HF 974

as introduced - 87th Legislature (2011 - 2012) Posted on 03/09/2011 09:40am

A bill for an act
relating to taxation; minerals; modifying the rates of taxation of nonferrous
minerals; modifying the distribution of the net proceed and taconite production
taxes; amending Minnesota Statutes 2010, sections 298.01, subdivision 3;
298.015, subdivision 1; 298.018, subdivision 1; 298.28, subdivisions 3, 11.

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

Section 1.

Minnesota Statutes 2010, section 298.01, subdivision 3, is amended to read:

Subd. 3.

Occupation tax; other ores.

Every person engaged in the business of
mining or producing ores in this state, except iron ore or taconite concentrates, shall pay
an occupation tax to the state of Minnesota as provided in this subdivision. The tax is
determined in the same manner as the tax imposed by section 290.02, except that sections
290.05, subdivision 1, clause (a), 290.17, subdivision 4, and 290.191, subdivision 2, do
not apply, and the occupation tax must be computed by applying to taxable income the rate
of deleted text begin 2.45 deleted text end new text begin 1.1 new text end percent. A person subject to occupation tax under this section shall apportion
its net income on the basis of the percentage obtained by taking the sum of:

(1) 75 percent of the percentage which the sales made within this state in connection
with the trade or business during the tax period are of the total sales wherever made in
connection with the trade or business during the tax period;

(2) 12.5 percent of the percentage which the total tangible property used by the
taxpayer in this state in connection with the trade or business during the tax period is of
the total tangible property, wherever located, used by the taxpayer in connection with the
trade or business during the tax period; and

(3) 12.5 percent of the percentage which the taxpayer's total payrolls paid or incurred
in this state or paid in respect to labor performed in this state in connection with the trade
or business during the tax period are of the taxpayer's total payrolls paid or incurred in
connection with the trade or business during the tax period.

The tax is in addition to all other taxes.

Sec. 2.

Minnesota Statutes 2010, section 298.015, subdivision 1, is amended to read:

Subdivision 1.

Tax imposed.

A person engaged in the business of mining shall pay
to the state of Minnesota for distribution as provided in section 298.018 a net proceeds tax
equal to deleted text begin two deleted text end new text begin 3.35 new text end percent of the net proceeds from mining in Minnesota. The tax applies
to all mineral and energy resources mined or extracted within the state of Minnesota
except for sand, silica sand, gravel, building stone, crushed rock, limestone, granite,
dimension granite, dimension stone, horticultural peat, clay, soil, iron ore, and taconite
concentrates. The tax is in addition to all other taxes provided for by law.

Sec. 3.

Minnesota Statutes 2010, section 298.018, subdivision 1, is amended to read:

Subdivision 1.

Within taconite assistance area.

The proceeds of the tax paid under
sections 298.015 to 298.017 on minerals and energy resources mined or extracted within
the taconite assistance area defined in section 273.1341, shall be allocated as follows:

(1) five percent to the city or town within which the minerals or energy resources
are mined or extracted new text begin or within which the concentrate was produced. If the mining
and concentration, or different steps in either process, are carried on in more than one
taxing district, the commissioner shall apportion equitably the proceeds of the part of the
tax going to cities and towns among them upon the basis of attributing 50 percent of
the proceeds of the tax to the operation of mining or extraction, and the remainder to
the concentrating plant and to the processes of concentration, and with respect to each
thereof giving due consideration to the relative extent of such operations performed in
each taxing district. The commissioner's order making the apportionment is subject to
review by the Tax Court at the request of any of the taxing districts, in the same manner as
other orders of the commissioner new text end ;

(2) ten percent to the taconite municipal aid account to be distributed as provided
in section 298.282;

(3) ten percent to the school district within which the minerals or energy resources
are mined or extracted new text begin or within which the concentrate was produced. If the mining
and concentration, or different steps in either process, are carried on in more than one
school district, distribution among the school districts must be based on the apportionment
formula prescribed in clause (1) new text end ;

(4) 20 percent to a group of school districts comprised of those school districts
wherein the mineral or energy resource was mined or extracted or in which there is a
qualifying municipality as defined by section 273.134, paragraph (b), in direct proportion
to school district indexes as follows: for each school district, its pupil units determined
under section 126C.05 for the prior school year shall be multiplied by the ratio of the
average adjusted net tax capacity per pupil unit for school districts receiving aid under
this clause as calculated pursuant to chapters 122A, 126C, and 127A for the school year
ending prior to distribution to the adjusted net tax capacity per pupil unit of the district.
Each district shall receive that portion of the distribution which its index bears to the sum
of the indices for all school districts that receive the distributions;

(5) 20 percent to the county within which the minerals or energy resources are mined
or extracted new text begin , provided that the county shall pay one percent of its proceeds to the Range
Association of Municipalities and Schools new text end ;

(6) 20 percent to St. Louis County acting as the counties' fiscal agent to be
distributed as provided in sections 273.134 to 273.136;

(7) five percent to the Iron Range Resources and Rehabilitation Board for the
purposes of section 298.22;

(8) deleted text begin five deleted text end new text begin three new text end percent to the Douglas J. Johnson economic protection trust fund; and

(9) deleted text begin five deleted text end new text begin seven new text end percent to the taconite environmental protection fund.

The proceeds of the tax shall be distributed on July 15 each year.

Sec. 4.

Minnesota Statutes 2010, section 298.28, subdivision 3, is amended to read:

Subd. 3.

Cities; towns.

(a) 12.5 cents per taxable ton, less any amount distributed
under subdivision 8, and paragraph (b), must be allocated to the taconite municipal aid
account to be distributed as provided in section 298.282.

(b) An amount must be allocated to towns or cities that is annually certified by
the county auditor of a county containing a taconite tax relief area as defined in section
273.134, paragraph (b), within which there is (1) an organized township if, as of January
2, 1982, more than 75 percent of the assessed valuation of the township consists of iron
ore or (2) a city if, as of January 2, 1980, more than 75 percent of the assessed valuation
of the city consists of iron ore.

(c) The amount allocated under paragraph (b) will be the portion of a township's or
city's certified levy equal to the proportion of (1) the difference between 50 percent of
January 2, 1982, assessed value in the case of a township and 50 percent of the January 2,
1980, assessed value in the case of a city and its current assessed value to (2) the sum of
its current assessed value plus the difference determined in (1), provided that the amount
distributed shall not exceed $55 per capita in the case of a township or $75 per capita in
the case of a city. For purposes of this limitation, population will be determined according
to the 1980 decennial census conducted by the United States Bureau of the Census. If the
current assessed value of the township exceeds 50 percent of the township's January 2,
1982, assessed value, or if the current assessed value of the city exceeds 50 percent of the
city's January 2, 1980, assessed value, this paragraph shall not apply. For purposes of this
paragraph, "assessed value," when used in reference to years other than 1980 or 1982,
means the appropriate net tax capacities multiplied by 10.2.

(d) In addition to other distributions under this subdivision, three cents per taxable
ton for distributions in 2009 must be allocated for distribution to towns that are entirely
located within the taconite tax relief area defined in section 273.134, paragraph (b).
deleted text begin For distribution in 2010 and subsequent years, the three-cent amount must be annually
increased in the same proportion as the increase in the implicit price deflator as provided
in section 298.24, subdivision 1. deleted text end The amount available under this paragraph will be
distributed to eligible towns on a per capita basis, provided that no town may receive more
than $50,000 in any year under this paragraph. Any amount of the distribution that exceeds
the $50,000 limitation for a town under this paragraph must be redistributed on a per
capita basis among the other eligible towns, to whose distributions do not exceed $50,000.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for the 2012 distribution.
new text end

Sec. 5.

Minnesota Statutes 2010, section 298.28, subdivision 11, is amended to read:

Subd. 11.

Remainder.

(a) The proceeds of the tax imposed by section 298.24 which
remain after the distributions and payments in subdivisions 2 to 10a, as certified by the
commissioner of revenue, and paragraphs (b), (c), and (d) have been made, together with
interest earned on all money distributed under this section prior to distribution, shall be
divided between the taconite environmental protection fund created in section 298.223
and the Douglas J. Johnson economic protection trust fund created in section 298.292 as
follows: Two-thirds to the taconite environmental protection fund and one-third to the
Douglas J. Johnson economic protection trust fund. The proceeds shall be placed in
the respective special accounts.

(b) There shall be distributed to each city, town, and county the amount that it
received under section 294.26 in calendar year 1977; provided, however, that the amount
distributed in 1981 to the unorganized territory number 2 of Lake County and the town
of Beaver Bay based on the between-terminal trackage of Erie Mining Company will be
distributed in 1982 and subsequent years to the unorganized territory number 2 of Lake
County and the towns of Beaver Bay and Stony River based on the miles of track of Erie
Mining Company in each taxing district.

(c) There shall be distributed to the Iron Range Resources and Rehabilitation Board
the amounts it received in 1977 under section 298.22. The amount distributed under
this paragraph shall be expended within or for the benefit of the taconite assistance area
defined in section 273.1341.

deleted text begin (d) There shall be distributed to each school district 62 percent of the amount that it
received under section 294.26 in calendar year 1977.
deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for the 2012 distribution.
new text end