1.1.................... moves to amend H.F. No. 2323, the delete everything amendment
1.2(A09-0462), as follows:
1.3Page 204, after line 28, insert:


1.6    Section 1. Minnesota Statutes 2008, section 273.13, is amended by adding a
1.7subdivision to read:
1.8    Subd. 35. Certain manufacturing facilities within the nonferrous minerals
1.9assistance area. Notwithstanding any other provision of law, the tax capacity and
1.10referendum market value of a manufacturing facility used to produce a value-added
1.11product from materials that would otherwise be subject to a minerals tax, and located
1.12within the nonferrous minerals assistance area, as defined in section 298.001, subdivision
1.1310, shall be excluded from the local tax base in determining local tax rates under section
1.14275.08. The local tax attributable to the property shall be based on the average total net
1.15tax capacity tax rate in the county and the average total referendum market value tax rate
1.16in the county. The proceeds of the local portion of the tax shall be distributed as provided
1.17in section 298.018, subdivision 1. The proceeds of the tax resulting from the state general
1.18levy shall be distributed as provided in section 276.112.
1.19EFFECTIVE DATE.This section is effective the day following final enactment.

1.20    Sec. 2. Minnesota Statutes 2008, section 298.001, is amended by adding a subdivision
1.21to read:
1.22    Subd. 10. Nonferrous minerals assistance area. The area of the "nonferrous
1.23minerals assistance area" means the area of the following independent school districts, or
1.24their successor districts:
1.25(1) No. 166, Cook County;
2.1(2) No. 316, Coleraine;
2.2(3) No. 318, Grand Rapids;
2.3(4) No. 319, Nashwauk-Keewatin;
2.4(5) No. 381, Lake Superior;
2.5(6) No. 695, Chisholm;
2.6(7) No. 696, Ely;
2.7(8) No. 701, Hibbing;
2.8(9) No. 706, Virginia;
2.9(10) No. 712, Mountain Iron-Buhl;
2.10(11) No. 2711, Mesabi-East;
2.11(12) No. 2142, St. Louis County; and
2.12(13) No. 2154, Eveleth-Gilbert.

2.13    Sec. 3. Minnesota Statutes 2008, section 298.018, subdivision 1, is amended to read:
2.14    Subdivision 1. Within taconite nonferrous minerals assistance area. The
2.15proceeds of the tax paid under sections 298.015 to 298.017 on minerals and energy
2.16resources mined or extracted within the taconite nonferrous minerals assistance area
2.17defined in section 273.1341, shall be allocated as follows:
2.18(1) five percent to the city or town within which the minerals or energy resources
2.19are mined or extracted;
2.20(2) ten percent to the taconite municipal aid account to be distributed as provided
2.21in section 298.282 to qualifying municipalities, as defined in section 298.282, located in
2.22the nonferrous minerals assistance area;
2.23(3) ten percent to the school district within which the minerals or energy resources
2.24are mined or extracted;
2.25(4) 20 30 percent to a group of school districts comprised of those school districts
2.26wherein the mineral or energy resource was mined or extracted or in which there is a
2.27qualifying municipality as defined by section 273.134, paragraph (b), in direct proportion
2.28to school district indexes as follows: for each school district, its pupil units determined
2.29under section 126C.05 for the prior school year shall be multiplied by the ratio of the
2.30average adjusted net tax capacity per pupil unit for school districts receiving aid under
2.31this clause as calculated pursuant to chapters 122A, 126C, and 127A for the school year
2.32ending prior to distribution to the adjusted net tax capacity per pupil unit of the district.
2.33Each district shall receive that portion of the distribution which its index bears to the sum
2.34of the indices for all school districts that receive the distributions;
3.1(5) 20 percent to the county within which the minerals or energy resources are
3.2mined or extracted. These amounts are not subject to section 126C.21, subdivision 4, and
3.3126C.48, subdivision 8;
3.4(6) 20 percent to St. Louis County acting as the counties' fiscal agent to be
3.5distributed as provided in sections 273.134 to 273.136;
3.6(7) five percent to the Iron Range Resources and Rehabilitation Board for the
3.7purposes of section 298.22;
3.8(8) five (7) ten percent to the Douglas J. Johnson economic protection trust fund; and
3.9(9) five (8) ten percent to the taconite environmental protection fund.
3.10The proceeds of the tax shall be distributed on July 15 each year.

3.11    Sec. 4. Minnesota Statutes 2008, section 298.018, subdivision 2, is amended to read:
3.12    Subd. 2. Outside taconite nonferrous minerals assistance area. The proceeds of
3.13the tax paid under sections 298.015 to 298.017 on minerals and energy resources mined or
3.14extracted outside of the taconite nonferrous minerals assistance area defined in section
3.15273.1341 , shall be deposited in the general fund.

3.16    Sec. 5. Minnesota Statutes 2008, section 298.018, is amended by adding a subdivision
3.17to read:
3.18    Subd. 3. Segregation of funds. The proceeds of the tax allocated under subdivision
3.191, clauses (2), (6), (7), and (8), including the investment earnings on the funds, must be
3.20segregated and separately accounted for in the respective funds or accounts to which
3.21they are allocated. These amounts must only be distributed to municipalities within the
3.22nonferrous minerals assistance area or used for projects within the area.

3.23    Sec. 6. Minnesota Statutes 2008, section 298.24, subdivision 1, is amended to read:
3.24    Subdivision 1. Imposed; calculation. (a) For concentrate produced in 2001, 2002,
3.25and 2003, there is imposed upon taconite and iron sulphides, and upon the mining and
3.26quarrying thereof, and upon the production of iron ore concentrate therefrom, and upon
3.27the concentrate so produced, a tax of $2.103 per gross ton of merchantable iron ore
3.28concentrate produced therefrom. For concentrates produced in 2005 2009, the tax rate is
3.29the same rate imposed for concentrates produced in 2004 2008. For concentrates produced
3.30in 2009 and subsequent years, the tax is also imposed upon other iron-bearing material.
3.31    (b) For concentrates produced in 2006 2010 and subsequent years, the tax rate shall
3.32be equal to the preceding year's tax rate plus an amount equal to the preceding year's tax
3.33rate multiplied by the percentage increase in the implicit price deflator from the fourth
3.34quarter of the second preceding year to the fourth quarter of the preceding year. "Implicit
4.1price deflator" means the implicit price deflator for the gross domestic product prepared by
4.2the Bureau of Economic Analysis of the United States Department of Commerce.
4.3    (c) An additional tax is imposed equal to three cents per gross ton of merchantable
4.4iron ore concentrate for each one percent that the iron content of the product exceeds 72
4.5percent, when dried at 212 degrees Fahrenheit.
4.6    (d) The tax on taconite and iron sulphides shall be imposed on the average of the
4.7production for the current year and the previous two years. The rate of the tax imposed
4.8will be the current year's tax rate. This clause shall not apply in the case of the closing
4.9of a taconite facility if the property taxes on the facility would be higher if this clause
4.10and section 298.25 were not applicable. The tax on other iron-bearing material shall be
4.11imposed on the current year production.
4.12    (e) If the tax or any part of the tax imposed by this subdivision is held to be
4.13unconstitutional, a tax of $2.103 per gross ton of merchantable iron ore concentrate
4.14produced shall be imposed.
4.15    (f) Consistent with the intent of this subdivision to impose a tax based upon the
4.16weight of merchantable iron ore concentrate, the commissioner of revenue may indirectly
4.17determine the weight of merchantable iron ore concentrate included in fluxed pellets by
4.18subtracting the weight of the limestone, dolomite, or olivine derivatives or other basic
4.19flux additives included in the pellets from the weight of the pellets. For purposes of this
4.20paragraph, "fluxed pellets" are pellets produced in a process in which limestone, dolomite,
4.21olivine, or other basic flux additives are combined with merchantable iron ore concentrate.
4.22No subtraction from the weight of the pellets shall be allowed for binders, mineral and
4.23chemical additives other than basic flux additives, or moisture.
4.24    (g)(1) Notwithstanding any other provision of this subdivision, for the first two years
4.25of a plant's commercial production of direct reduced ore from ore mined in this state, no
4.26tax is imposed under this section. As used in this paragraph, "commercial production" is
4.27production of more than 50,000 tons of direct reduced ore in the current year or in any
4.28prior year, "noncommercial production" is production of 50,000 tons or less of direct
4.29reduced ore in any year, and "direct reduced ore" is ore that results in a product that has an
4.30iron content of at least 75 percent. For the third year of a plant's commercial production of
4.31direct reduced ore, the rate to be applied to direct reduced ore is 25 percent of the rate
4.32otherwise determined under this subdivision. For the fourth commercial production year,
4.33the rate is 50 percent of the rate otherwise determined under this subdivision; for the fifth
4.34commercial production year, the rate is 75 percent of the rate otherwise determined under
4.35this subdivision; and for all subsequent commercial production years, the full rate is
4.36imposed.
5.1    (2) Subject to clause (1), production of direct reduced ore in this state is subject to
5.2the tax imposed by this section, but if that production is not produced by a producer of
5.3taconite, iron sulfides, or other iron-bearing material, the production of taconite, iron
5.4sulfides, or other iron-bearing material, that is consumed in the production of direct
5.5reduced iron in this state is not subject to the tax imposed by this section on taconite,
5.6iron sulfides, or other iron-bearing material.
5.7    (3) Notwithstanding any other provision of this subdivision, no tax is imposed
5.8on direct reduced ore under this section during the facility's noncommercial production
5.9of direct reduced ore. The taconite or iron sulphides consumed in the noncommercial
5.10production of direct reduced ore is subject to the tax imposed by this section on taconite
5.11and iron sulphides. Three-year average production of direct reduced ore does not
5.12include production of direct reduced ore in any noncommercial year. Three-year average
5.13production for a direct reduced ore facility that has noncommercial production is the
5.14average of the commercial production of direct reduced ore for the current year and the
5.15previous two commercial years.
5.16    (4) This paragraph applies only to plants for which all environmental permits have
5.17been obtained and construction has begun before July 1, 2008.
5.18EFFECTIVE DATE.This section is effective the day after final enactment.

5.19    Sec. 7. Minnesota Statutes 2008, section 298.28, subdivision 2, is amended to read:
5.20    Subd. 2. City or town where quarried or produced. (a) 4.5 6.5 cents per gross
5.21ton of merchantable iron ore concentrate, hereinafter referred to as "taxable ton," must be
5.22allocated to the city or town in the county in which the lands from which taconite was
5.23mined or quarried were located or within which the concentrate was produced. If the
5.24mining, quarrying, and concentration, or different steps in either thereof are carried on in
5.25more than one taxing district, the commissioner shall apportion equitably the proceeds
5.26of the part of the tax going to cities and towns among such subdivisions upon the basis
5.27of attributing 40 50 percent of the proceeds of the tax to the operation of mining or
5.28quarrying the taconite, and the remainder to the concentrating plant and to the processes of
5.29concentration, and with respect to each thereof giving due consideration to the relative
5.30extent of such operations performed in each such taxing district. The commissioner's
5.31order making such apportionment shall be subject to review by the Tax Court at the
5.32instance of any of the interested taxing districts, in the same manner as other orders of
5.33the commissioner.
5.34(b) Four cents per taxable ton shall be allocated to cities and organized townships
5.35affected by mining because their boundaries are within three miles of a taconite mine pit
6.1that has been actively mined in at least one of the prior three years. If a city or town is
6.2located near more than one mine meeting these criteria, the city or town is eligible to
6.3receive aid calculated from only the mine producing the largest taxable tonnage. When
6.4more than one municipality qualifies for aid based on one company's production, the aid
6.5must be apportioned among the municipalities in proportion to their populations. Of the
6.6amounts distributed under this paragraph to each municipality, one-half must be used for
6.7infrastructure improvement projects, and one-half must be used for projects in which two
6.8or more municipalities cooperate. Each municipality that receives a distribution under this
6.9paragraph must report annually to the Iron Range Resources and Rehabilitation Board and
6.10the commissioner of Iron Range resources and rehabilitation on the projects involving
6.11cooperation with other municipalities.
6.12EFFECTIVE DATE.This section is effective for production in 2009, for
6.13distributions in 2010, and thereafter.

6.14    Sec. 8. Minnesota Statutes 2008, section 298.28, subdivision 4, is amended to read:
6.15    Subd. 4. School districts. (a) 23.15 cents per taxable ton, plus the increase provided
6.16in paragraph (d) must be allocated to qualifying school districts to be distributed, based
6.17upon the certification of the commissioner of revenue, under paragraphs (b), (c), and (f).
6.18    (b) (i) 3.43 cents per taxable ton must be distributed to the school districts in which
6.19the lands from which taconite was mined or quarried were located or within which the
6.20concentrate was produced. The distribution must be based on the apportionment formula
6.21prescribed in subdivision 2.
6.22    (ii) Four cents per taxable ton from each taconite facility must be distributed to
6.23each affected school district for deposit in a fund dedicated to building maintenance
6.24and repairs, as follows:
6.25    (1) proceeds from Keewatin Taconite or its successor are distributed to Independent
6.26School Districts Nos. 316, Coleraine, and 319, Nashwauk-Keewatin, or their successor
6.27districts;
6.28    (2) proceeds from the Hibbing Taconite Company or its successor are distributed to
6.29Independent School Districts Nos. 695, Chisholm, and 701, Hibbing, or their successor
6.30districts;
6.31    (3) proceeds from the Mittal Steel Company and Minntac or their successors are
6.32distributed to Independent School Districts Nos. 712, Mountain Iron-Buhl, 706, Virginia,
6.332711, Mesabi East, and 2154, Eveleth-Gilbert, or their successor districts;
7.1    (4) proceeds from the Northshore Mining Company or its successor are distributed
7.2to Independent School Districts Nos. 2142, St. Louis County, and 381, Lake Superior,
7.3or their successor districts; and
7.4    (5) proceeds from United Taconite or its successor are distributed to Independent
7.5School Districts Nos. 2142, St. Louis County, and 2154, Eveleth-Gilbert, or their
7.6successor districts.
7.7    Revenues that are required to be distributed to more than one district shall be
7.8apportioned according to the number of pupil units identified in section 126C.05,
7.9subdivision 1 , enrolled in the second previous year.
7.10    (c)(i) 15.72 cents per taxable ton, less any amount distributed under paragraph (e),
7.11shall be distributed to a group of school districts comprised of those school districts which
7.12qualify as a tax relief area under section 273.134, paragraph (b), or in which there is a
7.13qualifying municipality as defined by section 273.134, paragraph (a), in direct proportion
7.14to school district indexes as follows: for each school district, its pupil units determined
7.15under section 126C.05 for the prior school year shall be multiplied by the ratio of the
7.16average adjusted net tax capacity per pupil unit for school districts receiving aid under
7.17this clause as calculated pursuant to chapters 122A, 126C, and 127A for the school year
7.18ending prior to distribution to the adjusted net tax capacity per pupil unit of the district.
7.19Each district shall receive that portion of the distribution which its index bears to the sum
7.20of the indices for all school districts that receive the distributions.
7.21    (ii) Notwithstanding clause (i), each school district that receives a distribution
7.22under sections 298.018; 298.23 to 298.28, exclusive of any amount received under this
7.23clause; 298.34 to 298.39; 298.391 to 298.396; 298.405; or any law imposing a tax on
7.24severed mineral values after reduction for any portion distributed to cities and towns under
7.25section 126C.48, subdivision 8, paragraph (5), that is less than the amount of its levy
7.26reduction under section 126C.48, subdivision 8, for the second year prior to the year of the
7.27distribution shall receive a distribution equal to the difference; the amount necessary to
7.28make this payment shall be derived from proportionate reductions in the initial distribution
7.29to other school districts under clause (i).
7.30    (d) Any school district described in paragraph (c) where a levy increase pursuant to
7.31section 126C.17, subdivision 9, was authorized by referendum for taxes payable in 2001,
7.32shall receive a distribution of 21.3 cents per ton. Each district shall receive $175 times the
7.33pupil units identified in section 126C.05, subdivision 1, enrolled in the second previous
7.34year or the 1983-1984 school year, whichever is greater, less the product of 1.8 percent
7.35times the district's taxable net tax capacity in the second previous year.
8.1    If the total amount provided by paragraph (d) is insufficient to make the payments
8.2herein required then the entitlement of $175 per pupil unit shall be reduced uniformly
8.3so as not to exceed the funds available. Any amounts received by a qualifying school
8.4district in any fiscal year pursuant to paragraph (d) shall not be applied to reduce general
8.5education aid which the district receives pursuant to section 126C.13 or the permissible
8.6levies of the district. Any amount remaining after the payments provided in this paragraph
8.7shall be paid to the commissioner of Iron Range resources and rehabilitation who shall
8.8deposit the same in the taconite environmental protection fund and the Douglas J. Johnson
8.9economic protection trust fund as provided in subdivision 11.
8.10    Each district receiving money according to this paragraph shall reserve the lesser of
8.11the amount received under this paragraph or $25 times the number of pupil units served
8.12in the district. It may use the money for early childhood programs or for outcome-based
8.13learning programs that enhance the academic quality of the district's curriculum. The
8.14outcome-based learning programs must be approved by the commissioner of education.
8.15    (e) There shall be distributed to any school district the amount which the school
8.16district was entitled to receive under section 298.32 in 1975.
8.17    (f) Four cents per taxable ton must be distributed to qualifying school districts
8.18according to the distribution specified in paragraph (b), clause (ii), and apportioned based
8.19on the apportionment formula prescribed in subdivision 2. Two cents per taxable ton must
8.20be distributed according to the distribution specified in paragraph (c). These amounts are
8.21not subject to sections 126C.21, subdivision 4, and 126C.48, subdivision 8.
8.22EFFECTIVE DATE.This section is effective for production in 2009, for
8.23distributions in 2010, and thereafter.

8.24    Sec. 9. Minnesota Statutes 2008, section 298.28, is amended by adding a subdivision
8.25to read:
8.26    Subd. 9e. Taconite environmental fund; additional distribution. Beginning
8.27with distributions in 2010, an amount equal to the total taconite railroad distribution
8.28paid in 2009 to counties, cities, and towns under section 298.28, subdivision 11, less
8.29the equivalent of 2.0 cents per gross ton that is distributed to the cities and towns under
8.30section 298.28, subdivision 2 for the current distribution year. The amount of difference
8.31must annually be paid to the taconite environmental fund for use under section 298.223, as
8.32provided under that subdivision.
8.33EFFECTIVE DATE.This section is effective for production in 2009, for
8.34distributions in 2010, and thereafter.

9.1    Sec. 10. Minnesota Statutes 2008, section 298.28, subdivision 11, is amended to read:
9.2    Subd. 11. Remainder. (a) The proceeds of the tax imposed by section 298.24 which
9.3remain after the distributions and payments in subdivisions 2 to 10a, as certified by the
9.4commissioner of revenue, and paragraphs (b), (c), (d), and (e) have been made, together
9.5with interest earned on all money distributed under this section prior to distribution, shall
9.6be divided between the taconite environmental protection fund created in section 298.223
9.7and the Douglas J. Johnson economic protection trust fund created in section 298.292 as
9.8follows: Two-thirds to the taconite environmental protection fund and one-third to the
9.9Douglas J. Johnson economic protection trust fund. The proceeds shall be placed in
9.10the respective special accounts.
9.11(b) There shall be distributed to each city, town, and county the amount that it
9.12received under section 294.26 in calendar year 1977; provided, however, that the amount
9.13distributed in 1981 to the unorganized territory number 2 of Lake County and the town
9.14of Beaver Bay based on the between-terminal trackage of Erie Mining Company will be
9.15distributed in 1982 and subsequent years to the unorganized territory number 2 of Lake
9.16County and the towns of Beaver Bay and Stony River based on the miles of track of Erie
9.17Mining Company in each taxing district.
9.18(c) There shall be distributed to the Iron Range Resources and Rehabilitation Board
9.19the amounts it received in 1977 under section 298.22. The amount distributed under
9.20this paragraph shall be expended within or for the benefit of the taconite assistance area
9.21defined in section 273.1341.
9.22(d) (c) There shall be distributed to each school district 62 percent of the amount
9.23that it received under section 294.26 in calendar year 1977.
9.24(e) (d) In 2003 only, $100,000 must be distributed to a township located in a taconite
9.25tax relief area as defined in section 273.134, paragraph (a), that received $119,259 of
9.26homestead and agricultural credit aid and $182,014 in local government aid in 2001.
9.27EFFECTIVE DATE.This section is effective for production in 2009, distributions
9.28in 2010, and thereafter."
9.29Renumber the sections in sequence and correct the internal references
9.30Amend the title accordingly