Skip to main content Skip to office menu Skip to footer
Minnesota Legislature

Office of the Revisor of Statutes

275.72 MS 1998 [Expired]
275.72 LEVY LIMIT ADJUSTMENTS FOR CONSOLIDATION AND ANNEXATION.
    Subdivision 1. Adjustments for consolidation. If all of the area included in two or more
local governmental units is consolidated, merged, or otherwise combined to constitute a single
governmental unit, the levy limit base for the resulting governmental unit in the first levy year
in which the consolidation is effective shall be equal to (1) the highest tax rate in any of the
merging governmental units in the previous year multiplied by the net tax capacity of all the
merging governmental units in the previous year, minus (2) the sum of all levies in the merging
governmental units in the previous year that qualify as special levies under section 275.70,
subdivision 5
.
    Subd. 2. Adjustments for annexation. If a local governmental unit increases its tax base
through annexation of an area which is not the area of an entire local governmental unit and
the area of annexation contains a population of 50 or more, the levy limit base of the local
governmental unit in the first year in which the annexation is effective shall be equal to its levy
limit base established before the adjustment under section 275.71, subdivision 3, for the current
levy year multiplied by the ratio of the net tax capacity in the local governmental unit after the
annexation compared to its net tax capacity before the annexation.
    Subd. 3. Adjustments for changes in service levels. If a local governmental unit, as a
result of an annexation agreement, has different tax rates in various parts of the jurisdiction
due to different service levels, it may petition the commissioner of revenue to adjust its levy
limits established under section 275.71. The commissioner shall adjust the levy limits to reflect
scheduled changes in tax rates related to increasing service levels in areas currently receiving less
city services. The local governmental unit shall provide the commissioner with any information
the commissioner deems necessary in making the levy limit adjustment.
    Subd. 4. Transfer of governmental functions. If a function or service of one local
governmental unit is transferred to another local governmental unit, the levy limits established
under section 275.71 must be adjusted by the commissioner of revenue in such manner so as
to fairly and equitably reflect the reduced or increased property tax burden resulting from the
transfer. The aggregate of the adjusted limitations must not exceed the aggregate of the limitations
prior to adjustment.
    Subd. 5. Effective date for levy limits purposes. Annexations, mergers, and shifts in
services and functional responsibilities that are effective by June 30 of the levy year are included
in the calculation of the levy limit for that levy year. Annexations, mergers, and shifts in services
and functional responsibilities that are effective after June 30 of a levy year are not included in
the calculation of the levy limit until the subsequent levy year.
History: 1Sp2001 c 5 art 16 s 8; 1Sp2003 c 21 art 7 s 6