HF 1646

as introduced - 88th Legislature (2013 - 2014) Posted on 03/20/2013 10:42am

A bill for an act
relating to taxation; taconite production taxation; modifying the distribution of
the proceeds of the tax; imposing a supplemental tax rate to finance a reserve
fund; modifying the computation of the homestead credit; authorizing the
issuance of bonds; appropriating money; amending Minnesota Statutes 2012,
sections 273.135, subdivision 2; 298.225, subdivision 2; 298.24, by adding a
subdivision; 298.28, subdivision 4, by adding a subdivision; 298.293; repealing
Minnesota Statutes 2012, sections 298.227; 298.28, subdivision 9a.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2012, section 273.135, subdivision 2, is amended to read:

Subd. 2.

Reduction amount.

The amount of the reduction authorized by
subdivision 1 shall be:

(a) In the case of property located within a municipality as defined under section
273.134, paragraph (a), 66 percent of the tax, provided that the reduction shall not exceed
the maximum amounts specified in paragraph (c).

(b) In the case of property located within the boundaries of a school district which
qualifies as a tax relief area under section 273.134, paragraph (b), but which is outside the
boundaries of a municipality which meets the qualifications prescribed in section 273.134,
paragraph (a), 57 percent of the tax, provided that the reduction shall not exceed the
maximum amounts specified in paragraph (c).

(c) The maximum reduction of the tax is $315.10 on property described in paragraph
(a) and $289.80 on property described in paragraph (b) new text begin , provided that the maximum
reduction is increased by $100 for any property located in a city or an organized town, any
portion of which is within eight miles of an active iron ore mine as of July 1 of the year
prior to the year in which the credit is paid new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning for property taxes payable
in 2014.
new text end

Sec. 2.

Minnesota Statutes 2012, section 298.225, subdivision 2, is amended to read:

Subd. 2.

Funding guaranteed distribution level.

The money necessary for
funding the difference between the initial distribution made pursuant to section 298.28
and the amount guaranteed in subdivision 1 is appropriated new text begin first from the guarantee trust
fund under section 298.28, subdivision 11b, to the extent funds are available then, new text end in
equal proportions from the initial current year distributions to the taconite environmental
protection fund and to the Douglas J. Johnson economic protection trust pursuant to
section 298.28. If the initial distributions to the taconite environmental protection fund and
the Douglas J. Johnson economic protection trust are insufficient to fund the difference,
the commissioner of Iron Range resources and rehabilitation shall make the payments
of any remaining difference from the corpus of the taconite environmental protection
fund and the corpus of the Douglas J. Johnson economic protection trust fund in equal
proportions as directed by the commissioner of revenue.

If a taconite producer ceases beneficiation operations permanently and is required
by a special law to make bond payments for a school district, the Douglas J. Johnson
economic protection trust fund shall assume the payments of the taconite producer if
the producer ceases to make the needed payments. The commissioner of Iron Range
resources and rehabilitation shall make these school bond payments from the corpus of
the Douglas J. Johnson economic protection trust fund in the amounts certified by the
commissioner of revenue.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2014.
new text end

Sec. 3.

Minnesota Statutes 2012, section 298.24, is amended by adding a subdivision
to read:

new text begin Subd. 5. new text end

new text begin Supplemental tax; certain years. new text end

new text begin (a) In addition to the tax imposed under
subdivision 1, a supplemental tax applies to production in a calendar year as provided
under paragraph (c). The tax under this subdivision only applies to plants subject to
tax under subdivision 1.
new text end

new text begin (b) For purposes of this subdivision, "index" means the first release of the annual value
of the producer price index for iron ore (including crude, concentrates, agglomerates, and
pellates), as published by the Bureau of Labor Statistics of the United States Department
of Labor, with an index value of 100 for calendar year 1997, for the calendar year.
new text end

new text begin (c) The tax under this subdivision applies for each calendar year in which the index
for that calendar year exceeds a value of 150. The tax applies to the production for the
calendar year at the following rates:
new text end

new text begin Index for the calendar year: new text end	new text begin Tax rate per ton: new text end
new text begin less than 150 new text end	new text begin no tax new text end
new text begin greater than or equal to 150, but less than 175 new text end	new text begin ten cents new text end
new text begin greater than or equal to 175, but less than 200 new text end	new text begin 20 cents new text end
new text begin greater than or equal to 200 new text end	new text begin 30 cents new text end

new text begin (d) Notwithstanding section 298.27, the commissioner shall notify each producer of
the tax, if any, due under this subdivision for a calendar year as soon as practicable after
the index is published and the commissioner determines that the tax applies to the calendar
year and the rate of the tax. Notwithstanding the payment requirements under section
298.27, payment of the entire tax under this subdivision is due on or before August 24.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning for production year 2013.
new text end

Sec. 4.

Minnesota Statutes 2012, section 298.28, subdivision 4, is amended to read:

Subd. 4.

School districts.

(a) 23.15 cents per taxable ton, plus the increase provided
in paragraph (d), less the amount that would have been computed under Minnesota
Statutes 2008, section 126C.21, subdivision 4, for the current year for that district, must be
allocated to qualifying school districts to be distributed, based upon the certification of the
commissioner of revenue, under paragraphs (b), (c), and (f).

(b)(i) 3.43 cents per taxable ton must be distributed to the school districts in which
the lands from which taconite was mined or quarried were located or within which the
concentrate was produced. The distribution must be based on the apportionment formula
prescribed in subdivision 2.

(ii) Four cents per taxable ton from each taconite facility must be distributed to
each affected school district for deposit in a fund dedicated to building maintenance
and repairs, as follows:

(1) proceeds from Keewatin Taconite or its successor are distributed to Independent
School Districts Nos. 316, Coleraine, and 319, Nashwauk-Keewatin, or their successor
districts;

(2) proceeds from the Hibbing Taconite Company or its successor are distributed to
Independent School Districts Nos. 695, Chisholm, and 701, Hibbing, or their successor
districts;

(3) proceeds from the Mittal Steel Company and Minntac or their successors are
distributed to Independent School Districts Nos. 712, Mountain Iron-Buhl, 706, Virginia,
2711, Mesabi East, and 2154, Eveleth-Gilbert, or their successor districts;

(4) proceeds from the Northshore Mining Company or its successor are distributed
to Independent School Districts Nos. 2142, St. Louis County, and 381, Lake Superior,
or their successor districts; and

(5) proceeds from United Taconite or its successor are distributed to Independent
School Districts Nos. 2142, St. Louis County, and 2154, Eveleth-Gilbert, or their
successor districts.

Revenues that are required to be distributed to more than one district shall be
apportioned according to the number of pupil units identified in section 126C.05,
subdivision 1, enrolled in the second previous year.

(c)(i) 15.72 cents per taxable ton, less any amount distributed under paragraph (e),
shall be distributed to a group of school districts comprised of those school districts which
qualify as a tax relief area under section 273.134, paragraph (b), or in which there is a
qualifying municipality as defined by section 273.134, paragraph (a), in direct proportion
to school district indexes as follows: for each school district, its pupil units determined
under section 126C.05 for the prior school year shall be multiplied by the ratio of the
average adjusted net tax capacity per pupil unit for school districts receiving aid under
this clause as calculated pursuant to chapters 122A, 126C, and 127A for the school year
ending prior to distribution to the adjusted net tax capacity per pupil unit of the district.
Each district shall receive that portion of the distribution which its index bears to the sum
of the indices for all school districts that receive the distributions.

(ii) Notwithstanding clause (i), each school district that receives a distribution
under sections 298.018; 298.23 to 298.28, exclusive of any amount received under this
clause; 298.34 to 298.39; 298.391 to 298.396; 298.405; or any law imposing a tax on
severed mineral values after reduction for any portion distributed to cities and towns
under section 126C.48, subdivision 8, paragraph (5), that is less than the amount of its
levy reduction under section 126C.48, subdivision 8, for the second year prior to the
year of the distribution shall receive a distribution equal to the difference; the amount
necessary to make this payment shall be derived from proportionate reductions in the
initial distribution to other school districts under clause (i). If there are insufficient tax
proceeds to make the distribution provided under this paragraph in any year, money must
be transferred from the taconite property tax relief account in subdivision 6, to the extent
of the shortfall in the distribution.

(d) Any school district described in paragraph (c) where a levy increase pursuant to
section 126C.17, subdivision 9, was authorized by referendum for taxes payable in 2001,
shall receive a distribution of 21.3 cents per ton. Each district shall receive $175 times the
pupil units identified in section 126C.05, subdivision 1, enrolled in the second previous
year or the 1983-1984 school year, whichever is greater, less the product of 1.8 percent
times the district's taxable net tax capacity in the second previous year.

If the total amount provided by paragraph (d) is insufficient to make the payments
herein required then the entitlement of $175 per pupil unit shall be reduced uniformly
so as not to exceed the funds available. Any amounts received by a qualifying school
district in any fiscal year pursuant to paragraph (d) shall not be applied to reduce general
education aid which the district receives pursuant to section 126C.13 or the permissible
levies of the district. Any amount remaining after the payments provided in this paragraph
shall be paid to the commissioner of Iron Range resources and rehabilitation who shall
deposit the same in the taconite environmental protection fund and the Douglas J. Johnson
economic protection trust fund as provided in subdivision 11.

Each district receiving money according to this paragraph shall reserve the lesser of
the amount received under this paragraph or $25 times the number of pupil units served
in the district. It may use the money for early childhood programs or for outcome-based
learning programs that enhance the academic quality of the district's curriculum. The
outcome-based learning programs must be approved by the commissioner of education.

(e) There shall be distributed to any school district the amount which the school
district was entitled to receive under section 298.32 in 1975.

(f) Four cents per taxable ton must be distributed to qualifying school districts
according to the distribution specified in paragraph (b), clause (ii), and two cents per taxable
ton must be distributed according to the distribution specified in paragraph (c). These
amounts are not subject to sections 126C.21, subdivision 4, and 126C.48, subdivision 8.

new text begin (g) 16.2 cents per taxable ton must be distributed to school districts as provided
under paragraph (c), except the amounts received are not subject to section 126C.48,
subdivision 8.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for the 2015 distribution and
thereafter.
new text end

Sec. 5.

Minnesota Statutes 2012, section 298.28, is amended by adding a subdivision
to read:

new text begin Subd. 11b. new text end

new text begin Supplemental tax; guarantee trust fund. new text end

new text begin The proceeds of the tax
imposed under section 298.24, subdivision 5, must be allocated to St. Louis County to be
held in trust for the cities, counties, towns, and school districts in the taconite tax relief
area to provide a reserve fund for payment of distributions under this section, as provided
in sections 298.225 and 298.293. The amounts so held are a trust fund only to be used as
provided under sections 298.225 and 298.293.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2013.
new text end

Sec. 6.

Minnesota Statutes 2012, section 298.293, is amended to read:

298.293 EXPENDING FUNDS.

The funds provided by section 298.28, subdivision 11, relating to the Douglas J.
Johnson economic protection trust fund, except money expended pursuant to Laws
1982, Second Special Session, chapter 2, sections 8 to 14, shall be expended only in
an amount that does not exceed the sum of the net interest, dividends, and earnings
arising from the investment of the trust for the preceding 12 calendar months from the
date of the authorization plus, for fiscal year 1983, $10,000,000 from the corpus of the
fund. The funds may be spent only in or for the benefit of the taconite assistance area as
defined in section 273.1341. If during any year the taconite property tax account under
sections 273.134 to 273.136 does not contain sufficient funds to pay the property tax relief
specified in deleted text begin Laws 1977, chapter 423, article X, deleted text end section deleted text begin 4 deleted text end new text begin 273.135 new text end , there is appropriated
new text begin first from the guarantee trust fund under section 298.28, subdivision 11b, to the extent
funds are available then, new text end from this trust fund to the relief account sufficient funds to pay
the relief specified in deleted text begin Laws 1977, chapter 423, article X, deleted text end section deleted text begin 4 deleted text end new text begin 273.135 new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2014.
new text end

Sec. 7. new text begin 2013 DISTRIBUTION ONLY.
new text end

new text begin For the 2013 distribution, a special fund is established to receive $6,000,000 of the
amount that otherwise would be distributed under Minnesota Statutes, section 298.28,
subdivision 6, and this amount must be paid to the city of Hibbing for improvements to
the city's water supply system.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for the 2013 distribution, all of which
must be made in the August 2013 payment.
new text end

Sec. 8. new text begin IRON RANGE RESOURCES AND REHABILITATION
COMMISSIONER; BONDS AUTHORIZED.
new text end

new text begin Subdivision 1. new text end

new text begin Issuance; purpose. new text end

new text begin Notwithstanding any provision of Minnesota
Statutes, chapter 298, to the contrary, the commissioner of Iron Range resources and
rehabilitation may issue revenue bonds in a principal amount of $....... in one or more
series, and bonds to refund those bonds. The proceeds of the bonds must be used to
make grants to school districts located in the taconite tax relief area defined in Minnesota
Statutes, section 273.134, or the taconite assistance area defined in Minnesota Statutes,
section 273.1341, to be used by the school districts to pay for building projects, energy
efficiency, technology, infrastructure, health, safety, and maintenance improvements.
new text end

new text begin Subd. 2. new text end

new text begin Appropriation. new text end

new text begin There is annually appropriated from the distribution of
taconite production tax revenues under Minnesota Statues, section 298.28, prior to the
calculation of the amount of the remainder under Minnesota Statutes, section 298.28,
subdivision 11, an amount sufficient to pay when due the principal and interest on the
bonds issued pursuant to subdivision 1. The appropriation under this section must
not exceed one-half of the amount that would have been distributed under Minnesota
Statutes, section 298.28, subdivision 9a, if that subdivision had not been repealed. The
appropriation under this subdivision terminates upon payment or maturity of the last of the
bonds issued under this section.
new text end

new text begin Subd. 3. new text end

new text begin Credit enhancement. new text end

new text begin The bonds issued under this section are "debt
obligations" and the commissioner of Iron Range resources and rehabilitation is a "district"
for purposes of Minnesota Statutes, section 126C.55, provided that advances made under
Minnesota Statutes, section 126C.55, subdivision 2, are not subject to Minnesota Statutes,
section 126C.55, subdivisions 4 to 7.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment and
applies beginning with the 2014 distribution under Minnesota Statutes, section 298.28.
new text end

Sec. 9. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2012, sections 298.227; and 298.28, subdivision 9a, new text end new text begin are repealed.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning for the 2015 distribution,
except the distribution for 2014 must equal one-half of the amount of the distribution
provided by Minnesota Statutes, section 298.24, subdivision 9a. The provisions of
Minnesota Statutes, section 298.227, requiring repayment of loans, continue in effect until
the loans and all other obligations are repaid.
new text end