HF 1574

as introduced - 83rd Legislature (2003 - 2004) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to taxation; changing the rate and 
  1.3             distribution of the taconite production tax; providing 
  1.4             for the transfer or disposition of funds and accounts; 
  1.5             providing for two tax payments; amending Minnesota 
  1.6             Statutes 2002, sections 298.22, subdivisions 1, 7; 
  1.7             298.223, subdivision 3; 298.24, subdivision 1; 298.27; 
  1.8             298.28, subdivisions 1, 2, 4, 5, 15; 298.292, 
  1.9             subdivision 2; 298.293; 298.296, subdivision 2; 
  1.10            repealing Minnesota Statutes 2002, sections 273.135; 
  1.11            273.136; 298.225; 298.227; 298.24, subdivision 3; 
  1.12            298.28, subdivisions 3, 6, 7, 8, 9, 9a, 9b, 10, 11, 
  1.13            11a, 13; 298.282; 298.283; 298.285; 298.2961; 298.297; 
  1.14            Laws 2002, chapter 377, article 8, section 17. 
  1.15  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.16     Section 1.  Minnesota Statutes 2002, section 298.22, 
  1.17  subdivision 1, is amended to read: 
  1.18     Subdivision 1.  [COMMISSIONER OF IRON RANGE RESOURCES AND 
  1.19  REHABILITATION.] (1) The governor shall appoint the commissioner 
  1.20  of iron range resources and rehabilitation under section 15.06. 
  1.21     (2) The commissioner may hold other positions or 
  1.22  appointments that are not incompatible with duties as 
  1.23  commissioner of iron range resources and rehabilitation.  The 
  1.24  commissioner may appoint a deputy commissioner.  All expenses of 
  1.25  the commissioner, including the payment of such assistance as 
  1.26  may be necessary, must be paid out of the amounts appropriated 
  1.27  by section 298.28 298.292, subdivision 2.  
  1.28     (3) When the commissioner determines that distress and 
  1.29  unemployment exists or may exist in the future in any county by 
  1.30  reason of the removal of natural resources or a possibly limited 
  2.1   use of natural resources in the future and any resulting 
  2.2   decrease in employment, the commissioner may use whatever 
  2.3   amounts of the appropriation made to the commissioner of revenue 
  2.4   in section 298.28 available to the commissioner that are 
  2.5   determined to be necessary and proper in the development of the 
  2.6   remaining resources of the county and in the vocational training 
  2.7   and rehabilitation of its residents, except that the amount 
  2.8   needed to cover cost overruns awarded to a contractor by an 
  2.9   arbitrator in relation to a contract awarded by the commissioner 
  2.10  or in effect after July 1, 1985, is appropriated from the 
  2.11  general fund.  For the purposes of this section, "development of 
  2.12  remaining resources" includes, but is not limited to, the 
  2.13  promotion of tourism. 
  2.14     [EFFECTIVE DATE.] This section is effective January 1, 2004.
  2.15     Sec. 2.  Minnesota Statutes 2002, section 298.22, 
  2.16  subdivision 7, is amended to read: 
  2.17     Subd. 7.  [PROJECT AREA DEVELOPMENT AUTHORITY.] (a) In 
  2.18  addition to the other powers granted in this section and other 
  2.19  law and notwithstanding any limitations contained in subdivision 
  2.20  5, the commissioner, for purposes of fostering economic 
  2.21  development and tourism within the Giants Ridge recreation area 
  2.22  or the Ironworld Discovery Center area, may spend any money made 
  2.23  available to the agency under section 298.28 to acquire real or 
  2.24  personal property or interests therein by gift, purchase, or 
  2.25  lease and may convey by lease, sale, or other means of 
  2.26  conveyance or commitment any or all property interests owned or 
  2.27  administered by the commissioner within such areas.  
  2.28     (b) In furtherance of development of the Giants Ridge 
  2.29  recreation area or the Ironworld Discovery Center area, the 
  2.30  commissioner may establish and participate in charitable 
  2.31  foundations and nonprofit corporations, including a corporation 
  2.32  within the meaning of section 317A.011, subdivision 6. 
  2.33     (c) The term "Giants Ridge recreation area" refers to an 
  2.34  economic development project area established by the 
  2.35  commissioner in furtherance of the powers delegated in this 
  2.36  section within St. Louis county in the western portions of the 
  3.1   town of White and in the eastern portion of the westerly, 
  3.2   adjacent, unorganized township. 
  3.3      (d) The term "Ironworld Discovery Center area" refers to an 
  3.4   economic development and tourism promotion project area 
  3.5   established by the commissioner in furtherance of the powers 
  3.6   delegated in this section within St. Louis county in the south 
  3.7   portion of the town of Balkan. 
  3.8      Sec. 3.  Minnesota Statutes 2002, section 298.223, 
  3.9   subdivision 3, is amended to read: 
  3.10     Subd. 3.  [APPROPRIATION.] There is hereby annually 
  3.11  appropriated to the commissioner of iron range resources and 
  3.12  rehabilitation such funds as are necessary to carry out the 
  3.13  projects approved and such funds as are necessary for 
  3.14  administration of this section.  Annual administrative costs, 
  3.15  not including detailed engineering expenses for the projects, 
  3.16  shall not exceed five percent of the amount annually expended 
  3.17  from the fund. 
  3.18     Funds for the purposes of this section are provided by 
  3.19  section 298.28, subdivision 11, relating to the taconite 
  3.20  environmental protection fund. 
  3.21     [EFFECTIVE DATE.] This section is effective for taxes 
  3.22  payable in 2004 and thereafter. 
  3.23     Sec. 4.  Minnesota Statutes 2002, section 298.24, 
  3.24  subdivision 1, is amended to read: 
  3.25     Subdivision 1.  (a) For concentrate produced in 2001, 2002, 
  3.26  and 2003 and thereafter, there is imposed upon taconite and iron 
  3.27  sulphides, and upon the mining and quarrying thereof, and upon 
  3.28  the production of iron ore concentrate therefrom, and upon the 
  3.29  concentrate so produced, a tax of $2.103 $0.80 per gross ton of 
  3.30  merchantable iron ore concentrate produced therefrom.  
  3.31     (b) For concentrates produced in 2004 and subsequent years, 
  3.32  the tax rate shall be equal to the preceding year's tax rate 
  3.33  plus an amount equal to the preceding year's tax rate multiplied 
  3.34  by the percentage increase in the implicit price deflator from 
  3.35  the fourth quarter of the second preceding year to the fourth 
  3.36  quarter of the preceding year.  "Implicit price deflator" means 
  4.1   the implicit price deflator for the gross domestic product 
  4.2   prepared by the bureau of economic analysis of the United States 
  4.3   Department of Commerce.  
  4.4      (c) On concentrates produced in 1997 and thereafter, an 
  4.5   additional tax is imposed equal to three cents per gross ton of 
  4.6   merchantable iron ore concentrate for each one percent that the 
  4.7   iron content of the product exceeds 72 percent, when dried at 
  4.8   212 degrees Fahrenheit. 
  4.9      (d) (c) The tax shall be imposed on the average of the 
  4.10  production for the current year and the previous two years.  The 
  4.11  rate of the tax imposed will be the current year's tax rate.  
  4.12  This clause shall not apply in the case of the closing of a 
  4.13  taconite facility if the property taxes on the facility would be 
  4.14  higher if this clause and section 298.25 were not applicable.  
  4.15     (e) If the tax or any part of the tax imposed by this 
  4.16  subdivision is held to be unconstitutional, a tax of $2.103 per 
  4.17  gross ton of merchantable iron ore concentrate produced shall be 
  4.18  imposed.  
  4.19     (f) (d) Consistent with the intent of this subdivision to 
  4.20  impose a tax based upon the weight of merchantable iron ore 
  4.21  concentrate, the commissioner of revenue may indirectly 
  4.22  determine the weight of merchantable iron ore concentrate 
  4.23  included in fluxed pellets by subtracting the weight of the 
  4.24  limestone, dolomite, or olivine derivatives or other basic flux 
  4.25  additives included in the pellets from the weight of the 
  4.26  pellets.  For purposes of this paragraph, "fluxed pellets" are 
  4.27  pellets produced in a process in which limestone, dolomite, 
  4.28  olivine, or other basic flux additives are combined with 
  4.29  merchantable iron ore concentrate.  No subtraction from the 
  4.30  weight of the pellets shall be allowed for binders, mineral and 
  4.31  chemical additives other than basic flux additives, or moisture. 
  4.32     (g) (e)(1) Notwithstanding any other provision of this 
  4.33  subdivision, for the first two years of a plant's production of 
  4.34  direct reduced ore, no tax is imposed under this section.  As 
  4.35  used in this paragraph, "direct reduced ore" is ore that results 
  4.36  in a product that has an iron content of at least 75 percent.  
  5.1   For the third year of a plant's production of direct reduced 
  5.2   ore, the rate to be applied to direct reduced ore is 25 percent 
  5.3   of the rate otherwise determined under this subdivision.  For 
  5.4   the fourth such production year, the rate is 50 percent of the 
  5.5   rate otherwise determined under this subdivision; for the fifth 
  5.6   such production year, the rate is 75 percent of the rate 
  5.7   otherwise determined under this subdivision; and for all 
  5.8   subsequent production years, the full rate is imposed. 
  5.9      (2) Subject to clause (1), production of direct reduced ore 
  5.10  in this state is subject to the tax imposed by this section, but 
  5.11  if that production is not produced by a producer of taconite or 
  5.12  iron sulfides, the production of taconite or iron sulfides 
  5.13  consumed in the production of direct reduced iron in this state 
  5.14  is not subject to the tax imposed by this section on taconite or 
  5.15  iron sulfides. 
  5.16     [EFFECTIVE DATE.] This section is effective for 
  5.17  concentrates produced in 2003 and thereafter. 
  5.18     Sec. 5.  Minnesota Statutes 2002, section 298.27, is 
  5.19  amended to read: 
  5.20     298.27 [COLLECTION AND PAYMENT OF TAX.] 
  5.21     The taxes provided by section 298.24 shall be paid directly 
  5.22  to each eligible county and the iron range resources and 
  5.23  rehabilitation board.  The commissioner of revenue shall notify 
  5.24  each producer of the amount to be paid each recipient prior to 
  5.25  February 15.  Every person subject to taxes imposed by section 
  5.26  298.24 shall file a correct report covering the preceding year.  
  5.27  The report must contain the information required by the 
  5.28  commissioner.  The report shall be filed by each producer on or 
  5.29  before February 1.  A remittance equal to 50 percent of the 
  5.30  total tax required to be paid hereunder in 2003 and 100 percent 
  5.31  of the total tax required to be paid hereunder in 2004 and 
  5.32  thereafter shall be paid on or before February 24.  A remittance 
  5.33  equal to the remaining total tax required to be paid hereunder 
  5.34  in 2003 shall be paid on or before August 24.  On or before 
  5.35  February 25, and in 2003, August 25, the county auditor shall 
  5.36  make distribution of the payments previously received by the 
  6.1   county in the manner provided by section 298.28.  Reports shall 
  6.2   be made and hearings held upon the determination of the tax in 
  6.3   accordance with procedures established by the commissioner of 
  6.4   revenue.  The commissioner of revenue shall have authority to 
  6.5   make reasonable rules as to the form and manner of filing 
  6.6   reports necessary for the determination of the tax hereunder, 
  6.7   and by such rules may require the production of such information 
  6.8   as may be reasonably necessary or convenient for the 
  6.9   determination and apportionment of the tax.  All the provisions 
  6.10  of the occupation tax law with reference to the assessment and 
  6.11  determination of the occupation tax, including all provisions 
  6.12  for appeals from or review of the orders of the commissioner of 
  6.13  revenue relative thereto, but not including provisions for 
  6.14  refunds, are applicable to the taxes imposed by section 298.24 
  6.15  except in so far as inconsistent herewith.  If any person 
  6.16  subject to section 298.24 shall fail to make the report provided 
  6.17  for in this section at the time and in the manner herein 
  6.18  provided, the commissioner of revenue shall in such case, upon 
  6.19  information possessed or obtained, ascertain the kind and amount 
  6.20  of ore mined or produced and thereon find and determine the 
  6.21  amount of the tax due from such person.  There shall be added to 
  6.22  the amount of tax due a penalty for failure to report on or 
  6.23  before February 1, which penalty shall equal ten percent of the 
  6.24  tax imposed and be treated as a part thereof. 
  6.25     If any person responsible for making a tax payment at the 
  6.26  time and in the manner herein provided fails to do so, there 
  6.27  shall be imposed a penalty equal to ten percent of the amount so 
  6.28  due, which penalty shall be treated as part of the tax due. 
  6.29     In the case of any underpayment of the tax payment required 
  6.30  herein, there may be added and be treated as part of the tax due 
  6.31  a penalty equal to ten percent of the amount so underpaid. 
  6.32     A person having a liability of $120,000 or more during a 
  6.33  calendar year must remit all liabilities by means of a funds 
  6.34  transfer as defined in section 336.4A-104, paragraph (a).  The 
  6.35  funds transfer payment date, as defined in section 336.4A-401, 
  6.36  must be on or before the date the tax is due.  If the date the 
  7.1   tax is due is not a funds transfer business day, as defined in 
  7.2   section 336.4A-105, paragraph (a), clause (4), the payment date 
  7.3   must be on or before the funds transfer business day next 
  7.4   following the date the tax is due. 
  7.5      [EFFECTIVE DATE.] This section is effective for taxes 
  7.6   payable in 2004 and thereafter. 
  7.7      Sec. 6.  Minnesota Statutes 2002, section 298.28, 
  7.8   subdivision 1, is amended to read: 
  7.9      Subdivision 1.  [DISTRIBUTION.] The proceeds of the taxes 
  7.10  collected under section 298.24, except the tax collected under 
  7.11  section 298.24, subdivision 2, shall, upon certification of the 
  7.12  commissioner of revenue, be allocated under subdivisions 2 to 12 
  7.13  this section. 
  7.14     Sec. 7.  Minnesota Statutes 2002, section 298.28, 
  7.15  subdivision 2, is amended to read: 
  7.16     Subd. 2.  [CITY OR TOWN WHERE QUARRIED OR PRODUCED.] (a) 
  7.17  4.5 Twenty-one cents per gross ton of merchantable iron ore 
  7.18  concentrate, hereinafter referred to as "taxable ton," must be 
  7.19  allocated to the city or town in the county in which the cities 
  7.20  and towns contained within the boundaries of a school district 
  7.21  that: 
  7.22     (1) contains lands from which taconite was mined or 
  7.23  quarried were located or within which the concentrate was 
  7.24  produced; or 
  7.25     (2) has a school district boundary no further than ten 
  7.26  miles from a taconite concentrating plant or from where taconite 
  7.27  is mined or quarried. 
  7.28     The commissioner shall allocate the proceeds of the tax to 
  7.29  each city and town located in a qualifying school district in 
  7.30  the same proportion as the city's or town's population is to the 
  7.31  population of all the cities and towns located in the qualifying 
  7.32  school districts.  
  7.33     If the mining, quarrying, and concentration, or different 
  7.34  steps in either thereof are carried on in more than one taxing 
  7.35  district, the commissioner shall apportion equitably the 
  7.36  proceeds of the part of the tax going to cities and towns among 
  8.1   such subdivisions upon the basis of attributing 40 percent of 
  8.2   the proceeds of the tax to the operation of mining or quarrying 
  8.3   
  8.4   the taconite, and the remainder to the concentrating plant and 
  8.5   to the processes of concentration, and with respect to each 
  8.6   thereof giving due consideration to the relative extent of such 
  8.7   operations performed in each such taxing district.  The 
  8.8   commissioner's order making such apportionment shall be subject 
  8.9   to review by the tax court at the instance of any of the 
  8.10  interested taxing districts, in the same manner as other orders 
  8.11  of the commissioner. 
  8.12     (b) Four cents per taxable ton shall be allocated to cities 
  8.13  and organized townships affected by mining because their 
  8.14  boundaries are within three miles of a taconite mine pit that 
  8.15  has been actively mined in at least one of the prior three years.
  8.16  If a city or town is located near more than one mine meeting 
  8.17  these criteria, the city or town is eligible to receive aid 
  8.18  calculated from only the mine producing the largest taxable 
  8.19  tonnage.  When more than one municipality qualifies for aid 
  8.20  based on one company's production, the aid must be apportioned 
  8.21  among the municipalities in proportion to their populations.  Of 
  8.22  the amounts distributed under this paragraph to each 
  8.23  municipality, one-half must be used for infrastructure 
  8.24  improvement projects, and one-half must be used for projects in 
  8.25  which two or more municipalities cooperate.  Each municipality 
  8.26  that receives a distribution under this paragraph must report 
  8.27  annually to the iron range resources and rehabilitation board 
  8.28  and the commissioner of iron range resources and rehabilitation 
  8.29  on the projects involving cooperation with other municipalities. 
  8.30     [EFFECTIVE DATE.] This section is effective for taxes 
  8.31  payable in 2004 and thereafter. 
  8.32     Sec. 8.  Minnesota Statutes 2002, section 298.28, 
  8.33  subdivision 4, is amended to read: 
  8.34     Subd. 4.  [SCHOOL DISTRICTS.] (a) 17.15 cents per taxable 
  8.35  ton plus the increase provided in paragraph (d) must be 
  8.36  allocated to qualifying school districts to be distributed, 
  8.37  based upon the certification of the commissioner of revenue, 
  9.1   under paragraphs (b) and (c), except as otherwise provided in 
  9.2   paragraph (f). 
  9.3      (b) 3.43 Thirty-six cents per taxable ton must be 
  9.4   distributed to the (1) school districts in which the lands from 
  9.5   which taconite was mined or quarried were located or within 
  9.6   which the concentrate was produced; and (2) school districts 
  9.7   whose boundary is no further than ten miles from a taconite 
  9.8   concentrating plant or from where taconite is mined or 
  9.9   quarried.  The distribution must be based on the apportionment 
  9.10  formula prescribed in subdivision 2. 
  9.11     (c)(i) 13.72 cents per taxable ton, less any amount 
  9.12  distributed under paragraph (e), shall be distributed to a group 
  9.13  of school districts comprised of those school districts in which 
  9.14  the taconite was mined or quarried or the concentrate produced 
  9.15  or in which there is a qualifying municipality as defined by 
  9.16  section 273.134, paragraph (b), in direct proportion to school 
  9.17  district indexes as follows:  for each school district, its 
  9.18  pupil units determined under section 126C.05 for the prior 
  9.19  school year shall be multiplied by the ratio of the average 
  9.20  adjusted net tax capacity per pupil unit for school districts 
  9.21  receiving aid under this clause as calculated pursuant to 
  9.22  chapters 122A, 126C, and 127A for the school year ending prior 
  9.23  to distribution to the adjusted net tax capacity per pupil unit 
  9.24  of the district.  Each district shall receive that portion of 
  9.25  the distribution which its index bears to the sum of the indices 
  9.26  for all school districts that receive the distributions.  
  9.27     (ii) Notwithstanding clause (i), each school district that 
  9.28  receives a distribution under sections 298.018; 298.23 to 
  9.29  298.28, exclusive of any amount received under this clause; 
  9.30  298.34 to 298.39; 298.391 to 298.396; 298.405; or any law 
  9.31  imposing a tax on severed mineral values after reduction for any 
  9.32  portion distributed to cities and towns under section 126C.48, 
  9.33  subdivision 8, paragraph (5), that is less than the amount of 
  9.34  its levy reduction under section 126C.48, subdivision 8, for the 
  9.35  second year prior to the year of the distribution shall receive 
  9.36  a distribution equal to the difference; the amount necessary to 
 10.1   make this payment shall be derived from proportionate reductions 
 10.2   in the initial distribution to other school districts under 
 10.3   clause (i).  
 10.4      (d) Any school district described in paragraph (c) where a 
 10.5   levy increase pursuant to section 126C.17, subdivision 9, was 
 10.6   authorized by referendum for taxes payable in 2001, shall 
 10.7   receive a distribution from a fund that receives a distribution 
 10.8   in 1998 of 21.3 cents per ton.  On July 15 of 1999, and each 
 10.9   year thereafter, the increase over the amount established for 
 10.10  the prior year shall be determined according to the increase in 
 10.11  the implicit price deflator as provided in section 298.24, 
 10.12  subdivision 1.  Each district shall receive $175 times the pupil 
 10.13  units identified in section 126C.05, subdivision 1, enrolled in 
 10.14  the second previous year or the 1983-1984 school year, whichever 
 10.15  is greater, less the product of 1.8 percent times the district's 
 10.16  taxable net tax capacity in the second previous year. 
 10.17     If the total amount provided by paragraph (d) is 
 10.18  insufficient to make the payments herein required then the 
 10.19  entitlement of $175 per pupil unit shall be reduced uniformly so 
 10.20  as not to exceed the funds available.  Any amounts received by a 
 10.21  qualifying school district in any fiscal year pursuant to 
 10.22  paragraph (d) shall not be applied to reduce general education 
 10.23  aid which the district receives pursuant to section 126C.13 or 
 10.24  the permissible levies of the district.  Any amount remaining 
 10.25  after the payments provided in this paragraph shall be paid to 
 10.26  the commissioner of iron range resources and rehabilitation who 
 10.27  shall deposit the same in the taconite environmental protection 
 10.28  fund and the northeast Minnesota economic protection trust fund 
 10.29  as provided in subdivision 11. 
 10.30     Each district receiving money according to this paragraph 
 10.31  shall reserve $25 times the number of pupil units in the 
 10.32  district.  It may use the money for early childhood programs or 
 10.33  for outcome-based learning programs that enhance the academic 
 10.34  quality of the district's curriculum.  The outcome-based 
 10.35  learning programs must be approved by the commissioner of 
 10.36  children, families, and learning. 
 11.1      (e) There shall be distributed to any school district the 
 11.2   amount which the school district was entitled to receive under 
 11.3   section 298.32 in 1975. 
 11.4      (f) Effective for the distribution in 2003 only, five 
 11.5   percent of the distributions to school districts under 
 11.6   paragraphs (b), (c), and (e); subdivision 6, paragraph (c); 
 11.7   subdivision 11; and section 298.225, shall be distributed to the 
 11.8   general fund.  The remainder less any portion distributed to 
 11.9   cities and towns under section 126C.48, subdivision 8, paragraph 
 11.10  (5), shall be distributed to the northeast Minnesota economic 
 11.11  protection trust fund created in section 298.292.  Fifty percent 
 11.12  of the amount distributed to the northeast Minnesota economic 
 11.13  protection trust fund shall be made available for expenditure 
 11.14  under section 298.293 as governed by section 298.296.  Effective 
 11.15  in 2003 only, 100 percent of the distributions to school 
 11.16  districts under section 477A.15 less any portion distributed to 
 11.17  cities and towns under section 126C.48, subdivision 8, paragraph 
 11.18  (5), shall be distributed to the general fund. 
 11.19     The commissioner shall allocate the proceeds of the tax to 
 11.20  each qualifying school district in the same proportion as the 
 11.21  number of the school district's pupils in average daily 
 11.22  membership for the previous school year is to the sum of the 
 11.23  number of pupils in average daily membership for the previous 
 11.24  school year of all the qualifying school districts. 
 11.25     (b) Five cents per taxable ton must be paid in equal shares 
 11.26  to the taconite environmental protection fund and to the 
 11.27  northeast Minnesota economic protection trust fund to make the 
 11.28  payments on bonded indebtedness as required under Laws 2000, 
 11.29  chapter 489, article 5, sections 24, 25, and 26.  After the 
 11.30  bonds are retired, the amount distributed under this paragraph 
 11.31  shall be distributed to qualifying school districts under the 
 11.32  provisions of paragraph (a). 
 11.33     [EFFECTIVE DATE.] This section is effective for taxes 
 11.34  payable in 2004 and thereafter. 
 11.35     Sec. 9.  Minnesota Statutes 2002, section 298.28, 
 11.36  subdivision 5, is amended to read: 
 12.1      Subd. 5.  [COUNTIES.] (a) 26.05 cents per taxable ton is 
 12.2   allocated to counties to be distributed, based upon 
 12.3   certification by the commissioner of revenue, under paragraphs 
 12.4   (b) to (d). 
 12.5      (b) 20.525 Eighteen cents per taxable ton shall be 
 12.6   distributed to the county in which the taconite is mined or 
 12.7   quarried or in which the concentrate is produced, less any 
 12.8   amount which is to be distributed pursuant to paragraph 
 12.9   (c).  The apportionment formula prescribed in subdivision 2 is 
 12.10  the basis for the distribution If the mining, quarrying, and 
 12.11  concentration, or different steps in either are carried out in 
 12.12  more than one county, the commissioner shall apportion equitably 
 12.13  the proceeds of the tax distributed under this subdivision by 
 12.14  attributing 40 percent of the proceeds of the tax to the 
 12.15  operation of mining or quarrying the taconite, and 60 percent to 
 12.16  the concentrating plant and concentration processes, giving 
 12.17  consideration to the relative extent of the operation performed 
 12.18  in each county.  The commissioner's apportionment order is 
 12.19  subject to review by the tax court on appeal by an affected 
 12.20  county in the same manner as other orders of the commissioner. 
 12.21     (c) If an electric power plant owned by and providing the 
 12.22  primary source of power for a taxpayer mining and concentrating 
 12.23  taconite is located in a county other than the county in which 
 12.24  the mining and the concentrating processes are conducted, one 
 12.25  cent per taxable ton of the tax distributed to the counties 
 12.26  pursuant to paragraph (b) and imposed on and collected from such 
 12.27  taxpayer shall be paid to the county in which the power plant is 
 12.28  located. 
 12.29     (d) 5.525 cents per taxable ton shall be paid to the county 
 12.30  from which the taconite was mined, quarried or concentrated to 
 12.31  be deposited in the county road and bridge fund.  If the mining, 
 12.32  quarrying and concentrating, or separate steps in any of those 
 12.33  processes are carried on in more than one county, the 
 12.34  commissioner shall follow the apportionment formula prescribed 
 12.35  in subdivision 2. 
 12.36     [EFFECTIVE DATE.] This section is effective for taxes 
 13.1   payable in 2004 and thereafter. 
 13.2      Sec. 10.  Minnesota Statutes 2002, section 298.28, 
 13.3   subdivision 15, is amended to read: 
 13.4      Subd. 15.  [DISTRIBUTION OF DELAYED PAYMENTS.] 
 13.5   Notwithstanding any other provision of this section or any other 
 13.6   law, if payment of taxes collected under section 298.24 is 
 13.7   delayed past the due date because the taxpayer is a debtor in a 
 13.8   pending bankruptcy proceeding, the amount paid shall be 
 13.9   distributed as follows when received:  
 13.10     (1) 50 percent to St. Louis county acting as the counties' 
 13.11  fiscal agent, to be distributed as provided in sections 273.134 
 13.12  to 273.136; 
 13.13     (2) 25 percent to the northeast Minnesota economic 
 13.14  protection trust fund; and 
 13.15     (3) 25 percent to the taconite environmental protection 
 13.16  fund to the cities, towns, counties, and school districts 
 13.17  receiving distributions under subdivisions 2; 4, paragraph (a); 
 13.18  and 5, in the same proportion as distributions are paid under 
 13.19  those subdivisions for taxes payable in the year of distribution.
 13.20     [EFFECTIVE DATE.] This section is effective for 
 13.21  distributions made in 2004 and thereafter. 
 13.22     Sec. 11.  Minnesota Statutes 2002, section 298.292, 
 13.23  subdivision 2, is amended to read: 
 13.24     Subd. 2.  [USE OF MONEY.] Money in the northeast Minnesota 
 13.25  economic protection trust fund may be used for the following 
 13.26  purposes:  
 13.27     (1) to provide loans, loan guarantees, interest buy-downs 
 13.28  and other forms of participation with private sources of 
 13.29  financing, but a loan to a private enterprise shall be for a 
 13.30  principal amount not to exceed one-half of the cost of the 
 13.31  project for which financing is sought, and the rate of interest 
 13.32  on a loan shall be no less than the lesser of eight percent or 
 13.33  an interest rate three percentage points less than a full faith 
 13.34  and credit obligation of the United States government of 
 13.35  comparable maturity, at the time that the loan is approved; 
 13.36     (2) to fund reserve accounts established to secure the 
 14.1   payment when due of the principal of and interest on bonds 
 14.2   issued pursuant to section 298.2211; 
 14.3      (3) to pay in periodic payments or in a lump sum payment 
 14.4   any or all of the interest on bonds issued pursuant to chapter 
 14.5   474 for the purpose of constructing, converting, or retrofitting 
 14.6   heating facilities in connection with district heating systems 
 14.7   or systems utilizing alternative energy sources; and 
 14.8      (4) to pay all expenses of the commissioner of iron range 
 14.9   resources, including the payment of any assistance as may be 
 14.10  necessary; and 
 14.11     (5) to invest in a venture capital fund or enterprise that 
 14.12  will provide capital to other entities that are engaging in, or 
 14.13  that will engage in, projects or programs that have the purposes 
 14.14  set forth in subdivision 1.  No investments may be made in a 
 14.15  venture capital fund or enterprise unless at least two other 
 14.16  unrelated investors make investments of at least $500,000 in the 
 14.17  venture capital fund or enterprise, and the investment by the 
 14.18  northeast Minnesota economic protection trust fund may not 
 14.19  exceed the amount of the largest investment by an unrelated 
 14.20  investor in the venture capital fund or enterprise.  For 
 14.21  purposes of this subdivision, an "unrelated investor" is a 
 14.22  person or entity that is not related to the entity in which the 
 14.23  investment is made or to any individual who owns more than 40 
 14.24  percent of the value of the entity, in any of the following 
 14.25  relationships:  spouse, parent, child, sibling, employee, or 
 14.26  owner of an interest in the entity that exceeds ten percent of 
 14.27  the value of all interests in it.  For purposes of determining 
 14.28  the limitations under this clause, the amount of investments 
 14.29  made by an investor other than the northeast Minnesota economic 
 14.30  protection trust fund is the sum of all investments made in the 
 14.31  venture capital fund or enterprise during the period beginning 
 14.32  one year before the date of the investment by the northeast 
 14.33  Minnesota economic protection trust fund.  
 14.34     Except as provided in clause (4), money from the trust fund 
 14.35  shall be expended only in or for the benefit of the tax relief 
 14.36  area defined in section 273.134, paragraph (b). 
 15.1      [EFFECTIVE DATE.] This section is effective January 1, 2004.
 15.2      Sec. 12.  Minnesota Statutes 2002, section 298.293, is 
 15.3   amended to read: 
 15.4      298.293 [EXPENDING FUNDS.] 
 15.5      The funds provided by section 298.28, subdivision 11, prior 
 15.6   to its repeal, relating to the northeast Minnesota economic 
 15.7   protection trust fund, except money expended pursuant to Laws 
 15.8   1982, Second Special Session, chapter 2, sections 8 to 14, shall 
 15.9   be expended only in an amount that does not exceed the sum of 
 15.10  the net interest, dividends, and earnings arising from the 
 15.11  investment of the trust for the preceding 12 calendar months 
 15.12  from the date of the authorization plus, for fiscal year 1983, 
 15.13  $10,000,000 from the corpus of the fund.  The funds may be spent 
 15.14  only in or for the benefit of those areas that are tax relief 
 15.15  areas as defined in section 273.134, paragraph (b).  If during 
 15.16  any year the taconite property tax account under sections 
 15.17  273.134 to 273.136 does not contain sufficient funds to pay the 
 15.18  property tax relief specified in Laws 1977, chapter 423, article 
 15.19  X, section 4, there is appropriated from this trust fund to the 
 15.20  relief account sufficient funds to pay the relief specified in 
 15.21  Laws 1977, chapter 423, article X, section 4. 
 15.22     [EFFECTIVE DATE.] This section is effective January 1, 2004.
 15.23     Sec. 13.  Minnesota Statutes 2002, section 298.296, 
 15.24  subdivision 2, is amended to read: 
 15.25     Subd. 2.  [EXPENDITURE OF FUNDS.] (a) Before January 1, 
 15.26  2028, funds may be expended on projects and for administration 
 15.27  of the trust fund only from the net interest, earnings, and 
 15.28  dividends arising from the investment of the trust at any time, 
 15.29  including net interest, earnings, and dividends that have arisen 
 15.30  prior to July 13, 1982, plus $10,000,000 made available for use 
 15.31  in fiscal year 1983, except that any amount required to be paid 
 15.32  out of the trust fund to provide the property tax relief 
 15.33  specified in Laws 1977, chapter 423, article X, section 4, and 
 15.34  to make school bond payments and payments to recipients of 
 15.35  taconite production tax proceeds pursuant to section 298.225, 
 15.36  may be taken from the corpus of the trust.  
 16.1      (b) Additionally, upon recommendation by the board, up to 
 16.2   $13,000,000 from the corpus of the trust may be made available 
 16.3   for use as provided in subdivision 4, and up to $10,000,000 from 
 16.4   the corpus of the trust may be made available for use as 
 16.5   provided in section 298.2961.  
 16.6      (c) Additionally, an amount equal to 20 percent of the 
 16.7   value of the corpus of the trust on May 18, 2002, not including 
 16.8   the funds authorized in paragraph (b), plus the amounts made 
 16.9   available under section 298.28, subdivision 4, and Laws 2002, 
 16.10  chapter 377, article 8, section 17 prior to its repeal, may be 
 16.11  expended on projects.  Funds may be expended for projects under 
 16.12  this paragraph only if the project: 
 16.13     (1) is for the purposes established under section 298.292, 
 16.14  subdivision 1, clause (1) or (2); and 
 16.15     (2) is approved by the board upon an affirmative vote of at 
 16.16  least ten of its members. 
 16.17  No money made available under this paragraph or paragraph (d) 
 16.18  can be used for administrative or operating expenses of the iron 
 16.19  range resources and rehabilitation board or expenses relating to 
 16.20  any facilities owned or operated by the board on May 18, 2002. 
 16.21     (d) Upon recommendation by a unanimous vote of all members 
 16.22  of the board, amounts in addition to those authorized under 
 16.23  paragraphs (a), (b), and (c) may be expended on projects 
 16.24  described in section 298.292, subdivision 1. 
 16.25     (e) Annual administrative costs, not including detailed 
 16.26  engineering expenses for the projects, shall not exceed five 
 16.27  percent of the net interest, dividends, and earnings arising 
 16.28  from the trust in the preceding fiscal year.  
 16.29     (f) Principal and interest received in repayment of loans 
 16.30  made pursuant to this section, and earnings on other investments 
 16.31  made under section 298.292, subdivision 2, clause (4), shall be 
 16.32  deposited in the state treasury and credited to the trust.  
 16.33  These receipts are appropriated to the board for the purposes of 
 16.34  sections 298.291 to 298.298. 
 16.35     [EFFECTIVE DATE.] This section is effective January 1, 2004.
 16.36     Sec. 14.  [HOMESTEAD PROPERTY TAX RELIEF; TRANSITION.] 
 17.1      (a) Funds remaining in the property tax relief account 
 17.2   under Minnesota Statutes 2002, section 273.136, as of January 1, 
 17.3   2004, shall be distributed as provided in this section for each 
 17.4   succeeding property taxes payable year until expended.  The 
 17.5   property tax to be paid with respect to homestead property 
 17.6   contained within a tax relief area as defined in paragraph (b) 
 17.7   as otherwise determined by law for all purposes must be reduced 
 17.8   by a percentage determined by the commissioner of revenue, not 
 17.9   to exceed 66 percent of the tax, provided that the maximum 
 17.10  reduction of the tax on each qualifying homestead must not 
 17.11  exceed $315. 
 17.12     (b) For purposes of this section, "tax relief area" means a 
 17.13  geographic area: 
 17.14     (1) located within a school district in which there is a 
 17.15  taconite concentrating plant or where taconite is mined or 
 17.16  quarried; or 
 17.17     (2) located within a school district whose boundary is no 
 17.18  further than ten miles from a taconite concentrating plant or 
 17.19  from where taconite is mined or quarried.  
 17.20     (c) Except as otherwise provided in this section, the 
 17.21  amounts shall be determined and paid as provided in Minnesota 
 17.22  Statutes 2002, sections 273.135, subdivisions 3 and 5, and 
 17.23  273.136, except that based on the amount certified under 
 17.24  Minnesota Statutes 2002, section 273.135, subdivision 3, the 
 17.25  commissioner of revenue shall adjust the percentage, if 
 17.26  necessary, so that the total amount allowed under this section 
 17.27  does not exceed the funds available in the taconite tax relief 
 17.28  account.  The commissioner of revenue shall notify the county 
 17.29  auditors of any reductions by January 2 of the taxes payable 
 17.30  year. 
 17.31     (d) Notwithstanding Minnesota Statutes, sections 275.065 
 17.32  and 275.07, if notified of a reduction in payments under 
 17.33  paragraph (c), a taxing jurisdiction may increase its levy by 
 17.34  the amount of the reduction under the provisions of Minnesota 
 17.35  Statutes, section 275.07, subdivision 5. 
 17.36     Sec. 15.  [TACONITE AREA ENVIRONMENTAL PROTECTION FUND 
 18.1   ACCOUNT; DISPOSITION OF FUNDS.] 
 18.2      Any funds in the account created in Minnesota Statutes, 
 18.3   section 298.2961, on January 1, 2006, that are unapproved for 
 18.4   expenditure, plus any funds or proceeds from equity percentages 
 18.5   received under Minnesota Statutes, section 298.2961, by the iron 
 18.6   range resources and rehabilitation board from any project on or 
 18.7   after January 1, 2007, must be distributed to the northeast 
 18.8   Minnesota economic protection trust fund. 
 18.9      Sec. 16.  [REPEALER.] 
 18.10     (a) Minnesota Statutes 2002, sections 273.135 and 273.136, 
 18.11  are repealed for property taxes payable in 2004 and thereafter. 
 18.12     (b) Minnesota Statutes 2002, sections 298.227; 298.2961; 
 18.13  and 298.297, are repealed January 1, 2006. 
 18.14     (c) Minnesota Statutes 2002, sections 298.225; 298.24, 
 18.15  subdivision 3; 298.28, subdivisions 3, 6, 7, 8, 9, 9a, 9b, 10, 
 18.16  11, 11a, and 13; 298.282; 298.283; and 298.285; and Laws 2002, 
 18.17  chapter 377, article 8, section 17, are repealed effective for 
 18.18  taxes payable in 2004 and thereafter.