The Taconite Capital of the World

City of Mountain Iron, Minnesota



Resolution 03-01 TTRA

RESOLUTION NUMBER 03-01

TACONITE TAX RELIEF AREA

WHEREAS, the legislators in the Iron Range Legislative delegation have publicly indicated that they are considering legislation to reduce property tax relief funded by the taconite production tax in order to preserve and enhance funding for IRRRB economic development programs; and

WHEREAS, taconite production tax revenue could decline due to a general slow-down in the U.S. Steel industry and due to the closing of the LTV taconite plant; and,

WHEREAS, the taconite production tax is a tax imposed in lieu of property taxes and therefore communities with taconite facilities within their jurisdiction may not directly levy property taxes on taconite mines or facilities; and,

WHEREAS, some communities within the taconite tax relief area oppose sharing of non-taconite commercial-industrial tax base growth in the taconite tax relief area through the Range Fiscal Disparities Act, and whereas that Act has been declared unconstitutional by the Itasca District Court; and,

WHEREAS, the current statutes and formulas for distribution of the revenue generated by the taconite production tax distribute taconite production tax revenues to many municipalities and to many taxpayers who live in municipalities without an operating taconite mine or facility; and,

WHEREAS, as a result of the slow-down in the taconite industry increased economic distress can be expected in the core Iron Range communities where taconite plants and mines are located; and,

WHEREAS, the increased economic distress requires increased public resources devoted to the needs of residents and communities in core taconite-producing Iron Range communities; and,

WHEREAS, U.S. Steel’s Minntac facility located within the municipal limits of the City of Mountain Iron generated taconite production taxes paid in lieu of local property taxes totaling $27.9 million for distribution in the year 2000, but only $3.36 million of that revenue was returned directly to the City of Mountain Iron and the Mountain Iron-Buhl school district and its taxpayers under the current distribution formula; and,

WHEREAS, the vast majority of the in lieu property tax revenue generated by the Minntac facility is distributed outside the City of Mountain Iron and its school district, including to communities which do not have operating taconite facilities within their jurisdiction; and,

WHEREAS, other core Iron Range Communities, such as Keewatin, Hibbing, Virginia, Eveleth, Gilbert, and Hoyt Lakes are host to taconite facilities whose in lieu property tax payments are distributed to municipalities without taconite facilities in their communities; and,

WHEREAS, the current system of distributing taconite production tax revenue is grossly unfair because it takes revenue generated in lieu of property taxes in taconite communities and distributes a substantial portion of this revenue to non-taconite communities;

NOW, THEREFORE BE IT RESOLVED by the City Council of Mountain Iron, Minnesota, that the City of Mountain Iron formally recommends and urges the Iron Range Legislative delegation and the State legislature to enact legislation which:

(1) shrinks the Taconite Tax Relief Area so that it more directly corresponds to the core area of the Iron Range where taconite mining and concentrating occurs today; and

(2) reduces or eliminates the distribution of taconite production tax revenue to municipalities, schools, counties, and taxpayers in communities with little or no property generating taconite production tax revenue.

DULY ADOPTED BY THE CITY COUNCIL THIS 16TH DAY OF JANUARY, 2001.

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