1.1A bill for an act1.2relating to taxation; conforming certain income, franchise, and property tax 1.3refund provisions for tax year 2012 to the provisions of the Federal Aviation 1.4Administration Modernization and Reform Act of 2012 and the American 1.5Taxpayer Relief Act of 2012; changing provisions relating to the Iron Range 1.6Resources and Rehabilitation Board;amending Minnesota Statutes 2012, 1.7sections 116J.424; 270C.13, subdivision 1; 290.01, subdivisions 19, 31; 290A.03, 1.8subdivision 15; 298.22, subdivisions 5a, 8, 10, 11, by adding a subdivision; 1.9298.221; 298.2211, subdivision 3; 298.2213, subdivision 4; 298.2214, subdivision 1.106; 298.223, subdivisions 1, 2; 298.227; 298.28, subdivision 9d; 298.292, 1.11subdivision 2; 298.294; 298.296, subdivisions 1, 2; 298.2961, subdivisions 2, 4, 1.125; repealing Minnesota Statutes 2012, section 298.22, subdivision 2.1.13BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:1.14    Section 1. Minnesota Statutes 2012, section 116J.424, is amended to read:1.15116J.424 IRON RANGE RESOURCES AND REHABILITATION BOARD 1.16CONTRIBUTION.1.17The commissioner of the Iron Range Resources and Rehabilitation Board with 1.18approval by at least seven Iron Range Resources and Rehabilitation Board members the 1.19board, shall provide an equal match for any loan or equity investment made for a facility 1.20located in the tax relief area defined in section 
         273.134, paragraph (b), by the Minnesota 1.21minerals 21st century fund created by section 
         116J.423. The match may be in the form 1.22of a loan or equity investment, notwithstanding whether the fund makes a loan or equity 1.23investment. The state shall not acquire an equity interest because of an equity investment 1.24or loan by the board and the board at its sole discretion shall decide what interest it acquires 1.25in a project. The commissioner of employment and economic development may require a 1.26commitment from the board to make the match prior to disbursing money from the fund.2.1    Sec. 2. Minnesota Statutes 2012, section 270C.13, subdivision 1, is amended to read:2.2    Subdivision 1. Biennial report. The commissioner shall report to the legislature 2.3by March 1 of each odd-numbered year on the overall incidence of the income tax, 2.4sales and excise taxes, and property tax. The report shall present information on the 2.5distribution of the tax burden as follows: (1) for the overall income distribution, using 2.6a systemwide incidence measure such as the Suits index or other appropriate measures 2.7of equality and inequality; (2) by income classes, including at a minimum deciles of the 2.8income distribution; and (3) by other appropriate taxpayer characteristics. The report 2.9must also include information on the distribution of the burden of federal taxes borne 2.10by Minnesota residents.2.11EFFECTIVE DATE.This section is effective the day following final enactment.2.12    Sec. 3. Minnesota Statutes 2012, section 290.01, subdivision 19, is amended to read:2.13    Subd. 19. Net income. The term "net income" means the federal taxable income, 2.14as defined in section 63 of the Internal Revenue Code of 1986, as amended through the 2.15date named in this subdivision, incorporating the federal effective dates of changes to the 2.16Internal Revenue Code and any elections made by the taxpayer in accordance with the 2.17Internal Revenue Code in determining federal taxable income for federal income tax 2.18purposes, and with the modifications provided in subdivisions 19a to 19f.2.19    In the case of a regulated investment company or a fund thereof, as defined in section 2.20851(a) or 851(g) of the Internal Revenue Code, federal taxable income means investment 2.21company taxable income as defined in section 852(b)(2) of the Internal Revenue Code, 2.22except that:2.23    (1) the exclusion of net capital gain provided in section 852(b)(2)(A) of the Internal 2.24Revenue Code does not apply;2.25    (2) the deduction for dividends paid under section 852(b)(2)(D) of the Internal 2.26Revenue Code must be applied by allowing a deduction for capital gain dividends and 2.27exempt-interest dividends as defined in sections 852(b)(3)(C) and 852(b)(5) of the Internal 2.28Revenue Code; and2.29    (3) the deduction for dividends paid must also be applied in the amount of any 2.30undistributed capital gains which the regulated investment company elects to have treated 2.31as provided in section 852(b)(3)(D) of the Internal Revenue Code.2.32    The net income of a real estate investment trust as defined and limited by section 2.33856(a), (b), and (c) of the Internal Revenue Code means the real estate investment trust 2.34taxable income as defined in section 857(b)(2) of the Internal Revenue Code.3.1    The net income of a designated settlement fund as defined in section 468B(d) of 3.2the Internal Revenue Code means the gross income as defined in section 468B(b) of the 3.3Internal Revenue Code.3.4    The Internal Revenue Code of 1986, as amended through April 14, 2011, shall be 3.5in effect for taxable years beginning after December 31, 1996. The provisions of the 3.6act of January 22, 2010, Public Law 111-126, to accelerate the benefits for charitable 3.7cash contributions for the relief of victims of the Haitian earthquake, are effective at the 3.8same time they became effective for federal purposes and apply to the subtraction under 3.9subdivision 19b, clause (6). The provisions of title II, section 2112, of the act of September 3.1027, 2010, Public Law 111-240, rollovers from elective deferral plans to designated Roth 3.11accounts, are effective at the same time they became effective for federal purposes and 3.12taxable rollovers are included in net income at the same time they are included in gross 3.13income for federal purposes, and before January 1, 2012, and for taxable years beginning 3.14after December 31, 2012. The Internal Revenue Code of 1986, as amended through 3.15January 3, 2013, is in effect for taxable years beginning after December 31, 2011, and 3.16before January 1, 2013.3.17    Except as otherwise provided, references to the Internal Revenue Code in 3.18subdivisions 19 to 19f mean the code in effect for purposes of determining net income for 3.19the applicable year.3.20EFFECTIVE DATE.This section is effective the day following final enactment.3.21    Sec. 4. Minnesota Statutes 2012, section 290.01, subdivision 31, is amended to read:3.22    Subd. 31. Internal Revenue Code. Unless specifically defined otherwise, for 3.23taxable years beginning before January 1, 2012, and after December 31, 2012, "Internal 3.24Revenue Code" means the Internal Revenue Code of 1986, as amended through April 14, 3.252011; and for taxable years beginning after December 31, 2011, and before January 1, 3.262013, "Internal Revenue Code" means the Internal Revenue Code of 1986, as amended 3.27through January 3, 2013. Internal Revenue Code also includes any uncodified provision in 3.28federal law that relates to provisions of the Internal Revenue Code that are incorporated 3.29into Minnesota law. When used in this chapter, the reference to "subtitle A, chapter 1, 3.30subchapter N, part 1, of the Internal Revenue Code" is to the Internal Revenue Code as 3.31amended through March 18, 2010.3.32EFFECTIVE DATE.This section is effective the day following final enactment, 3.33except the changes incorporated by federal changes are effective at the same time as the 3.34changes were effective for federal purposes.4.1    Sec. 5. Minnesota Statutes 2012, section 290A.03, subdivision 15, is amended to read:4.2    Subd. 15. Internal Revenue Code.For taxable years beginning before January 1, 4.32012, and after December 31, 2012, "Internal Revenue Code" means the Internal Revenue 4.4Code of 1986, as amended through April 14, 2011; and for taxable years beginning after 4.5December 31, 2011, and before January 1, 2013, "Internal Revenue Code" means the 4.6Internal Revenue Code of 1986, as amended through January 3, 2013.4.7EFFECTIVE DATE.This section is effective for property tax refunds based on 4.8property taxes payable after December 31, 2012, and rent paid after December 31, 2011.4.9    Sec. 6. Minnesota Statutes 2012, section 298.22, is amended by adding a subdivision 4.10to read:4.11    Subd. 1a.Iron Range Resources and Rehabilitation Board.The Iron Range 4.12Resources and Rehabilitation Board consists of the state senators and representatives 4.13elected from state senatorial or legislative districts in which one-third or more of the 4.14residents reside in a taconite assistance area as defined in section 273.1341. One additional 4.15state senator shall also be appointed by the senate Subcommittee on Committees of the 4.16Committee on Rules and Administration. All expenditures and projects made by the 4.17commissioner shall first be submitted to the board for approval. The expenses of the 4.18board shall be paid by the state from the funds raised pursuant to this section. Members 4.19of the board may be reimbursed for expenses in the manner provided in sections 3.099, 4.20subdivision 1, and 3.101, and may receive per diem payments during the interims between 4.21legislative sessions in the manner provided in section 3.099, subdivision 1.4.22The members shall be appointed in January of every odd-numbered year, and shall 4.23serve until January of the next odd-numbered year. Vacancies on the board shall be filled 4.24in the same manner as original members were chosen.4.25    Sec. 7. Minnesota Statutes 2012, section 298.22, subdivision 5a, is amended to read:4.26    Subd. 5a. Forest trust. The commissioner, upon the affirmative vote of at least 4.27seven Iron Range Resources and Rehabilitation Board members approval by the board, 4.28may purchase forest lands in the taconite assistance area defined in under section 
         273.13414.29with funds specifically authorized for the purchase. The acquired forest lands must be 4.30held in trust for the benefit of the citizens of the taconite assistance area as the Iron Range 4.31Miners' Memorial Forest. The forest trust lands shall be managed and developed for 4.32recreation and economic development purposes. The commissioner, upon the affirmative 4.33vote of at least seven Iron Range Resources and Rehabilitation Board members approval 4.34by the board, may sell forest lands purchased under this subdivision if the board finds that 5.1the sale advances the purposes of the trust. Proceeds derived from the management or sale 5.2of the lands and from the sale of timber or removal of gravel or other minerals from these 5.3forest lands shall be deposited into an Iron Range Miners' Memorial Forest account that is 5.4established within the state financial accounts. Funds may be expended from the account 5.5upon approval by at least seven Iron Range Resources and Rehabilitation Board members5.6 the board, to purchase, manage, administer, convey interests in, and improve the forest 5.7lands. By an affirmative vote of at least seven Iron Range Resources and Rehabilitation 5.8Board members With approval by the board, money in the Iron Range Miners' Memorial 5.9Forest account may be transferred into the corpus of the Douglas J. Johnson economic 5.10protection trust fund established under sections 
         298.291 to 
         298.294. The property acquired 5.11under the authority granted by this subdivision and income derived from the property or 5.12the operation or management of the property are exempt from taxation by the state or its 5.13political subdivisions while held by the forest trust.5.14    Sec. 8. Minnesota Statutes 2012, section 298.22, subdivision 8, is amended to read:5.15    Subd. 8. Spending priority. In making or approving any expenditures on programs 5.16or projects, the commissioner and the board shall give the highest priority to programs 5.17and projects that target relief to those areas of the taconite assistance area as defined in 5.18section 
         273.1341, that have the largest percentages of job losses and population losses 5.19directly attributable to the economic downturn in the taconite industry since the 1980s. 5.20The commissioner and the board shall compare the 1980 population and employment 5.21figures with the 2000 population and employment figures, and shall specifically consider 5.22the job losses in 2000 and 2001 resulting from the closure of LTV Steel Mining Company, 5.23in making or approving expenditures consistent with this subdivision, as well as the areas 5.24of residence of persons who suffered job loss for which relief is to be targeted under this 5.25subdivision. The commissioner may lease, for a term not exceeding 50 years and upon 5.26the terms determined by the commissioner and approved by at least seven Iron Range 5.27Resources and Rehabilitation Board members the board, surface and mineral interests 5.28owned or acquired by the state of Minnesota acting by and through the office of the 5.29commissioner of Iron Range resources and rehabilitation within those portions of the 5.30taconite assistance area affected by the closure of the LTV Steel Mining Company facility 5.31near Hoyt Lakes. The payments and royalties from these leases must be deposited into the 5.32fund established in section 
         298.292. This subdivision supersedes any other conflicting 5.33provisions of law and does not preclude the commissioner and the board from making 5.34expenditures for programs and projects in other areas.6.1    Sec. 9. Minnesota Statutes 2012, section 298.22, subdivision 10, is amended to read:6.2    Subd. 10. Sale or privatization of functions. The commissioner of Iron Range 6.3resources and rehabilitation may not sell or privatize the Ironworld Discovery Center or 6.4Giants Ridge Golf and Ski Resort without prior approval by at least seven Iron Range 6.5Resources and Rehabilitation Board members the board.6.6    Sec. 10. Minnesota Statutes 2012, section 298.22, subdivision 11, is amended to read:6.7    Subd. 11. Budgeting. The commissioner of Iron Range resources and rehabilitation 6.8shall annually prepare a budget for operational expenditures, programs, and projects, and 6.9submit it to the Iron Range Resources and Rehabilitation Board and the governor. After 6.10the budget is approved by at least seven Iron Range Resources and Rehabilitation Board 6.11members the board and the governor, the commissioner may spend money in accordance 6.12with the approved budget.6.13    Sec. 11. Minnesota Statutes 2012, section 298.221, is amended to read:6.14298.221 RECEIPTS FROM CONTRACTS; APPROPRIATION.6.15(a) Except as provided in paragraph (c), all money paid to the state of Minnesota 6.16pursuant to the terms of any contract entered into by the state under authority of section 6.17298.22
          and any fees which may, in the discretion of the commissioner of Iron Range 6.18resources and rehabilitation, be charged in connection with any project pursuant to that 6.19section as amended, shall be deposited in the state treasury to the credit of the Iron Range 6.20Resources and Rehabilitation Board account in the special revenue fund and are hereby 6.21appropriated for the purposes of section 
         298.22.6.22(b) Notwithstanding section 
         16A.013, merchandise may be accepted by the 6.23commissioner of the Iron Range Resources and Rehabilitation Board for payment of 6.24advertising contracts if the commissioner determines that the merchandise can be used 6.25for special event prizes or mementos at facilities operated by the board. Nothing in this 6.26paragraph authorizes the commissioner or a member of the board to receive merchandise 6.27for personal use.6.28(c) All fees charged by the commissioner in connection with public use of the 6.29state-owned ski and golf facilities at the Giants Ridge Recreation Area and all other 6.30revenues derived by the commissioner from the operation or lease of those facilities 6.31and from the lease, sale, or other disposition of undeveloped lands at the Giants Ridge 6.32Recreation Area must be deposited into an Iron Range Resources and Rehabilitation Board 6.33account that is created within the state enterprise fund. All funds deposited in the enterprise 7.1fund account are appropriated to the commissioner to be expended, subject to approval by at 7.2least seven Iron Range Resources and Rehabilitation Board members the board, as follows:7.3(1) to pay costs associated with the construction, equipping, operation, repair, or 7.4improvement of the Giants Ridge Recreation Area facilities or lands;7.5(2) to pay principal, interest and associated bond issuance, reserve, and servicing 7.6costs associated with the financing of the facilities; and7.7(3) to pay the costs of any other project authorized under section 
         298.22.7.8    Sec. 12. Minnesota Statutes 2012, section 298.2211, subdivision 3, is amended to read:7.9    Subd. 3. Project approval. All projects authorized by this section shall be 7.10submitted by the commissioner to the Iron Range Resources and Rehabilitation Board for 7.11approval by at least seven Iron Range Resources and Rehabilitation Board members the 7.12board. Prior to the commencement of a project involving the exercise by the commissioner 7.13of any authority of sections 
         469.174 to 
         469.179, the governing body of each municipality 7.14in which any part of the project is located and the county board of any county containing 7.15portions of the project not located in an incorporated area shall by majority vote approve 7.16or disapprove the project. Any project approved by at least seven Iron Range Resources 7.17and Rehabilitation Board members the board and the applicable governing bodies, if 7.18any, together with detailed information concerning the project, its costs, the sources of 7.19its funding, and the amount of any bonded indebtedness to be incurred in connection 7.20with the project, shall be transmitted to the governor, who shall approve, disapprove, or 7.21return the proposal for additional consideration within 30 days of receipt. No project 7.22authorized under this section shall be undertaken, and no obligations shall be issued and 7.23no tax increments shall be expended for a project authorized under this section until the 7.24project has been approved by the governor.7.25    Sec. 13. Minnesota Statutes 2012, section 298.2213, subdivision 4, is amended to read:7.26    Subd. 4. Project approval. The board and commissioner shall by August 1 each 7.27year prepare a list of projects to be funded from the money appropriated in this section 7.28with necessary supporting information including descriptions of the projects, plans, and 7.29cost estimates. A project must not be approved by the board unless it finds that:7.30(1) the project will materially assist, directly or indirectly, the creation of additional 7.31long-term employment opportunities;7.32(2) the prospective benefits of the expenditure exceed the anticipated costs; and7.33(3) in the case of assistance to private enterprise, the project will serve a sound 7.34business purpose.8.1Each project must be approved by at least seven Iron Range Resources and 8.2Rehabilitation Board members the board and the commissioner of Iron Range resources 8.3and rehabilitation. The list of projects must be submitted to the governor, who shall, by 8.4November 15 of each year, approve, disapprove, or return for further consideration, each 8.5project. The money for a project may be spent only upon approval of the project by the 8.6governor. The board may submit supplemental projects for approval at any time.8.7    Sec. 14. Minnesota Statutes 2012, section 298.2214, subdivision 6, is amended to read:8.8    Subd. 6. Per diem. Members of the committee may be reimbursed for expenses 8.9in the manner provided in section 298.22, subdivision 2 by the state from funds raised 8.10pursuant to section 298.22.8.11    Sec. 15. Minnesota Statutes 2012, section 298.223, subdivision 1, is amended to read:8.12    Subdivision 1. Creation; purposes. A fund called the taconite environmental 8.13protection fund is created for the purpose of reclaiming, restoring and enhancing those 8.14areas of northeast Minnesota located within the taconite assistance area defined in section 8.15273.1341
         , that are adversely affected by the environmentally damaging operations 8.16involved in mining taconite and iron ore and producing iron ore concentrate and for the 8.17purpose of promoting the economic development of northeast Minnesota. The taconite 8.18environmental protection fund shall be used for the following purposes:8.19(1) to initiate investigations into matters the Iron Range Resources and Rehabilitation 8.20Board determines are in need of study and which will determine the environmental 8.21problems requiring remedial action;8.22(2) reclamation, restoration, or reforestation of mine lands not otherwise provided 8.23for by state law;8.24(3) local economic development projects but only if those projects are approved 8.25by at least seven Iron Range Resources and Rehabilitation Board members the board, 8.26and public works, including construction of sewer and water systems located within the 8.27taconite assistance area defined in section 
         273.1341;8.28(4) monitoring of mineral industry related health problems among mining employees;8.29(5) local public works projects under section 
         298.227, paragraph (c); and8.30(6) local public works projects as provided under this clause. The following amounts 8.31shall be distributed in 2009 based upon the taxable tonnage of production in 2008:8.32(i) .4651 cent per ton to the city of Aurora for street repair and renovation;8.33(ii) .4264 cent per ton to the city of Biwabik for street and utility infrastructure 8.34improvements to the south side industrial site;9.1(iii) .6460 cent per ton to the city of Buhl for street repair;9.2(iv) 1.0336 cents per ton to the city of Hoyt Lakes for public utility improvements;9.3(v) 1.1628 cents per ton to the city of Eveleth for water and sewer infrastructure 9.4upgrades;9.5(vi) 1.0336 cents per ton to the city of Gilbert for water and sewer infrastructure 9.6upgrades;9.7(vii) .7752 cent per ton to the city of Mountain Iron for water and sewer infrastructure;9.8(viii) 1.2920 cents per ton to the city of Virginia for utility upgrades and accessibility 9.9modifications for the miners' memorial;9.10(ix) .6460 cent per ton to the town of White for Highway 135 road upgrades;9.11(x) 1.9380 cents per ton to the city of Hibbing for public infrastructure projects;9.12(xi) 1.1628 cents per ton to the city of Chisholm for water and sewer repair;9.13(xii) .6460 cent per ton to the town of Balkan for community center repairs;9.14(xiii) .9044 cent per ton to the city of Babbitt for city garage construction;9.15(xiv) .5168 cent per ton to the city of Cook for public infrastructure projects;9.16(xv) .5168 cent per ton to the city of Ely for reconstruction of 2nd Avenue West;9.17(xvi) .6460 cent per ton to the city of Tower for water infrastructure upgrades;9.18(xvii) .1292 cent per ton to the city of Orr for water infrastructure upgrades;9.19(xviii) .1292 cent per ton to the city of Silver Bay for emergency cleanup;9.20(xvix) .3230 cent per ton to Lake County for trail construction;9.21(xx) .1292 cent per ton to Cook County for construction of tennis courts in Grand 9.22Marais;9.23(xxi) .3101 cent per ton to the city of Two Harbors for water infrastructure 9.24improvements;9.25(xxii) .1938 cent per ton for land acquisition for phase one of Cook Airport project;9.26(xxiii) 1.0336 cents per ton to the city of Coleraine for water and sewer 9.27improvements along Gayley Avenue;9.28(xxiv) .3876 cent per ton to the city of Marble for construction of a city 9.29administration facility;9.30(xxv) .1292 cent per ton to the city of Calumet for repairs at city hall and the 9.31community center;9.32(xxvi) .6460 cent per ton to the city of Nashwauk for electrical infrastructure 9.33upgrades;9.34(xxvii) 1.0336 cents per ton to the city of Keewatin for water and sewer upgrades 9.35along Depot Street;10.1(xxviii) .2584 cent per ton to the city of Aitkin for water, sewer, street, and gutter 10.2improvements;10.3(xxix) 1.1628 cents per ton to the city of Grand Rapids for water and sewer 10.4infrastructure upgrades at Pokegema Golf Course and Park Place;10.5(xxx) .1809 cent per ton to the city of Grand Rapids for water and sewer upgrades 10.6for 1st Avenue from River Road to 3rd Street SE; and10.7(xxxi) .9044 cent per ton to the city of Cohasset for upgrades to the railroad crossing 10.8at Highway 2 and County Road 62.10.9    Sec. 16. Minnesota Statutes 2012, section 298.223, subdivision 2, is amended to read:10.10    Subd. 2. Administration. (a) The taconite area environmental protection fund shall 10.11be administered by the commissioner of the Iron Range Resources and Rehabilitation 10.12Board. The commissioner shall by September 1 of each year submit to the board a list 10.13of projects to be funded from the taconite area environmental protection fund, with such 10.14supporting information including description of the projects, plans, and cost estimates as 10.15may be necessary.10.16    (b) Each year no less than one-half of the amounts deposited into the taconite 10.17environmental protection fund must be used for public works projects, including 10.18construction of sewer and water systems, as specified under subdivision 1, clause (3). The 10.19Iron Range Resources and Rehabilitation Board with approval by at least seven Iron 10.20Range Resources and Rehabilitation Board members, may waive the requirements of 10.21this paragraph.10.22    (c) Upon approval by at least seven Iron Range Resources and Rehabilitation Board 10.23members the board, the list of projects approved under this subdivision shall be submitted to 10.24the governor by November 1 of each year. By December 1 of each year, the governor shall 10.25approve or disapprove, or return for further consideration, each project. Funds for a project 10.26may be expended only upon approval of the project by at least seven Iron Range Resources 10.27and Rehabilitation Board members, the board and the governor. The commissioner may 10.28submit supplemental projects to the board and governor for approval at any time.10.29    Sec. 17. Minnesota Statutes 2012, section 298.227, is amended to read:10.30298.227 TACONITE ECONOMIC DEVELOPMENT FUND.10.31    (a) An amount equal to that distributed pursuant to each taconite producer's taxable 10.32production and qualifying sales under section 
         298.28, subdivision 9a, shall be held by 10.33the Iron Range Resources and Rehabilitation Board in a separate taconite economic 10.34development fund for each taconite and direct reduced ore producer. Money from the 11.1fund for each producer shall be released by the commissioner after review by a joint 11.2committee consisting of an equal number of representatives of the salaried employees and 11.3the nonsalaried production and maintenance employees of that producer. The District 11 11.4director of the United States Steelworkers of America, on advice of each local employee 11.5president, shall select the employee members. In nonorganized operations, the employee 11.6committee shall be elected by the nonsalaried production and maintenance employees. 11.7The review must be completed no later than six months after the producer presents a 11.8proposal for expenditure of the funds to the committee. The funds held pursuant to this 11.9section may be released only for workforce development and associated public facility 11.10improvement, or for acquisition of plant and stationary mining equipment and facilities 11.11for the producer or for research and development in Minnesota on new mining, or 11.12taconite, iron, or steel production technology, but only if the producer provides a matching 11.13expenditure to be used for the same purpose of at least 50 percent of the distribution 11.14based on 14.7 cents per ton beginning with distributions in 2002. Effective for proposals 11.15for expenditures of money from the fund beginning May 26, 2007, the commissioner 11.16may not release the funds before the next scheduled meeting of the board. If a proposed 11.17expenditure is not approved by at least seven Iron Range Resources and Rehabilitation 11.18Board members the board, the funds must be deposited in the Taconite Environmental 11.19Protection Fund under sections 
         298.222 to 
         298.225. If a producer uses money which has 11.20been released from the fund prior to May 26, 2007 to procure haulage trucks, mobile 11.21equipment, or mining shovels, and the producer removes the piece of equipment from the 11.22taconite tax relief area defined in section 
         273.134 within ten years from the date of receipt 11.23of the money from the fund, a portion of the money granted from the fund must be repaid 11.24to the taconite economic development fund. The portion of the money to be repaid is 100 11.25percent of the grant if the equipment is removed from the taconite tax relief area within 12 11.26months after receipt of the money from the fund, declining by ten percent for each of the 11.27subsequent nine years during which the equipment remains within the taconite tax relief 11.28area. If a taconite production facility is sold after operations at the facility had ceased, any 11.29money remaining in the fund for the former producer may be released to the purchaser of 11.30the facility on the terms otherwise applicable to the former producer under this section. If 11.31a producer fails to provide matching funds for a proposed expenditure within six months 11.32after the commissioner approves release of the funds, the funds are available for release to 11.33another producer in proportion to the distribution provided and under the conditions of 11.34this section. Any portion of the fund which is not released by the commissioner within 11.35one year of its deposit in the fund shall be divided between the taconite environmental 11.36protection fund created in section 
         298.223 and the Douglas J. Johnson economic protection 12.1trust fund created in section 
         298.292 for placement in their respective special accounts. 12.2Two-thirds of the unreleased funds shall be distributed to the taconite environmental 12.3protection fund and one-third to the Douglas J. Johnson economic protection trust fund.12.4    (b)(i) Notwithstanding the requirements of paragraph (a), setting the amount of 12.5distributions and the review process, an amount equal to ten cents per taxable ton of 12.6production in 2007, for distribution in 2008 only, that would otherwise be distributed 12.7under paragraph (a), may be used for a loan or grant for the cost of providing for a 12.8value-added wood product facility located in the taconite tax relief area and in a county 12.9that contains a city of the first class. This amount must be deducted from the distribution 12.10under paragraph (a) for which a matching expenditure by the producer is not required. The 12.11granting of the loan or grant is subject to approval by at least seven Iron Range Resources 12.12and Rehabilitation Board members the board. If the money is provided as a loan, interest 12.13must be payable on the loan at the rate prescribed in section 
         298.2213, subdivision 3. (ii) 12.14Repayments of the loan and interest, if any, must be deposited in the taconite environment 12.15protection fund under sections 
         298.222 to 
         298.225. If a loan or grant is not made under 12.16this paragraph by July 1, 2012, the amount that had been made available for the loan under 12.17this paragraph must be transferred to the taconite environment protection fund under 12.18sections 
         298.222 to 
         298.225. (iii) Money distributed in 2008 to the fund established 12.19under this section that exceeds ten cents per ton is available to qualifying producers under 12.20paragraph (a) on a pro rata basis.12.21(c) Repayment or transfer of money to the taconite environmental protection fund 12.22under paragraph (b), item (ii), must be allocated by the Iron Range Resources and 12.23Rehabilitation Board for public works projects in house legislative districts in the same 12.24proportion as taxable tonnage of production in 2007 in each house legislative district, for 12.25distribution in 2008, bears to total taxable tonnage of production in 2007, for distribution 12.26in 2008. Notwithstanding any other law to the contrary, expenditures under this paragraph 12.27do not require approval by the governor. For purposes of this paragraph, "house legislative 12.28districts" means the legislative districts in existence on May 15, 2009.12.29    Sec. 18. Minnesota Statutes 2012, section 298.28, subdivision 9d, is amended to read:12.30    Subd. 9d. Iron Range higher education account. Five cents per taxable ton must 12.31be allocated to the Iron Range Resources and Rehabilitation Board to be deposited in 12.32an Iron Range higher education account that is hereby created, to be used for higher 12.33education programs conducted at educational institutions in the taconite assistance area 12.34defined in section 
         273.1341. The Iron Range Higher Education committee under section 12.35298.2214,
          and the Iron Range Resources and Rehabilitation Board by an affirmative vote 13.1of at least seven Iron Range Resources and Rehabilitation Board members, must approve 13.2all expenditures from the account.13.3    Sec. 19. Minnesota Statutes 2012, section 298.292, subdivision 2, is amended to read:13.4    Subd. 2. Use of money. Money in the Douglas J. Johnson economic protection trust 13.5fund may be used for the following purposes:13.6    (1) to provide loans, loan guarantees, interest buy-downs and other forms of 13.7participation with private sources of financing, but a loan to a private enterprise shall be 13.8for a principal amount not to exceed one-half of the cost of the project for which financing 13.9is sought, and the rate of interest on a loan to a private enterprise shall be no less than the 13.10lesser of eight percent or an interest rate three percentage points less than a full faith 13.11and credit obligation of the United States government of comparable maturity, at the 13.12time that the loan is approved;13.13    (2) to fund reserve accounts established to secure the payment when due of the 13.14principal of and interest on bonds issued pursuant to section 
         298.2211;13.15    (3) to pay in periodic payments or in a lump-sum payment any or all of the interest 13.16on bonds issued pursuant to chapter 474 for the purpose of constructing, converting, 13.17or retrofitting heating facilities in connection with district heating systems or systems 13.18utilizing alternative energy sources;13.19    (4) to invest in a venture capital fund or enterprise that will provide capital to other 13.20entities that are engaging in, or that will engage in, projects or programs that have the 13.21purposes set forth in subdivision 1. No investments may be made in a venture capital fund 13.22or enterprise unless at least two other unrelated investors make investments of at least 13.23$500,000 in the venture capital fund or enterprise, and the investment by the Douglas 13.24J. Johnson economic protection trust fund may not exceed the amount of the largest 13.25investment by an unrelated investor in the venture capital fund or enterprise. For purposes 13.26of this subdivision, an "unrelated investor" is a person or entity that is not related to 13.27the entity in which the investment is made or to any individual who owns more than 40 13.28percent of the value of the entity, in any of the following relationships: spouse, parent, 13.29child, sibling, employee, or owner of an interest in the entity that exceeds ten percent of 13.30the value of all interests in it. For purposes of determining the limitations under this 13.31clause, the amount of investments made by an investor other than the Douglas J. Johnson 13.32economic protection trust fund is the sum of all investments made in the venture capital 13.33fund or enterprise during the period beginning one year before the date of the investment 13.34by the Douglas J. Johnson economic protection trust fund; and14.1    (5) to purchase forest land in the taconite assistance area defined in section 
         273.1341 14.2to be held and managed as a public trust for the benefit of the area for the purposes 14.3authorized in section 
         298.22, subdivision 5a. Property purchased under this section may 14.4be sold by the commissioner upon approval by at least seven Iron Range Resources and 14.5Rehabilitation Board members the board. The net proceeds must be deposited in the trust 14.6fund for the purposes and uses of this section.14.7    Money from the trust fund shall be expended only in or for the benefit of the taconite 14.8assistance area defined in section 
         273.1341.14.9    Sec. 20. Minnesota Statutes 2012, section 298.294, is amended to read:14.10298.294 INVESTMENT OF FUND.14.11(a) The trust fund established by section 
         298.292 shall be invested pursuant to law 14.12by the State Board of Investment and the net interest, dividends, and other earnings arising 14.13from the investments shall be transferred, except as provided in paragraph (b), on the first 14.14day of each month to the trust and shall be included and become part of the trust fund. 14.15The amounts transferred, including the interest, dividends, and other earnings earned 14.16prior to July 13, 1982, together with the additional amount of $10,000,000 for fiscal year 14.171983, which is appropriated April 21, 1983, are appropriated from the trust fund to the 14.18commissioner of Iron Range resources and rehabilitation for deposit in a separate account 14.19for expenditure for the purposes set forth in section 
         298.292. Amounts appropriated 14.20pursuant to this section shall not cancel but shall remain available unless expended.14.21(b) For fiscal years 2010 and 2011 only, $1,500,000 of the net interest, dividends, 14.22and other earnings under paragraph (a) shall be transferred to a special account. Funds 14.23in the special account are available for loans or grants to businesses, with priority given 14.24to businesses with 25 or fewer employees. Funds may be used for wage subsidies for 14.25up to 52 weeks of up to $5 per hour or other activities, including, but not limited to, 14.26short-term operating expenses and purchase of equipment and materials by businesses 14.27under financial duress, that will create additional jobs in the taconite assistance area under 14.28section 
         273.1341. Expenditures from the special account must be approved by at least 14.29seven Iron Range Resources and Rehabilitation Board members the board.14.30(c) To qualify for a grant or loan, a business must be currently operating and have 14.31been operating for one year immediately prior to its application for a loan or grant, and its 14.32corporate headquarters must be located in the taconite assistance area.14.33    Sec. 21. Minnesota Statutes 2012, section 298.296, subdivision 1, is amended to read:15.1    Subdivision 1. Project approval. The board and commissioner shall by August 1 of 15.2each year prepare a list of projects to be funded from the Douglas J. Johnson economic 15.3protection trust with necessary supporting information including description of the 15.4projects, plans, and cost estimates. These projects shall be consistent with the priorities 15.5established in section 
         298.292 and shall not be approved by the board unless it finds that:15.6(a) the project will materially assist, directly or indirectly, the creation of additional 15.7long-term employment opportunities;15.8(b) the prospective benefits of the expenditure exceed the anticipated costs; and15.9(c) in the case of assistance to private enterprise, the project will serve a sound 15.10business purpose.15.11 Each project must be approved by at least eight Iron Range Resources and 15.12Rehabilitation Board over one-half of all of the members of the board and the 15.13commissioner of Iron Range resources and rehabilitation. The list of projects shall 15.14be submitted to the governor, who shall, by November 15 of each year, approve or 15.15disapprove, or return for further consideration, each project. The money for a project may 15.16be expended only upon approval of the project by the governor. The board may submit 15.17supplemental projects for approval at any time.15.18    Sec. 22. Minnesota Statutes 2012, section 298.296, subdivision 2, is amended to read:15.19    Subd. 2. Expenditure of funds. (a) Before January 1, 2028, funds may be expended 15.20on projects and for administration of the trust fund only from the net interest, earnings, 15.21and dividends arising from the investment of the trust at any time, including net interest, 15.22earnings, and dividends that have arisen prior to July 13, 1982, plus $10,000,000 made 15.23available for use in fiscal year 1983, except that any amount required to be paid out of the 15.24trust fund to provide the property tax relief specified in Laws 1977, chapter 423, article 15.25X, section 4, and to make school bond payments and payments to recipients of taconite 15.26production tax proceeds pursuant to section 
         298.225, may be taken from the corpus of 15.27the trust.15.28    (b) Additionally, upon recommendation by the board, up to $13,000,000 from the 15.29corpus of the trust may be made available for use as provided in subdivision 4, and up to 15.30$10,000,000 from the corpus of the trust may be made available for use as provided in 15.31section 
         298.2961.15.32    (c) Additionally, an amount equal to 20 percent of the value of the corpus of the trust 15.33on May 18, 2002, not including the funds authorized in paragraph (b), plus the amounts 15.34made available under section 
         298.28, subdivision 4, and Laws 2002, chapter 377, article 16.18, section 17, may be expended on projects. Funds may be expended for projects under 16.2this paragraph only if the project:16.3    (1) is for the purposes established under section 
         298.292, subdivision 1, clause 16.4(1) or (2); and16.5    (2) is approved by two-thirds of all of the members of the board upon an affirmative 16.6vote of at least ten of its members.16.7No money made available under this paragraph or paragraph (d) can be used for 16.8administrative or operating expenses of the Iron Range Resources and Rehabilitation Board 16.9or expenses relating to any facilities owned or operated by the board on May 18, 2002.16.10    (d) Upon recommendation by a unanimous vote of all members of the board, 16.11amounts in addition to those authorized under paragraphs (a), (b), and (c) may be 16.12expended on projects described in section 
         298.292, subdivision 1.16.13    (e) Annual administrative costs, not including detailed engineering expenses for the 16.14projects, shall not exceed five percent of the net interest, dividends, and earnings arising 16.15from the trust in the preceding fiscal year.16.16    (f) Principal and interest received in repayment of loans made pursuant to this 16.17section, and earnings on other investments made under section 
         298.292, subdivision 2, 16.18clause (4), shall be deposited in the state treasury and credited to the trust. These receipts 16.19are appropriated to the board for the purposes of sections 
         298.291 to 
         298.298.16.20    (g) Additionally, notwithstanding section 
         298.293, upon the affirmative vote of at 16.21least seven Iron Range Resources and Rehabilitation Board members approval of the 16.22board, money from the corpus of the trust may be expanded to purchase forest lands 16.23within the taconite assistance area as provided in sections 
         298.22, subdivision 5a, and 16.24298.292, subdivision 2
         , clause (5).16.25    Sec. 23. Minnesota Statutes 2012, section 298.2961, subdivision 2, is amended to read:16.26    Subd. 2. Projects; approval. (a) Projects funded must be for:16.27    (1) environmentally unique reclamation projects; or16.28    (2) pit or plant repairs, expansions, or modernizations other than for a value added 16.29iron products plant.16.30    (b) To be proposed by the board, a project must be approved by at least eight Iron 16.31Range Resources and Rehabilitation Board members the board. The money for a project 16.32may be spent only upon approval of the project by the governor. The board may submit 16.33supplemental projects for approval at any time.16.34    (c) The board may require that it receive an equity percentage in any project to 16.35which it contributes under this section.17.1    Sec. 24. Minnesota Statutes 2012, section 298.2961, subdivision 4, is amended to read:17.2    Subd. 4. Grant and loan fund. (a) A fund is established to receive distributions 17.3under section 
         298.28, subdivision 9b, and to make grants or loans as provided in this 17.4subdivision. Any grant or loan made under this subdivision must be approved by at least 17.5seven Iron Range Resources and Rehabilitation Board members the board, established 17.6under section 
         298.22.17.7    (b) Distributions received in calendar year 2005 are allocated to the city of Virginia 17.8for improvements and repairs to the city's steam heating system.17.9    (c) Distributions received in calendar year 2006 are allocated to a project of the 17.10public utilities commissions of the cities of Hibbing and Virginia to convert their electrical 17.11generating plants to the use of biomass products, such as wood.17.12    (d) Distributions received in calendar year 2007 must be paid to the city of Tower to 17.13be used for the East Two Rivers project in or near the city of Tower.17.14    (e) For distributions received in 2008, the first $2,000,000 of the 2008 distribution 17.15must be paid to St. Louis County for deposit in its county road and bridge fund to be 17.16used for relocation of St. Louis County Road 715, commonly referred to as Pike River 17.17Road. The remainder of the 2008 distribution must be paid to St. Louis County for a 17.18grant to the city of Virginia for connecting sewer and water lines to the St. Louis County 17.19maintenance garage on Highway 135, further extending the lines to interconnect with the 17.20city of Gilbert's sewer and water lines. All distributions received in 2009 and subsequent 17.21years are allocated for projects under section 
         298.223, subdivision 1.17.22    Sec. 25. Minnesota Statutes 2012, section 298.2961, subdivision 5, is amended to read:17.23    Subd. 5. Public works and local economic development fund. For distributions in 17.242007 only, a special fund is established to receive 38.4 cents per ton that otherwise would 17.25be allocated under section 
         298.28, subdivision 6. The following amounts are allocated to 17.26St. Louis County acting as the fiscal agent for the recipients for the specific purposes:17.27    (1) 13.4 cents per ton for the Central Iron Range Sanitary Sewer District for 17.28construction of a combined wastewater facility and notwithstanding section 
         298.28, 17.29subdivision 11, paragraph (a), or any other law, interest accrued on this money while held 17.30by St. Louis County shall also be distributed to the recipient;17.31    (2) six cents per ton to the city of Eveleth to redesign and design and construct 17.32improvements to renovate its water treatment facility;17.33    (3) one cent per ton for the East Range Joint Powers Board to acquire land for and to 17.34design a central wastewater collection and treatment system;17.35    (4) 0.5 cents per ton to the city of Hoyt Lakes to repair Leeds Road;18.1    (5) 0.7 cents per ton to the city of Virginia to extend Eighth Street South;18.2    (6) 0.7 cents per ton to the city of Mountain Iron to repair Hoover Road;18.3    (7) 0.9 cents per ton to the city of Gilbert for alley repairs between Michigan and 18.4Indiana Avenues and for repayment of a loan to the Minnesota Department of Employment 18.5and Economic Development;18.6    (8) 0.4 cents per ton to the city of Keewatin for a new city well;18.7    (9) 0.3 cents per ton to the city of Grand Rapids for planning for a fire and hazardous 18.8materials center;18.9    (10) 0.9 cents per ton to Aitkin County Growth for an economic development 18.10project for peat harvesting;18.11    (11) 0.4 cents per ton to the city of Nashwauk to develop a comprehensive city plan;18.12    (12) 0.4 cents per ton to the city of Taconite for development of a city comprehensive 18.13plan;18.14    (13) 0.3 cents per ton to the city of Marble for water and sewer infrastructure;18.15    (14) 0.8 cents per ton to Aitkin County for improvements to the Long Lake 18.16Environmental Learning Center;18.17    (15) 0.3 cents per ton to the city of Coleraine for the Coleraine Technology Center;18.18    (16) 0.5 cents per ton to the Economic Development Authority of the city of Grand 18.19Rapids for planning for the North Central Research and Technology Laboratory;18.20    (17) 0.6 cents per ton to the city of Bovey for sewer and water extension;18.21    (18) 0.3 cents per ton to the city of Calumet for infrastructure improvements; and18.22    (19) ten cents per ton to the commissioner of Iron Range Resources and 18.23Rehabilitation for deposit in a Highway 1 Corridor Account established by the 18.24commissioner, to be distributed by the commissioner to any of the cities of Babbitt, Cook, 18.25Ely, or Tower, for economic development projects approved by at least seven Iron Range 18.26Resources and Rehabilitation Board members the board; notwithstanding section 
         298.28, 18.27subdivision 11
         , paragraph (a), or any other law, interest accrued on this money while held 18.28by St. Louis County or the commissioner shall also be distributed to the recipient.18.29    Sec. 26. AMENDED RETURNS; CERTAIN IRA ROLLOVERS.18.30An individual who excludes an amount from net income in a prior taxable year 18.31through rollover of an airline payment amount to a traditional IRA, as authorized under 18.32Public Law 112-95, section 1106, may file an amended individual income tax return and 18.33claim for refund of state taxes as provided under Minnesota Statutes, section 289A.40, 18.34subdivision 1, or, if later, by June 1, 2013.18.35EFFECTIVE DATE.This section is effective the day following final enactment.19.1    Sec. 27.  REPEALER.19.2Minnesota Statutes 2012, section 298.22, subdivision 2, is repealed.19.3    Sec. 28. EFFECTIVE DATE.19.4This act is effective the day following final enactment.