Minnesota Session Laws - 1991, Regular Session

  

                         Laws of Minnesota 1991 

                        CHAPTER 194-S.F.No. 962 
           An act relating to natural resources; revising certain 
          provisions regarding the leasing of state-owned iron 
          ore and related minerals; amending Minnesota Statutes 
          1990, sections 93.16; 93.17, subdivisions 1 and 3; and 
          93.20, by adding a subdivision; repealing Minnesota 
          Statutes 1990, section 93.20, subdivision 9. 
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
    Section 1.  Minnesota Statutes 1990, section 93.16, is 
amended to read: 
    93.16 [PERMITS; SALE, NOTICE.] 
    Except as otherwise expressly provided by law, prospecting 
permits for iron ore or other minerals belonging to the state 
shall be issued only upon public sale as herein provided.  The 
sale of permits may be held annually, at the discretion of at 
such times and places as designated by the commissioner, on the 
second Monday in August.  The commissioner shall give public 
notice of each sale by publication for four three successive 
weeks in a daily newspaper printed and published in each of the 
cities of St. Paul, Minneapolis, Duluth, Hibbing, and Virginia.  
The last publication shall be not less than seven days nor more 
than 30 days before August 1 next preceding the date of sale.  
Like notice may be published in not to exceed two additional 
newspapers and two trade magazines, as the commissioner may 
direct.  
    Each notice shall contain the following information: 
    (1) Time and place of holding the sale; 
    (2) The general requirements of law affecting bidders and 
purchasers of permits; 
    (3) The place or places where the list of mining units, to 
be offered for sale will be available for inspection and where 
forms for bids and applications for prospecting permits may be 
obtained; 
    (4) Such other information as the commissioner may direct.  
    Sec. 2.  Minnesota Statutes 1990, section 93.17, 
subdivision 1, is amended to read: 
    Subdivision 1.  Applications for permits to prospect for 
iron ore shall be presented to the commissioner in writing in 
such form as the commissioner may prescribe at any time prior to 
the time of opening the bids as hereinafter provided before 4:30 
p.m., St. Paul, Minnesota time, on the last business day before 
the day specified for the opening of bids, and no bids submitted 
after that time shall be considered.  The application shall be 
accompanied by a certified check payable to the state treasurer 
in the sum of $50 for each mining unit as set out above.  Each 
application shall be accompanied also by a sealed bid setting 
forth the amount of royalty per gross ton of crude ore based 
upon the iron content of the ore when dried at 212 degrees 
Fahrenheit, in its natural condition or when concentrated, as 
set out in detail hereafter, that the applicant proposes to pay 
to the state of Minnesota in case the permit shall be awarded.  
    Sec. 3.  Minnesota Statutes 1990, section 93.17, 
subdivision 3, is amended to read: 
    Subd. 3.  On the date At the time and place fixed for the 
sale at 11 o'clock in the forenoon in the office of the governor 
in the state capitol in St. Paul, the commissioner shall 
publicly announce the number of applications and bids received, 
and none received thereafter shall be considered.  The 
commissioner, together with at least one member of the executive 
council as designated by the council, shall then publicly open 
the bids, and announce the amount of each bid separately, and.  
Thereafter, the commissioner, together with the executive 
council, shall award the permits to the highest bidders for the 
respective mining units, but no bids shall be accepted that 
shall not equal or exceed the minimum amounts provided for in 
section 93.20, nor shall any bid be accepted that shall not 
comply with the law and be accompanied by a certified check for 
the faithful performance of the terms of each permit as 
hereinbefore set out.  The right is reserved to the state to 
reject any and all bids.  All applications for permits and bids 
not accepted at such sale shall become void at the close of the 
sale and the checks accompanying the applications and bids shall 
be returned to the applicants entitled to them.  Upon the award 
of a permit, the certified check submitted with the application 
as provided by subdivision 1, shall be deposited with the state 
treasurer as a fee for the permit, to be credited to the same 
fund as the rental or royalty from the mining unit affected, and 
the certified check submitted with the bid as provided by 
subdivision 2, shall be deposited with the state treasurer and 
held for further disposition as provided by law.  
    Sec. 4.  Minnesota Statutes 1990, section 93.20, is amended 
by adding a subdivision to read: 
    Subd. 9a.  (1) The royalties to be paid by the part.... of 
the second part to the party of the first part on ore removed in 
each calendar quarter that the lease remains in force as 
hereinbefore specified shall be subject to increase by fifty 
percent (50%) of the sum of the amounts determined in accordance 
with subparagraphs (a) and (b) below: 
    (a) Reference shall be made to the Producer Price Index for 
Iron Ores (December 1984=100) (Industry Code No. 1011), as 
originally published (unrevised) by the Bureau of Labor 
Statistics of the United States Department of Labor, or any 
succeeding federal agency publishing such index, for the first 
month in the calendar quarter for which royalty payment is to be 
made.  If the Producer Price Index for Iron Ores exceeds ....., 
which was the level of such index for the month in which this 
lease was issued (hereafter called the "PPI - IO Base Index"), 
the excess shall be computed and this excess shall become the 
numerator of a fraction, the denominator of which shall be the 
PPI - IO Base Index, and the resulting fraction shall be 
multiplied by the royalty rate per ton payable on the ore mined 
and removed during any such quarter. 
    For example, if the PPI - IO Base Index under this lease 
was 119.2, and if the Producer Price Index for Iron Ores for 
January, 19.. was 125.3, the additional amount for the calendar 
quarter of January, February, and March 19.. would be computed 
as follows:  
 [(125.3-119.2)/119.2] x  base royalty rate  =  additional amount
   (b) Reference shall be made to the Producer Price Index for 
the Iron and Steel Subgroup of the Metals and Metal Products 
Group (1982=100) (Commodity Code No. 101), as originally 
published (unrevised) by the Bureau of Labor Statistics of the 
United States Department of Labor, or any succeeding federal 
agency publishing such index, for the first month in the 
calendar quarter for which royalty payment is to be made.  If 
the Producer Price Index for the Iron and Steel Subgroup of the 
Metals and Metal Products Group exceeds ....., which was the 
level of such index for the month in which this lease was issued 
(hereafter called the "PPI - I&S Base Index)", the excess shall 
be computed and this excess shall become the numerator of a 
fraction, the denominator of which shall be the PPI - I&S Base 
Index, and the resulting fraction shall be multiplied by the 
royalty rate per ton payable on the ore mined and removed during 
any such quarter. 
    For example, if the PPI -  I&S Base Index under this lease 
was 129.5, and if the Producer Price Index for the Iron and 
Steel Subgroup of the Metals and Metal Products Group for 
January, 19.. was 139.5, the additional amount for the calendar 
quarter of January, February, and March 19.. would be computed 
as follows: 
 [(139.5-129.5)/129.5] x  base royalty rate  =  additional amount
    (2) In the event some other period than December 1984 is 
used as a base of 100 in determining the Producer Price Index 
for Iron Ores or some other period than 1982 is used as a base 
of 100 in determining the Producer Price Index for the Iron and 
Steel Subgroup of the Metals and Metal Products Group, for the 
purposes of this lease these indexes shall be adjusted so as to 
be in correct relationship to the appropriate base.  In the 
event either such index is not published by any federal agency, 
the index to be used as aforesaid shall be that index 
independently published, which, after necessary adjustments, if 
any, provides the most reasonable substitute for the appropriate 
index during any period subsequent to the month in which this 
lease is issued; it being intended to substitute for the 
Producer Price Index for Iron Ores and index that most 
accurately reflects fluctuations in the prices of Great Lakes 
iron ores in the manner presently reported by the Producer Price 
Index for Iron Ores (December 1984=100), as originally published 
(unrevised) by the Bureau of Labor Statistics of the United 
States Department of Labor, and it being intended to substitute 
for the Producer Price Index for the Iron and Steel Subgroup of 
the Metals and Metal Products Group an index that most 
accurately reflects fluctuations in the prices of iron and steel 
in the manner presently reported by the Producer Price Index for 
the Iron and Steel Subgroup of the Metals and Metal Products 
Group (1982=100), as originally published (unrevised) by the 
Bureau of Labor Statistics of the United States Department of 
Labor. 
    If the parties to this lease cannot agree upon substitute 
indexes which accomplish these purposes, each shall choose an 
arbitrator and the two thus selected shall choose a third.  The 
decision of the arbitrators or any two of them shall be final 
and binding on the parties in interest.  The agreement or the 
decision of the arbitrators shall be attached as a supplement to 
the lease.  Each party to the arbitration shall bear their 
representative share of the costs for the arbitration. 
    Sec. 5.  [REPEALER.] 
    Minnesota Statutes 1990, section 93.20, subdivision 9, is 
repealed. 
    Sec. 6.  [EFFECTIVE DATE.] 
    This act is effective the day following its final enactment.
    Presented to the governor May 23, 1991 
    Signed by the governor May 27, 1991, 10:22 p.m.