Mining Tax Guide - Minnesota State Legislature

(c) Occupation Tax Grandfather Amount to IRRRB
In 1978 and each year thereafter, the amount distributed to
the IRRRB was the same as it received in 1977 from the
distribution of the taconite and iron ore occupation taxes:
$1,252,520.
Additional Payments
Although the following payments are not included in M.S. 298.28
or its subdivisions, they are subtracted prior to dividing the
remainder described in subdivision 11.
These payments are listed in detail on page 19 and consist of school
bond payments to school districts within the taconite tax relief
area and taconite assistance area. Most are funded 80 percent
taconite and 20 percent local efforts.
In Laws 2005, Chapter 152, Article 1, Sec. 39, the legislature
authorized the Commissioner of IRRRB to issue $15 million in
revenue bonds to make grants to school districts in the taconite
relief area or taconite assistance area. The bonds are to be used
by the school districts to pay for health, safety and maintenance
improvements. The bonds are funded in equal shares from the
Taconite Environmental Protection Fund and the Douglas J.
Johnson Economic Fund. Minor amendments were made by
the 2006 legislature.
Aid Guarantee (M.S. 298.225)
The recipients of the taconite production tax, provided in M.S.
298.28, subds. 2 to 5; subd. 6(b) and (c); and subds. 7 and 8, are
guaranteed to receive distributions equal to the amount distributed
to them with respect to the 1983 or 1999 production years,
provided that production is not less than 42 million taxable tons.
If the production is less, the amount distributed from the fund is
reduced proportionately by 2 percent per each 1 million tons by
which the taxable tons are less than 42 million tons. For example,
if the taxable tonnage (three-year average) is 39,800,000, then
the proportionate reduction is 4.4 percent. This is calculated by
multiplying 2 percent times 2.2 million tons.
This aid guarantee is funded equally from the initial current-year
distributions to the Taconite Environmental Protection Fund
and the Northeast Minnesota Economic Protection Fund. If the
initial distributions are insufficient to fund the difference, the
commissioner of the IRRRB makes the payments of any remaining
difference from the capital of the Taconite Environmental
Protection Fund and the Northeast Minnesota Economic
Protection Trust Fund in equal proportions.
11
The commissioner of the Minnesota Department of Revenue
determines the amounts. The aid payments covered by this variable
guarantee are listed as follows:
1. 4.5 cents—City and Town Fund
2. 12.2 cents—Taconite Municipal Aid
3. 21.3 cents— Taconite Referendum Fund
4. 6.5 cents—escalated to IRRRB
5. 0.3 cent—RAMS
6. 0.1875 cent—power plant transfer from Taconite Property
Tax Relief Account to Cook County
7. 4.0 cents - Mining Effects Fund (uses 1999 production year
as base year)
The following funds are guaranteed at 75 percent or the variable
guarantee, whichever is less:
1. 15.525 cents—Taconite County Fund
2. 10.525 cents—Taconite County Road and Bridge Fund
The following funds are guaranteed at 31.2 percent or the variable
guarantee, whichever is less:
1. 15.72 cents—Regular School Fund
2. 3.43 cents—Taconite School Fund
3. 0.5625 cent—power plant transfer from Taconite Property
Tax Relief Account to School District 166, Cook County
The Taconite Property Tax Relief Account is not covered by M.S.
298.225, but is separately guaranteed by the Economic Protection
Fund, as stated in M.S. 298.293.