1998 Minnesota Statutes

     298.24 Tax on taconite and iron sulphides. 

    Subdivision 1.  (a) For concentrate produced in 1997 and 
 1998, 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 $2.141 per gross ton of merchantable iron ore 
 concentrate produced therefrom.  

    (b) For concentrates produced in 1999 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" for 
 the gross national product means the implicit price deflator 
 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 $2.141 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.  (a) A credit in the amount of not to exceed four 
 cents per gross ton of taxable iron ore concentrate produced 
 shall be allowed against the tax imposed by subdivision 1, with 
 respect to the production of iron ore concentrate from taconite 
 plants which, together with the lands upon which they are 
 located and lands used in connection with the mining, quarrying 
 and concentration of taconite and buildings, machinery, 
 equipment and other fixtures used in the production of taconite, 
 and notwithstanding the provisions of section 298.25, have by 
 law been made subject to direct taxes for the payment of 
 principal and interest on bonds issued by a school district or 
 city.  

    (b) Notwithstanding clause (a), a credit of not to exceed 
 seven cents shall be allowed a producer for the payment of taxes 
 for bonds, and interest on them, issued by independent school 
 district No. 703, for which the producer's property has been 
 made subject to direct taxes.  

    (c) The credit allowed in this subdivision shall be allowed 
 against taxes payable in the calendar years following the 
 issuance and sale of the bonds until the total credit allowed in 
 all years equals the total liability of the producer for direct 
 taxes for the payment of the bonds and interest.  If necessary 
 to equal the total liability of the producer, the credit may be 
 taken in years after the years when the taxes for the bond 
 principal and interest were paid.  

    The amount of credit allowable hereunder in any year with 
 respect to production from any plant subjected to direct taxes 
 shall not exceed the amount of the direct taxes levied in the 
 prior year against the plant for the bonds and interest and the 
 indebtedness secured thereby, except if the credit allowed does 
 not equal the amount levied in the prior year, then the unused 
 credits of prior years may be used for the deficiency. 

    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 
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