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Chapter 298

Section 298.28

Recent History

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    Subd. 1a.[Repealed, 1977 c 423 art 10 s 30]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), or section 298.2961, subdivision
5, 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. .30 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 must be paid to the taconite
environmental fund for use under section 298.2961, subdivision 4.
    Subd. 9c. Temporary distribution; city of Eveleth. 0.20 cent per taxable ton must be paid
to the city of Eveleth for distribution in 2007 through 2011 only, to be used for the support of
the Hockey Hall of Fame, provided that it continues to operate in that city, and provided that the
city of Eveleth certifies to the St. Louis County auditor that it has received donations for the
support of the Hockey Hall of Fame from professional hockey organizations or other donors in
an amount at least equal to the amount of the distribution under this subdivision. If the Hockey
Hall of Fame ceases to operate in the city of Eveleth prior to receipt of the distribution in either
year, and the governing body of the city determines that it is unlikely to resume operation there
within a six-month period, the distribution under this subdivision shall be made to the Iron Range
Resources and Rehabilitation Board. If the amount of the distribution authorized under this
subdivision exceeds the total amount of donations for the support of the Hockey Hall of Fame
during the 12-month period ending 30 days before the date of the distribution, the amount by
which 0.20 cent per ton exceeds the donations shall be distributed to the Iron Range Resources
and Rehabilitation Board.
    Subd. 10. Increase. (a) Except as provided in paragraph (b), 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.
(b) For distributions in 2005 and subsequent years, an amount equal to the increased tax
proceeds attributable to the increase in the implicit price deflator as provided in section 298.24,
subdivision 1
, for taxes paid in 2005, except for the amount of revenue increases provided in
subdivision 4, paragraph (d), is distributed to the grant and loan fund established in section
298.2961, subdivision 4.
    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.
History: 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; 1Sp2005
c 1 art 4 s 89,90; 2006 c 247 s 13; 2006 c 259 art 12 s 10,11

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