2003 Minnesota Statutes

CHAPTER 298. Minerals taxes

     298.001 Definitions. 

    Subdivision 1.    Generally.  As used in this chapter, 
 the terms defined in this section have the meanings given in 
 this section. 

    Subd. 2.    City.  "City" includes any home rule charter 
 city, statutory city, or any city however organized. 

    Subd. 3.    Person.  "Person" means individuals, 
 fiduciaries, estates, trusts, partnerships, companies, joint 
 stock companies, corporations, and all associations. 

    Subd. 4.    Taconite.  "Taconite" means ferruginous 
 chert or ferruginous slate in the form of compact, siliceous 
 rock, in which the iron oxide is so finely disseminated that 
 substantially all of the iron-bearing particles of merchantable 
 grade are smaller than 20 mesh and which is not merchantable as 
 iron ore in its natural state, and which cannot be made 
 merchantable by simple methods of beneficiation involving only 
 crushing, screening, washing, jigging, drying, or any 
 combination thereof. 

    Subd. 5.    Iron sulphides.  "Iron sulphides" means 
 chemical combinations of iron and sulphur (mineralogically known 
 as pyrrhotite, pyrites, or marcasite), in relatively impure 
 condition, which are not merchantable as iron ore and which 
 cannot be made merchantable by the simple methods of 
 beneficiation above described.  

    Subd. 6.    Semitaconite.  "Semitaconite" means altered 
 iron formation, altered taconite, ferruginous chert, or 
 ferruginous slate which has been oxidized and partially leached 
 and in which the iron oxide is so finely disseminated that 
 substantially all of the iron-bearing particles of merchantable 
 grade are smaller than 20 mesh and which is not merchantable as 
 iron ore in its natural state, and which cannot be made 
 merchantable by simple methods of beneficiation involving only 
 crushing, screening, washing, jigging, heavy media separation, 
 spirals, cyclones, drying, or any combination thereof.  

    Subd. 7.    Agglomerates.  "Agglomerates" means the 
 merchantable iron ore aggregates which are produced by 
 agglomeration.  

    Subd. 8.    Commissioner.  "Commissioner" means the 
 commissioner of revenue of the state of Minnesota.  

    HIST: 1998 c 389 art 10 s 4 

MINING

     298.01 Mining or producing ores. 

    Subdivision 1. Repealed, 1987 c 268 art 9 s 43 

    Subd. 2. Repealed, 1985 c 300 s 30 

    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), and 290.17, subdivision 4, do not 
 apply.  The tax is in addition to all other taxes. 

    Subd. 3a.    Gross income.  (a) For purposes of 
 determining a person's taxable income under subdivision 3, gross 
 income is determined by the amount of gross proceeds from mining 
 in this state under section 298.016 and includes any gain or 
 loss recognized from the sale or disposition of assets used in 
 the business in this state. 

    (b) In applying section 290.191, subdivision 5, transfers 
 of ores are deemed to be sales outside this state if the ores 
 are transported out of this state after the ores have been 
 converted to a marketable quality. 

    Subd. 3b.    Deductions.  (a) For purposes of 
 determining taxable income under subdivision 3, the deductions 
 from gross income include only those expenses necessary to 
 convert raw ores to marketable quality.  Such expenses include 
 costs associated with refinement but do not include expenses 
 such as transportation, stockpiling, marketing, or marine 
 insurance that are incurred after marketable ores are produced, 
 unless the expenses are included in gross income. 

    (b) The provisions of section 290.01, subdivisions 19c, 
 clauses (6) and (9), and 19d, clauses (7) and (11), are not used 
 to determine taxable income. 

    Subd. 3c.    Alternative minimum tax.  For purposes of 
 calculating the alternative minimum tax under section 290.0921, 
 Minnesota alternative minimum taxable income must be computed 
 under the provisions of subdivisions 3, 3a, and 3b, and the 
 provisions of section 290.0921, except that: 

    (1) the adjustment for adjusted current earnings under 
 section 56(g) of the Internal Revenue Code of 1986, as amended 
 through December 31, 1996, must be determined using gross income 
 as defined in subdivision 3a; and 

    (2) the tax preference for depletion under section 57(a)(1) 
 of the Internal Revenue Code of 1986, as amended through 
 December 31, 1996, must be included in alternative minimum 
 taxable income. 

    Subd. 3d.    Alternative minimum tax credit.  A credit 
 is allowed against qualified regular tax for qualified 
 alternative minimum tax previously paid.  The amount of the 
 credit allowed under this subdivision is determined under 
 section 290.0921, subdivision 8.  For purposes of calculating 
 this credit, the following terms have the meanings given: 

    (a) "Qualified alternative minimum tax" means the amount 
 determined under subdivision 3 and section 290.0921, subdivision 
 1. 

    (b) "Qualified regular tax" means the tax imposed under 
 subdivision 3 and section 290.06, subdivision 1. 

    Subd. 4.    Occupation tax; iron ore; taconite 
 concentrates.  A person engaged in the business of mining or 
 producing of iron ore, taconite concentrates or direct reduced 
 ore in this state shall pay an occupation tax to the state of 
 Minnesota.  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), and 290.17, subdivision 4, do not 
 apply.  The tax is in addition to all other taxes. 

    Subd. 4a.    Gross income.  (a) For purposes of 
 determining a person's taxable income under subdivision 4, gross 
 income is determined by the mine value of the ore mined in 
 Minnesota and includes any gain or loss recognized from the sale 
 or disposition of assets used in the business in this state. 

    (b) Mine value is the value, or selling price, of iron ore 
 or taconite concentrates, f.o.b. mine.  The mine value is 
 calculated by multiplying the iron unit price for the period, as 
 determined by the commissioner, by the tons produced and the 
 weighted average analysis. 

    (c) In applying section 290.191, subdivision 5, transfers 
 of iron ore and taconite concentrates are deemed to be sales 
 outside this state if the iron ore or taconite concentrates are 
 transported out of this state after the raw iron ore and 
 taconite concentrates have been converted to a marketable 
 quality. 

    Subd. 4b.    Deductions.  For purposes of determining 
 taxable income under subdivision 4, the deductions from gross 
 income include only those expenses necessary to convert raw iron 
 ore or taconite concentrates to marketable quality.  Such 
 expenses include costs associated with beneficiation and 
 refinement but do not include expenses such as transportation, 
 stockpiling, marketing, or marine insurance that are incurred 
 after marketable iron ore or taconite pellets are produced. 

    Subd. 4c.    Special deductions; net operating loss.  (a)
 For purposes of determining taxable income under subdivision 4, 
 the provisions of section 290.01, subdivisions 19c, clauses (6) 
 and (9), and 19d, clauses (7) and (11), are not used to 
 determine taxable income. 

    (b) The amount of net operating loss incurred in a taxable 
 year beginning before January 1, 1990, that may be carried over 
 to a taxable year beginning after December 31, 1989, is the 
 amount of net operating loss carryover determined in the 
 calculation of the hypothetical corporate franchise tax under 
 Minnesota Statutes 1988, sections 298.40 and 298.402. 

    Subd. 4d.    Alternative minimum tax.  For purposes of 
 calculating the alternative minimum tax under section 290.0921, 
 Minnesota alternative minimum taxable income must be computed 
 under the provisions of subdivisions 4, 4a, 4b and 4c, and the 
 provisions of section 290.0921, except that: 

    (1) for purposes of the depreciation adjustments provided 
 by section 56(a)(1) of the Internal Revenue Code of 1986, as 
 amended through December 31, 1996, the basis for depreciable 
 property placed in service is the remaining depreciable basis as 
 defined in subdivision 4c; 

    (2) the adjustment for adjusted current earnings under 
 section 56(g) of the Internal Revenue Code of 1986, as amended 
 through December 31, 1996, must be determined using gross income 
 as defined in subdivision 4a; 

    (3) the tax preference for depletion under section 57(a)(1) 
 of the Internal Revenue Code of 1986, as amended through 
 December 31, 1996, must be included in alternative minimum 
 taxable income; and 

    (4) for purposes of calculating the tax preference for 
 accelerated depreciation or amortization of certain property 
 placed in service before January 1, 1987, under section 57(a)(7) 
 of the Internal Revenue Code of 1986, as amended through 
 December 31, 1996, the deduction allowable for the taxable year 
 shall mean the deduction allowable under subdivision 4c, 
 provided that this modification must not reduce the amount of 
 tax preference to less than zero. 

    Subd. 4e.    Alternative minimum tax credit.  A credit 
 is allowed against qualified regular tax for qualified 
 alternative minimum tax previously paid.  The amount of the 
 credit allowed under this paragraph is determined under section 
 290.0921, subdivision 8.  For purposes of calculating this 
 credit, the following terms have the meanings given: 

    (1) "Qualified alternative minimum tax" means the amount 
 determined under subdivision 4d and section 290.0921, 
 subdivision 1. 

    (2) "Qualified regular tax" means the tax imposed under 
 subdivision 4 and section 290.06, subdivision 1. 

    Subd. 5.    If declared unconstitutional.  If the taxes 
 imposed in subdivisions 3 and 4 are found unconstitutional by 
 any court of last resort, then persons engaged in the business 
 of mining or producing iron ore or other ores shall pay the 
 occupation taxes imposed in Minnesota Statutes 1986, chapter 298.

    HIST: (2373, 2373-1) 1921 c 223 s 1; Ex1937 c 85 s 1; 1939 c 
 356 s 1; 1941 c 544 s 1; 1943 c 590 s 1,2; 1945 c 448 s 1; 1947 
 c 542 s 1; Ex1955 c 2 art 2 s 1; Ex1957 c 1 art 4 s 1; Ex1959 c 
 70 art 8 s 1; Ex1971 c 31 art 4 s 1; 1973 c 631 s 1,2; 1984 c 
 502 art 7 s 10; 1985 c 300 s 20; 1Sp1985 c 14 art 10 s 7; 1987 c 
 268 art 9 s 22-25; 1988 c 719 art 2 s 51,52; 1989 c 27 art 1 s 
 3-9; 1Sp1989 c 1 art 10 s 38,39; 1991 c 291 art 11 s 12-15; 1993 
 c 375 art 8 s 14; 1994 c 587 art 1 s 24; 1995 c 264 art 1 s 4; 
 art 7 s 1; 1996 c 471 art 9 s 15; 1997 c 231 art 6 s 24; 1Sp2001 
 c 5 art 9 s 26,27; 2002 c 377 art 8 s 3,4 

  298.011 Repealed, Ex1971 c 31 art 4 s 5 

  298.012 Repealed, 1998 c 389 art 10 s 23 

     298.015 Net proceeds tax on mining. 

    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 two 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.  

    Subd. 2.    Net proceeds.  For purposes of this section, 
 the term "net proceeds" means the gross proceeds from mining, as 
 defined in section 298.016, less the deductions allowed in 
 section 298.017.  No other credits or deductions shall apply to 
 this tax except for those provided in section 298.017.  

    HIST: 1987 c 268 art 9 s 26; 1990 c 604 art 10 s 15; 1991 c 
 291 art 11 s 16 

     298.016 Gross proceeds. 

    Subdivision 1.    Computation; arm's-length transactions. 
  When a metal or mineral product is sold by the producer in an 
 arm's-length transaction, the gross proceeds are equal to the 
 proceeds from the sale of the product.  This subdivision applies 
 to sales realized on all metal or mineral products produced from 
 mining, including reduction, beneficiation, or any treatment 
 used by a producer to obtain a metal or mineral product which is 
 commercially marketable.  

    Subd. 2.    Other transactions.  When a metal or mineral 
 product is used by the producer or disposed of in a 
 non-arm's-length transaction, the gross proceeds must be 
 determined using the alternative computation in subdivision 3.  
 Transactions subject to this subdivision include, but are not 
 limited to, shipments to a wholly owned smelter, transactions 
 with associated or affiliated companies, and any other 
 transactions which are not at arm's length. 

    Subd. 3.    Alternative computation.  The commissioner 
 of revenue shall determine the alternative computation of gross 
 proceeds using the following procedure:  

    (a)(1) Metal and mineral prices shall be determined by 
 using the average annual market price as published in the 
 Engineering and Mining Journal; (2) For metals or mineral 
 products with a monthly or weekly price quotation in the 
 Engineering and Mining Journal, but for which no average annual 
 price has been published, an arithmetic average of the monthly 
 or weekly prices published in the Engineering and Mining Journal 
 shall be used; (3) If the price of a particular metal or mineral 
 product is not published in the Engineering and Mining Journal, 
 another recognized published price, as established by the 
 commissioner of revenue will be used.  

    (b) The quantity of each particular metal or mineral 
 product recovered and paid or credited for by the smelter will 
 be multiplied by the average annual market price as determined 
 in clause (a).  Special smelter charges for particular metals 
 will be allowed as a deduction from this price.  The resulting 
 amount will be the gross proceeds for calculating the tax in 
 section 298.015.  

    Subd. 4.    Definitions.  For the purposes of sections 
 298.015 and 298.017, the terms defined in this subdivision have 
 the meaning given them unless the context clearly indicates 
 otherwise.  

    (a) "Metal or mineral products" means all those mineral and 
 energy resources subject to the tax provided in section 298.015. 

    (b) "Exploration" means activities designed and engaged in 
 to ascertain the existence, location, extent, or quality of any 
 deposit of metal or mineral products prior to the development of 
 a mining site.  

    (c) "Development" means activities designed and engaged in 
 to prepare or develop a potential mining site for mining after 
 the existence of metal or mineral products in commercially 
 marketable quantities has been disclosed including, but not 
 limited to, the clearing of forestation, the building of roads, 
 removal of overburden, or the sinking of shafts.  

    (d) "Research" means activities designed and engaged in to 
 create new or improved methods of mining, producing, processing, 
 beneficiating, smelting, or refining metal or mineral products.  

    HIST: 1987 c 268 art 9 s 27 

     298.017 Deductions. 

    Subdivision 1.    Deductions not allowed.  For purposes 
 of calculating the net proceeds under section 298.015, the 
 following expenses are not deductible:  (1) all sales, 
 marketing, and interest expenses; (2) all insurance expense and 
 taxes, except as specifically provided in this section; (3) all 
 administrative expenses outside of Minnesota; (4) any research 
 expense prior to production; (5) funds set aside during 
 production years to pay for reclamation expenses after 
 production ends; (6) royalty expenses, depletion allowances, and 
 cost of mining land.  

    Subd. 2.    Deductions allowed.  (a) In calculating the 
 net proceeds for the purpose of determining the tax provided in 
 section 298.015, only those expenses specifically allowed in 
 this subdivision may be deducted from gross proceeds.  The 
 carryback or carryforward of deductions shall not be allowed.  

    (b) Ordinary and necessary expenses actually paid for the 
 mining, production, processing, beneficiation, smelting, or 
 refining of metal or mineral products for: 

    (1) labor, including wages, salaries, fringe benefits, 
 unemployment and workers' compensation insurance; 

    (2) machinery, equipment, and supplies, including any sales 
 and use tax paid on it, except that machinery and equipment 
 subject to depreciation shall only be deductible under clause 
 (b)(3); 

    (3) depreciation as defined and allowed by section 167 of 
 the Internal Revenue Code of 1986, as amended through December 
 31, 1996; 

    (4) administrative expenses inside Minnesota; and 

    (5) reclamation costs actually incurred in Minnesota and 
 paid in a year of production, including the payment of bonds 
 required by the provisions of an environmental permit issued by 
 the state of Minnesota are deductible.  

    (c) Ordinary and necessary expenses of transporting metal 
 or mineral products are allowed as a deduction if the costs are 
 included in the sale price of the products.  

    (d) Expenses of exploration, research, or development in 
 this state for the mining and processing of minerals within 
 Minnesota paid in a production year are deductible in the 
 production year.  

    (e) Expenses of exploration and development in Minnesota 
 incurred prior to production must be amortized and deducted on a 
 straight-line basis over the first five years of production.  

    HIST: 1987 c 268 art 9 s 28; 1990 c 604 art 10 s 16; 1994 c 
 587 art 1 s 22; 1995 c 264 art 1 s 4; 1997 c 231 art 6 s 24 

     298.018 Distribution of proceeds. 

    Subdivision 1.    Within the 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; 

    (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; 

    (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; 

    (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) five percent to the Douglas J. Johnson economic 
 protection trust fund; and 

    (9) five percent to the taconite environmental protection 
 fund. 

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

    Subd. 2.    Outside the taconite assistance area.  The 
 proceeds of the tax paid under sections 298.015 to 298.017 on 
 minerals and energy resources mined or extracted outside of the 
 taconite assistance area defined in section 273.1341, shall be 
 deposited in the general fund. 

    HIST: 1987 c 268 art 9 s 29; 1988 c 719 art 5 s 84; 1989 c 329 
 art 13 s 20; 1998 c 397 art 11 s 3; 1Sp2001 c 5 art 6 s 11,12; 
 2003 c 127 art 11 s 12; 1Sp2003 c 21 art 11 s 14,15 

  298.02 Repealed, 1987 c 268 art 9 s 43 

  298.025 Repealed, Ex1971 c 31 art 4 s 5 

  298.026 Repealed, 1987 c 268 art 9 s 43 

  298.027 Repealed, 1987 c 268 art 9 s 43 

  298.028 Repealed, 1987 c 268 art 9 s 43 

  298.03 Repealed, 1987 c 268 art 9 s 43 

  298.031 Repealed, 1987 c 268 art 9 s 43 

  298.04 Repealed, 1987 c 268 art 9 s 43 

  298.045 Repealed, 1984 c 522 s 20 

  298.046 Repealed, 1984 c 522 s 20 

  298.047 Repealed, 1984 c 522 s 20 

  298.048 Repealed, 1984 c 522 s 20 

  298.05 Repealed, 1991 c 291 art 11 s 20 

  298.06 Repealed, 1991 c 291 art 11 s 20 

  298.07 Repealed, 1991 c 291 art 11 s 20 

  298.08 Repealed, 1991 c 291 art 11 s 20 

  298.09 Repealed, 1991 c 291 art 11 s 20 

  298.10 Repealed, 1991 c 291 art 11 s 20 

  298.11 Repealed, 1991 c 291 art 11 s 20 

  298.12 Repealed, 1991 c 291 art 11 s 20 

  298.13 Repealed, 1991 c 291 art 11 s 20 

  298.14 Repealed, 1991 c 291 art 11 s 20 

  298.15 Repealed, 1991 c 291 art 11 s 20 

     298.16 Taxes to be credited to general fund. 

    All taxes imposed under sections 298.01 and 298.015 must be 
 paid into the state treasury and credited to the general fund. 

    HIST: (2386) 1921 c 223 s 14; 1969 c 399 s 49; 1991 c 291 art 
 11 s 17 

     298.17 Occupation taxes to be apportioned. 

    All occupation taxes paid by persons, copartnerships, 
 companies, joint stock companies, corporations, and 
 associations, however or for whatever purpose organized, engaged 
 in the business of mining or producing iron ore or other ores, 
 when collected shall be apportioned and distributed in 
 accordance with the Constitution of the state of Minnesota, 
 article X, section 3, in the manner following:  90 percent shall 
 be deposited in the state treasury and credited to the general 
 fund of which four-ninths shall be used for the support of 
 elementary and secondary schools; and ten percent of the 
 proceeds of the tax imposed by this section shall be deposited 
 in the state treasury and credited to the general fund for the 
 general support of the university.  Of the moneys apportioned to 
 the general fund by this section there is annually appropriated 
 and credited to the Iron Range Resources and Rehabilitation 
 Board account in the special revenue fund an amount equal to 
 that which would have been generated by a 1.5 cent tax imposed 
 by section 298.24 on each taxable ton produced in the preceding 
 calendar year, to be expended for the purposes of section 
 298.22.  The money appropriated pursuant to this section shall 
 be used (1) to provide environmental development grants to local 
 governments located within any county in region 3 as defined in 
 governor's executive order number 60, issued on June 12, 1970, 
 which does not contain a municipality qualifying pursuant to 
 section 273.134, paragraph (b), or (2) to provide economic 
 development loans or grants to businesses located within any 
 such county, provided that the county board or an advisory group 
 appointed by the county board to provide recommendations on 
 economic development shall make recommendations to the Iron 
 Range Resources and Rehabilitation Board regarding the loans.  
 Payment to the Iron Range Resources and Rehabilitation Board 
 account shall be made by May 15 annually. 

    Of the money allocated to Koochiching County, one-third 
 must be paid to the Koochiching County Economic Development 
 Commission. 

    HIST: (2391) 1923 c 402 s 1; 1961 c 561 s 9; 1969 c 399 s 42; 
 1976 c 2 s 172; 1980 c 607 art 7 s 2; 1984 c 524 s 1; 1991 c 199 
 art 1 s 65; 1996 c 471 art 13 s 14; 2000 c 484 art 1 s 1; 
 1Sp2001 c 5 art 6 s 13 

     298.18 Taxes to go to general fund if section 298.17 
  invalid.  

    If for any reason section 298.17 shall be held to be 
 invalid, then all such taxes, when collected, shall be paid into 
 the state treasury and credited to the general fund.  

    HIST: (2392) 1923 c 402 s 2; 1969 c 399 s 49 

  298.19 Repealed, 1991 c 291 art 11 s 20 

  298.20 Repealed, 1991 c 291 art 11 s 20 

  298.21 Repealed, 1998 c 389 art 10 s 23 

IRON RANGE RESOURCES AND REHABILITATION

     298.22 Iron Range resources and rehabilitation. 

    Subdivision 1.    Commissioner of iron range resources and 
 rehabilitation.  (1) The governor shall appoint the 
 commissioner of iron range resources and rehabilitation under 
 section 15.06. 

    (2) The commissioner may hold other positions or 
 appointments that are not incompatible with duties as 
 commissioner of Iron Range resources and rehabilitation.  The 
 commissioner may appoint a deputy commissioner.  All expenses of 
 the commissioner, including the payment of such assistance as 
 may be necessary, must be paid out of the amounts appropriated 
 by section 298.28.  

    (3) When the commissioner determines that distress and 
 unemployment exists or may exist in the future in any county by 
 reason of the removal of natural resources or a possibly limited 
 use of natural resources in the future and any resulting 
 decrease in employment, the commissioner may use whatever 
 amounts of the appropriation made to the commissioner of revenue 
 in section 298.28 that are determined to be necessary and proper 
 in the development of the remaining resources of the county and 
 in the vocational training and rehabilitation of its residents, 
 except that the amount needed to cover cost overruns awarded to 
 a contractor by an arbitrator in relation to a contract awarded 
 by the commissioner or in effect after July 1, 1985, is 
 appropriated from the general fund.  For the purposes of this 
 section, "development of remaining resources" includes, but is 
 not limited to, the promotion of tourism. 

    Subd. 2.    Iron Range Resources and Rehabilitation Board. 
  There is hereby created the Iron Range Resources and 
 Rehabilitation Board, consisting of 13 members, five of whom are 
 state senators appointed by the Subcommittee on Committees of 
 the Rules Committee of the senate, and five of whom are 
 representatives, appointed by the speaker of the house of 
 representatives.  The remaining members shall be appointed one 
 each by the senate majority leader, the speaker of the house of 
 representatives, and the governor and must be nonlegislators who 
 reside in a taconite assistance area as defined in section 
 273.1341.  The members shall be appointed in January of every 
 odd-numbered year, except that the initial nonlegislator members 
 shall be appointed by July 1, 1999, and shall serve until 
 January of the next odd-numbered year.  Vacancies on the board 
 shall be filled in the same manner as the original members were 
 chosen.  At least a majority of the legislative members of the 
 board shall be elected from state senatorial or legislative 
 districts in which over 50 percent of the residents reside 
 within a taconite assistance area as defined in section 
 273.1341.  All expenditures and projects made by the 
 commissioner of iron range resources and rehabilitation shall be 
 consistent with the priorities established in subdivision 8 and 
 shall first be submitted to the Iron Range Resources and 
 Rehabilitation Board for approval by a majority of the board of 
 expenditures and projects for rehabilitation purposes as 
 provided by this section, and the method, manner, and time of 
 payment of all funds proposed to be disbursed shall be first 
 approved or disapproved by the board.  The board shall 
 biennially make its report to the governor and the legislature 
 on or before November 15 of each even-numbered year.  The 
 expenses of the board shall be paid by the state from the funds 
 raised pursuant to this section. 

    Subd. 3.    Commissioner may acquire property.  Whenever 
 the commissioner of iron range resources and rehabilitation has 
 made determinations required by subdivision 1 and has determined 
 that distress and unemployment exists or may exist in the future 
 in any county by reason of the removal of the natural resources 
 or a possible limited use thereof in the future and the decrease 
 in employment resulting therefrom and deems that the acquirement 
 of real estate or personal property is necessary and proper in 
 the development of the remaining resources, the commissioner may 
 acquire such property or interests therein by gift, purchase, or 
 lease.  The commissioner may purchase insurance to protect any 
 property acquired from loss or damage by fire, or to protect the 
 commissioner from any liability the commissioner may incur by 
 reason of ownership of the property, or both.  If after such 
 property is acquired it is necessary in the judgment of the 
 commissioner to acquire a right-of-way for access to projects 
 operated on property acquired by gift, purchase, or lease, said 
 right-of-way may be acquired by condemnation in the manner 
 provided by law.  If the owner or operator of an iron mine or 
 related production or beneficiation facilities discontinues the 
 operation of the mine or facilities for any reason, the 
 commissioner may acquire any or all of the mine lands and 
 related facilities by gift, purchase, lease, or condemnation in 
 the manner provided in chapter 117. 

    Subd. 4.    Commissioner may accept grants and 
 conveyances.  Whenever property has been granted and conveyed 
 to the state of Minnesota in accordance with an agreement made 
 by the commissioner of iron range resources and rehabilitation 
 and the commissioner of administration for the necessary and 
 proper development of the remaining resources of any distressed 
 county, such grants, and conveyances or leases are hereby 
 accepted in accordance with the terms and conditions thereof. 

    Subd. 5.    Commissioner may lease property.  In order 
 to carry out the terms and provisions of this section, the 
 commissioner of iron range resources and rehabilitation and the 
 commissioner of administration may lease any property acquired 
 hereunder for a term not to exceed 20 years upon such terms as 
 they may determine, provided that such property shall not be 
 leased to any person in such a manner as to constitute a direct 
 contribution of working capital to a business enterprise. Such 
 lease may provide that in the event the property is ever sold by 
 the state to such lessee, the lessee may obtain a credit on the 
 purchase price covering the rentals paid under the lease or any 
 renewals thereof and that said real estate can be conveyed by 
 the commissioner of iron range resources and rehabilitation and 
 the commissioner of administration and the said commissioners 
 are hereby authorized to make such conveyances. 

    Subd. 6.    Private entity participation.  The board may 
 acquire an equity interest in any project for which it provides 
 funding.  The commissioner may establish, participate in the 
 management of, and dispose of the assets of charitable 
 foundations and nonprofit corporations associated with any 
 project for which it provides funding, including specifically, 
 but without limitation, a corporation within the meaning of 
 section 317A.011, subdivision 6. 

    Subd. 7.    Project area development authority.  (a) In 
 addition to the other powers granted in this section and other 
 law and notwithstanding any limitations contained in subdivision 
 5, the commissioner, for purposes of fostering economic 
 development and tourism within the Giants Ridge Recreation Area 
 or the Ironworld Discovery Center area, may spend any money made 
 available to the agency under section 298.28 to acquire real or 
 personal property or interests therein by gift, purchase, or 
 lease and may convey by lease, sale, or other means of 
 conveyance or commitment any or all property interests owned or 
 administered by the commissioner within such areas.  

    (b) In furtherance of development of the Giants Ridge 
 Recreation Area or the Ironworld Discovery Center area, the 
 commissioner may establish and participate in charitable 
 foundations and nonprofit corporations, including a corporation 
 within the meaning of section 317A.011, subdivision 6. 

    (c) The term "Giants Ridge recreation area" refers to an 
 economic development project area established by the 
 commissioner in furtherance of the powers delegated in this 
 section within St. Louis County in the western portions of the 
 town of White and in the eastern portion of the westerly, 
 adjacent, unorganized township. 

    (d) The term "Ironworld Discovery Center area" refers to an 
 economic development and tourism promotion project area 
 established by the commissioner in furtherance of the powers 
 delegated in this section within St. Louis County in the south 
 portion of the town of Balkan. 

    Subd. 8.    Spending priority.  In making or approving 
 any expenditures on programs or projects, the commissioner and 
 the board shall give the highest priority to programs and 
 projects that target relief to those areas of the taconite 
 assistance area as defined in section 273.1341, that have the 
 largest percentages of job losses and population losses directly 
 attributable to the economic downturn in the taconite industry 
 since the 1980s.  The commissioner and the board shall compare 
 the 1980 population and employment figures with the 2000 
 population and employment figures, and shall specifically 
 consider the job losses in 2000 and 2001 resulting from the 
 closure of LTV Steel Mining Company, in making or approving 
 expenditures consistent with this subdivision, as well as the 
 areas of residence of persons who suffered job loss for which 
 relief is to be targeted under this subdivision.  This 
 subdivision supersedes any other conflicting provisions of law 
 and does not preclude the commissioner and the board from making 
 expenditures for programs and projects in other areas. 

    Subd. 9.    Economic development and trade promotion.  
 In the promotion of tourism, trade, and economic development, 
 the commissioner may expend money made available to the agency 
 under section 298.28 in the same manner as private persons, 
 firms, corporations, and associations make expenditures for 
 these purposes.  An expenditure for food, lodging, or travel is 
 not governed by the travel rules of the commissioner of employee 
 relations. 

    HIST: 1941 c 544 s 4; 1943 c 590 s 4; 1949 c 739 s 22; 1951 c 
 713 s 31; 1957 c 882 s 1; Ex1959 c 49 s 1; 1969 c 399 s 43,49; 
 1969 c 1129 art 8 s 9; art 10 s 2; 1971 c 25 s 59; 1973 c 613 s 
 1; 1974 c 406 s 67; 1975 c 271 s 6; 1977 c 305 s 34; 1977 c 423 
 art 10 s 8,9; 1980 c 607 art 7 s 3; 1983 c 301 s 183; 1986 c 
 444; 1Sp1986 c 3 art 2 s 49; 1987 c 404 s 162; 1988 c 719 art 19 
 s 16; 1995 c 224 s 92; 1996 c 452 s 34; 1997 c 200 art 1 s 71; 
 2Sp1997 c 3 s 14; 1998 c 351 s 4; 1998 c 389 art 10 s 5; 1999 c 
 223 art 2 s 42,43; 1999 c 243 art 5 s 33; 2001 c 149 s 1; 
 1Sp2001 c 5 art 6 s 14,15; 2002 c 380 art 2 s 15,16; 1Sp2003 c 
 21 art 11 s 16,17 

     298.221 Receipts from contracts; appropriation. 

    (a) All money paid to the state of Minnesota pursuant to 
 the terms of any contract entered into by the state under 
 authority of section 298.22 and any fees which may, in the 
 discretion of the commissioner of iron range resources and 
 rehabilitation, be charged in connection with any project 
 pursuant to that section as amended, shall be deposited in the 
 state treasury to the credit of the Iron Range Resources and 
 Rehabilitation Board account in the special revenue fund and are 
 hereby appropriated for the purposes of section 298.22. 

    (b) Notwithstanding section 61A.013, merchandise may be 
 accepted by the commissioner of the Iron Range Resources and 
 Rehabilitation Board for payment of advertising contracts if the 
 commissioner determines that the merchandise can be used for 
 special event prizes or mementos at facilities operated by the 
 board.  Nothing in this paragraph authorizes the commissioner or 
 a member of the board to receive merchandise for personal use.  

    HIST: 1961 c 215 s 1; 1973 c 613 s 2; 1975 c 271 s 6; 1992 c 
 513 art 3 s 51; 1998 c 389 art 10 s 6; 2003 c 112 art 2 s 50 

     298.2211 Financing activities. 

    Subdivision 1.    Purpose; grant of authority.  In order 
 to accomplish the legislative purposes specified in sections 
 469.142 to 469.165 and chapter 462C, within the taconite 
 assistance area as defined in section 273.1341, the commissioner 
 of Iron Range resources and rehabilitation may exercise the 
 following powers:  (1) all powers conferred upon a rural 
 development financing authority under sections 469.142 to 
 469.149; (2) all powers conferred upon a city under chapter 
 462C; (3) all powers conferred upon a municipality or a 
 redevelopment agency under sections 469.152 to 469.165; (4) all 
 powers provided by sections 469.142 to 469.151 to further any of 
 the purposes and objectives of chapter 462C and sections 469.152 
 to 469.165; (5) apply for, borrow, receive, and expend grant and 
 loan money made available from federal sources and from 
 federally funded programs; and (6) all powers conferred upon a 
 municipality or an authority under sections 469.174 to 469.177, 
 469.178, except subdivision 2 thereof, and 469.179, subject to 
 compliance with the provisions of section 469.175, subdivisions 
 1, 2, and 3; provided that any tax increments derived by the 
 commissioner from the exercise of this authority may be used 
 only to finance or pay premiums or fees for insurance, letters 
 of credit, or other contracts guaranteeing the payment when due 
 of net rentals under a project lease or the payment of principal 
 and interest due on or repurchase of bonds issued to finance a 
 project or program, to accumulate and maintain reserves securing 
 the payment when due on bonds issued to finance a project or 
 program, or to provide an interest rate reduction program 
 pursuant to section 469.012, subdivision 7.  Tax increments and 
 earnings thereon remaining in any bond reserve account after 
 payment or discharge of any bonds secured thereby shall be used 
 within one year thereafter in furtherance of this section or 
 returned to the county auditor of the county in which the tax 
 increment financing district is located.  If returned to the 
 county auditor, the county auditor shall immediately allocate 
 the amount among all government units which would have shared 
 therein had the amount been received as part of the other ad 
 valorem taxes on property in the district most recently paid, in 
 the same proportions as other taxes were distributed, and shall 
 immediately distribute it to the government units in accordance 
 with the allocation. 

    Subd. 2.    Area of operation.  Projects undertaken, 
 developed, or financed pursuant to this section shall be located 
 within the taconite assistance area defined in section 273.1341. 

    Subd. 3.    Project approval.  All projects authorized 
 by this section shall be submitted by the commissioner to the 
 Iron Range Resources and Rehabilitation Board, which shall 
 recommend approval or disapproval or modification of the 
 projects.  Prior to the commencement of a project involving the 
 exercise by the commissioner of any authority of sections 
 469.174 to 469.179, the governing body of each municipality in 
 which any part of the project is located and the county board of 
 any county containing portions of the project not located in an 
 incorporated area shall by majority vote approve or disapprove 
 the project.  Any project, as so approved by the board and the 
 applicable governing bodies, if any, together with detailed 
 information concerning the project, its costs, the sources of 
 its funding, and the amount of any bonded indebtedness to be 
 incurred in connection with the project, shall be transmitted to 
 the governor, who shall approve, disapprove, or return the 
 proposal for additional consideration within 30 days of 
 receipt.  No project authorized under this section shall be 
 undertaken, and no obligations shall be issued and no tax 
 increments shall be expended for a project authorized under this 
 section until the project has been approved by the governor.  

    Subd. 3a. Repealed, 1995 c 224 s 126 

    Subd. 4.    Obligations not state debt.  Bonds and other 
 obligations issued by the commissioner pursuant to this section, 
 along with all related documents, are not general obligations of 
 the state of Minnesota and are not subject to sections 16C.03, 
 subdivision 4, and 16C.05.  The full faith and credit and taxing 
 powers of the state are not and may not be pledged for the 
 payment of these bonds or other obligations, and no person has 
 the right to compel the levy of any state tax for their payment 
 or to compel the appropriation of any moneys of the state for 
 their payment except as specifically provided herein.  These 
 bonds and obligations shall be payable solely from the property 
 and moneys derived by the commissioner pursuant to the authority 
 granted in this section that the commissioner pledges to their 
 payment.  The legislature intends not to appropriate money from 
 the general fund to pay for these bonds or other obligations.  
 All these bonds or other obligations must contain the provisions 
 of this subdivision or words to the same effect on their face.  

    Subd. 5.    Appropriation of moneys.  There is 
 appropriated to the commissioner for the purpose of carrying out 
 any project or program undertaken pursuant to this section, all 
 property and moneys derived by the commissioner through the 
 exercise of the powers conferred by this section.  The 
 commissioner may pledge all the property or moneys for the 
 security or payment of bonds or other obligations issued or 
 entered into by the commissioner for this purpose.  

    Subd. 6.    Fee setting.  Fees for admission to or use 
 of facilities operated by the Iron Range Resources and 
 Rehabilitation Board that have been established according to 
 prevailing market conditions and to recover operating costs need 
 not be set by rule. 

    HIST: 1983 c 357 s 1; 1Sp1985 c 13 s 313; 1986 c 444; 1986 c 
 465 art 1 s 2; 1987 c 291 s 213,214; 1989 c 209 art 2 s 33; 1989 
 c 355 s 1; 1990 c 610 art 2 s 6; 1993 c 369 s 108; 1994 c 632 
 art 4 s 70; 1998 c 386 art 2 s 82; 1Sp2001 c 5 art 6 s 16; 2003 
 c 127 art 11 s 6; 1Sp2003 c 21 art 11 s 18,19 

     298.2212 Investment of funds. 

    All funds credited to the Iron Range Resources and 
 Rehabilitation Board account in the special revenue fund for the 
 purposes of section 298.22 must be invested pursuant to law.  
 The net interest and dividends from the investments are included 
 and become part of the funds available for purposes of section 
 298.22. 

    HIST: 1Sp1985 c 14 art 10 s 12 

NORTHEAST MINNESOTA ECONOMIC DEVELOPMENT FUND

     298.2213 Northeast Minnesota economic development fund. 

    Subdivision 1.    Appropriation.  $4,000,000 is 
 appropriated from the general fund to the commissioner of iron 
 range resources and rehabilitation.  $300,000 of this 
 appropriation must be used in the same manner as money 
 appropriated under section 298.17. 

    Subd. 2.    Purpose of expenditures.  The money 
 appropriated in this section may be used for projects and 
 programs for which technological and economic feasibility have 
 been demonstrated and that have the following purposes:  

    (1) creating and maintaining productive, permanent, skilled 
 employment, including employment in technologically innovative 
 businesses; and 

    (2) encouraging diversification of the economy and 
 promoting the development of minerals, alternative energy 
 sources utilizing indigenous fuels, forestry, small business, 
 and tourism.  

    Subd. 3.    Use of money.  The money appropriated under 
 this section may be used to provide loans, loan guarantees, 
 interest buy-downs, and other forms of participation with 
 private sources of financing, provided that a loan to a private 
 enterprise must be for a principal amount not to exceed one-half 
 of the cost of the project for which financing is sought, and 
 the rate of interest on a loan must be no less than the lesser 
 of eight percent or the rate of interest that is three 
 percentage points less than a full faith and credit obligation 
 of the United States government of comparable maturity, at the 
 time that the loan is approved.  

    Money appropriated in this section must be expended only in 
 or for the benefit of the taconite assistance area defined in 
 section 273.1341, and as otherwise provided in this section. 

    Subd. 4.    Project approval.  The board shall by August 
 1 each year prepare a list of projects to be funded from the 
 money appropriated in this section with necessary supporting 
 information including descriptions of the projects, plans, and 
 cost estimates.  A project must not be approved by the board 
 unless it finds that:  

    (1) the project will materially assist, directly or 
 indirectly, the creation of additional long-term employment 
 opportunities; 

    (2) the prospective benefits of the expenditure exceed the 
 anticipated costs; and 

    (3) in the case of assistance to private enterprise, the 
 project will serve a sound business purpose.  

    To be proposed by the board, a project must be approved by 
 a majority of the Iron Range Resources and Rehabilitation Board 
 members and the commissioner of iron range resources and 
 rehabilitation.  The list of projects must be submitted to the 
 governor, who shall, by November 15 of each year, approve, 
 disapprove, or return for further consideration, each project.  
 The money for a project may be spent only upon approval of the 
 project by the governor.  The board may submit supplemental 
 projects for approval at any time.  

    Subd. 5.    Advisory committees.  Before submission to 
 the board of a proposal for a project for expenditure of money 
 appropriated under this section, the commissioner of iron range 
 resources and rehabilitation shall appoint a technical advisory 
 committee consisting of at least seven persons who are 
 knowledgeable in areas related to the objectives of the 
 proposal.  If the project involves investment in a scientific 
 research proposal, at least four of the committee members must 
 be knowledgeable in the specific scientific research area 
 relating to the project.  Members of the committees must be 
 compensated as provided in section 15.059, subdivision 3.  The 
 board shall not act on a proposal until it has received the 
 evaluation and recommendations of the technical advisory 
 committee.  

    Subd. 6.    Use of repayments and earnings.  Principal 
 and interest received in repayment of loans made under this 
 section must be deposited in the state treasury and are 
 appropriated to the board for the purposes of this section. 

    HIST: 1987 c 386 art 8 s 1; 1988 c 719 art 19 s 17; 1993 c 369 
 s 109; 1998 c 389 art 10 s 7; 1999 c 223 art 2 s 44; 1Sp2001 c 5 
 art 6 s 17; 1Sp2003 c 21 art 11 s 20 

IRON RANGE HIGHER EDUCATION

     298.2214 Iron Range higher education. 

    Subdivision 1.    Creation of committee; purpose.  A 
 committee is created to advise the commissioner of Iron Range 
 resources and rehabilitation on providing higher education 
 programs in the taconite assistance area defined in section 
 273.1341.  The committee is subject to section 15.059. 

    Subd. 2.    Membership.  The members of the committee 
 shall consist of: 

    (1) one member appointed by the governor; 

    (2) one member appointed by the president of the University 
 of Minnesota; 

    (3) two members appointed by the commissioner of iron range 
 resources and rehabilitation; and 

    (4) the commissioner of iron range resources and 
 rehabilitation. 

    Subd. 3.    Advisory function.  The committee shall 
 advise the commissioner regarding development of a contract with 
 the state university system.  The contract would require the 
 system to provide courses within the taconite assistance area 
 defined in section 273.1341. 

    Subd. 4.    Contract.  The commissioner shall prepare a 
 contract as described in subdivision 3 and submit it to the 
 committee for review and recommendations for approval, 
 disapproval, or modifications.  At the conclusion of the review 
 process, the commissioner shall enter into a contract with the 
 state university system to provide the services. 

    Subd. 5.    System approval.  A program may not be 
 offered under a contract executed according to this section 
 unless it is approved by the board of the system offering the 
 program.  

    HIST: 1991 c 356 art 4 s 1; 1995 c 212 art 3 s 52; 1Sp2001 c 5 
 art 6 s 18; 1Sp2003 c 21 art 11 s 21,22 

TACONITE ENVIRONMENTAL

PROTECTION FUND ACT

     298.222 Citation. 

    Sections 298.222 to 298.226 and Laws 1977, chapter 423, 
 article 10, section 22 shall be known as the Taconite 
 Environmental Protection Fund Act of 1977. 

    HIST: 1977 c 423 art 10 s 19 

     298.223 Taconite area environmental protection fund. 

    Subdivision 1.    Creation; purposes.  A fund called the 
 taconite environmental protection fund is created for the 
 purpose of reclaiming, restoring and enhancing those areas of 
 northeast Minnesota located within the taconite assistance area 
 defined in section 273.1341, that are adversely affected by the 
 environmentally damaging operations involved in mining taconite 
 and iron ore and producing iron ore concentrate and for the 
 purpose of promoting the economic development of northeast 
 Minnesota.  The taconite environmental protection fund shall be 
 used for the following purposes: 

    (a) to initiate investigations into matters the Iron Range 
 Resources and Rehabilitation Board determines are in need of 
 study and which will determine the environmental problems 
 requiring remedial action; 

    (b) reclamation, restoration, or reforestation of minelands 
 not otherwise provided for by state law; 

    (c) local economic development projects including 
 construction of sewer and water systems, and other public works 
 located within the taconite assistance area defined in section 
 273.1341; 

    (d) monitoring of mineral industry related health problems 
 among mining employees. 

    Subd. 2.    Administration.  The taconite environmental 
 protection fund shall be administered by the commissioner of the 
 iron range resources and rehabilitation board.  The commissioner 
 shall by September 1 of each year submit to the board a list of 
 projects to be funded from the taconite environmental protection 
 fund, with such supporting information including description of 
 the projects, plans, and cost estimates as may be necessary.  
 Upon approval by a majority of the members of the Iron Range 
 Resources and Rehabilitation Board, this list shall be submitted 
 to the governor by November 1 of each year.  By December 1 of 
 each year, the governor shall approve or disapprove, or return 
 for further consideration, each project.  Funds for a project 
 may be expended only upon approval of the project by the board 
 and governor.  The commissioner may submit supplemental projects 
 to the board and governor for approval at any time.  

    Subd. 3.    Appropriation.  There is hereby annually 
 appropriated to the commissioner of iron range resources and 
 rehabilitation such funds as are necessary to carry out the 
 projects approved and such funds as are necessary for 
 administration of this section.  Annual administrative costs, 
 not including detailed engineering expenses for the projects, 
 shall not exceed five percent of the amount annually expended 
 from the fund. 

    Funds for the purposes of this section are provided by 
 section 298.28, subdivision 11, relating to the taconite 
 environmental protection fund. 

    HIST: 1977 c 423 art 10 s 20; 1980 c 607 art 7 s 4; 1Sp1981 c 
 4 art 2 s 31; 1Sp1985 c 14 art 10 s 13; 1988 c 719 art 19 s 18; 
 1993 c 369 s 110; 1995 c 224 s 93; 1999 c 223 art 2 s 45; 
 1Sp2001 c 5 art 6 s 19; 1Sp2003 c 21 art 11 s 23 

     298.224 Investment of funds; income. 

    The fund established by section 298.223 shall be invested 
 pursuant to law and the net interest and dividends arising from 
 the investment shall be included and become part of the fund. 

    HIST: 1977 c 423 art 10 s 21 

     298.225 Appropriation. 

    Subdivision 1.  (a) The distribution of the taconite 
 production tax as provided in section 298.28, subdivisions 3 to 
 5, 6, paragraph (b), 7, and 8, shall equal the lesser of the 
 following amounts:  

    (1) the amount distributed pursuant to this section and 
 section 298.28, with respect to 1983 production if the 
 production for the year prior to the distribution year is no 
 less than 42,000,000 taxable tons.  If the production is less 
 than 42,000,000 taxable tons, the amount of the distributions 
 shall be reduced proportionately at the rate of two percent for 
 each 1,000,000 tons, or part of 1,000,000 tons by which the 
 production is less than 42,000,000 tons; or 

    (2)(i) for the distributions made pursuant to section 
 298.28, subdivisions 4, paragraphs (b) and (c), and 6, paragraph 
 (c), 31.2 percent of the amount distributed pursuant to this 
 section and section 298.28, with respect to 1983 production; 

    (ii) for the distributions made pursuant to section 298.28, 
 subdivision 5, paragraphs (b) and (d), 75 percent of the amount 
 distributed pursuant to this section and section 298.28, with 
 respect to 1983 production.  

    (b) The distribution of the taconite production tax as 
 provided in section 298.28, subdivision 2, shall equal the 
 following amount: 

    (1) if the production for the year prior to the 
 distribution year is at least 42,000,000 taxable tons, the 
 amount distributed pursuant to this section and section 298.28 
 with respect to 1999 production; or 

    (2) if the production for the year prior to the 
 distribution year is less than 42,000,000 taxable tons, the 
 amount distributed pursuant to this section and section 298.28 
 with respect to 1999 production, reduced proportionately at the 
 rate of two percent for each 1,000,000 tons or part of 1,000,000 
 tons by which the production is less than 42,000,000 tons. 

    Subd. 2.  The money necessary for funding the difference 
 between the initial distribution made pursuant to section 298.28 
 and the amount guaranteed in subdivision 1 is appropriated in 
 equal proportions from the initial current year distributions to 
 the taconite environmental protection fund and to the Douglas J. 
 Johnson economic protection trust pursuant to section 298.28.  
 If the initial distributions to the taconite environmental 
 protection fund and the Douglas J. Johnson economic protection 
 trust are insufficient to fund the difference, the commissioner 
 of Iron Range Resources and Rehabilitation shall make the 
 payments of any remaining difference from the corpus of the 
 taconite environmental protection fund and the corpus of the 
 Douglas J. Johnson economic protection trust fund in equal 
 proportions as directed by the commissioner of revenue.  

    If a taconite producer ceases beneficiation operations 
 permanently and is required by a special law to make bond 
 payments for a school district, the Douglas J. Johnson economic 
 protection trust fund shall assume the payments of the taconite 
 producer if the producer ceases to make the needed payments.  
 The commissioner of Iron Range Resources and Rehabilitation 
 shall make these school bond payments from the corpus of the 
 Douglas J. Johnson economic protection trust fund in the amounts 
 certified by the commissioner of revenue.  

    HIST: 1977 c 423 art 10 s 23; 1Sp1981 c 1 art 10 s 13; 1982 c 
 523 art 30 s 1; 2Sp1982 c 2 s 1; 1984 c 502 art 7 s 13; 1985 c 
 300 s 22; 1Sp1985 c 14 art 10 s 14; 1986 c 441 s 10; 1Sp1986 c 3 
 art 2 s 37; 1998 c 389 art 10 s 8; 1Sp2001 c 5 art 6 s 20; 2002 
 c 377 art 8 s 5; 2003 c 127 art 11 s 12 

  298.226 Repealed, 1996 c 310 s 1 

TACONITE ECONOMIC DEVELOPMENT FUND

     298.227 Taconite economic development fund. 

    An amount equal to that distributed pursuant to each 
 taconite producer's taxable production and qualifying sales 
 under section 298.28, subdivision 9a, shall be held by the Iron 
 Range Resources and Rehabilitation Board in a separate taconite 
 economic development fund for each taconite and direct reduced 
 ore producer.  Money from the fund for each producer shall be 
 released by the commissioner after review by a joint committee 
 consisting of an equal number of representatives of the salaried 
 employees and the nonsalaried production and maintenance 
 employees of that producer.  The District 11 director of the 
 United States Steelworkers of America, on advice of each local 
 employee president, shall select the employee members.  In 
 nonorganized operations, the employee committee shall be elected 
 by the nonsalaried production and maintenance employees.  The 
 review must be completed no later than six months after the 
 producer presents a proposal for expenditure of the funds to the 
 committee.  The funds held pursuant to this section may be 
 released only for acquisition of equipment and facilities for 
 the producer or for research and development in Minnesota on new 
 mining, or taconite, iron, or steel production technology, but 
 only if the producer provides a matching expenditure to be used 
 for the same purpose of at least 50 percent of the distribution 
 based on 14.7 cents per ton beginning with distributions in 
 2002.  If a taconite production facility is sold after 
 operations at the facility had ceased, any money remaining in 
 the fund for the former producer may be released to the 
 purchaser of the facility on the terms otherwise applicable to 
 the former producer under this section.  If a producer fails to 
 provide matching funds for a proposed expenditure within six 
 months after the commissioner approves release of the funds, the 
 funds are available for release to another producer in 
 proportion to the distribution provided and under the conditions 
 of this section.  Any portion of the fund which is not released 
 by the commissioner within two years of its deposit in the fund 
 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 for 
 placement in their respective special accounts.  Two-thirds of 
 the unreleased funds shall be distributed to the taconite 
 environmental protection fund and one-third to the Douglas J. 
 Johnson economic protection trust fund. 

    HIST: 1992 c 511 art 9 s 8; 1993 c 375 art 16 s 1; 1994 c 587 
 art 6 s 2; 1995 c 264 art 7 s 2; 1996 c 471 art 12 s 1; 1Sp2001 
 c 5 art 6 s 21; 2003 c 127 art 11 s 12 

TAX ON TACONITE

AND IRON SULPHIDES

  298.23 Repealed, 1998 c 389 art 10 s 23 

     298.24 Tax on taconite and iron sulphides. 

    Subdivision 1.  (a) For concentrate produced in 2001, 2002, 
 and 2003, there is imposed upon taconite and iron sulphides, and 
 upon the mining and quarrying thereof, and upon the production 
 of iron ore concentrate therefrom, and upon the concentrate so 
 produced, a tax of $2.103 per gross ton of merchantable iron ore 
 concentrate produced therefrom.  

    (b) For concentrates produced in 2004 and subsequent years, 
 the tax rate shall be equal to the preceding year's tax rate 
 plus an amount equal to the preceding year's tax rate multiplied 
 by the percentage increase in the implicit price deflator from 
 the fourth quarter of the second preceding year to the fourth 
 quarter of the preceding year.  "Implicit price deflator" means 
 the implicit price deflator for the gross domestic product 
 prepared by the Bureau of Economic Analysis of the United States 
 Department of Commerce.  

    (c) On concentrates produced in 1997 and thereafter, an 
 additional tax is imposed equal to three cents per gross ton of 
 merchantable iron ore concentrate for each one percent that the 
 iron content of the product exceeds 72 percent, when dried at 
 212 degrees Fahrenheit. 

    (d) The tax shall be imposed on the average of the 
 production for the current year and the previous two years.  The 
 rate of the tax imposed will be the current year's tax rate.  
 This clause shall not apply in the case of the closing of a 
 taconite facility if the property taxes on the facility would be 
 higher if this clause and section 298.25 were not applicable.  

    (e) If the tax or any part of the tax imposed by this 
 subdivision is held to be unconstitutional, a tax of $2.103 per 
 gross ton of merchantable iron ore concentrate produced shall be 
 imposed.  

    (f) Consistent with the intent of this subdivision to 
 impose a tax based upon the weight of merchantable iron ore 
 concentrate, the commissioner of revenue may indirectly 
 determine the weight of merchantable iron ore concentrate 
 included in fluxed pellets by subtracting the weight of the 
 limestone, dolomite, or olivine derivatives or other basic flux 
 additives included in the pellets from the weight of the 
 pellets.  For purposes of this paragraph, "fluxed pellets" are 
 pellets produced in a process in which limestone, dolomite, 
 olivine, or other basic flux additives are combined with 
 merchantable iron ore concentrate.  No subtraction from the 
 weight of the pellets shall be allowed for binders, mineral and 
 chemical additives other than basic flux additives, or moisture. 

    (g)(1) Notwithstanding any other provision of this 
 subdivision, for the first two years of a plant's production of 
 direct reduced ore, no tax is imposed under this section.  As 
 used in this paragraph, "direct reduced ore" is ore that results 
 in a product that has an iron content of at least 75 percent.  
 For the third year of a plant's production of direct reduced 
 ore, the rate to be applied to direct reduced ore is 25 percent 
 of the rate otherwise determined under this subdivision.  For 
 the fourth such production year, the rate is 50 percent of the 
 rate otherwise determined under this subdivision; for the fifth 
 such production year, the rate is 75 percent of the rate 
 otherwise determined under this subdivision; and for all 
 subsequent production years, the full rate is imposed. 

    (2) Subject to clause (1), production of direct reduced ore 
 in this state is subject to the tax imposed by this section, but 
 if that production is not produced by a producer of taconite or 
 iron sulfides, the production of taconite or iron sulfides 
 consumed in the production of direct reduced iron in this state 
 is not subject to the tax imposed by this section on taconite or 
 iron sulfides. 

    Subd. 2.  There is hereby imposed upon taconite and iron 
 sulphides, and upon the mining and quarrying thereof, and upon 
 the production of iron ore concentrate therefrom, and upon the 
 tailings so produced an additional tax of 10 cents per 2,000 
 pounds of tailings produced.  For the purposes of this 
 subdivision tailings mean the solid and liquid waste materials 
 resulting from the beneficiation process. 

    The tax imposed by this subdivision shall only apply to 
 those tailings from a taconite facility which are not deposited 
 on land in accordance with permits issued by the Pollution 
 Control Agency and the Department of Natural Resources. 

    The proceeds of the tax imposed by this subdivision shall 
 be deposited in the general fund of the state. 

    Subd. 3. Repealed, 2003 c 127 art 11 s 13 

    Subd. 4. Repealed, 1992 c 511 art 9 s 33 

    HIST: 1941 c 375 s 2; 1947 c 93 s 2; 1951 c 613 s 1; 1969 c 
 1156 s 1; 1973 c 123 art 5 s 7; 1977 c 423 art 10 s 10,11; 1979 
 c 303 art 10 s 13; 1Sp1981 c 1 art 10 s 14; 1982 c 523 art 30 s 
 2; 1984 c 502 art 7 s 14,15,22 subd 2; 1984 c 655 art 2 s 23 
 subd 1; 1Sp1985 c 14 art 10 s 15; 1986 c 441 s 11; 1Sp1986 c 1 
 art 4 s 43; 1987 c 268 art 9 s 37; 1990 c 604 art 10 s 18; 1992 
 c 511 art 9 s 9; 1994 c 587 art 6 s 3; 1995 c 264 art 7 s 3; 
 1996 c 471 art 12 s 2; 1997 c 231 art 8 s 7; 1998 c 389 art 10 s 
 9; 1999 c 243 art 9 s 1; 2000 c 490 art 13 s 17; 1Sp2001 c 5 art 
 6 s 22 

  298.241 Repealed, 1977 c 423 art 10 s 31 

  298.242 Repealed, 1975 c 437 art 11 s 7 

  298.243 Repealed, 1977 c 423 art 10 s 31 

  298.244 Repealed, 1996 c 310 s 1 

     298.25 Taxes additional to other taxes. 

    The taxes imposed under section 298.24 shall be in addition 
 to the occupation tax imposed upon the business of mining and 
 producing iron ore.  Except as herein otherwise provided, such 
 taxes shall be in lieu of all other taxes upon such taconite, 
 iron sulphides, and direct reduced ore or the lands in which 
 they are contained, or upon the mining or quarrying thereof, or 
 the production of concentrate or direct reduced ore therefrom, 
 or upon the concentrate or direct reduced ore produced, or upon 
 the machinery, equipment, tools, supplies and buildings used in 
 such mining, quarrying or production, or upon the lands occupied 
 by, or used in connection with, such mining, quarrying or 
 production facilities.  If electric or steam power for the 
 mining, transportation or concentration of such taconite, 
 concentrates or direct reduced ore produced therefrom is 
 generated in plants principally devoted to the generation of 
 power for such purposes, the plants in which such power is 
 generated and all machinery, equipment, tools, supplies, 
 transmission and distribution lines used in the generation and 
 distribution of such power, shall be considered to be machinery, 
 equipment, tools, supplies and buildings used in the mining, 
 quarrying, or production of taconite, taconite concentrates or 
 direct reduced ore within the meaning of this section.  If part 
 of the power generated in such a plant is used for purposes 
 other than the mining or concentration of taconite or direct 
 reduced ore or the transportation or loading of taconite, the 
 concentrates thereof or direct reduced ore, a proportionate 
 share of the value of such generating facilities, equal to the 
 proportion that the power used for such other purpose bears to 
 the generating capacity of the plant, shall be subject to the 
 general property tax in the same manner as other property; 
 provided, power generated in such a plant and exchanged for an 
 equivalent amount of power which is used for the mining, 
 transportation, or concentration of such taconite, concentrates 
 or direct reduced ore produced therefrom, shall be considered as 
 used for such purposes within the meaning of this section.  
 Nothing herein shall prevent the assessment and taxation of the 
 surface of reserve land containing taconite and not occupied by 
 such facilities or used in connection therewith at the value 
 thereof without regard to the taconite or iron sulphides 
 therein, nor the assessment and taxation of merchantable iron 
 ore or other minerals, or iron-bearing materials other than 
 taconite or iron sulphides in such lands in the manner provided 
 by law, nor the assessment and taxation of facilities used in 
 producing sulphur or sulphur products from iron sulphide 
 concentrates, or in refining such sulphur products, under the 
 general property tax laws.  Nothing herein shall except from 
 general taxation or from taxation as provided by other laws any 
 property used for residential or townsite purposes, including 
 utility services thereto. 

    HIST: 1941 c 375 s 3; 1947 c 93 s 3; 1955 c 729 s 1; 1957 c 
 363 s 1; 1961 c 450 s 1; Ex1971 c 31 art 30 s 2; 1977 c 423 art 
 10 s 13; 1987 c 268 art 9 s 38; 1995 c 264 art 7 s 4 

     298.26 Tax on unmined taconite and iron sulphides. 

    In any year in which at least 1,000 tons of iron ore 
 concentrate is not produced from any 40-acre tract or 
 governmental lot containing taconite or iron sulphides, a tax 
 may be assessed upon the taconite or iron sulphides therein at 
 the local tax rate prevailing in the taxing district and spread 
 against the net tax capacity of the taconite or iron sulphides, 
 such net tax capacity to be determined in accordance with 
 existing laws.  The amount of the tax spread under authority of 
 this section by reason of the taconite and iron sulphides in any 
 tract of land shall not exceed $15 per acre. 

    HIST: 1941 c 375 s 4; 1947 c 93 s 4; 1977 c 423 art 10 s 14; 
 1988 c 719 art 5 s 84; 1989 c 329 art 13 s 20; 1Sp1989 c 1 art 2 
 s 11; 1994 c 587 art 5 s 16 

     298.27 Collection and payment of tax. 

    The taxes provided by section 298.24 shall be paid directly 
 to each eligible county and the Iron Range Resources and 
 Rehabilitation Board.  The commissioner of revenue shall notify 
 each producer of the amount to be paid each recipient prior to 
 February 15.  Every person subject to taxes imposed by section 
 298.24 shall file a correct report covering the preceding year.  
 The report must contain the information required by the 
 commissioner.  The report shall be filed by each producer on or 
 before February 1.  A remittance equal to 50 percent of the 
 total tax required to be paid hereunder shall be paid on or 
 before February 24.  A remittance equal to the remaining total 
 tax required to be paid hereunder shall be paid on or before 
 August 24.  On or before February 25 and August 25, the county 
 auditor shall make distribution of the payments previously 
 received by the county in the manner provided by section 
 298.28.  Reports shall be made and hearings held upon the 
 determination of the tax in accordance with procedures 
 established by the commissioner of revenue.  The commissioner of 
 revenue shall have authority to make reasonable rules as to the 
 form and manner of filing reports necessary for the 
 determination of the tax hereunder, and by such rules may 
 require the production of such information as may be reasonably 
 necessary or convenient for the determination and apportionment 
 of the tax.  All the provisions of the occupation tax law with 
 reference to the assessment and determination of the occupation 
 tax, including all provisions for appeals from or review of the 
 orders of the commissioner of revenue relative thereto, but not 
 including provisions for refunds, are applicable to the taxes 
 imposed by section 298.24 except in so far as inconsistent 
 herewith.  If any person subject to section 298.24 shall fail to 
 make the report provided for in this section at the time and in 
 the manner herein provided, the commissioner of revenue shall in 
 such case, upon information possessed or obtained, ascertain the 
 kind and amount of ore mined or produced and thereon find and 
 determine the amount of the tax due from such person.  There 
 shall be added to the amount of tax due a penalty for failure to 
 report on or before February 1, which penalty shall equal ten 
 percent of the tax imposed and be treated as a part thereof. 

    If any person responsible for making a tax payment at the 
 time and in the manner herein provided fails to do so, there 
 shall be imposed a penalty equal to ten percent of the amount so 
 due, which penalty shall be treated as part of the tax due. 

    In the case of any underpayment of the tax payment required 
 herein, there may be added and be treated as part of the tax due 
 a penalty equal to ten percent of the amount so underpaid. 

    A person having a liability of $120,000 or more during a 
 calendar year must remit all liabilities by means of a funds 
 transfer as defined in section 336.4A-104, paragraph (a).  The 
 funds transfer payment date, as defined in section 336.4A-401, 
 must be on or before the date the tax is due.  If the date the 
 tax is due is not a funds transfer business day, as defined in 
 section 336.4A-105, paragraph (a), clause (4), the payment date 
 must be on or before the funds transfer business day next 
 following the date the tax is due. 

    HIST: 1941 c 375 s 5; 1947 c 193 s 1; Ex1971 c 31 art 30 s 3; 
 1973 c 582 s 3; 1975 c 46 s 7; 1975 c 437 art 11 s 5; 1977 c 423 
 art 10 s 15; 1984 c 522 s 14; 1985 c 248 s 70; 1Sp1985 c 14 art 
 10 s 16; 1986 c 444; 1991 c 291 art 11 s 19; 1993 c 375 art 10 s 
 42; 1994 c 465 art 2 s 1; 2002 c 377 art 8 s 6; 2003 c 127 art 
 11 s 7 

     298.28 Division and distribution of proceeds. 

    Subdivision 1.  MS 1984 Renumbered 298.28 subds 
 1-12 

    Subdivision 1.    Distribution.  The proceeds of the 
 taxes collected under section 298.24, except the tax collected 
 under section 298.24, subdivision 2, shall, upon certification 
 of the commissioner of revenue, be allocated under subdivisions 
 2 to 12. 

    Subd. 1a.  Repealed, 1977 c 423 art 10 s 30 

    Subd. 2.  MS 1984 Renumbered 298.28 subd 13 

    Subd. 2.    City or town where quarried or produced.  (a)
 4.5 cents per gross ton of merchantable iron ore concentrate, 
 hereinafter referred to as "taxable ton," must be allocated to 
 the city or town in the county in which the lands from which 
 taconite was mined or quarried were located or within which the 
 concentrate was produced.  If the mining, quarrying, and 
 concentration, or different steps in either thereof 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 such subdivisions upon the basis of 
 attributing 40 percent of the proceeds of the tax to the 
 operation of mining or quarrying the taconite, 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 such taxing district.  The commissioner's 
 order making such apportionment shall be subject to review by 
 the Tax Court at the instance of any of the interested taxing 
 districts, in the same manner as other orders of the 
 commissioner. 

    (b) Four cents per taxable ton shall be allocated to cities 
 and organized townships affected by mining because their 
 boundaries are within three miles of a taconite mine pit that 
 has been actively mined in at least one of the prior three years.
 If a city or town is located near more than one mine meeting 
 these criteria, the city or town is eligible to receive aid 
 calculated from only the mine producing the largest taxable 
 tonnage.  When more than one municipality qualifies for aid 
 based on one company's production, the aid must be apportioned 
 among the municipalities in proportion to their populations.  Of 
 the amounts distributed under this paragraph to each 
 municipality, one-half must be used for infrastructure 
 improvement projects, and one-half must be used for projects in 
 which two or more municipalities cooperate.  Each municipality 
 that receives a distribution under this paragraph must report 
 annually to the Iron Range Resources and Rehabilitation Board 
 and the commissioner of iron range resources and rehabilitation 
 on the projects involving cooperation with other municipalities. 

    Subd. 3.  MS 1984 Renumbered 298.23 subd 14 

    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. 

    Subd. 4.    School districts.  (a) 17.15 cents per 
 taxable ton plus the increase provided in paragraph (d) must be 
 allocated to qualifying school districts to be distributed, 
 based upon the certification of the commissioner of revenue, 
 under paragraphs (b) and (c), except as otherwise provided in 
 paragraph (f). 

    (b) 3.43 cents per taxable ton must be distributed to the 
 school districts in which the lands from which taconite was 
 mined or quarried were located or within which the concentrate 
 was produced.  The distribution must be based on the 
 apportionment formula prescribed in subdivision 2. 

    (c)(i) 13.72 cents per taxable ton, less any amount 
 distributed under paragraph (e), shall be distributed to a group 
 of school districts comprised of those school districts which 
 qualify as a tax relief area under section 273.134, paragraph 
 (b), or in which there is a qualifying municipality as defined 
 by section 273.134, paragraph (a), 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.  

    (ii) Notwithstanding clause (i), each school district that 
 receives a distribution under sections 298.018; 298.23 to 
 298.28, exclusive of any amount received under this clause; 
 298.34 to 298.39; 298.391 to 298.396; 298.405; or any law 
 imposing a tax on severed mineral values after reduction for any 
 portion distributed to cities and towns under section 126C.48, 
 subdivision 8, paragraph (5), that is less than the amount of 
 its levy reduction under section 126C.48, subdivision 8, for the 
 second year prior to the year of the distribution shall receive 
 a distribution equal to the difference; the amount necessary to 
 make this payment shall be derived from proportionate reductions 
 in the initial distribution to other school districts under 
 clause (i).  

    (d) Any school district described in paragraph (c) where a 
 levy increase pursuant to section 126C.17, subdivision 9, was 
 authorized by referendum for taxes payable in 2001, shall 
 receive a distribution of 21.3 cents per ton.  Each district 
 shall receive $175 times the pupil units identified in section 
 126C.05, subdivision 1, enrolled in the second previous year or 
 the 1983-1984 school year, whichever is greater, less the 
 product of 1.8 percent times the district's taxable net tax 
 capacity in the second previous year. 

    If the total amount provided by paragraph (d) is 
 insufficient to make the payments herein required then the 
 entitlement of $175 per pupil unit shall be reduced uniformly so 
 as not to exceed the funds available.  Any amounts received by a 
 qualifying school district in any fiscal year pursuant to 
 paragraph (d) shall not be applied to reduce general education 
 aid which the district receives pursuant to section 126C.13 or 
 the permissible levies of the district.  Any amount remaining 
 after the payments provided in this paragraph shall be paid to 
 the commissioner of Iron Range Resources and Rehabilitation who 
 shall deposit the same in the taconite environmental protection 
 fund and the Douglas J. Johnson economic protection trust fund 
 as provided in subdivision 11. 

    Each district receiving money according to this paragraph 
 shall reserve the lesser of the amount received under this 
 paragraph or $25 times the number of pupil units served in the 
 district.  It may use the money for early childhood programs or 
 for outcome-based learning programs that enhance the academic 
 quality of the district's curriculum.  The outcome-based 
 learning programs must be approved by the commissioner of 
 education. 

    (e) There shall be distributed to any school district the 
 amount which the school district was entitled to receive under 
 section 298.32 in 1975. 

    (f) Effective for the distribution in 2003 only, five 
 percent of the distributions to school districts under 
 paragraphs (b), (c), and (e); subdivision 6, paragraph (c); 
 subdivision 11; and section 298.225, shall be distributed to the 
 general fund.  The remainder less any portion distributed to 
 cities and towns under section 126C.48, subdivision 8, paragraph 
 (5), shall be distributed to the Douglas J. Johnson economic 
 protection trust fund created in section 298.292.  Fifty percent 
 of the amount distributed to the Douglas J. Johnson economic 
 protection trust fund shall be made available for expenditure 
 under section 298.293 as governed by section 298.296.  Effective 
 in 2003 only, 100 percent of the distributions to school 
 districts under section 477A.15 less any portion distributed to 
 cities and towns under section 126C.48, subdivision 8, paragraph 
 (5), shall be distributed to the general fund. 

    Subd. 5.    Counties.  (a) 26.05 cents per taxable ton 
 is allocated to counties to be distributed, based upon 
 certification by the commissioner of revenue, under paragraphs 
 (b) to (d). 

    (b) 20.525 cents per taxable ton shall be distributed to 
 the county in which the taconite is mined or quarried or in 
 which the concentrate is produced, less any amount which is to 
 be distributed pursuant to paragraph (c).  The apportionment 
 formula prescribed in subdivision 2 is the basis for the 
 distribution. 

    (c) If an electric power plant owned by and providing the 
 primary source of power for a taxpayer mining and concentrating 
 taconite is located in a county other than the county in which 
 the mining and the concentrating processes are conducted, one 
 cent per taxable ton of the tax distributed to the counties 
 pursuant to paragraph (b) and imposed on and collected from such 
 taxpayer shall be paid to the county in which the power plant is 
 located. 

    (d) 5.525 cents per taxable ton shall be paid to the county 
 from which the taconite was mined, quarried or concentrated to 
 be deposited in the county road and bridge fund.  If the mining, 
 quarrying and concentrating, or separate steps in any of those 
 processes are carried on in more than one county, the 
 commissioner shall follow the apportionment formula prescribed 
 in subdivision 2. 

    Subd. 6.    Property tax relief.  (a) In 2002 and 
 thereafter, 33.9 cents per taxable ton, less any amount required 
 to be distributed under paragraphs (b) and (c), must be 
 allocated to St. Louis County acting as the counties' fiscal 
 agent, to be distributed as provided in sections 273.134 to 
 273.136. 

    (b) If an electric power plant owned by and providing the 
 primary source of power for a taxpayer mining and concentrating 
 taconite is located in a county other than the county in which 
 the mining and the concentrating processes are conducted, .1875 
 cent per taxable ton of the tax imposed and collected from such 
 taxpayer shall be paid to the county. 

    (c) If an electric power plant owned by and providing the 
 primary source of power for a taxpayer mining and concentrating 
 taconite is located in a school district other than a school 
 district in which the mining and concentrating processes are 
 conducted, .4541 cent per taxable ton of the tax imposed and 
 collected from the taxpayer shall be paid to the school district.

    Subd. 7.    Iron Range Resources and Rehabilitation Board. 
  For the 1998 distribution, 6.5 cents per taxable ton shall be 
 paid to the Iron Range Resources and Rehabilitation Board for 
 the purposes of section 298.22.  That amount shall be increased 
 in 1999 and subsequent years in the same proportion as the 
 increase in the implicit price deflator as provided in section 
 298.24, subdivision 1.  The amount distributed pursuant to this 
 subdivision shall be expended within or for the benefit of the 
 taconite assistance area defined in section 273.1341.  No part 
 of the fund provided in this subdivision may be used to provide 
 loans for the operation of private business unless the loan is 
 approved by the governor. 

    Subd. 8.    Range Association of Municipalities and 
 Schools.  .20 cent per taxable ton shall be paid to the Range 
 Association of Municipalities and Schools, for the purpose of 
 providing an areawide approach to problems which demand 
 coordinated and cooperative actions and which are common to 
 those areas of northeast Minnesota affected by operations 
 involved in mining iron ore and taconite and producing 
 concentrate therefrom, and for the purpose of promoting the 
 general welfare and economic development of the cities, towns 
 and school districts within the iron range area of northeast 
 Minnesota. 

    Subd. 9.    Douglas J. Johnson economic protection trust 
 fund.  In 1999, 3.35 cents per taxable ton shall be paid to 
 the Douglas J. Johnson economic protection trust fund.  

    Subd. 9a.    Taconite economic development fund.  (a) 
 30.1 cents per ton for distributions in 2002 and thereafter must 
 be paid to the taconite economic development fund.  No 
 distribution shall be made under this paragraph in 2004 or any 
 subsequent year in which total industry production falls below 
 30 million tons.  Distribution shall only be made to a taconite 
 producer's fund under section 298.227 if the producer timely 
 pays its tax under section 298.24 by the dates provided under 
 section 298.27, or pursuant to the due dates provided by an 
 administrative agreement with the commissioner. 

    (b) An amount equal to 50 percent of the tax under section 
 298.24 for concentrate sold in the form of pellet chips and 
 fines not exceeding 5/16 inch in size and not including crushed 
 pellets shall be paid to the taconite economic development 
 fund.  The amount paid shall not exceed $700,000 annually for 
 all companies.  If the initial amount to be paid to the fund 
 exceeds this amount, each company's payment shall be prorated so 
 the total does not exceed $700,000. 

    Subd. 9b.    Taconite environmental fund.  Five cents 
 per ton for distributions in 1999, 2000, 2001, 2002, and 2003 
 must be paid to the taconite environmental fund for use under 
 section 298.2961.  

    Subd. 10.    Increase.  Beginning with distributions in 
 2000, the amount determined under subdivision 9 shall be 
 increased in the same proportion as the increase in the implicit 
 price deflator as provided in section 298.24, subdivision 1.  
 Beginning with distributions in 2003, the amount determined 
 under subdivision 6, paragraph (a), shall be increased in the 
 same proportion as the increase in the implicit price deflator 
 as provided in section 298.24, subdivision 1.  

    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), (d), and (e) 
 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. 

    (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. 

    (e) In 2003 only, $100,000 must be distributed to a 
 township located in a taconite tax relief area as defined in 
 section 273.134, paragraph (a), that received $119,259 of 
 homestead and agricultural credit aid and $182,014 in local 
 government aid in 2001. 

    Subd. 11a.    Prorated distributions.  For production 
 years 1994 through 1999, distributions under this section that 
 are based on a number of cents per ton explicitly provided in 
 this section shall be reduced on a pro rata basis to reflect the 
 reduction in tax proceeds as a result of the tax rate reduction 
 applied to direct reduced ore under section 298.24, subdivision 
 1, paragraph (f). 

    Subd. 12.    Estimates.  On or before October 10 of each 
 calendar year each producer of taconite or iron sulphides 
 subject to taxation under section 298.24 (hereinafter called 
 "taxpayer") shall file with the commissioner of revenue an 
 estimate of the amount of tax which would be payable by such 
 taxpayer under said law for such calendar year; provided such 
 estimate shall be in an amount not less than the amount due on 
 the mining and production of concentrates up to September 30 of 
 said year plus the amount becoming due because of probable 
 production between September 30 and December 31 of said year, 
 less any credit allowable as provided in subdivision 13.  The 
 commissioner of revenue shall annually on or before October 10 
 report an estimated distribution amount to each taxing district 
 and the officers with whom such report is so filed shall use the 
 amount so indicated as being distributable to each taxing 
 district in computing the permissible tax levy of such county or 
 city in the year in which such estimate is made, and payable in 
 the next ensuing calendar year, except that one cent per taxable 
 ton of the amount distributed under subdivision 5, paragraph 
 (d), shall not be deducted in calculating the permissible levy.  
 In any calendar year in which a general property tax levy has 
 been made, if the taxes distributable to any such county or city 
 are greater than the amount estimated by the commissioner to be 
 paid to any such county or city in such year, the excess of such 
 distribution shall be held in a special fund by the county or 
 city and shall not be expended until the succeeding calendar 
 year, and shall be included in computing the permissible levies 
 of such county or city payable in such year.  If the amounts 
 distributable to any such county or city after final 
 determination by the commissioner of revenue under this section 
 are less than the amounts by which a taxing district's levies 
 were reduced pursuant to this section, such county or city may 
 issue certificates of indebtedness in the amount of the 
 shortage, and may include in its next tax levy an amount 
 sufficient to pay such certificates of indebtedness and interest 
 thereon, or, if no certificates were issued, an amount equal to 
 such shortage. 

    Subd. 13.    Deduction for credits; payment.  In 
 determining the distributions and payments of the proceeds of 
 the tax collected under section 298.24, the commissioner of 
 revenue shall deduct the amount of any credits authorized under 
 section 298.24, subdivision 3, against the tax imposed under 
 subdivision 1 of said section, from the amount which would 
 otherwise have been paid to the Iron Range Resources and 
 Rehabilitation Board for credit to the Douglas J. Johnson 
 economic protection trust fund.  

    Subd. 14. Repealed, 1987 c 268 art 9 s 43 

    Subd. 15.    Distribution of delayed payments.  
 Notwithstanding any other provision of this section or any other 
 law, if payment of taxes collected under section 298.24 is 
 delayed past the due date because the taxpayer is a debtor in a 
 pending bankruptcy proceeding, the amount paid shall be 
 distributed as follows when received:  

    (1) 50 percent to St. Louis County acting as the counties' 
 fiscal agent, to be distributed as provided in sections 273.134 
 to 273.136; 

    (2) 25 percent to the Douglas J. Johnson economic 
 protection trust fund; and 

    (3) 25 percent to the taconite environmental protection 
 fund.  

    HIST: 1941 c 375 s 6; 1947 c 193 s 2; 1955 c 728 s 1; 1959 c 
 158 s 26; 1959 c 677 s 1; 1965 c 698 s 1; 1969 c 399 s 49; 1969 
 c 1156 s 2; 1971 c 736 s 1,2; Ex1971 c 31 art 35 s 2; 1973 c 123 
 art 5 s 7; 1973 c 582 s 3; 1973 c 631 s 6; 1975 c 46 s 8; 1976 c 
 134 s 78; 1977 c 307 s 29; 1977 c 423 art 10 s 16; 1978 c 721 
 art 9 s 3; 1978 c 764 s 113; 1978 c 793 s 70; 1980 c 607 art 7 s 
 5; 1981 c 358 art 1 s 43; 1Sp1981 c 1 art 10 s 15,16; 1982 c 523 
 art 41 s 1; 1982 c 548 art 1 s 15; 2Sp1982 c 2 s 2,3; 1983 c 216 
 art 1 s 50; 1983 c 314 art 1 s 22; 1984 c 463 art 1 s 12; 1984 c 
 502 art 7 s 16; 1984 c 522 s 15; 1985 c 300 s 23; 1Sp1985 c 12 
 art 1 s 33; 1Sp1985 c 14 art 10 s 17,18; 1986 c 441 s 12; 1986 c 
 444; 1Sp1986 c 1 art 4 s 44; 1Sp1986 c 3 art 2 s 38; 1987 c 268 
 art 9 s 39-42; 1988 c 486 s 91; 1988 c 719 art 5 s 45,84; art 19 
 s 19; 1989 c 277 art 2 s 47; art 4 s 27; 1989 c 329 art 13 s 20; 
 1Sp1989 c 1 art 3 s 27; art 5 s 20; 1990 c 480 art 7 s 25; 1990 
 c 562 art 7 s 11; 1991 c 130 s 37; 1991 c 265 art 1 s 27; 1991 c 
 356 art 4 s 2-4,6; 1992 c 499 art 8 s 23; art 12 s 29; 1992 c 
 511 art 9 s 10; 1993 c 224 art 1 s 31; 1993 c 369 s 111; 1993 c 
 375 art 16 s 2-5; 1Sp1993 c 6 s 31; 1994 c 416 art 1 s 41; 1994 
 c 587 art 6 s 4,5; 1995 c 264 art 7 s 5; 1Sp1995 c 3 art 16 s 
 13; 1996 c 471 art 12 s 3-5; 1997 c 231 art 8 s 8,9; 1998 c 389 
 art 10 s 10-19; 1998 c 397 art 11 s 3; 1999 c 243 art 9 s 2,3; 
 1Sp2001 c 5 art 6 s 23-28; 2002 c 377 art 8 s 7-13; 2003 c 127 
 art 11 s 8,12; 1Sp2003 c 9 art 5 s 30; 1Sp2003 c 21 art 11 s 
 24,25 

  298.281 Repealed, 1977 c 423 art 10 s 30 

     298.282 Distribution of taconite municipal aid account; 
  taconite municipal aid; payment. 

    Subdivision 1.  The amount deposited with the county as 
 provided in section 298.28, subdivision 3, must be distributed 
 as provided by this section among the municipalities comprising 
 a tax relief area under section 273.134, paragraph (b), each 
 being referred to in this section as a qualifying municipality. 

    Subd. 2.  (a) Each year following the final determination 
 of the amount of taxes payable under section 298.24, the 
 commissioner of revenue shall determine the amount in the 
 taconite municipal aid account as of July 1 of that year and the 
 amount to be distributed to each qualifying municipality during 
 the year.  The amount to be distributed to each qualifying 
 municipality shall be determined by determining an index for 
 each qualifying municipality by subtracting its local effort tax 
 rate, multiplied by its equalized gross tax capacity, from its 
 fiscal need factor.  For the purposes of this subdivision, the 
 following terms have the meanings given them herein.  A 
 municipality's "local effort tax rate" means its fiscal need 
 factor per capita divided by $21 per capita for each one percent 
 of the gross local tax rate or $17 per capita for each one 
 percent of the net local tax rate for the first $350 of its 
 fiscal need factor per capita; plus its fiscal need factor per 
 capita divided by $18 per capita for each one percent of the 
 gross local tax rate or $15 per capita for each one percent of 
 the net local tax rate on that part of its fiscal need factor 
 per capita, if any, in excess of $350.  In no case shall a 
 municipality's local effort tax rate be less than a gross local 
 tax rate of 6.56 percent or a net local tax rate of 8.16 
 percent.  A municipality's "equalized gross tax capacity" means 
 its previous year tax capacity, less the tax capacity in any tax 
 increment district, divided by the municipality's aggregate 
 sales ratio covering the period ending two years prior to the 
 year of aid distribution.  A municipality's "fiscal need factor" 
 means the three-year average of the sum of its municipal levy, 
 taconite aids received under section 298.28, subdivisions 2, 11, 
 paragraph (b), and this section and its local government aid 
 distribution amount, for taxes payable and distribution amounts 
 receivable in the three years immediately preceding the aid 
 distribution year.  

    The ratio of the resulting index for each qualifying 
 municipality to the sum of all qualifying municipalities' 
 indexes shall be multiplied by the total amount in the taconite 
 municipal aid account less the amount distributed pursuant to 
 subdivision 5.  

    (b) If the distribution under this section, sections 
 273.138, 298.26 and 298.28, and chapter 477A, to any 
 municipality would exceed that municipality's levy for that 
 year, the amount in excess of the levy for that year shall 
 reduce the amount distributed to the municipality under this 
 section and this excess amount shall be distributed to the other 
 qualifying municipalities in the same manner as the distribution 
 made pursuant to subdivision 2, except that the qualifying 
 municipality receiving an initial distribution when added to 
 that received pursuant to sections 273.138, 298.26, 298.28, and 
 chapter 477A in excess of the qualifying municipality's levy, 
 shall not receive a distribution nor shall its index be used in 
 computing the distribution pursuant to this clause.  The 
 distributions to be received in the year in which the taxes are 
 payable shall be compared to the levy for that same year.  Upon 
 completion of the determination, the commissioner of revenue 
 shall certify to the chief clerical officer of each qualifying 
 municipality the amount which will be distributed to the 
 municipality from the taconite municipal aid account that year. 

    Subd. 3.  If the amount certified by the commissioner of 
 revenue as distributable to any qualifying municipality is 
 greater than the amount previously estimated to have been 
 distributable to such qualifying municipality in such year, the 
 excess distributed to such municipality shall be held in a 
 separate fund by the qualifying municipality and shall not be 
 expended until the succeeding calendar year.  If the amount 
 distributable to any qualifying municipality, after final 
 determination by the commissioner of revenue is less than the 
 amount estimated to have been distributable to such qualifying 
 municipality, such municipality may issue certificates of 
 indebtedness in the amount of the shortage and may include in 
 its next tax levy an amount sufficient to pay such certificates 
 of indebtedness and interest thereon or, if no certificates were 
 issued, an amount equal to such shortage. 

    Subd. 4.  On or before September 15 of each year, the 
 county auditor shall issue a warrant in favor of the treasurer 
 of each qualifying municipality in the amount determined by the 
 commissioner of revenue to be due and payable to such qualifying 
 municipality in such year.  

    Subd. 5.  The county auditor shall annually on September 15 
 make a payment from the taconite municipal aid fund to cities 
 and towns for the purpose of replacing the revenue loss to them 
 resulting from Laws 1975, chapter 437, article XI, section 7.  
 The amount of aid to be paid annually to each city and town is 
 the amount they were entitled to receive for 1975 under the 
 provisions of Minnesota Statutes 1974, section 298.32. 

    HIST: Ex1971 c 31 art 30 s 6; 1973 c 492 s 14; 1973 c 582 s 3; 
 1973 c 631 s 7-9; 1975 c 46 s 10; 1976 c 328 s 1,2; 1977 c 423 
 art 10 s 17,18; 1978 c 767 s 35; 1984 c 522 s 16; 1Sp1985 c 14 
 art 10 s 19-21; 1986 c 441 s 13; 1986 c 444; 1987 c 384 art 2 s 
 1; 1988 c 719 art 5 s 84; 1989 c 277 art 4 s 28; 1989 c 329 art 
 13 s 20; 1Sp1989 c 1 art 2 s 11; art 5 s 21,22; 1Sp2001 c 5 art 
 6 s 29 

     298.283 Change of status of municipality; date for 
  determining status.  

    If any qualifying municipality as defined in section 
 298.282, is consolidated with another municipality or part 
 thereof, the secretary of state shall certify that fact to the 
 commissioner of revenue, who shall determine the amounts payable 
 to the consolidated municipality according to the combined 
 population resulting, for the purpose of determining aid payable 
 under the provisions of section 298.282.  The determination of 
 amounts payable under the provisions of section 298.282 shall 
 however be based on the status of the municipality on January 1 
 of each year.  

    HIST: Ex 1971 c 31 art 30 s 7; 1973 c 582 s 3; 1973 c 631 s 10 

     298.285 State aid amount; appropriation. 

    The commissioner of revenue shall determine a state aid 
 amount equal to a tax of 33 cents per taxable ton of iron ore 
 concentrates for production your 2001 and 22 cents per taxable 
 ton of iron ore concentrates for production years 2002 and 
 thereafter.  There is appropriated from the general fund to the 
 commissioner an amount equal to the state aid determined under 
 this section.  It must be distributed under section 298.28, as 
 if the aid were production tax revenues. 

    HIST: 1Sp2001 c 5 art 6 s 39 

  298.29 Renumbered 117.46 

DOUGLAS J. JOHNSON ECONOMIC

PROTECTION TRUST FUND ACT

     298.291 Citation. 

    Sections 298.291 to 298.294 shall be known as the "Douglas 
 J. Johnson Economic Protection Trust Fund Act." 

    HIST: 1977 c 423 art 10 s 25; 2Sp1982 c 2 s 4; 2002 c 377 art 
 8 s 14 

     298.292 Policy. 

    Subdivision 1.    Purposes.  The legislature is 
 cognizant of the severe economic dislocations and widespread 
 unemployment that result when a single industry on which an area 
 is largely dependent, experiences a drastic reduction in 
 activity.  The Douglas J. Johnson economic protection trust fund 
 is hereby created to be devoted to economic rehabilitation and 
 diversification of industrial enterprises where these conditions 
 ensue as the result of the decline of such a single industry.  
 Priority shall be given to using the Douglas J. Johnson economic 
 protection trust fund for the following purposes:  

    (1) projects and programs that are designed to create and 
 maintain productive, permanent, skilled employment, including 
 employment in technologically innovative businesses; 

    (2) projects and programs to encourage diversification of 
 the economy and to promote the development of minerals, 
 alternative energy sources utilizing indigenous fuels, forestry, 
 small business, and tourism; and 

    (3) projects and programs for which technological and 
 economic feasibility have been demonstrated. 

    Subd. 2.    Use of money.  Money in the Douglas J. 
 Johnson economic protection trust fund may be used for the 
 following purposes:  

    (1) to provide loans, loan guarantees, interest buy-downs 
 and other forms of participation with private sources of 
 financing, but a loan to a private enterprise shall be for a 
 principal amount not to exceed one-half of the cost of the 
 project for which financing is sought, and the rate of interest 
 on a loan to a private enterprise shall be no less than the 
 lesser of eight percent or an interest rate three percentage 
 points less than a full faith and credit obligation of the 
 United States government of comparable maturity, at the time 
 that the loan is approved; 

    (2) to fund reserve accounts established to secure the 
 payment when due of the principal of and interest on bonds 
 issued pursuant to section 298.2211; 

    (3) to pay in periodic payments or in a lump sum payment 
 any or all of the interest on bonds issued pursuant to chapter 
 474 for the purpose of constructing, converting, or retrofitting 
 heating facilities in connection with district heating systems 
 or systems utilizing alternative energy sources; and 

    (4) to invest in a venture capital fund or enterprise that 
 will provide capital to other entities that are engaging in, or 
 that will engage in, projects or programs that have the purposes 
 set forth in subdivision 1.  No investments may be made in a 
 venture capital fund or enterprise unless at least two other 
 unrelated investors make investments of at least $500,000 in the 
 venture capital fund or enterprise, and the investment by the 
 Douglas J. Johnson economic protection trust fund may not exceed 
 the amount of the largest investment by an unrelated investor in 
 the venture capital fund or enterprise.  For purposes of this 
 subdivision, an "unrelated investor" is a person or entity that 
 is not related to the entity in which the investment is made or 
 to any individual who owns more than 40 percent of the value of 
 the entity, in any of the following relationships:  spouse, 
 parent, child, sibling, employee, or owner of an interest in the 
 entity that exceeds ten percent of the value of all interests in 
 it.  For purposes of determining the limitations under this 
 clause, the amount of investments made by an investor other than 
 the Douglas J. Johnson economic protection trust fund is the sum 
 of all investments made in the venture capital fund or 
 enterprise during the period beginning one year before the date 
 of the investment by the Douglas J. Johnson economic protection 
 trust fund.  

    Money from the trust fund shall be expended only in or for 
 the benefit of the taconite assistance area defined in section 
 273.1341. 

    HIST: 1977 c 423 art 10 s 26; 2Sp1982 c 2 s 5; 1983 c 46 s 1; 
 1983 c 357 s 2; 1Sp1985 c 14 art 10 s 22; 1987 c 386 art 8 s 2; 
 1Sp2001 c 5 art 6 s 30; 2003 c 127 art 11 s 9,12; 1Sp2003 c 21 
 art 11 s 26 

     298.293 Expending funds. 

    The funds provided by section 298.28, subdivision 11, 
 relating to the Douglas J. Johnson economic protection trust 
 fund, except money expended pursuant to Laws 1982, Second 
 Special Session, chapter 2, sections 8 to 14, shall be expended 
 only in an amount that does not exceed the sum of the net 
 interest, dividends, and earnings arising from the investment of 
 the trust for the preceding 12 calendar months from the date of 
 the authorization plus, for fiscal year 1983, $10,000,000 from 
 the corpus of the fund.  The funds may be spent only in or for 
 the benefit of the taconite assistance area as defined in 
 section 273.1341.  If during any year the taconite property tax 
 account under sections 273.134 to 273.136 does not contain 
 sufficient funds to pay the property tax relief specified in 
 Laws 1977, chapter 423, article X, section 4, there is 
 appropriated from this trust fund to the relief account 
 sufficient funds to pay the relief specified in Laws 1977, 
 chapter 423, article X, section 4. 

    HIST: 1977 c 423 art 10 s 27; 1978 c 721 art 9 s 4; 2Sp1982 c 
 2 s 6; 1983 c 46 s 2; 1Sp1985 c 14 art 10 s 23; 1Sp2001 c 5 art 
 6 s 31; 1Sp2003 c 21 art 11 s 12,27 

     298.294 Investment of fund. 

    The trust fund established by section 298.292 shall be 
 invested pursuant to law by the State Board of Investment and 
 the net interest, dividends, and other earnings arising from the 
 investments shall be transferred on the first day of each month 
 to the trust and shall be included and become part of the trust 
 fund.  The amounts transferred, including the interest, 
 dividends, and other earnings earned prior to July 13, 1982, 
 together with the additional amount of $10,000,000 for fiscal 
 year 1983, which is appropriated April 21, 1983, are 
 appropriated from the trust fund to the commissioner of iron 
 range resources and rehabilitation for deposit in a separate 
 account for expenditure for the purposes set forth in section 
 298.292.  Amounts appropriated pursuant to this section shall 
 not cancel but shall remain available unless expended.  

    HIST: 1977 c 423 art 10 s 28; 3Sp1981 c 2 art 7 s 6; 2Sp1982 c 
 2 s 7; 1983 c 46 s 3 

  298.295 Repealed, 1983 c 46 s 8 

     298.296 Operation of fund. 

    Subdivision 1.    Project approval.  The board shall by 
 August 1 of each year prepare a list of projects to be funded 
 from the northeast Minnesota economic protection trust with 
 necessary supporting information including description of the 
 projects, plans, and cost estimates.  These projects shall be 
 consistent with the priorities established in section 298.292 
 and shall not be approved by the board unless it finds that:  

    (a) the project will materially assist, directly or 
 indirectly, the creation of additional long-term employment 
 opportunities; 

    (b) the prospective benefits of the expenditure exceed the 
 anticipated costs; and 

    (c) in the case of assistance to private enterprise, the 
 project will serve a sound business purpose.  

    To be proposed by the board, a project must be approved by 
 at least eight Iron Range Resources and Rehabilitation Board 
 members and the commissioner of iron range resources and 
 rehabilitation.  The list of projects shall be submitted to the 
 governor, who shall, by November 15 of each year, approve or 
 disapprove, or return for further consideration, each project.  
 The money for a project may be expended only upon approval of 
 the project by the governor.  The board may submit supplemental 
 projects for approval at any time.  

    Subd. 2.    Expenditure of funds.  (a) Before January 1, 
 2028, funds may be expended on projects and for administration 
 of the trust fund only from the net interest, earnings, and 
 dividends arising from the investment of the trust at any time, 
 including net interest, earnings, and dividends that have arisen 
 prior to July 13, 1982, plus $10,000,000 made available for use 
 in fiscal year 1983, except that any amount required to be paid 
 out of the trust fund to provide the property tax relief 
 specified in Laws 1977, chapter 423, article X, section 4, and 
 to make school bond payments and payments to recipients of 
 taconite production tax proceeds pursuant to section 298.225, 
 may be taken from the corpus of the trust.  

    (b) Additionally, upon recommendation by the board, up to 
 $13,000,000 from the corpus of the trust may be made available 
 for use as provided in subdivision 4, and up to $10,000,000 from 
 the corpus of the trust may be made available for use as 
 provided in section 298.2961.  

    (c) Additionally, an amount equal to 20 percent of the 
 value of the corpus of the trust on May 18, 2002, not including 
 the funds authorized in paragraph (b), plus the amounts made 
 available under section 298.28, subdivision 4, and Laws 2002, 
 chapter 377, article 8, section 17, may be expended on 
 projects.  Funds may be expended for projects under this 
 paragraph only if the project: 

    (1) is for the purposes established under section 298.292, 
 subdivision 1, clause (1) or (2); and 

    (2) is approved by the board upon an affirmative vote of at 
 least ten of its members. 

 No money made available under this paragraph or paragraph (d) 
 can be used for administrative or operating expenses of the Iron 
 Range Resources and Rehabilitation Board or expenses relating to 
 any facilities owned or operated by the board on May 18, 2002. 

    (d) Upon recommendation by a unanimous vote of all members 
 of the board, amounts in addition to those authorized under 
 paragraphs (a), (b), and (c) may be expended on projects 
 described in section 298.292, subdivision 1. 

    (e) Annual administrative costs, not including detailed 
 engineering expenses for the projects, shall not exceed five 
 percent of the net interest, dividends, and earnings arising 
 from the trust in the preceding fiscal year.  

    (f) Principal and interest received in repayment of loans 
 made pursuant to this section, and earnings on other investments 
 made under section 298.292, subdivision 2, clause (4), shall be 
 deposited in the state treasury and credited to the trust.  
 These receipts are appropriated to the board for the purposes of 
 sections 298.291 to 298.298. 

    Subd. 3.    Administration.  The commissioner and staff 
 of the Iron Range Resources and Rehabilitation Board shall 
 administer the program under which funds are expended pursuant 
 to sections 298.292 to 298.298.  

    Subd. 4.    Temporary loan authority.  (a) The board may 
 recommend that up to $7,500,000 from the corpus of the trust may 
 be used for loans, loan guarantees, grants, or equity 
 investments as provided in this subdivision.  The money would be 
 available for loans for construction and equipping of facilities 
 constituting (1) a value added iron products plant, which may be 
 either a new plant or a facility incorporated into an existing 
 plant that produces iron upgraded to a minimum of 75 percent 
 iron content or any iron alloy with a total minimum metallic 
 content of 90 percent; or (2) a new mine or minerals processing 
 plant for any mineral subject to the net proceeds tax imposed 
 under section 298.015.  A loan or loan guarantee under this 
 paragraph may not exceed $5,000,000 for any facility.  

    (b) Additionally, the board must reserve the first 
 $2,000,000 of the net interest, dividends, and earnings arising 
 from the investment of the trust after June 30, 1996, to be used 
 for grants, loans, loan guarantees, or equity investments for 
 the purposes set forth in paragraph (a).  This amount must be 
 reserved until it is used as described in this subdivision. 

    (c) Additionally, the board may recommend that up to 
 $5,500,000 from the corpus of the trust may be used for 
 additional grants, loans, loan guarantees, or equity investments 
 for the purposes set forth in paragraph (a). 

    (d) The board may require that it receive an equity 
 percentage in any project to which it contributes under this 
 section. 

    HIST: 2Sp1982 c 2 s 9; 1983 c 46 s 4; 1984 c 654 art 2 s 121; 
 1987 c 386 art 8 s 3; 1993 c 369 s 112; 1994 c 587 art 6 s 6,7; 
 1995 c 264 art 7 s 6; 1996 c 471 art 12 s 6,7; 1997 c 231 art 8 
 s 10; 1998 c 389 art 10 s 20; 1999 c 243 art 9 s 4; 1Sp2001 c 5 
 art 6 s 32; 2002 c 377 art 8 s 15; 2003 c 127 art 11 s 10 

     298.2961 Producer grants. 

    Subdivision 1.    Appropriation.  (a) $10,000,000 is 
 appropriated from the Douglas J. Johnson economic protection 
 trust fund to a special account in the taconite area 
 environmental protection fund for grants to producers on a 
 project-by-project basis as provided in this section. 

    (b) The proceeds of the tax designated under section 
 298.28, subdivision 9b, are appropriated for grants to producers 
 on a project-by-project basis as provided in this section. 

    Subd. 2.    Projects; approval.  (a) Projects funded 
 must be for: 

    (1) environmentally unique reclamation projects; 

    (2) pit or plant repairs, expansions, or modernizations 
 other than for a value added iron products plant; or 

    (3) haulage trucks and equipment and mining shovels. 

    (b) To be proposed by the board, a project must be approved 
 by at least eight Iron Range Resources and Rehabilitation Board 
 members.  The money for a project may be spent only upon 
 approval of the project by the governor.  The board may submit 
 supplemental projects for approval at any time. 

    (c) The board may require that it receive an equity 
 percentage in any project to which it contributes under this 
 section.  

    Subd. 3.    Redistribution.  (a) If a taconite 
 production facility is sold after operations at the facility had 
 ceased, any money remaining in the taconite environmental fund 
 for the former producer may be released to the purchaser of the 
 facility on the terms otherwise applicable to the former 
 producer under this section. 

    (b) Any portion of the taconite environmental fund that is 
 not released by the commissioner within three years of its 
 deposit in the taconite environmental fund 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 for placement in their 
 respective special accounts.  Two-thirds of the unreleased funds 
 must be distributed to the taconite environmental protection 
 fund and one-third to the Douglas J. Johnson economic protection 
 trust fund. 

    HIST: 1996 c 471 art 12 s 8; 1997 c 231 art 8 s 11; 1Sp2001 c 
 5 art 6 s 33; 2003 c 127 art 11 s 11,12 

     298.297 Advisory committees. 

    Before submission of a project to the board, the 
 commissioner of iron range resources and rehabilitation shall 
 appoint a technical advisory committee consisting of one or more 
 persons who are knowledgeable in areas related to the objectives 
 of the proposal.  Members of the committees shall be compensated 
 as provided in section 15.059, subdivision 3.  The board shall 
 not act on a proposal until it has received the evaluation and 
 recommendations of the technical advisory committee or until 15 
 days have elapsed since the proposal was transmitted to the 
 advisory committee, whichever occurs first.  

    HIST: 2Sp1982 c 2 s 10; 1983 c 46 s 5 

     298.298 Long-range plan. 

    Consistent with the policy established in sections 298.291 
 to 298.298, the Iron Range Resources and Rehabilitation Board 
 shall prepare and present to the governor and the legislature by 
 January 1, 1984 a long-range plan for the use of the northeast 
 Minnesota economic protection trust fund for the economic 
 development and diversification of the taconite assistance area 
 defined in section 273.1341.  The Iron Range Resources and 
 Rehabilitation Board shall, before November 15 of each even 
 numbered year, prepare a report to the governor and legislature 
 updating and revising this long-range plan and reporting on the 
 Iron Range Resources and Rehabilitation Board's progress on 
 those matters assigned to it by law.  After January 1, 1984, no 
 project shall be approved by the Iron Range Resources and 
 Rehabilitation Board which is not consistent with the goals and 
 objectives established in the long-range plan. 

    HIST: 2Sp1982 c 2 s 11; 1983 c 46 s 6; 1Sp2001 c 5 art 6 s 34; 
 1Sp2003 c 21 art 11 s 28 

  298.30 Renumbered 117.47 

  298.31 Private 

  298.32 Repealed, 1975 c 437 art 11 s 7 

SEMITACONITE TAXATION

     298.34 Semitaconite, taxation, definitions. 

    Subdivision 1. Repealed, 1998 c 389 art 10 s 23 

    Subd. 2.    Semitaconite deposit.  For the purposes of 
 sections 298.34 to 298.39, a "semitaconite deposit" is a deposit 
 of altered iron formation, altered taconite, composites of 
 iron-bearing and other minerals that exist either in mass as 
 altered iron formation, or as intermingled masses of altered 
 iron formation and other iron-bearing materials, from which, and 
 in accordance with good mining practice, the concentrates or 
 equivalent must be produced in an operation involving the 
 beneficiation of the semitaconite.  Such deposits include 
 stockpiles of semitaconite.  They also include rejects or 
 tailings that in themselves are of semitaconite type (as defined 
 in subdivision 1), produced from mining or beneficiation 
 operations.  Not included is any separable portion of 
 merchantable iron-bearing material if this separable portion is 
 of such size and so situated that in accordance with good 
 practice it can be mined and shipped.  Also not included is any 
 separable portion of iron-bearing material that can be made 
 merchantable by simple methods of beneficiation (as defined in 
 subdivision 1), if this separable portion is of such size and so 
 situated that in accordance with good practice it can be mined, 
 beneficiated, and shipped in a separate commercial operation.  

    Subd. 3.    Semitaconite facility.  For the purposes of 
 sections 298.34 to 298.39, a semitaconite facility is:  (a) a 
 beneficiating plant or a section or part thereof used solely in 
 the process of beneficiating semitaconite, including buildings, 
 machinery, tools, equipment and supplies used in connection 
 therewith; (b) machinery, tools, equipment and supplies used 
 solely in the mining of semitaconite or semitaconite deposit; 
 (c) in the case of a part or section of a mining or 
 beneficiating facility or buildings, machinery, tools, equipment 
 or supplies used to a substantial extent, but not solely, in the 
 mining or beneficiating of semitaconite or a semitaconite 
 deposit, such proportionate part of the valuation of the part of 
 the facility or the buildings, machinery, tools, equipment or 
 supplies that the use for mining or beneficiation of 
 semitaconite or semitaconite deposit bears to the whole use 
 thereof shall be considered a semitaconite mining or 
 beneficiation facility, and the remaining proportionate part 
 shall remain subject to taxation in the same manner as other 
 property, such proportion to be determined, and redetermined 
 from time to time, by the commissioner of revenue upon 
 application of the assessing officer or the owner of such 
 facility.  

    Subd. 4. Repealed, 1998 c 389 art 10 s 23 

    HIST: Ex1959 c 81 s 1; 1973 c 582 s 3 

     298.35 Imposition of tax; amount.  

    There is hereby imposed upon semitaconite and semitaconite 
 deposits, and upon the mining and quarrying thereof, and upon 
 the production of concentrate or equivalent therefrom, and upon 
 the concentrate or equivalent so produced, a tax of (a) in the 
 case of concentrates agglomerated or sintered in Minnesota or to 
 be agglomerated or sintered in Minnesota, five cents per gross 
 ton of merchantable concentrate as produced therefrom, plus 
 one-tenth of one cent per gross ton for each one percent that 
 the iron content of such product exceeds 55 percent, when dried 
 at 212 degrees Fahrenheit, or (b) in the case of all other 
 concentrates or equivalent ten cents per gross ton of 
 merchantable concentrate or equivalent as produced therefrom, 
 plus one-tenth of one cent per gross ton for each one-half 
 percent that the iron content of such product exceeds 55 
 percent, when dried at 212 degrees Fahrenheit.  If any part of 
 the ore materials from a semitaconite deposit, beneficiated in 
 connection with or incidental to the beneficiation of 
 semitaconite therefrom, is made merchantable by simple methods 
 of beneficiation referred to in section 298.34, the tax 
 hereunder upon the portion of merchantable concentrate so 
 beneficiated shall be at the rate of ten cents per gross ton 
 plus one-tenth of one cent per gross ton for each one-half of 
 one percent that the iron content of such product exceeds 55 
 percent, when dried at 212 degrees Fahrenheit.  

    HIST: Ex1959 c 81 s 2 

     298.36 Nature of tax.  

    Such tax shall be in addition to the occupation tax imposed 
 upon the business of mining and producing iron ore and in 
 addition to the royalty tax imposed upon royalties received for 
 permission to mine and produce iron ore.  Except as herein 
 otherwise provided, it shall be in lieu of all other taxes upon 
 such semitaconite and semitaconite deposits, or the lands in 
 which contained, or upon the mining or quarrying thereof, or the 
 production of concentrates therefrom, or upon the concentrate 
 produced, or upon semitaconite mining and beneficiation 
 facilities used in connection therewith, or upon the lands 
 occupied by such semitaconite mining or beneficiation 
 facilities. If electric or steam power for the mining, 
 transportation or concentration of such semitaconite or the 
 concentrates produced therefrom is generated in plants 
 principally devoted to the generation of power for such 
 purposes, the plants in which such power is generated and all 
 machinery, equipment, tools, supplies, transmission and 
 distribution lines used in the generation and distribution of 
 such power, shall be considered to be machinery, equipment, 
 tools, supplies and buildings used in the mining, quarrying or 
 production of semitaconite and semitaconite concentrates within 
 the meaning of this section.  If part of the power generated in 
 such a plant is used for purposes other than the mining or 
 concentration of semitaconite or the transportation or loading 
 of semitaconite or the concentrates thereof, a proportionate 
 share of the value of such generating facilities, equal to the 
 proportion that the power used for such other purpose bears to 
 the whole amount of power generated therein, shall be subject to 
 the general property tax in the same manner as other property; 
 provided, power generated in such a plant and exchanged for an 
 equivalent amount of power which is used for the mining, 
 transportation or concentration of such semitaconite or 
 concentrates produced therefrom, shall be considered as used for 
 such purposes within the meaning of this section.  Nothing 
 herein shall prevent the assessment and taxation of the surface 
 of reserve land containing semitaconite and not occupied by such 
 facilities or used solely in connection therewith at the value 
 thereof without regard to the semitaconite therein, nor the 
 assessment and taxation of merchantable iron ore or other 
 minerals, or iron-bearing materials other than semitaconite in 
 such lands in the manner provided by law, nor the assessment and 
 taxation of facilities used in producing sulphur or sulphur 
 products from iron sulphide concentrates, or in refining such 
 sulphur products, under the general property tax laws.  Nothing 
 herein shall except from general taxation or from taxation as 
 provided by other laws any property used for residential or 
 townsite purposes, including utility services thereto.  

    HIST: Ex1959 c 81 s 3 

     298.37 Assessment at local tax rate. 

    In any year in which at least 1,000 tons of iron ore 
 concentrate is not produced from any 40-acre tract or 
 governmental lot containing semitaconite, a tax may be assessed 
 upon the semitaconite therein at the local tax rate prevailing 
 in the taxing district and spread against the net tax capacity 
 of the semitaconite; such net tax capacity shall not exceed the 
 greater of:  (a) the net tax capacity specifically assigned to 
 the semitaconite material in said land in the assessment for the 
 year 1958, or, (b) an amount sufficient to yield a tax of $1 per 
 acre less the amount of any tax assessed against such land under 
 the authority of section 298.26. 

    HIST: Ex1959 c 81 s 4; 1988 c 719 art 5 s 84; 1989 c 329 art 
 13 s 20; 1Sp1989 c 1 art 2 s 11 

     298.38 Payment and collection.  

    The tax provided in section 298.35 shall be collected and 
 paid in the same manner and at the same time as provided by law 
 for the payment of the occupation tax.  Reports shall be made 
 and hearings held upon the determination of the tax at the same 
 times and in the same manner as provided by law for the 
 occupation tax.  The commissioner of revenue shall have 
 authority to make reasonable rules as to the form and manner of 
 filing reports necessary for the determination of the tax 
 hereunder, and by such rules may require the production of such 
 information as may be reasonably necessary or convenient for the 
 determination and apportionment of the tax.  All the provisions 
 of the occupation tax law with reference to the assessment, 
 determination, and collection of the occupation tax, including 
 all provisions for penalties and for appeals from or review of 
 the orders of the commissioner of revenue relative thereto, are 
 hereby made applicable to the tax imposed by section 298.35, 
 except insofar as inconsistent herewith.  

    HIST: Ex1959 c 81 s 5; 1973 c 582 s 3; 1985 c 248 s 70 

     298.39 Distribution of proceeds. 

    The proceeds of the tax collected under section 298.35 
 shall be distributed by the commissioner of finance, upon 
 certificate of the commissioner of revenue to the general fund 
 of the state and to the various taxing districts in which the 
 lands from which the semitaconite was mined or quarried were 
 located in the following proportions:  22 percent thereof to the 
 city or town; 50 percent thereof to the school district; 22 
 percent thereof to the county; six percent thereof to the 
 state.  If the mining and concentration, or different steps in 
 either thereof 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 or towns among such 
 subdivisions, and the part going to school districts among such 
 districts, and the part going to counties among such counties, 
 upon the basis of attributing 40 percent of the proceeds of the 
 tax to the operation of mining or quarrying the semitaconite, 
 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 such taxing district.  The 
 commissioner's order making such apportionment shall be subject 
 to review by the Tax Court at the instance of any of the 
 interested taxing districts, in the same manner as other orders 
 of the commissioner.  The amount so distributed shall be divided 
 among the various funds of the state, or of the taxing districts 
 in the same proportion as the general ad valorem tax thereof.  
 If in any year the state shall not spread any general ad valorem 
 tax levy against real property, the state's proportion of the 
 tax shall be paid into the general fund.  On or before October 
 10 of each calendar year each producer of semitaconite subject 
 to taxation under section 298.35, hereinafter called "taxpayer," 
 shall file with the commissioner of revenue and with the county 
 auditor of each county in which such taxpayer operates, and with 
 the chief clerical officer of each school district or city which 
 is entitled to participate in the distribution of the tax, an 
 estimate of the amount of tax which would be payable by such 
 taxpayer under said law for such calendar year; provided such 
 estimate shall be in an amount not less than the amount due on 
 the mining and production of concentrates up to September 30 of 
 said year plus the amount becoming due because of probable 
 production between September 30 and December 31 of said year, 
 less any credit allowable as hereinafter provided.  Such 
 estimate shall list the taxing districts entitled to participate 
 in the distribution of such tax, and the amount of the estimated 
 tax which would be distributable to each such district in such 
 next ensuing calendar year on the basis of the last percentage 
 distribution certified by the commissioner of revenue.  If there 
 be no such prior certification, the taxpayer shall set forth its 
 estimate of the proper distribution of such tax under the law, 
 which estimate may be corrected by the commissioner on deeming 
 it improper, notice of such correction being given by the 
 commissioner to the taxpayer and the public officers receiving 
 such estimate.  The officers with whom such report is so filed 
 shall use the amount so indicated as being distributable to each 
 taxing district in computing the permissible tax levy of such 
 city in the year in which such estimate is made, and payable in 
 the next ensuing calendar year.  Such taxpayer shall then pay, 
 at the times payments are required to be made pursuant to 
 section 298.36, as the amount of tax payable under section 
 298.35, the greater of (a) the amount shown by such estimate, or 
 (b) the amount due under said section as finally determined by 
 the commissioner of revenue pursuant to law.  If, as a result of 
 the payment of the amount of such estimate, the taxpayer has 
 paid in any calendar year an amount of tax in excess of the 
 amount due in such year under section 298.35, after application 
 of credits for any excess payments made in previous years, all 
 as determined by the commissioner of revenue, the taxpayer shall 
 be given credit for such excess amount against any taxes which, 
 under said section, may become due from the taxpayer in 
 subsequent years.  In any calendar year in which a general 
 property tax levy subject to chapter 123A, 123B, or 126C has 
 been made, if the taxes distributable to any such city or school 
 district are greater than the amount estimated to be paid to any 
 such city or school district in such year, the excess of such 
 distribution shall be held in a special fund by the city or 
 school district and shall not be expended until the succeeding 
 calendar year, and shall be included in computing the 
 permissible levies under chapter 123A, 123B, or 126C of such 
 city or school district payable in such year.  If the amounts 
 distributable to any such city or school district, after final 
 determination by the commissioner of revenue under this section 
 are less than the amounts indicated by such estimates, such city 
 or school district may issue certificates of indebtedness in the 
 amount of the shortage, and may include in its next tax levy, in 
 excess of the limitations of chapters 123A, 123B, and 126C an 
 amount sufficient to pay such certificates of indebtedness and 
 interest thereon, or, if no certificates were issued, an amount 
 equal to such shortage. 

    There is hereby appropriated to such taxing districts as 
 are stated herein, from any fund or account in the state 
 treasury to which the money was credited, an amount sufficient 
 to make the payment or transfer. 

    HIST: Ex1959 c 81 s 6; 1965 c 641 s 1; 1965 c 698 s 1; 1969 c 
 399 s 49; Ex1971 c 31 art 35 s 4; 1973 c 123 art 5 s 7; 1973 c 
 582 s 3; 1976 c 134 s 78; 1977 c 307 s 29; 1978 c 764 s 114; 
 1983 c 314 art 1 s 22; 1986 c 444; 1988 c 486 s 92; 1988 c 719 
 art 5 s 84; 1Sp1989 c 1 art 5 s 23; 1991 c 130 s 37; 1992 c 499 
 art 12 s 29; 1996 c 305 art 1 s 67; 1998 c 397 art 11 s 3; 2003 
 c 112 art 2 s 50 

AGGLOMERATING FACILITIES PRODUCTION TAX

     298.391 Agglomerating facilities definitions. 

    Subdivision 1.  When used in sections 298.391 to 298.396, 
 the following terms have the meaning assigned to them in this 
 section, unless the context otherwise requires.  

    Subd. 2. Repealed, 1998 c 389 art 10 s 23 

    Subd. 3.  "Agglomerating facility" means a plant or plants, 
 other than taconite plants or semitaconite facilities for the 
 production of agglomerates and other merchantable iron ore 
 products not less than 80 percent of the total annual productive 
 capacity of which is designed and used for the production of 
 agglomerates, together with all lands, except iron ore and iron 
 bearing material therein; all structures, buildings, machinery, 
 equipment, tools and supplies which are used or to be used in 
 connection with such plant or plants or in connection with the 
 mining of agglomerate reserves; mined iron ore, iron bearing 
 materials and concentrates stockpiled at said plant or plants 
 for processing therein and stockpiles of the merchantable iron 
 ore products which have been produced therein.  

    Subd. 4.  "Agglomeration" means the application of a 
 process either of pelletizing, sintering, nodulizing, 
 briquetting, extruding or mechanical pressure to iron ore and 
 iron bearing material, other than taconite and semitaconite, at 
 temperatures in excess of 900 degrees Fahrenheit.  

    Subd. 5. Repealed, 1998 c 389 art 10 s 23 

    HIST: 1965 c 893 s 1; 1973 c 582 s 3 

     298.392 Qualification of agglomerating facilities; 
  procedure and order.  

    An agglomerating facility shall be or become subject to 
 taxation under sections 298.391 to 298.396 after it shall have 
 been approved as such by order of the commissioner.  Request for 
 such approval shall be in writing and shall contain a 
 description of the facility, together with such additional 
 information and supporting data as the commissioner may 
 require.  The commissioner may make reasonable rules not 
 inconsistent herewith prescribing the form of such requests.  On 
 determining that the facility, which may include existing 
 structures, buildings, machinery, equipment, tools and supplies, 
 qualifies as an agglomerating facility under sections 298.391 to 
 298.396, the commissioner shall by order approve the same as 
 such and the facility shall thereupon become subject to the 
 provisions of sections 298.391 to 298.396.  

    HIST: 1965 c 893 s 2; 1985 c 248 s 70; 1986 c 444 

     298.393 Imposition of tax; amount.  

    There is hereby imposed upon agglomerating facilities and 
 upon the production of agglomerates and other merchantable iron 
 ore products therein and upon the agglomerates and other 
 products so produced, a tax equal to five cents per gross ton of 
 agglomerates and other merchantable iron ore products which 
 shall have been produced in the agglomerating facility during 
 the calendar year plus one-tenth of one cent per gross ton for 
 each one percent that the iron content of such products exceeds 
 55 percent, when dried at 212 degrees Fahrenheit.  

    HIST: 1965 c 893 s 3 

     298.394 Nature of tax.  

    Such tax shall be in addition to the occupation tax imposed 
 upon the business of mining and producing iron ore and in 
 addition to the royalty tax imposed upon royalties received for 
 permission to mine and produce iron ore.  Except as herein 
 otherwise provided, it shall be in lieu of all other taxes upon 
 the agglomerating facility or upon the production of 
 agglomerates and other merchantable iron ore products therein, 
 or upon the agglomerates and other products so produced.  

    HIST: 1965 c 893 s 4 

     298.395 Payment and collection.  

    The tax provided in section 298.393 shall be collected and 
 paid in the same manner and at the same time as provided by law 
 for the payment of the occupation tax.  Reports shall be made 
 and hearings held upon the determination of the tax at the same 
 times and in the same manner as provided by law for the 
 occupation tax.  The commissioner of revenue shall have 
 authority to make reasonable rules as to the form and manner of 
 filing reports necessary for the determination of the tax 
 hereunder, and by such rules may require the submission by 
 taxpayer of such information as may be reasonably necessary or 
 convenient for the determination and apportionment of the tax.  
 All the provisions of the occupation tax law with reference to 
 the assessment, determination and collection of the occupation 
 tax, including all provisions for penalties and for appeals from 
 or review of the orders of the commissioner of revenue relative 
 thereto, are hereby made applicable to the tax imposed by said 
 section 298.393, except insofar as inconsistent herewith.  

    HIST: 1965 c 893 s 5; 1973 c 582 s 3; 1985 c 248 s 70 

     298.396 Distribution of proceeds. 

    The proceeds of the tax collected under section 298.393 
 shall be distributed by the commissioner of finance, upon 
 certificate of the commissioner to the general fund of the state 
 and to the various taxing districts in which the agglomerating 
 facility is located in the following proportions:  22 percent 
 thereof to the city or town; 50 percent thereof to the school 
 district; 22 percent thereof to the county; 6 percent thereof to 
 the state.  If the agglomerating facility is located in more 
 than one tax district, the commissioner shall apportion 
 equitably the proceeds of the part of the tax going to cities or 
 towns among such subdivisions, and the part going to school 
 districts among such districts, and the part going to counties 
 among such counties, giving due consideration to the relative 
 extent of the facilities located in each such taxing district.  
 The commissioner's order making such apportionment shall be 
 subject to review by the Tax Court at the instance of any of the 
 interested taxing districts, in the same manner as other orders 
 of the commissioner.  The amount to be distributed among the 
 several taxing districts of the state shall be divided by such 
 districts among the funds of such districts in the same 
 proportion as the general ad valorem tax thereof.  

    HIST: 1965 c 698 s 3; 1965 c 893 s 6; 1969 c 399 s 49; Ex1971 
 c 31 art 35 s 5; 1973 c 123 art 5 s 7; 1976 c 134 s 78; 1977 c 
 307 s 29; 1978 c 764 s 115; 1986 c 444; 1988 c 719 art 5 s 84; 
 1Sp1989 c 1 art 5 s 24; 2003 c 112 art 2 s 50 

  298.40 Repealed, 1987 c 268 art 9 s 43 

  298.401 Repealed, 1988 c 719 art 2 s 56 

     298.402 Net operating losses. 

    For purposes of the computation under Minnesota Statutes 
 1988, section 298.40, subdivision 1, clause (b), a net operating 
 loss incurred in a taxable year beginning after December 31, 
 1986, is a net operating loss carryover to each of the 15 
 taxable years following the taxable year of the loss, in 
 accordance with section 290.095.  A net operating loss incurred 
 in a taxable year beginning after December 31, 1981, and before 
 January 1, 1987, is a net operating loss carryover to taxable 
 years beginning after December 31, 1986, not to exceed the five 
 taxable years following the taxable year of the loss, in 
 accordance with section 290.095.  No net operating loss 
 carryback is allowed for a net operating loss incurred in a 
 taxable year beginning after December 31, 1986. 

    HIST: 1988 c 719 art 2 s 53; 1992 c 464 art 2 s 5 

TAXATION OF OTHER IRON BEARING MATERIAL

     298.405 Iron ore bearing material other than taconite 
  and semitaconite; taxation. 

    Subdivision 1.    Imposition of tax.  In any year in 
 which iron bearing material other than taconite and semitaconite 
 as defined by law, having not more than 46.5 percent natural 
 iron content on the average, produced from any 40 acre tract or 
 governmental lot, but not from more than three such tracts or 
 lots by an individual producer, is finer than or is ground to 90 
 percent passing 20 mesh and is treated for the purpose of 
 separating the iron particles from silica, alumina, or other 
 detrimental compounds or elements unless used in a direct 
 reduction process, and is treated in Minnesota: 

    (a) By either electrostatic separation, roasting and 
 magnetic separation, or flotation or 

    (b) By a direct reduction process or 

    (c) By any combination of such processes or 

    (d) By any other process or method not presently employed 
 in gravity separation plants employing only crushing, screening, 
 washing, jigging, heavy media separation, spirals, cyclones, 
 drying or any combination thereof, the production of such ore 
 shall be taxed in the manner and at the rates provided for the 
 taxation of semitaconite under section 298.35 provided that the 
 amount of concentrates or final product so produced each year 
 from any one 40 acre tract or governmental lot exceeds 100,000 
 tons or exceeds 25,000 tons from any one 40 acre tract or 
 governmental lot where the average phosphorus content exceeds 
 .125 percent dry analysis or .10 percent sulphur dry analysis.  
 Such tax shall be in addition to the occupation and royalty 
 taxes but shall be in lieu of all other taxes upon the said 40 
 acre tract or governmental lot, the iron ore contained therein, 
 the concentrates produced, and the mining and beneficiating 
 facilities used in such production.  The determination as to 
 what materials will qualify under this law will be made by the 
 Oommissioner of revenue who may use the services of the Ore 
 Estimate Division of the University of Minnesota, Department of 
 Civil and Mineral Engineering, which is hereby established as a 
 technical consultant to the commissioner for the purposes of 
 this section.  The tax imposed shall be collected, paid, and the 
 proceeds thereof distributed in the same manner and at the same 
 time as the tax imposed upon semitaconite by section 298.35 is 
 collected, paid, and distributed.  

    Subd. 2.    Producer; annual report.  On or before 
 October 1 of each calendar year each producer of the iron 
 bearing material described above in this section subject to 
 taxation under section 298.35 (hereinafter called "taxpayer") 
 shall file with the commissioner of revenue a report in the form 
 prescribed by the commissioner of revenue.  Such report shall 
 show, with such other facts as the commissioner may require, by 
 months the number of tons of such iron bearing material produced 
 in each 40 acre tract or governmental lot, with a description 
 thereof and of the number of concentrates produced therefrom, 
 all during the current calendar year; the estimated number of 
 tons of such material and of concentrates which will be produced 
 in each such tract or governmental lot during the remainder of 
 the current calendar year and the name and location of the 
 beneficiating facilities used in such production; and a 
 description of the 40 acre tract or governmental lot and a 
 description of the real property which it is claimed is exempt 
 from taxation under the in lieu provisions of subdivision 1 by 
 virtue of the removal of iron ore bearing material from such 40 
 acre tract or governmental lot.  From such report, the 
 commissioner of revenue shall tentatively determine the 
 descriptions of real estate which it appears will not be subject 
 to general ad valorem taxation under the in lieu provisions of 
 subdivision 1, and certify the same to the appropriate county 
 auditor.  As soon as possible after each March 1, the 
 commissioner of revenue shall make a final determination of the 
 descriptions of the real estate which will not be subject to 
 general ad valorem taxation under the in lieu provisions of 
 subdivision 1, and certify the same to the appropriate county 
 auditor.  

    Subd. 3.    Producer; final report; payment.  On or 
 before February 15 of each calendar year the taxpayer shall file 
 with the commissioner of revenue a final report in such form as 
 the commissioner of revenue may prescribe setting forth the 
 description of each 40 acre tract or governmental lot from which 
 such iron bearing material was processed, and the number of tons 
 of concentrate produced from such iron bearing materials from 
 each 40 acre tract or governmental lot.  The taxpayer shall pay 
 the tax due on or before the March 1 next following.  

    Subd. 4.    Commissioner of revenue; certification of 
 nonexempt real property.  If less than 100,000 tons of 
 concentrates are produced from a 40 acre tract or governmental 
 subdivision which was listed in the report required by 
 subdivision 2 in a calendar year, the commissioner of revenue 
 shall certify such fact to the county auditor of the county in 
 which the affected lands are located.  If any of such lands and 
 mining and beneficiating facilities have been treated as exempt 
 from taxation under the provisions of this section, the county 
 auditor shall treat such lands and facilities as omitted 
 property and proceed with collection of the taxes thereon.  

    HIST: 1963 c 735 s 1; 1963 c 841 s 1; 1973 c 582 s 3; 1992 c 
 464 art 2 s 6 

  298.41 Repealed, Ex1971 c 31 art 12 s 1 

  298.42 Repealed, Ex1971 c 31 art 12 s 1 

  298.43 Repealed, Ex1971 c 31 art 12 s 1 

  298.44 Repealed, Ex1971 c 31 art 12 s 1 

  298.45 Repealed, Ex1971 c 31 art 12 s 1 

UNMINED IRON ORE

     298.46 Exploratory drilling for iron ore.  

    Subdivision 1.  It is hereby declared to be in the public 
 interest of this state as a whole, and in particular with 
 respect to counties or other political subdivisions, to 
 encourage the location of all deposits of iron ore hitherto 
 unknown to such political subdivisions, that may be susceptible 
 of economic exploitation.  

    Subd. 2.  When in the opinion of the duly constituted 
 authorities of a taxing district there are in existence reserves 
 of unmined iron ore located in such district, these authorities 
 may petition the Iron Range Resources and Rehabilitation Board 
 for authority to petition the county assessor to verify the 
 existence of such reserves and to ascertain the value thereof by 
 drilling in a manner consistent with established engineering and 
 geological exploration methods, in order that such taxing 
 district may be able to forecast in a proper manner its future 
 economic and fiscal potentials.  

    Subd. 3.  If the fee owner of the land on which the unmined 
 iron ore is believed to be located, or the owner of a mineral 
 interest therein, refuses to permit the county assessor to 
 ascertain the value of unmined iron ore believed to be located 
 on such land, the county attorney, acting in the name of the 
 county may institute proceedings under chapter 117, for the 
 express purpose of being granted an easement which would permit 
 the county assessor to verify whether or not such land does, in 
 fact, contain reserves of unmined iron ore.  

    Subd. 4.  When the county assessor has verified the 
 existence of reserves of iron ore and has ascertained the value 
 of such reserves, or in the alternative has failed to locate any 
 reserves susceptible of being economically exploited, the 
 assessor shall notify the county attorney, and the county 
 attorney shall then, by appropriate means, request the district 
 court to discharge the easement secured for the purpose stated 
 above.  

    Subd. 5.  The cost of such exploration or drilling plus any 
 damages to the property which may be assessed by the district 
 court shall be paid by the Iron Range Resources and 
 Rehabilitation Board from amounts appropriated to that board 
 under section 298.22.  The Iron Range Resources and 
 Rehabilitation Board shall be reimbursed for one-half of the 
 amounts thus expended.  Such reimbursement shall be made by the 
 taxing districts in the proportion that each such taxing 
 district's levy on the property involved bears to the total levy 
 on such property.  Such reimbursement shall be made to the Iron 
 Range Resources and Rehabilitation Board in the manner provided 
 by section 298.221. 

    Subd. 6.  If any taxing district refuses to pay its share 
 of the reimbursement as provided in subdivision 5, the county 
 auditor is hereby authorized to reduce payments required to be 
 made by the county to such taxing district under other 
 provisions of law.  Thereafter the auditor shall draw a warrant, 
 which shall be deposited with the state treasury in accordance 
 with section 298.221, to the credit of the Iron Range Resources 
 and Rehabilitation Board. 

    Subd. 7.  The provisions of this section shall not apply in 
 the Boundary Waters Canoe Area. 

    HIST: 1974 c 365 s 1; 1975 c 271 s 6; 1986 c 444 

     298.47 Notification of commissioner of revenue of 
  unmined iron ore.  

    On ascertaining that there are in existence reserves of 
 unmined iron ore previously unreported, the county auditor shall 
 transmit all the relevant information to the commissioner of 
 revenue as soon as expedient.  

    HIST: 1974 c 365 s 2; 1986 c 444 

     298.48 Mineral rights; exploration data; filing 
  requirements; penalties. 

    Subdivision 1.    Annual filing.  By April 1 each year, 
 every owner or lessee of mineral rights who, in respect thereto, 
 has engaged in any exploration for or mining of taconite, 
 semitaconite, or iron-sulphide shall file with the commissioner 
 of revenue all data of the following kinds in the possession or 
 under the control of the owner or lessee which was acquired 
 during the preceding calendar year: 

    (a) Maps and other records indicating the location, 
 character and extent of exploration for taconite, semitaconite, 
 or iron-sulphides; 

    (b) Logs, notes and other records indicating the nature of 
 minerals encountered during the course of exploration; 

    (c) The results of any analyses of metallurgical tests or 
 samples taken in connection with exploration; 

    (d) The ultimate pit layout and the supporting cross 
 sections; and 

    (e) Any other data which the commissioner of revenue may 
 determine to be relevant to the determination of the location, 
 nature, extent, quality or quantity of unmined ores of said 
 minerals.  The commissioner of revenue may compel submission of 
 the data.  The court administrator of any court of record, upon 
 demand of the commissioner, shall issue a subpoena for the 
 production of any data before the commissioner.  Disobedience of 
 subpoenas issued under this section shall be punished by the 
 district court of the district in which the subpoena is issued 
 as for a contempt of the district court.  

    Subd. 2.    Use of data.  Notwithstanding any other law 
 to the contrary, the commissioner of revenue may use any data 
 filed pursuant to subdivision 1 and any similar data otherwise 
 obtained to the extent and in the manner the commissioner deems 
 necessary to project the future availability, value, and 
 utilization of the metallic mineral resources of this state.  In 
 making such projections the commissioner of revenue may consult 
 with, and provide data as deemed appropriate to, the 
 commissioner of natural resources. 

    Subd. 3.    Penalties.  Any owner or lessee of mineral 
 rights who fails, neglects or refuses to make any filing 
 required by this section is guilty of a gross misdemeanor. 

    Subd. 4.    Confidential nature of information.  The 
 data filed pursuant to subdivision 1 shall be considered 
 confidential for three years from the date it is filed with the 
 commissioner.  Nothing herein contained shall be construed to 
 prohibit the commissioner from disclosing information or 
 publishing statistics so classified as not to disclose the 
 identity of particular data. 

    Notwithstanding the other provisions of this subdivision, 
 the commissioner may furnish any information supplied under this 
 section to the commissioner of natural resources, the 
 commissioner of employment and economic development, or a county 
 assessor.  Any person violating the provisions of this section 
 shall be guilty of a gross misdemeanor. 

    HIST: 1977 c 423 art 10 s 29; 1978 c 767 s 36; 1981 c 356 s 
 193; 1983 c 289 s 115 subd 1; 1986 c 444; 1Sp1986 c 3 art 1 s 
 82; 1987 c 312 art 1 s 26 subd 2; 1992 c 464 art 1 s 56; 1998 c 
 389 art 10 s 21; 1Sp2003 c 4 s 1 

  298.51 Repealed, 1987 c 268 art 9 s 43 

  298.52 Repealed, 1987 c 268 art 9 s 43 

  298.53 Repealed, 1987 c 268 art 9 s 43 

  298.54 Repealed, 1987 c 268 art 9 s 43 

  298.55 Repealed, 1987 c 268 art 9 s 43 

  298.61 Repealed, 1987 c 268 art 9 s 43 

  298.62 Repealed, 1987 c 268 art 9 s 43 

  298.63 Repealed, 1987 c 268 art 9 s 43 

  298.64 Repealed, 1987 c 268 art 9 s 43 

  298.65 Repealed, 1987 c 268 art 9 s 43 

  298.66 Repealed, 1987 c 268 art 9 s 43 

  298.67 Repealed, 1987 c 268 art 9 s 43 

AGGREGATE MATERIAL TAX

     298.75 Aggregate material removal; production tax. 

    Subdivision 1.    Definitions.  Except as may otherwise 
 be provided, the following words, when used in this section, 
 shall have the meanings herein ascribed to them.  

    (1) "Aggregate material" shall mean nonmetallic natural 
 mineral aggregate including, but not limited to sand, silica 
 sand, gravel, crushed rock, limestone, granite, and borrow, but 
 only if the borrow is transported on a public road, street, or 
 highway.  Aggregate material shall not include dimension stone 
 and dimension granite.  Aggregate material must be measured or 
 weighed after it has been extracted from the pit, quarry, or 
 deposit.  

    (2) "Person" shall mean any individual, firm, partnership, 
 corporation, organization, trustee, association, or other entity.

    (3) "Operator" shall mean any person engaged in the 
 business of removing aggregate material from the surface or 
 subsurface of the soil, for the purpose of sale, either directly 
 or indirectly, through the use of the aggregate material in a 
 marketable product or service.  

    (4) "Extraction site" shall mean a pit, quarry, or deposit 
 containing aggregate material and any contiguous property to the 
 pit, quarry, or deposit which is used by the operator for 
 stockpiling the aggregate material.  

    (5) "Importer" shall mean any person who buys aggregate 
 material produced from a county not listed in paragraph (6) or 
 another state and causes the aggregate material to be imported 
 into a county in this state which imposes a tax on aggregate 
 material.  

    (6) "County" shall mean the counties of Pope, Stearns, 
 Benton, Sherburne, Carver, Scott, Dakota, Le Sueur, Kittson, 
 Marshall, Pennington, Red Lake, Polk, Norman, Mahnomen, Clay, 
 Becker, Carlton, St. Louis, Rock, Murray, Wilkin, Big Stone, 
 Sibley, Hennepin, Washington, Chisago, and Ramsey.  County also 
 means any other county whose board has voted after a public 
 hearing to impose the tax under this section and has notified 
 the commissioner of revenue of the imposition of the tax. 

    (7) "Borrow" shall mean granular borrow, consisting of 
 durable particles of gravel and sand, crushed quarry or mine 
 rock, crushed gravel or stone, or any combination thereof, the 
 ratio of the portion passing the (#200) sieve divided by the 
 portion passing the (1 inch) sieve may not exceed 20 percent by 
 mass. 

    Subd. 2.    Tax imposed.  A county shall impose upon 
 every importer and operator a production tax up to ten cents per 
 cubic yard or up to seven cents per ton of aggregate material 
 removed except that the county board may decide not to impose 
 this tax if it determines that in the previous year operators 
 removed less than 20,000 tons or 14,000 cubic yards of aggregate 
 material from that county.  The tax shall be imposed on 
 aggregate material produced in the county when the aggregate 
 material is transported from the extraction site or sold.  When 
 aggregate material is stored in a stockpile within the state of 
 Minnesota and a public highway, road or street is not used for 
 transporting the aggregate material, the tax shall be imposed 
 either when the aggregate material is sold, or when it is 
 transported from the stockpile site, or when it is used from the 
 stockpile, whichever occurs first.  The tax shall be imposed on 
 an importer when the aggregate material is imported into the 
 county that imposes the tax.  

    If the aggregate material is transported directly from the 
 extraction site to a waterway, railway, or another mode of 
 transportation other than a highway, road or street, the tax 
 imposed by this section shall be apportioned equally between the 
 county where the aggregate material is extracted and the county 
 to which the aggregate material is originally transported.  If 
 that destination is not located in Minnesota, then the county 
 where the aggregate material was extracted shall receive all of 
 the proceeds of the tax.  

    Subd. 3.  By the 14th day following the last day of each 
 calendar quarter, every operator or importer shall make and file 
 with the county auditor of the county in which the aggregate 
 material is removed or imported, a correct report under oath, in 
 such form and containing such information as the auditor shall 
 require relative to the quantity of aggregate material removed 
 or imported during the preceding calendar quarter.  The report 
 shall be accompanied by a remittance of the amount of tax due. 

    If any of the proceeds of the tax is to be apportioned as 
 provided in subdivision 2, the operator or importer shall also 
 include on the report any relevant information concerning the 
 amount of aggregate material transported, the tax and the county 
 of destination.  The county auditor shall notify the county 
 treasurer of the amount of such tax and the county to which it 
 is due.  The county treasurer shall remit the tax to the 
 appropriate county within 30 days.  

    Subd. 4.  If the county auditor has not received the report 
 by the 15th day after the last day of each calendar quarter from 
 the operator or importer as required by subdivision 3 or has 
 received an erroneous report, the county auditor shall estimate 
 the amount of tax due and notify the operator or importer by 
 registered mail of the amount of tax so estimated within the 
 next 14 days.  An operator or importer may, within 30 days from 
 the date of mailing the notice, and upon payment of the amount 
 of tax determined to be due, file in the office of the county 
 auditor a written statement of objections to the amount of taxes 
 determined to be due.  The statement of objections shall be 
 deemed to be a petition within the meaning of chapter 278, and 
 shall be governed by sections 278.02 to 278.13. 

    Subd. 5.  Failure to file the report and submit payment 
 shall result in a penalty of $5 for each of the first 30 days, 
 beginning on the 15th day after the last day of each calendar 
 quarter, for which the report and payment is due and no 
 statement of objection has been filed as provided in subdivision 
 4, and a penalty of $10 for each subsequent day shall be 
 assessed against the operator or importer who is required to 
 file the report.  The penalties imposed by this subdivision 
 shall be collected as part of the tax and credited to the county 
 revenue fund.  If neither the report nor a statement of 
 objection has been filed after more than 60 days have elapsed 
 from the date when the notice was sent, the operator or importer 
 who is required to file the report is guilty of a misdemeanor. 

    Subd. 6.  It is a misdemeanor for any operator or importer 
 to remove aggregate material from a pit, quarry, or deposit or 
 for any importer to import aggregate material unless all taxes 
 due under this section for the previous reporting period have 
 been paid or objections thereto have been filed pursuant to 
 subdivision 4. 

    It is a misdemeanor for the operator or importer who is 
 required to file a report to file a false report with intent to 
 evade the tax. 

    Subd. 7.  All money collected as taxes under this section 
 shall be deposited in the county treasury and credited as 
 follows, for expenditure by the county board: 

    (a) Sixty percent to the county road and bridge fund for 
 expenditure for the maintenance, construction and reconstruction 
 of roads, highways and bridges; 

    (b) Thirty percent to the road and bridge fund of those 
 towns as determined by the county board and to the general fund 
 or other designated fund of those cities as determined by the 
 county board, to be expended for maintenance, construction and 
 reconstruction of roads, highways and bridges; and 

    (c) Ten percent to a special reserve fund which is hereby 
 established, for expenditure for the restoration of abandoned 
 pits, quarries, or deposits located upon public and tax 
 forfeited lands within the county. 

    If there are no abandoned pits, quarries or 
 deposits located upon public or tax forfeited lands within the 
 county, this portion of the tax shall be deposited in the county 
 road and bridge fund for expenditure for the maintenance, 
 construction and reconstruction of roads, highways and bridges.  

    Subd. 8.  The county auditor or its duly authorized agent 
 may examine records, including computer records, maintained by 
 an importer or operator.  The term "record" includes, but is not 
 limited to, all accounts of an importer or operator.  The county 
 auditor must have access at all reasonable times to inspect and 
 copy all business records related to an importer's or operator's 
 collection, transportation, and disposal of aggregate to the 
 extent necessary to ensure that all aggregate material 
 production taxes required to be paid have been remitted to the 
 county.  The records must be maintained by the importer or 
 operator for no less than six years. 

    HIST: 1980 c 607 art 19 s 5; 1Sp1981 c 1 art 10 s 17-19; 1982 
 c 523 art 13 s 1; 1983 c 342 art 14 s 1; 1984 c 652 s 1; 1986 c 
 403 s 1,2; 1993 c 375 art 9 s 41,42; 1995 c 264 art 16 s 15; 
 1996 c 471 art 13 s 15; 1997 c 231 art 8 s 12-14; 1Sp2001 c 5 
 art 6 s 35,36; 2003 c 127 art 14 s 11 

*   NOTE:  The amendment to subdivision 1 by Laws 1997, chapter 
*231, article 8, section 12, adding St. Louis, Pope, and Carlton 
*counties is effective only upon local approval by that county.  
*If the St. Louis county board does not approve the amendment, 
*each of the following towns in St. Louis county may impose the 
*aggregate materials tax under this section subject to local 
*approval by that town:  the towns of Alden, Brevator, Canosia, 
*Duluth, Fredenberg, Gnesen, Grand Lake, Industrial, Lakewood, 
*Midway, Normanna, North Star, Rice Lake, and Solway.  Laws 1997, 
*chapter 231, article 8, sections 15 and 18.

  298.76 Repealed, 1982 c 523 art 13 s 3