Taconite Economic Development Fund
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During 1993-2010, IRRRB has reinvested a total of $192,796,611 in the Minnesota taconite industry through the following programs.
In 1992, the Minnesota Legislature established the Taconite Economic Development Fund (TEDF) to encourage capital investments in northeast Minnesota taconite plants. From 1993 through 2010, the TEDF program has reinvested more than $140 million back into northeast Minnesota taconite plants for workforce development and associated public facility improvement, for acquisition of plant and stationary mining equipment and facilities for the producer or for research and development in Minnesota on new mining, or taconite, iron, or steel production technology. These dollars leverage additional investments by the taconite producers. The taconite producers receive 30.1 cents for every ton of taconite they produce and must match it with a minimum of 7.35 cents per ton for an approved project. This rebate, commonly referred to as the investment tax credit, was made permanent by the 2001 Legislature.
From 1993 through 2010, IRRRB has refunded $146,407,050 of the Taconite Production Tax to the Minnesota taconite producers. (TEDF, Minnesota Statute §298.227). In 2001, the Legislature made the TEDF permanent and increased the distribution by 14.7-cents per ton to 30.1-cents beginning in 2002. In 2008, the Legislature made a one year reduction to 20.1 cents per ton. If the total annual production, from all producers, does not exceed 30 million tons, the rebate on pellet production is suspended for that year. The chips and fines that are produced that year are unaffected and remain eligible for the 15.4 cents per ton rebate. In 2009, taconite pellet production fell below the 30 million ton minimum, so that in 2010 only chips and fines production were eligible for the rebate.
The agency has provided an additional $46,389,561 since 1993 to the taconite producers through its Taconite Assistance Program, Producer Grant Program (PGP, Minnesota Statute §298.2961) and other assistance. This amount includes $10 million appropriated in 1996 from the Douglas J. Johnson Trust Fund for the PGP through which IRRRB provided grants to taconite producers for environmentally unique reclamation projects and facility improvements.
In March 2009 the University of Minnesota – Duluth, Labovitz School of Business and Economics, Bureau of Business and Economic Research completed and released a study titled, “The Economic Impact of Ferrous and Non-ferrous Mining on the State of Minnesota and on the Arrowhead Region and Douglas County, WI.” The data presented show that taconite mining is responsible for 32% of the local area’s economy, forestry contributes 12% and tourism provides 11%. Mining’s impact is 3 times greater than either forestry or tourism. The TEDF Program leverages additional funding from taconite companies as an incentive to stimulate capital investments in the Minnesota facilities. The result is to insure this critical component of Minnesota’s economy remains viable and competitive in the global industry.
2010 Minnesota Mining Tax Guide (476K)
