subd. 35.  [TAX EFFORT RATE.] "Tax effort rate" means the 
 23.15  sum of the net levy for all cities divided by the sum of the 
 23.16  city net tax capacity for all cities.  For purposes of this 
 23.17  section, "net levy" means the city levy, after all adjustments, 
 23.18  used for calculating the local tax rate under section 275.08 for 
 23.19  taxes payable in the year prior to the aid distribution.  The 
 23.20  fiscal disparity distribution levy under chapter 276A or 473F is 
 23.21  included in net levy. 
 23.22     Sec. 19.  Minnesota Statutes 1994, section 477A.013, 
 23.23  subdivision 6, is amended to read: 
 23.24     Subd. 6.  [AID ADJUSTMENT.] For calendar year 1990, there 
 23.25  shall be an amount equal to 3.4 percent of the town's or city's 
 23.26  adjusted net tax capacity computed using the net class rates for 
 23.27  taxes payable in 1990 and equalized market values as defined in 
 23.28  section 273.1398, subtracted from the aid amounts computed under 
 23.29  subdivision 1, in the case of towns, and under subdivisions 3 
 23.30  and 5 in the case of cities.  For cities, the subtraction will 
 23.31  be made first from the aid computed under subdivision 3.  If the 
 23.32  subtraction amount under this section is greater than the aid 
 23.33  amount computed under subdivision 3, the remaining amount will 
 23.34  be subtracted from the aid computed under subdivision 5.  The 
 23.35  resulting amounts shall be the town's local government aid or 
 23.36  the city's local government aid and equalization aid for 
 24.1   calendar year 1990.  The local government aid and equalization 
 24.2   aid amount for any city or town cannot be less than zero.  If 
 24.3   the subtraction amount under this section is greater than the 
 24.4   amount for any town or city computed under subdivisions 1, 3, 
 24.5   and 5, the remaining amount shall be subtracted from the town's 
 24.6   or city's homestead and agricultural credit aid under section 
 24.7   273.1398, subdivision 2. 
 24.8      For purposes of this subdivision, "adjusted net tax 
 24.9   capacity" means the city's total net tax capacity using the net 
 24.10  class rates for taxes payable in 1990 and equalized market 
 24.11  values as defined in section 273.1398, as adjusted for the 
 24.12  contributions and distributions required by chapter 276A or 473F 
 24.13  in the case of a city or town located within the metropolitan 
 24.14  area and less the captured value in any tax increment district. 
 24.15     An increase in a city's property tax levy for taxes payable 
 24.16  in 1990 attributable to the amount deducted from the city's aids 
 24.17  under this subdivision is exempt from the city's per capita levy 
 24.18  limit under section 275.11, from the city's percentage of market 
 24.19  value levy limit under section 412.251 or 426.04, and from any 
 24.20  limitation on levies under a city charter. 
 24.21     Sec. 20.  [EFFECTIVE DATE.] 
 24.22     Sections 1 to 19 are effective July 1, 1997, except as 
 24.23  provided in section 4.