Future of taconite tax rebates uncertain

Minnesota State Roundup

Published July 1, 2001  | July 2001 issue

After an eight-year run, a taconite tax rebate program has been found unconstitutional by a U.S. District Court; the decision will not be appealed by Minnesota's Iron Range Resources and Rehabilitation Board (IRRRB).

The Taconite Economic Development Fund was created by the state Legislature in 1992 to funnel a portion of taconite mine taxes through the IRRRB to encourage investment in new technology, equipment and research at the Iron Range's mines. A suit filed by one of the mines charged that the fund's disbursement method interfered with the labor negotiation process, saying that union members on the disbursement committee used their voting power to labor's advantage.

Since 1993 the fund has rebated more than $62.2 million, and this year about $3 million has already gone to two taconite mines, based on their 2000 production levels. Another four taconite plants have not yet received rebates from 2000 taxes. However, it is expected that the rebates will continue, but the procedure is still under discussion.

Kathy Cobb