HF 1646

1st Committee Engrossment - 88th Legislature (2013 - 2014) Posted on 03/21/2013 03:57pm

1.1A bill for an act

1.2relating to taxation; taconite production taxation; modifying the distribution
1.3of the proceeds of the tax; reducing distributions to the taconite economic
1.4development fund; modifying the computation of the homestead credit;
1.5authorizing the issuance of bonds; appropriating money;amending Minnesota
1.6Statutes 2012, section 298.28, subdivisions 4, 6, 9a.
1.7BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.8    Section 1. Minnesota Statutes 2012, section 298.28, subdivision 4, is amended to read:
1.9    Subd. 4. School districts. (a) 23.15 cents per taxable ton, plus the increase provided
1.10in paragraph (d), less the amount that would have been computed under Minnesota
1.11Statutes 2008, section 126C.21, subdivision 4, for the current year for that district, must be
1.12allocated to qualifying school districts to be distributed, based upon the certification of the
1.13commissioner of revenue, under paragraphs (b), (c), and (f).
1.14    (b)(i) 3.43 cents per taxable ton must be distributed to the school districts in which
1.15the lands from which taconite was mined or quarried were located or within which the
1.16concentrate was produced. The distribution must be based on the apportionment formula
1.17prescribed in subdivision 2.
1.18    (ii) Four cents per taxable ton from each taconite facility must be distributed to
1.19each affected school district for deposit in a fund dedicated to building maintenance
1.20and repairs, as follows:
1.21    (1) proceeds from Keewatin Taconite or its successor are distributed to Independent
1.22School Districts Nos. 316, Coleraine, and 319, Nashwauk-Keewatin, or their successor
1.23districts;
2.1    (2) proceeds from the Hibbing Taconite Company or its successor are distributed to
2.2Independent School Districts Nos. 695, Chisholm, and 701, Hibbing, or their successor
2.3districts;
2.4    (3) proceeds from the Mittal Steel Company and Minntac or their successors are
2.5distributed to Independent School Districts Nos. 712, Mountain Iron-Buhl, 706, Virginia,
2.62711, Mesabi East, and 2154, Eveleth-Gilbert, or their successor districts;
2.7    (4) proceeds from the Northshore Mining Company or its successor are distributed
2.8to Independent School Districts Nos. 2142, St. Louis County, and 381, Lake Superior,
2.9or their successor districts; and
2.10    (5) proceeds from United Taconite or its successor are distributed to Independent
2.11School Districts Nos. 2142, St. Louis County, and 2154, Eveleth-Gilbert, or their
2.12successor districts.
2.13    Revenues that are required to be distributed to more than one district shall be
2.14apportioned according to the number of pupil units identified in section 126C.05,
2.15subdivision 1 , enrolled in the second previous year.
2.16    (c)(i) 15.72 cents per taxable ton, less any amount distributed under paragraph (e),
2.17shall be distributed to a group of school districts comprised of those school districts which
2.18qualify as a tax relief area under section 273.134, paragraph (b), or in which there is a
2.19qualifying municipality as defined by section 273.134, paragraph (a), in direct proportion
2.20to school district indexes as follows: for each school district, its pupil units determined
2.21under section 126C.05 for the prior school year shall be multiplied by the ratio of the
2.22average adjusted net tax capacity per pupil unit for school districts receiving aid under
2.23this clause as calculated pursuant to chapters 122A, 126C, and 127A for the school year
2.24ending prior to distribution to the adjusted net tax capacity per pupil unit of the district.
2.25Each district shall receive that portion of the distribution which its index bears to the sum
2.26of the indices for all school districts that receive the distributions.
2.27    (ii) Notwithstanding clause (i), each school district that receives a distribution
2.28under sections 298.018; 298.23 to 298.28, exclusive of any amount received under this
2.29clause; 298.34 to 298.39; 298.391 to 298.396; 298.405; or any law imposing a tax on
2.30severed mineral values after reduction for any portion distributed to cities and towns
2.31under section 126C.48, subdivision 8, paragraph (5), that is less than the amount of its
2.32levy reduction under section 126C.48, subdivision 8, for the second year prior to the
2.33year of the distribution shall receive a distribution equal to the difference; the amount
2.34necessary to make this payment shall be derived from proportionate reductions in the
2.35initial distribution to other school districts under clause (i). If there are insufficient tax
2.36proceeds to make the distribution provided under this paragraph in any year, money must
3.1be transferred from the taconite property tax relief account in subdivision 6, to the extent
3.2of the shortfall in the distribution.
3.3    (d) Any school district described in paragraph (c) where a levy increase pursuant to
3.4section 126C.17, subdivision 9, was authorized by referendum for taxes payable in 2001,
3.5shall receive a distribution of 21.3 cents per ton. Each district shall receive $175 times the
3.6pupil units identified in section 126C.05, subdivision 1, enrolled in the second previous
3.7year or the 1983-1984 school year, whichever is greater, less the product of 1.8 percent
3.8times the district's taxable net tax capacity in the second previous year.
3.9    If the total amount provided by paragraph (d) is insufficient to make the payments
3.10herein required then the entitlement of $175 per pupil unit shall be reduced uniformly
3.11so as not to exceed the funds available. Any amounts received by a qualifying school
3.12district in any fiscal year pursuant to paragraph (d) shall not be applied to reduce general
3.13education aid which the district receives pursuant to section 126C.13 or the permissible
3.14levies of the district. Any amount remaining after the payments provided in this paragraph
3.15shall be paid to the commissioner of Iron Range resources and rehabilitation who shall
3.16deposit the same in the taconite environmental protection fund and the Douglas J. Johnson
3.17economic protection trust fund as provided in subdivision 11.
3.18    Each district receiving money according to this paragraph shall reserve the lesser of
3.19the amount received under this paragraph or $25 times the number of pupil units served
3.20in the district. It may use the money for early childhood programs or for outcome-based
3.21learning programs that enhance the academic quality of the district's curriculum. The
3.22outcome-based learning programs must be approved by the commissioner of education.
3.23    (e) There shall be distributed to any school district the amount which the school
3.24district was entitled to receive under section 298.32 in 1975.
3.25    (f) Four cents per taxable ton must be distributed to qualifying school districts
3.26according to the distribution specified in paragraph (b), clause (ii), and two cents per taxable
3.27ton must be distributed according to the distribution specified in paragraph (c). These
3.28amounts are not subject to sections 126C.21, subdivision 4, and 126C.48, subdivision 8.
3.29EFFECTIVE DATE.This section is effective beginning for the 2014 distribution.

3.30    Sec. 2. Minnesota Statutes 2012, section 298.28, subdivision 6, is amended to read:
3.31    Subd. 6. Property tax relief. (a) In 2002 2014 and thereafter, 33.9 35.3 cents per
3.32taxable ton, less any amount required to be distributed under paragraphs (b) and (c), or
3.33section 298.2961, subdivision 5, must be allocated to St. Louis County acting as the
3.34counties' fiscal agent, to be distributed as provided in sections 273.134 to 273.136.
4.1(b) If an electric power plant owned by and providing the primary source of power
4.2for a taxpayer mining and concentrating taconite is located in a county other than the
4.3county in which the mining and the concentrating processes are conducted, .1875 cent per
4.4taxable ton of the tax imposed and collected from such taxpayer shall be paid to the county.
4.5(c) If an electric power plant owned by and providing the primary source of power
4.6for a taxpayer mining and concentrating taconite is located in a school district other than
4.7a school district in which the mining and concentrating processes are conducted, .4541
4.8cent per taxable ton of the tax imposed and collected from the taxpayer shall be paid to
4.9the school district.
4.10EFFECTIVE DATE.This section is effective beginning for the 2014 distribution.

4.11    Sec. 3. Minnesota Statutes 2012, section 298.28, subdivision 9a, is amended to read:
4.12    Subd. 9a. Taconite economic development fund. (a) 30.1 20.4 cents per ton
4.13for distributions in 2002 2014 and thereafter must be paid to the taconite economic
4.14development fund. No distribution shall be made under this paragraph in 2004 or any
4.15 subsequent year in which total industry production falls below 30 million tons. Distribution
4.16shall only be made to a taconite producer's fund under section 298.227 if the producer
4.17timely pays its tax under section 298.24 by the dates provided under section 298.27, or
4.18pursuant to the due dates provided by an administrative agreement with the commissioner.
4.19(b) An amount equal to 50 percent of the tax under section 298.24 for concentrate
4.20sold in the form of pellet chips and fines not exceeding 5/16 inch in size and not including
4.21crushed pellets shall be paid to the taconite economic development fund. The amount
4.22paid shall not exceed $700,000 annually for all companies. If the initial amount to be
4.23paid to the fund exceeds this amount, each company's payment shall be prorated so the
4.24total does not exceed $700,000.
4.25EFFECTIVE DATE.This section is effective beginning for the 2014 distribution.

4.26    Sec. 4. 2013 DISTRIBUTION ONLY.
4.27For the 2013 distribution, a special fund is established to receive $....... of the
4.28amount that otherwise would be distributed under Minnesota Statutes, section 298.28,
4.29subdivision 6, and this amount must be paid as follows:
4.30(1) $ ....... to the city of Hibbing for improvements to the city's water supply system;
4.31and
4.32(2) $ ....... to the city of Mountain Iron for the cost of moving utilities required as a
4.33result of actions undertaken by United States Steel Corporation.
5.1EFFECTIVE DATE.This section is effective for the 2013 distribution, all of which
5.2must be made in the August 2013 payment.

5.3    Sec. 5. IRON RANGE RESOURCES AND REHABILITATION
5.4COMMISSIONER; BONDS AUTHORIZED.
5.5    Subdivision 1. Issuance; purpose. Notwithstanding any provision of Minnesota
5.6Statutes, chapter 298, to the contrary, the commissioner of Iron Range resources and
5.7rehabilitation may issue revenue bonds in a principal amount of $....... in one or more
5.8series, and bonds to refund those bonds. The proceeds of the bonds must be used to
5.9make grants to school districts located in the taconite tax relief area defined in Minnesota
5.10Statutes, section 273.134, or the taconite assistance area defined in Minnesota Statutes,
5.11section 273.1341, to be used by the school districts to pay for building projects, energy
5.12efficiency, technology, infrastructure, health, safety, and maintenance improvements.
5.13    Subd. 2. Appropriation. There is annually appropriated from the distribution of
5.14taconite production tax revenues under Minnesota Statues, section 298.28, prior to the
5.15calculation of the amount of the remainder under Minnesota Statutes, section 298.28,
5.16subdivision 11, an amount sufficient to pay when due the principal and interest on the
5.17bonds issued pursuant to subdivision 1. The appropriation under this section must not
5.18exceed an amount equal to ten cents per taxable ton.
5.19(b) If in any year the amount available under paragraph (a) is insufficient to pay
5.20principal and interest due on the bonds in that year, an additional amount is appropriated
5.21from the Douglas J. Johnson fund to make up the deficiency.
5.22(c) The appropriation under this subdivision terminates upon payment or maturity of
5.23the last of the bonds issued under this section.
5.24    Subd. 3. Credit enhancement. The bonds issued under this section are "debt
5.25obligations" and the commissioner of Iron Range resources and rehabilitation is a "district"
5.26for purposes of Minnesota Statutes, section 126C.55, provided that advances made under
5.27Minnesota Statutes, section 126C.55, subdivision 2, are not subject to Minnesota Statutes,
5.28section 126C.55, subdivisions 4 to 7.
5.29EFFECTIVE DATE.This section is effective the day following final enactment and
5.30applies beginning with the 2014 distribution under Minnesota Statutes, section 298.28.