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Mr. Jeff Karison July 25, 2012 Page 3 which base is further adjusted under Section 275.70, subd. 4 by three factors (growth in implicit price deflator, household growth, and taxable value increase due to new commercial construction). As is evident from this description, the determination of the levy limit is complex in the extreme. In fact, Section 275.74 states that the "commissioner of revenue shall make all necessary calculations for determining levy limits for localgovernments and notify the affected governmental units directly by September 1 of each levy year." But if levy limits under Section 275.70 to 275.74 are not in effect—those provisions expired with taxes levied in 2010 and paid in 2011 the commissioner will not prepare the calculations. The various data that are needed to determine the "levy aid base" and the "levy limit base" may not be available, and in fact the aids may or may not exist, or may be delivered in different ways or under different statutes. Therefore, it is simply not possible to calculate a levy "in accordance with the provisions of Minn. Stat., Sections 275.70 to 275.74" as the amendment purports to require. Moreover, the amendment adds to the confusion by stating that the levy for the year 2012 will be the starting point for calculating all subsequent levy adjustments. Does this mean that one should ignore the definitions of "levy limit base" in the statute altogether? If so, how are levy limits determined "in accordance" with the statute as the amendment directs. And exactly what adjustments are to be made? Does one just use the three factors identified in Section 275.71, subdivision 4? But again, those factors are applied to the "levy limit base," and since it's not clear how the City should calculate that, or whether that term is relevant to the "year 2012" tax levy, it's not clear how those factors should be applied. It is not even clear whether the levy "for the year 2012" refers to taxes levied in 2012 for collection in 2013, or the levy collected in 2012. One assumes the intent was to reference the 2012 levy year, though the levy "for the year 2012" literally seems to mean the year in which the taxes are paid (in Minnesota, taxes are levied in one year, for collection and use in the following year). This adds to the uncertainty in whether the City could ever have confidence that it was determining the levy limit in compliance with the -City Charter. The next paragraph of the amendment introduces even greater problems. This section includes within the levy limit all levies "imposed on a majority of the property owners in the City for a new special district or utility (such as a storm sewer improvement district, storm sewer utility, or lake improvement district) created after 2011 ...." These levies qualify as "special levies" only if the voters authorize the creation of the special district or utility. This provision is flawed in several respects. First is the difficulty of determining when a levy is imposed on the "majority of property owners." Exactly how will that be 408003v1 LNI40-86