1.1                          A bill for an act 
  1.2             relating to taxation; reducing the taconite production 
  1.3             tax rate; providing for payment of the taconite 
  1.4             production tax in installments; providing for certain 
  1.5             grants from the Minnesota minerals 21st century fund; 
  1.6             changing distributions of the production tax; 
  1.7             providing an exemption from the sales tax for certain 
  1.8             tangible personal property used in the taconite 
  1.9             industry; making sales of capital equipment used in 
  1.10            taconite mining and refining an up-front exemption; 
  1.11            amending Minnesota Statutes 2000, sections 116J.423; 
  1.12            297A.68, subdivision 5, by adding a subdivision; 
  1.13            297A.75, subdivision 1; 298.24, subdivision 1; 298.27; 
  1.14            298.28, subdivisions 4, 6, 7, 9a, 9b, 10; repealing 
  1.15            Minnesota Statutes 2000, section 298.28, subdivision 9.
  1.16  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.17     Section 1.  Minnesota Statutes 2000, section 116J.423, is 
  1.18  amended to read: 
  1.19     116J.423 [MINNESOTA MINERALS 21ST CENTURY FUND.] 
  1.20     Subdivision 1.  [CREATED.] The Minnesota minerals 21st 
  1.21  century fund is created as a separate account in the treasury.  
  1.22  Money in the account is appropriated to the commissioner of 
  1.23  trade and economic development for the purposes of this 
  1.24  section.  All money earned by the account, loan repayments of 
  1.25  principal and interest, and earnings on investments must be 
  1.26  credited to the account.  For the purpose of this section, 
  1.27  "fund" means the Minnesota minerals 21st century fund.  The 
  1.28  commissioner shall operate the account as a revolving account. 
  1.29     Subd. 2.  [USE OF FUND.] (a) The commissioner shall use 
  1.30  money in the fund for grants to taconite producers for capital 
  2.1   improvements to taconite processing plants.  The grants for each 
  2.2   plant must be an amount equal to $1 per ton of taconite produced 
  2.3   by that plant in the 2000 production year and must be used to 
  2.4   make capital improvements at that plant.  To be eligible for the 
  2.5   grant, the plant must be in operation at the time the grant is 
  2.6   made and must have produced at least 1,000,000 tons in the 
  2.7   previous production year.  If the money in the fund is not 
  2.8   sufficient to pay the grants required in this paragraph, the 
  2.9   grants must be proportionately reduced so that the sum of the 
  2.10  grants equals the amount available. 
  2.11     (b) If funds are available after grants are made under 
  2.12  paragraph (a), the commissioner shall use money in the fund to 
  2.13  make loans or equity investments in mineral processing 
  2.14  facilities including, but not limited to, taconite processing, 
  2.15  direct reduction processing, and steel production.  The 
  2.16  commissioner must, prior to making any loans or equity 
  2.17  investments and after consultation with industry and public 
  2.18  officials, develop a strategy for making loans and equity 
  2.19  investments that assists the Minnesota mineral industry in 
  2.20  becoming globally competitive.  Money in the fund may also be 
  2.21  used to pay for the costs of carrying out the commissioner's due 
  2.22  diligence duties under this section. 
  2.23     Subd. 3.  [REQUIREMENTS PRIOR TO COMMITTING FUNDS.] The 
  2.24  commissioner, prior to making a commitment for a loan or equity 
  2.25  investment under subdivision 2, paragraph (b), must, at a 
  2.26  minimum, conduct due diligence research regarding the proposed 
  2.27  loan or equity investment, including contracting with 
  2.28  professionals as needed to assist in the due diligence. 
  2.29     Subd. 4.  [REQUIREMENTS FOR FUND DISBURSEMENTS.] The 
  2.30  commissioner may make conditional commitments for loans or 
  2.31  equity investments under subdivision 2, paragraph (b), but 
  2.32  disbursements of funds pursuant to a commitment may not be made 
  2.33  until commitments for the remainder of a project's funding are 
  2.34  made that are satisfactory to the commissioner and disbursements 
  2.35  made from the other commitments sufficient to protect the 
  2.36  interests of the state in its loan or investment. 
  3.1      Subd. 5.  [COMPANY CONTRIBUTION.] The commissioner may 
  3.2   provide loans or equity investments under subdivision 2, 
  3.3   paragraph (b), that match, in a proportion determined by the 
  3.4   commissioner, an investment made by the owner of a facility.  A 
  3.5   match must not be required for a grant under subdivision 2, 
  3.6   paragraph (a). 
  3.7      <b>[EFFECTIVE DATE.]</b> This section is effective June 30, 2001. 
  3.8      Sec. 2.  Minnesota Statutes 2000, section 297A.68, 
  3.9   subdivision 5, is amended to read: 
  3.10     Subd. 5.  [CAPITAL EQUIPMENT.] (a) Capital equipment is 
  3.11  exempt.  Except for capital equipment purchased or leased and 
  3.12  used in this state for mining or refining taconite, the tax must 
  3.13  be imposed and collected as if the rate under section 297A.62, 
  3.14  subdivision 1, applied, and then refunded in the manner provided 
  3.15  in section 297A.75. 
  3.16     "Capital equipment" means machinery and equipment purchased 
  3.17  or leased and used in this state by the purchaser or lessee 
  3.18  primarily for manufacturing, fabricating, mining, or refining 
  3.19  tangible personal property to be sold ultimately at retail. 
  3.20     Capital equipment means machinery and equipment essential 
  3.21  to the integrated production process.  Capital equipment also 
  3.22  includes machinery and equipment used to electronically transmit 
  3.23  results retrieved by a customer of an online computerized data 
  3.24  retrieval system. 
  3.25     (b) Capital equipment includes, but is not limited to: 
  3.26     (1) machinery and equipment used to operate, control, or 
  3.27  regulate the production equipment; 
  3.28     (2) machinery and equipment used for research and 
  3.29  development, design, quality control, and testing activities; 
  3.30     (3) environmental control devices that are used to maintain 
  3.31  conditions such as temperature, humidity, light, or air pressure 
  3.32  when those conditions are essential to and are part of the 
  3.33  production process; 
  3.34     (4) materials and supplies used to construct and install 
  3.35  machinery or equipment; 
  3.36     (5) repair and replacement parts, including accessories, 
  4.1   whether purchased as spare parts, repair parts, or as upgrades 
  4.2   or modifications to machinery or equipment; 
  4.3      (6) materials used for foundations that support machinery 
  4.4   or equipment; 
  4.5      (7) materials used to construct and install special purpose 
  4.6   buildings used in the production process; and 
  4.7      (8) ready-mixed concrete trucks in which the ready-mixed 
  4.8   concrete is mixed as part of the delivery process. 
  4.9      (c) Capital equipment does not include the following: 
  4.10     (1) motor vehicles taxed under chapter 297B; 
  4.11     (2) machinery or equipment used to receive or store raw 
  4.12  materials; 
  4.13     (3) building materials, except for materials included in 
  4.14  paragraph (b), clauses (6) and (7); 
  4.15     (4) machinery or equipment used for nonproduction purposes, 
  4.16  including, but not limited to, the following:  plant security,; 
  4.17  fire prevention,; first aid, and hospital stations; support 
  4.18  operations or administration; pollution control; and plant 
  4.19  cleaning,; disposal of scrap and waste,; plant 
  4.20  communications,; space heating, and lighting, or; and 
  4.21  safety; 
  4.22     (5) farm machinery and aquaculture production equipment as 
  4.23  defined by section 297A.61, subdivisions 12 and 13; 
  4.24     (6) machinery or equipment purchased and installed by a 
  4.25  contractor as part of an improvement to real property; or 
  4.26     (7) any other item that is not essential to the integrated 
  4.27  process of manufacturing, fabricating, mining, or refining. 
  4.28     (d) For purposes of this subdivision: 
  4.29     (1) "Machinery" means mechanical, electronic, or electrical 
  4.30  devices, including computers and computer software, that are 
  4.31  purchased or constructed to be used for the activities set forth 
  4.32  in paragraph (a). 
  4.33     (2) "Equipment" means independent devices or tools separate 
  4.34  from machinery, including computers and computer software, used 
  4.35  in operating, controlling, or regulating machinery and 
  4.36  equipment; and any subunit or assembly comprising a component of 
  5.1   any machinery or accessory or attachment parts of machinery, 
  5.2   such as tools, dies, jigs, patterns, and molds.  
  5.3      (3) "Primarily" means machinery and equipment used 50 
  5.4   percent or more of the time in an activity described in 
  5.5   paragraph (a). 
  5.6      (4) "Manufacturing" means an operation or series of 
  5.7   operations where raw materials are changed in form, composition, 
  5.8   or condition by machinery and equipment and which results in the 
  5.9   production of a new article of tangible personal property.  For 
  5.10  purposes of this subdivision, "manufacturing" includes the 
  5.11  generation of electricity or steam to be sold at retail. 
  5.12     (5) "Fabricating" means to make, build, create, produce, or 
  5.13  assemble components or property to work in a new or different 
  5.14  manner. 
  5.15     (6) "Mining" means the extraction of minerals, ores, stone, 
  5.16  or peat. 
  5.17     (7) "Refining" means the process of converting a natural 
  5.18  resource to a product, including the treatment of water to be 
  5.19  sold at retail. 
  5.20     (8) "Integrated production process" means a process 
  5.21  beginning with the removal of raw materials from inventory 
  5.22  through the completion of the product, including packaging of 
  5.23  the product. 
  5.24     (9) "Online data retrieval system" means a system whose 
  5.25  cumulation of information is equally available and accessible to 
  5.26  all its customers. 
  5.27     (10) "Machinery and equipment used for pollution control" 
  5.28  means machinery and equipment used solely to eliminate, prevent, 
  5.29  or reduce pollution resulting from an activity described in 
  5.30  paragraph (a).  
  5.31     <b>[EFFECTIVE DATE.]</b> This section is effective for sales and 
  5.32  purchases occurring after June 30, 2001. 
  5.33     Sec. 3.  Minnesota Statutes 2000, section 297A.68, is 
  5.34  amended by adding a subdivision to read: 
  5.35     Subd. 35.  [TACONITE INDUSTRY; TAILINGS STORAGE AND 
  5.36  DISPOSAL; POLLUTION CONTROL PROPERTY.] Tangible personal 
  6.1   property is exempt if it is used for or consumed in (1) the 
  6.2   storage or disposal of taconite tailings, or (2) the 
  6.3   elimination, prevention, or reduction of air, land, or water 
  6.4   pollution generated during or as a result of the mining or 
  6.5   refining of taconite. 
  6.6      <b>[EFFECTIVE DATE.]</b> This section is effective for sales and 
  6.7   purchases occurring after June 30, 2001. 
  6.8      Sec. 4.  Minnesota Statutes 2000, section 297A.75, 
  6.9   subdivision 1, is amended to read: 
  6.10     Subdivision 1.  [TAX COLLECTED.] The tax on the gross 
  6.11  receipts from the sale of the following exempt items must be 
  6.12  imposed and collected as if the sale were taxable and the rate 
  6.13  under section 297A.62, subdivision 1, applied.  The exempt items 
  6.14  include: 
  6.15     (1) capital equipment exempt under section 297A.68, 
  6.16  subdivision 5, other than capital equipment used for mining and 
  6.17  refining taconite; 
  6.18     (2) building materials for an agricultural processing 
  6.19  facility exempt under section 297A.71, subdivision 13; 
  6.20     (3) building materials for mineral production facilities 
  6.21  exempt under section 297A.71, subdivision 14; 
  6.22     (4) building materials for correctional facilities under 
  6.23  section 297A.71, subdivision 3; 
  6.24     (5) building materials used in a residence for disabled 
  6.25  veterans exempt under section 297A.71, subdivision 11; and 
  6.26     (6) chair lifts, ramps, elevators, and associated building 
  6.27  materials exempt under section 297A.71, subdivision 12. 
  6.28     <b>[EFFECTIVE DATE.]</b> This section is effective for sales and 
  6.29  purchases occurring after June 30, 2001. 
  6.30     Sec. 5.  Minnesota Statutes 2000, section 298.24, 
  6.31  subdivision 1, is amended to read: 
  6.32     Subdivision 1.  (a) For concentrate produced in 1999 2001 
  6.33  and thereafter, there is imposed upon taconite and iron 
  6.34  sulphides, and upon the mining and quarrying thereof, and upon 
  6.35  the production of iron ore concentrate therefrom, and upon the 
  6.36  concentrate so produced, a tax of $2.141 $1.673 per gross ton of 
  7.1   merchantable iron ore concentrate produced therefrom.  
  7.2      (b) For concentrates produced in 2000 and subsequent years, 
  7.3   the tax rate shall be equal to the preceding year's tax rate 
  7.4   plus an amount equal to the preceding year's tax rate multiplied 
  7.5   by the percentage increase in the implicit price deflator from 
  7.6   the fourth quarter of the second preceding year to the fourth 
  7.7   quarter of the preceding year.  "Implicit price deflator" means 
  7.8   the implicit price deflator for the gross domestic product 
  7.9   prepared by the bureau of economic analysis of the United States 
  7.10  Department of Commerce.  
  7.11     (c) On concentrates produced in 1997 and thereafter, an 
  7.12  additional tax is imposed equal to three cents per gross ton of 
  7.13  merchantable iron ore concentrate for each one percent that the 
  7.14  iron content of the product exceeds 72 percent, when dried at 
  7.15  212 degrees Fahrenheit. 
  7.16     (d) (c) The tax shall be imposed on the average of the 
  7.17  production for the current year and the previous two years.  The 
  7.18  rate of the tax imposed will be the current year's tax rate.  
  7.19  This clause shall not apply in the case of the closing of a 
  7.20  taconite facility if the property taxes on the facility would be 
  7.21  higher if this clause and section 298.25 were not applicable.  
  7.22     (e) (d) If the tax or any part of the tax imposed by this 
  7.23  subdivision is held to be unconstitutional, a tax 
  7.24  of $2.141 $1.673 per gross ton of merchantable iron ore 
  7.25  concentrate produced shall be imposed.  
  7.26     (f) (e) Consistent with the intent of this subdivision to 
  7.27  impose a tax based upon the weight of merchantable iron ore 
  7.28  concentrate, the commissioner of revenue may indirectly 
  7.29  determine the weight of merchantable iron ore concentrate 
  7.30  included in fluxed pellets by subtracting the weight of the 
  7.31  limestone, dolomite, or olivine derivatives or other basic flux 
  7.32  additives included in the pellets from the weight of the 
  7.33  pellets.  For purposes of this paragraph, "fluxed pellets" are 
  7.34  pellets produced in a process in which limestone, dolomite, 
  7.35  olivine, or other basic flux additives are combined with 
  7.36  merchantable iron ore concentrate.  No subtraction from the 
  8.1   weight of the pellets shall be allowed for binders, mineral and 
  8.2   chemical additives other than basic flux additives, or moisture. 
  8.3      (g) (f) (1) Notwithstanding any other provision of this 
  8.4   subdivision, for the first two years of a plant's production of 
  8.5   direct reduced ore, no tax is imposed under this section.  As 
  8.6   used in this paragraph, "direct reduced ore" is ore that results 
  8.7   in a product that has an iron content of at least 75 percent.  
  8.8   For the third year of a plant's production of direct reduced 
  8.9   ore, the rate to be applied to direct reduced ore is 25 percent 
  8.10  of the rate otherwise determined under this subdivision.  For 
  8.11  the fourth such production year, the rate is 50 percent of the 
  8.12  rate otherwise determined under this subdivision; for the fifth 
  8.13  such production year, the rate is 75 percent of the rate 
  8.14  otherwise determined under this subdivision; and for all 
  8.15  subsequent production years, the full rate is imposed. 
  8.16     (2) Subject to clause (1), production of direct reduced ore 
  8.17  in this state is subject to the tax imposed by this section, but 
  8.18  if that production is not produced by a producer of taconite or 
  8.19  iron sulfides, the production of taconite or iron sulfides 
  8.20  consumed in the production of direct reduced iron in this state 
  8.21  is not subject to the tax imposed by this section on taconite or 
  8.22  iron sulfides. 
  8.23     Sec. 6.  Minnesota Statutes 2000, section 298.27, is 
  8.24  amended to read: 
  8.25     298.27 [COLLECTION AND PAYMENT OF TAX.] 
  8.26     The taxes provided by section 298.24 shall be paid directly 
  8.27  to each eligible county and the iron range resources and 
  8.28  rehabilitation board.  The commissioner of revenue shall notify 
  8.29  each producer of the amount to be paid each recipient prior to 
  8.30  February 15.  Every person subject to taxes imposed by section 
  8.31  298.24 shall file a correct report covering the preceding year.  
  8.32  The report must contain the information required by the 
  8.33  commissioner.  The report shall be filed on or before February 
  8.34  1.  A remittance equal to 100 25 percent of the total tax 
  8.35  required to be paid hereunder shall be paid on or before 
  8.36  February 24, May 24, August 24, and November 24.  On or before 
  9.1   February 25, The county auditor shall make distribution of the 
  9.2   payment received by the county in the manner provided by section 
  9.3   298.28 on March 1, June 1, September 1, and December 1.  
  9.4   Payments of distributions under section 298.28 must be paid 
  9.5   first to school districts and then to other distributees in the 
  9.6   manner provided by section 298.28.  Reports shall be made and 
  9.7   hearings held upon the determination of the tax in accordance 
  9.8   with procedures established by the commissioner of revenue.  The 
  9.9   commissioner of revenue shall have authority to make reasonable 
  9.10  rules as to the form and manner of filing reports necessary for 
  9.11  the determination of the tax hereunder, and by such rules may 
  9.12  require the production of such information as may be reasonably 
  9.13  necessary or convenient for the determination and apportionment 
  9.14  of the tax.  All the provisions of the occupation tax law with 
  9.15  reference to the assessment and determination of the occupation 
  9.16  tax, including all provisions for appeals from or review of the 
  9.17  orders of the commissioner of revenue relative thereto, but not 
  9.18  including provisions for refunds, are applicable to the taxes 
  9.19  imposed by section 298.24 except in so far as inconsistent 
  9.20  herewith.  If any person subject to section 298.24 shall fail to 
  9.21  make the report provided for in this section at the time and in 
  9.22  the manner herein provided, the commissioner of revenue shall in 
  9.23  such case, upon information possessed or obtained, ascertain the 
  9.24  kind and amount of ore mined or produced and thereon find and 
  9.25  determine the amount of the tax due from such person.  There 
  9.26  shall be added to the amount of tax due a penalty for failure to 
  9.27  report on or before February 1, which penalty shall equal ten 
  9.28  percent of the tax imposed and be treated as a part thereof. 
  9.29     If any person responsible for making a tax payment at the 
  9.30  time and in the manner herein provided fails to do so, there 
  9.31  shall be imposed a penalty equal to ten percent of the amount so 
  9.32  due, which penalty shall be treated as part of the tax due. 
  9.33     In the case of any underpayment of the tax payment required 
  9.34  herein, there may be added and be treated as part of the tax due 
  9.35  a penalty equal to ten percent of the amount so underpaid. 
  9.36     A person having a liability of $120,000 or more during a 
 10.1   calendar year must remit all liabilities by means of a funds 
 10.2   transfer as defined in section 336.4A-104, paragraph (a).  The 
 10.3   funds transfer payment date, as defined in section 336.4A-401, 
 10.4   must be on or before the date the tax is due.  If the date the 
 10.5   tax is due is not a funds transfer business day, as defined in 
 10.6   section 336.4A-105, paragraph (a), clause (4), the payment date 
 10.7   must be on or before the funds transfer business day next 
 10.8   following the date the tax is due. 
 10.9      <b>[EFFECTIVE DATE.]</b> This section is effective for the 2001 
 10.10  production year and thereafter. 
 10.11     Sec. 7.  Minnesota Statutes 2000, section 298.28, 
 10.12  subdivision 4, is amended to read: 
 10.13     Subd. 4.  [SCHOOL DISTRICTS.] (a) 22.28 cents per taxable 
 10.14  ton plus the increase provided in paragraph (d) must be 
 10.15  allocated to qualifying school districts to be distributed, 
 10.16  based upon the certification of the commissioner of revenue, 
 10.17  under paragraphs (b) and (c). 
 10.18     (b) 4.46 cents per taxable ton must be distributed to the 
 10.19  school districts in which the lands from which taconite was 
 10.20  mined or quarried were located or within which the concentrate 
 10.21  was produced.  The distribution must be based on the 
 10.22  apportionment formula prescribed in subdivision 2. 
 10.23     (c)(i) 17.82 cents per taxable ton, less any amount 
 10.24  distributed under paragraph (e), shall be distributed to a group 
 10.25  of school districts comprised of those school districts in which 
 10.26  the taconite was mined or quarried or the concentrate produced 
 10.27  or in which there is a qualifying municipality as defined by 
 10.28  section 273.134 in direct proportion to school district indexes 
 10.29  as follows:  for each school district, its pupil units 
 10.30  determined under section 126C.05 for the prior school year shall 
 10.31  be multiplied by the ratio of the average adjusted net tax 
 10.32  capacity per pupil unit for school districts receiving aid under 
 10.33  this clause as calculated pursuant to chapters 122A, 126C, and 
 10.34  127A for the school year ending prior to distribution to the 
 10.35  adjusted net tax capacity per pupil unit of the district.  Each 
 10.36  district shall receive that portion of the distribution which 
 11.1   its index bears to the sum of the indices for all school 
 11.2   districts that receive the distributions.  
 11.3      (ii) Notwithstanding clause (i), each school district that 
 11.4   receives a distribution under sections 298.018; 298.23 to 
 11.5   298.28, exclusive of any amount received under this clause; 
 11.6   298.34 to 298.39; 298.391 to 298.396; 298.405; or any law 
 11.7   imposing a tax on severed mineral values that is less than the 
 11.8   amount of its levy reduction under section 126C.48, subdivision 
 11.9   8, for the second year prior to the year of the distribution 
 11.10  shall receive a distribution equal to the difference; the amount 
 11.11  necessary to make this payment shall be derived from 
 11.12  proportionate reductions in the initial distribution to other 
 11.13  school districts under clause (i).  
 11.14     (d) (b) Any school district described in that received a 
 11.15  distribution in 2001 under Minnesota Statutes 2000, section 
 11.16  298.28, subdivision 4, paragraph (c), where a levy increase 
 11.17  pursuant to section 126C.17, subdivision 9, is authorized by 
 11.18  referendum, shall receive a distribution from a fund that 
 11.19  receives a distribution in 1998 of 21.3 cents per ton.  On July 
 11.20  15 of 1999, and each year thereafter, the increase over the 
 11.21  amount established for the prior year shall be determined 
 11.22  according to the increase in the implicit price deflator as 
 11.23  provided in section 298.24, subdivision 1.  Each district shall 
 11.24  receive the product of: 
 11.25     (i) $175 times the pupil units identified in section 
 11.26  126C.05, subdivision 1, enrolled in the second previous year or 
 11.27  the 1983-1984 school year, whichever is greater, less the 
 11.28  product of 1.8 percent times the district's taxable net tax 
 11.29  capacity in the second previous year; times 
 11.30     (ii) the lesser of: 
 11.31     (A) one, or 
 11.32     (B) the ratio of the sum of the amount certified pursuant 
 11.33  to section 126C.17, subdivision 6, in the previous year, plus 
 11.34  the amount certified pursuant to section 126C.17, subdivision 8, 
 11.35  in the previous year, plus the referendum aid according to 
 11.36  section 126C.17, subdivision 7, for the current year, plus an 
 12.1   amount equal to the reduction under section 126C.17, subdivision 
 12.2   12, to the product of 1.8 percent times the district's taxable 
 12.3   net tax capacity in the second previous year. 
 12.4      If the total amount provided by this paragraph (d) is 
 12.5   insufficient to make the payments herein required then the 
 12.6   entitlement of $175 per pupil unit shall be reduced uniformly so 
 12.7   as not to exceed the funds available.  Any amounts received by a 
 12.8   qualifying school district in any fiscal year pursuant to this 
 12.9   paragraph (d) shall not be applied to reduce general education 
 12.10  aid which the district receives pursuant to section 126C.13 or 
 12.11  the permissible levies of the district.  Any amount remaining 
 12.12  after the payments provided in this paragraph shall be paid to 
 12.13  the commissioner of iron range resources and rehabilitation who 
 12.14  shall deposit the same in the taconite environmental protection 
 12.15  fund and the northeast Minnesota economic protection trust fund 
 12.16  as provided in subdivision 11. 
 12.17     Each district receiving money according to this paragraph 
 12.18  shall reserve $25 times the number of pupil units in the 
 12.19  district.  It may use the money for early childhood programs or 
 12.20  for outcome-based learning programs that enhance the academic 
 12.21  quality of the district's curriculum.  The outcome-based 
 12.22  learning programs must be approved by the commissioner of 
 12.23  children, families, and learning. 
 12.24     (e) There shall be distributed to any school district the 
 12.25  amount which the school district was entitled to receive under 
 12.26  section 298.32 in 1975. 
 12.27     <b>[EFFECTIVE DATE.]</b> This section is effective for 
 12.28  distributions in 2002 and thereafter. 
 12.29     Sec. 8.  Minnesota Statutes 2000, section 298.28, 
 12.30  subdivision 6, is amended to read: 
 12.31     Subd. 6.  [PROPERTY TAX RELIEF.] (a) In 1999 2002, 38.81 
 12.32  23.11 cents per taxable ton, less any amount required to be 
 12.33  distributed under paragraphs (b) and (c), and less any amount 
 12.34  required to be deducted under paragraph (d), must be allocated 
 12.35  to St. Louis county acting as the counties' fiscal agent, to be 
 12.36  distributed as provided in sections 273.134 to 273.136. 
 13.1      (b) If an electric power plant owned by and providing the 
 13.2   primary source of power for a taxpayer mining and concentrating 
 13.3   taconite is located in a county other than the county in which 
 13.4   the mining and the concentrating processes are conducted, .1875 
 13.5   cent per taxable ton of the tax imposed and collected from such 
 13.6   taxpayer shall be paid to the county. 
 13.7      (c) If an electric power plant owned by and providing the 
 13.8   primary source of power for a taxpayer mining and concentrating 
 13.9   taconite is located in a school district other than a school 
 13.10  district in which the mining and concentrating processes are 
 13.11  conducted, .7282 cent per taxable ton of the tax imposed and 
 13.12  collected from the taxpayer shall be paid to the school district.
 13.13     (d) Two cents per taxable ton must be deducted from the 
 13.14  amount allocated to the St. Louis county auditor under paragraph 
 13.15  (a). 
 13.16     Sec. 9.  Minnesota Statutes 2000, section 298.28, 
 13.17  subdivision 7, is amended to read: 
 13.18     Subd. 7.  [IRON RANGE RESOURCES AND REHABILITATION BOARD.] 
 13.19  For the 1998 distribution, 6.5 cents per taxable ton shall be 
 13.20  paid to the iron range resources and rehabilitation board for 
 13.21  the purposes of section 298.22.  That amount shall be increased 
 13.22  in 1999 and subsequent years in the same proportion as the 
 13.23  increase in the implicit price deflator as provided defined in 
 13.24  section 298.24, subdivision 1 10.  The amount distributed 
 13.25  pursuant to this subdivision shall be expended within or for the 
 13.26  benefit of a tax relief area defined in section 273.134.  No 
 13.27  part of the fund provided in this subdivision may be used to 
 13.28  provide loans for the operation of private business unless the 
 13.29  loan is approved by the governor. 
 13.30     Sec. 10.  Minnesota Statutes 2000, section 298.28, 
 13.31  subdivision 9a, is amended to read: 
 13.32     Subd. 9a.  [TACONITE ECONOMIC DEVELOPMENT FUND.] (a) 15.4 
 13.33  cents per ton for distributions in 1999, 2000, 2001, and 2002 
 13.34  must be paid to the taconite economic development fund.  No 
 13.35  distribution shall be made under this paragraph in any year in 
 13.36  which total industry production falls below 30 million tons. 
 14.1      (b) An amount equal to 50 percent of the tax under section 
 14.2   298.24 for concentrate sold in the form of pellet chips and 
 14.3   fines not exceeding 5/16 inch in size and not including crushed 
 14.4   pellets shall be paid to the taconite economic development 
 14.5   fund.  The amount paid shall not exceed $700,000 annually for 
 14.6   all companies.  If the initial amount to be paid to the fund 
 14.7   exceeds this amount, each company's payment shall be prorated so 
 14.8   the total does not exceed $700,000. 
 14.9      <b>[EFFECTIVE DATE.]</b> This section is effective for 
 14.10  distributions in 2002 and thereafter. 
 14.11     Sec. 11.  Minnesota Statutes 2000, section 298.28, 
 14.12  subdivision 9b, is amended to read: 
 14.13     Subd. 9b.  [TACONITE ENVIRONMENTAL FUND.] Five cents per 
 14.14  ton for distributions in 1999, 2000, 2001, and 2002 must be paid 
 14.15  to the taconite environmental fund for use under section 
 14.16  298.2961.  No distribution may be made under this paragraph in 
 14.17  any year in which total industry production falls below 
 14.18  30,000,000 tons. 
 14.19     <b>[EFFECTIVE DATE.]</b> This section is effective for 
 14.20  distributions in 2002 and thereafter. 
 14.21     Sec. 12.  Minnesota Statutes 2000, section 298.28, 
 14.22  subdivision 10, is amended to read: 
 14.23     Subd. 10.  [INCREASE.] Beginning with distributions in 2000 
 14.24  2003, the amounts determined under subdivisions subdivision 6, 
 14.25  paragraph (a), and 9 shall be increased in the same proportion 
 14.26  as the increase in the implicit price deflator as provided in 
 14.27  section 298.24, subdivision 1.  "Implicit price deflator" means 
 14.28  the implicit price deflator for the gross domestic product 
 14.29  prepared by the Bureau of Economic Analysis of the United States 
 14.30  Department of Commerce. 
 14.31     The distributions per ton determined under subdivisions 5, 
 14.32  paragraphs (b) and (d), and 6, paragraph (b), for distribution 
 14.33  in 1988 and subsequent years shall be the distribution per ton 
 14.34  determined for distribution in 1987.  The distribution per ton 
 14.35  under subdivision 6, paragraph (c), for distribution in 2000 and 
 14.36  subsequent years shall be 81 percent of the distribution per ton 
 15.1   determined for distribution in 1987. 
 15.2      Sec. 13.  [REPEALER.] 
 15.3      Minnesota Statutes 2000, section 298.28, subdivision 9, is 
 15.4   repealed, effective for distributions in 2002 and thereafter.