Minnesota 2025-2026 Regular Session

Minnesota House Bill HF2447 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	1.1 A bill for an act
2	2	1.2 relating to natural resources; facilitating the orderly and environmentally responsible
3	3	1.3 development of the state's gas resources; requiring rulemaking; appropriating
4	4	1.4 money; providing criminal penalties; amending Minnesota Statutes 2024, sections
5	5	1.5 11A.236; 86A.05, subdivision 6; 93.513, subdivision 1; 93.514; 93.516, subdivision
6	6	1.6 3, by adding a subdivision; 93.55, subdivision 1a; 103I.001; 103I.005, subdivisions
7	7	1.7 9, 21, by adding subdivisions; 103I.601, subdivision 1, by adding subdivisions;
8	8	1.8 272.02, subdivision 97; 272.03, subdivision 1; 273.12; 289A.02, subdivision 6;
9	9	1.9 289A.12, by adding a subdivision; 289A.19, subdivision 2; 290.0134, subdivision
10	10	1.10 9; 290.0135; 290.05, subdivision 1; 290.923, subdivision 1; 297A.68, subdivision
11	11	1.11 5; 297A.71, subdivision 14; 298.001, subdivision 3a, by adding subdivisions;
12	12	1.12 298.01, subdivisions 3, 3a, 3b, 4a, 4b, 5, 6; 298.015, subdivision 1; 298.016,
13	13	1.13 subdivisions 1, 2, 3, 4, by adding a subdivision; 298.018, subdivisions 1, 1a, 2, by
14	14	1.14 adding a subdivision; 298.17; proposing coding for new law in Minnesota Statutes,
15	15	1.15 chapters 93; 103I; repealing Minnesota Statutes 2024, section 93.513, subdivision
16	16	1.16 2.
17	17	1.17BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
18	18	1.18 ARTICLE 1
19	19	1.19 NATURAL RESOURCES
20	20	1.20 Section 1. Minnesota Statutes 2024, section 11A.236, is amended to read:
21	21	1.21 11A.236 ACCOUNT TO INVEST FINANCIAL ASSURANCE MONEY FROM
22	22	1.22PERMITS TO MINE AND GAS RESOURCE DEVELOPMENT PERMITS.
23	23	1.23 Subdivision 1.Establishment; appropriation.(a) The State Board of Investment, when
24	24	1.24requested by the commissioner of natural resources, may invest money collected by the
25	25	1.25commissioner as part of financial assurance provided under a permit to mine or gas resource
26	26	1.26development permit issued under chapter 93. The State Board of Investment may establish
27	27	1.27one or more accounts into which money may be deposited for the purposes of this section,
28	28	1.28subject to the policies and procedures of the State Board of Investment. Use of any money
29	29	1Article 1 Section 1.
30	30	REVISOR CKM/AD 25-0462203/12/25
31	31	State of Minnesota
32	32	This Document can be made available
33	33	in alternative formats upon request
34	34	HOUSE OF REPRESENTATIVES
35	35	H. F. No. 2447
36	36	NINETY-FOURTH SESSION
37	37	Authored by Skraba, Schultz, Igo, Warwas, Heintzeman and others03/17/2025
38	38	The bill was read for the first time and referred to the Committee on Environment and Natural Resources Finance and Policy 2.1in the account is restricted to the financial assurance purposes identified in sections 93.46
39	39	2.2to 93.51 93.5182 and rules adopted thereunder and as authorized under any trust fund
40	40	2.3agreements or other conditions established under a permit to mine or gas resource
41	41	2.4development permit.
42	42	2.5 (b) Money in an account established under paragraph (a) is appropriated to the
43	43	2.6commissioner of natural resources for the purposes for which the account is established
44	44	2.7under this section.
45	45	2.8 Subd. 2.Account maintenance and investment.(a) The commissioner of natural
46	46	2.9resources may deposit money in the appropriate account and may withdraw money from
47	47	2.10the appropriate account for the financial assurance purposes identified in sections 93.46 to
48	48	2.1193.51 93.5182 and rules adopted thereunder and as authorized under any trust fund
49	49	2.12agreements or other conditions established under the permit to mine or gas resource
50	50	2.13development permit for which the financial assurance is provided, subject to the policies
51	51	2.14and procedures of the State Board of Investment.
52	52	2.15 (b) Investment strategies related to an account established under this section must be
53	53	2.16determined jointly by the commissioner of natural resources and the executive director of
54	54	2.17the State Board of Investment. The authorized investments for an account are the investments
55	55	2.18authorized under section 11A.24 that are made available for investment by the State Board
56	56	2.19of Investment.
57	57	2.20 (c) Investment transactions must be at a time and in a manner determined by the executive
58	58	2.21director of the State Board of Investment. Decisions to withdraw money from the account
59	59	2.22must be determined by the commissioner of natural resources, subject to the policies and
60	60	2.23procedures of the State Board of Investment. Investment earnings must be credited to the
61	61	2.24appropriate account for financial assurance under the identified permit to mine or gas
62	62	2.25resource development permit.
63	63	2.26 (d) The commissioner of natural resources may terminate an account at any time, so
64	64	2.27long as the termination is in accordance with applicable statutes, rules, trust fund agreements,
65	65	2.28or other conditions established under the permit to mine or gas resource development permit,
66	66	2.29subject to the policies and procedures of the State Board of Investment.
67	67	2.30 Sec. 2. Minnesota Statutes 2024, section 86A.05, subdivision 6, is amended to read:
68	68	2.31 Subd. 6.State wilderness area; purpose; resource and site qualifications;
69	69	2.32administration.(a) A state wilderness area shall be established to preserve, in a natural
70	70	2Article 1 Sec. 2.
71	71	REVISOR CKM/AD 25-0462203/12/25 3.1wild and undeveloped condition, areas which offer outstanding opportunities for solitude
72	72	3.2and primitive types of outdoor recreation.
73	73	3.3 (b) No unit shall be authorized as a state wilderness area unless its proposed location
74	74	3.4substantially satisfies the following criteria: appears to have been primarily affected by the
75	75	3.5forces of nature, with the evidence of humanity being substantially unnoticeable or where
76	76	3.6the evidence of humanity may be eliminated by restoration.
77	77	3.7 (c) State wilderness areas shall be administered by the commissioner of natural resources
78	78	3.8in a manner which is consistent with the purposes of this subdivision, and shall be managed
79	79	3.9only to the extent necessary to control fire, insects, and disease, and to preserve existing
80	80	3.10wilderness or reestablish wilderness conditions. There shall be no development of public
81	81	3.11roads, permanent dwellings, or recreational facilities except trails for nonmotorized traffic.
82	82	3.12Motorized traffic shall not be allowed. No commercial utilization of timber or minerals
83	83	3.13shall be allowed, except for gas resources that are commercially developed without disturbing
84	84	3.14the surface. Facilities existing at the time of establishment shall be removed.
85	85	3.15 Sec. 3. Minnesota Statutes 2024, section 93.513, subdivision 1, is amended to read:
86	86	3.16 Subdivision 1.Permit required.Except as provided in section 103I.681, a person must
87	87	3.17not engage in or carry out production of gas or oil from consolidated or unconsolidated
88	88	3.18formations in the state unless the person has first obtained a permit for the production of
89	89	3.19gas or oil from the commissioner of natural resources. Any permit under this section must
90	90	3.20be protective of natural resources and require a demonstration of control of the extraction
91	91	3.21area through ownership, lease, or agreement must not be issued until the requirements in
92	92	3.22sections 93.517 to 93.5182 are met. For purposes of this section, "gas" includes both
93	93	3.23hydrocarbon and nonhydrocarbon gases. For purposes of this section, "production" includes
94	94	3.24extraction and beneficiation of gas or oil.
95	95	3.25 Sec. 4. Minnesota Statutes 2024, section 93.514, is amended to read:
96	96	3.26 93.514 GAS AND OIL PRODUCTION RULEMAKING.
97	97	3.27 (a) The following agencies may adopt rules governing gas and oil exploration or
98	98	3.28production, as applicable:
99	99	3.29 (1) the commissioner of the Pollution Control Agency may adopt or amend rules
100	100	3.30regulating air emissions; water discharges, including stormwater management; and storage
101	101	3.31tanks as they pertain to gas and oil production;
102	102	3Article 1 Sec. 4.
103	103	REVISOR CKM/AD 25-0462203/12/25 4.1 (2) the commissioner of health may adopt or amend rules on groundwater and surface
104	104	4.2water protection, exploratory boring construction, drilling registration and licensure, and
105	105	4.3inspections as they pertain to the exploration and appraisal of gas and oil resources;
106	106	4.4 (3) (2) the Environmental Quality Board may adopt or amend rules to establish mandatory
107	107	4.5categories for environmental review as they pertain to gas and oil production;
108	108	4.6 (4) (3) the commissioner of natural resources must adopt or amend rules pertaining to
109	109	4.7the conversion of an exploratory boring to a production well, pooling, spacing, unitization,
110	110	4.8well abandonment, siting, financial assurance, and reclamation, and leasing state mineral
111	111	4.9interests for the production of gas and oil; and
112	112	4.10 (5) (4) the commissioner of labor and industry may adopt or amend rules to protect
113	113	4.11workers from exposure and other potential hazards from gas and oil production.
114	114	4.12 (b) An agency adopting rules under this section must use the expedited procedure in
115	115	4.13section 14.389. Rules adopted or amended under this authority are exempt from the 18-month
116	116	4.14time limit under section 14.125. The agency must publish notice of intent to adopt expedited
117	117	4.15rules within 24 months of May 22, 2024.
118	118	4.16 (c) For purposes of this section, "gas" includes both hydrocarbon and nonhydrocarbon
119	119	4.17gases. "Production" includes extraction and beneficiation of gas or oil from consolidated
120	120	4.18or unconsolidated formations in the state.
121	121	4.19 (d) Any grant of rulemaking authority in this section is in addition to existing rulemaking
122	122	4.20authority and does not replace, impair, or interfere with any existing rulemaking authority.
123	123	4.21 Sec. 5. Minnesota Statutes 2024, section 93.516, subdivision 3, is amended to read:
124	124	4.22 Subd. 3.Lease terms.The commissioner must negotiate the terms of each lease entered
125	125	4.23into under this section on a case-by-case basis, taking into account the unique geological
126	126	4.24and environmental aspects of each proposal, control of adjacent lands, and the best interests
127	127	4.25of the state. A lease entered into under this section must be consistent with the following:
128	128	4.26 (1) the primary term of the lease may not exceed five years plus the unexpired portion
129	129	4.27of the calendar year in which the lease is issued. The commissioner and applicant may
130	130	4.28negotiate the conditions by which the lease may be extended beyond the primary term, in
131	131	4.29whole or in part;
132	132	4.30 (2) a bonus consideration of not less than $15 per acre must be paid by the applicant to
133	133	4.31the Department of Natural Resources before the lease is executed;
134	134	4Article 1 Sec. 5.
135	135	REVISOR CKM/AD 25-0462203/12/25 5.1 (3) the commissioner of natural resources may require an applicant to provide financial
136	136	5.2assurance to ensure payment of any damages resulting from the production of gas or oil;
137	137	5.3 (4) the rental rates must not be less than $5 per acre per year for the unexpired portion
138	138	5.4of the calendar year in which the lease is issued and in years thereafter; and
139	139	5.5 (5) on gas and oil produced and sold by the lessee from the lease area, the lessee must
140	140	5.6pay a production royalty to the Department of Natural Resources of not less than 18.75
141	141	5.7percent of the gross sales price of the product sold free on board at the delivery point, and
142	142	5.8the royalty must be credited as provided in section 93.22. For purposes of this section, "gross
143	143	5.9sales price" means the total consideration paid by the first purchaser that is not an affiliate
144	144	5.10of the lessee for gas or oil produced from the leased premises.
145	145	5.11 Sec. 6. Minnesota Statutes 2024, section 93.516, is amended by adding a subdivision to
146	146	5.12read:
147	147	5.13 Subd. 4.Disposition of payments.Payments made under this section as a bonus
148	148	5.14consideration, rental, or royalty must be made to the Department of Natural Resources and
149	149	5.15must be credited as provided in section 93.22.
150	150	5.16 Sec. 7. [93.517] DECLARATION OF POLICY.
151	151	5.17 It is the policy of the state to provide for the beneficial and orderly development of the
152	152	5.18state's gas resources through laws and policies that:
153	153	5.19 (1) avoid drilling unnecessary wells by establishing spacing units that regulate the density
154	154	5.20of drilling, pooling units that combine tracts and mineral interests, and implementing rules
155	155	5.21for utilizing gas reservoirs;
156	156	5.22 (2) prevent waste;
157	157	5.23 (3) protect correlative rights;
158	158	5.24 (4) provide for reclamation of gas resource development locations in a manner that
159	159	5.25controls adverse environmental effects and preserves the state's natural resources, both in
160	160	5.26the interest of the general welfare and as an exercise of the police power of the state;
161	161	5.27 (5) encourage planning for future land utilization; and
162	162	5.28 (6) recognize the beneficial aspects of gas resource development.
163	163	5Article 1 Sec. 7.
164	164	REVISOR CKM/AD 25-0462203/12/25 6.1 Sec. 8. [93.5171] DEFINITIONS.
165	165	6.2 Subdivision 1.Applicability.The definitions in this section apply to sections 93.517 to
166	166	6.393.5182.
167	167	6.4 Subd. 2.Commissioner."Commissioner" means the commissioner of natural resources.
168	168	6.5 Subd. 3.Contingency reclamation plan."Contingency reclamation plan" means a plan
169	169	6.6that:
170	170	6.7 (1) identifies reclamation activities, including closure and postclosure maintenance work,
171	171	6.8to be implemented by the permittee if operations cease or if producing gas wells are idled
172	172	6.9for more than 36 months; and
173	173	6.10 (2) includes the methods, sequence, and schedule of reclamation activities, maps and
174	174	6.11cross sections that depict gas resource development locations both before and after
175	175	6.12reclamation activities are completed, and cost estimates necessary to implement the
176	176	6.13contingency reclamation plan.
177	177	6.14 Subd. 4.Corrective action."Corrective action" means the immediate action that must
178	178	6.15be taken to correct an observed violation of the gas resource development permit. Corrective
179	179	6.16action may consist of immediately curing the violation or submitting within two weeks a
180	180	6.17corrective action plan for approval before the permittee implements actions to correct an
181	181	6.18observed violation.
182	182	6.19 Subd. 5.Correlative rights."Correlative rights" means the right of each owner and
183	183	6.20producer in a common pool or source of supply of gas resources to an equal opportunity to
184	184	6.21obtain and produce the owner's or producer's just and equitable share of the gas resources
185	185	6.22underlying the pool or source of supply.
186	186	6.23 Subd. 6.Department."Department" means the Department of Natural Resources.
187	187	6.24 Subd. 7.Exploration and production waste."Exploration and production waste" means
188	188	6.25waste that is associated with operations to locate or remove gas resources from the ground
189	189	6.26or to remove impurities from such substances and that is uniquely associated with and
190	190	6.27intrinsic to gas exploration, development, or production operations that are exempt from
191	191	6.28regulation under Subtitle C of the Resource Conservation and Recovery Act, United States
192	192	6.29Code, title 42, section 6921, et seq.
193	193	6.30 Subd. 8.Gas."Gas" means both hydrocarbon and nonhydrocarbon gas.
194	194	6Article 1 Sec. 8.
195	195	REVISOR CKM/AD 25-0462203/12/25 7.1 Subd. 9.Gas resource development facility."Gas resource development facility" means
196	196	7.2equipment or improvements used or installed for exploring, producing, withdrawing, treating,
197	197	7.3or processing gas resources.
198	198	7.4 Subd. 10.Gas resource development location."Gas resource development location"
199	199	7.5means a definable area where an operator has disturbed or intends to disturb the land surface
200	200	7.6to locate a gas resource development facility.
201	201	7.7 Subd. 11.Gas resource development operations."Gas resource development
202	202	7.8operations" means exploring for gas resources by drilling exploratory borings; siting, drilling,
203	203	7.9deepening, recompleting, reworking, or abandoning a gas well; producing operations related
204	204	7.10to any gas well, including installing flow lines; generating, transporting, storing, treating,
205	205	7.11or disposing of exploration and production wastes; and any construction, site preparation,
206	206	7.12or reclamation activities associated with such operations.
207	207	7.13 Subd. 12.Gas resource development plan."Gas resource development plan" means
208	208	7.14a plan to develop gas resources at one or more gas resource development locations.
209	209	7.15 Subd. 13.Gas well."Gas well" means a gas well, as defined in section 103I.005,
210	210	7.16subdivision 10b, that is sited at a gas resource development location.
211	211	7.17 Subd. 14.Interested party."Interested party" means a person with an ownership or
212	212	7.18leasehold interest in real property or in severed mineral rights.
213	213	7.19 Subd. 15.Natural resources."Natural resources" has the meaning given in section
214	214	7.20116B.02, subdivision 4.
215	215	7.21 Subd. 16.Notice."Notice" means publishing the information required by the
216	216	7.22commissioner at least once in each of the following at least 60 days but not more than 180
217	217	7.23days before a public meeting:
218	218	7.24 (1) the State Register;
219	219	7.25 (2) the EQB Monitor;
220	220	7.26 (3) the department's website; and
221	221	7.27 (4) one of the following:
222	222	7.28 (i) a qualified newspaper as defined in chapter 331A that has its known office of issue
223	223	7.29in the county seat of the county where the lands at issue are located; or
224	224	7.30 (ii) if no qualified newspaper has its known office of issue in the county seat of a
225	225	7.31particular county, the qualified newspaper designated as the publisher of the official
226	226	7.32proceedings of the county board of that county.
227	227	7Article 1 Sec. 8.
228	228	REVISOR CKM/AD 25-0462203/12/25 8.1 Subd. 17.Operator."Operator" means an owner or lessee of mineral rights engaged in
229	229	8.2or preparing to engage in gas resource development operations.
230	230	8.3 Subd. 18.Permittee."Permittee" means a person who holds a gas resource development
231	231	8.4permit.
232	232	8.5 Subd. 19.Person."Person" includes firms, partnerships, corporations, and other groups.
233	233	8.6 Subd. 20.Reclamation."Reclamation" means the actions required to comply with
234	234	8.7sections 93.517 to 93.5182 regarding decommissioning a gas resource development facility
235	235	8.8and restoring any associated gas resource development locations.
236	236	8.9 Subd. 21.Spacing order."Spacing order" means the act by the commissioner of
237	237	8.10allocating lands to a spacing unit.
238	238	8.11 Subd. 22.Spacing unit or unit."Spacing unit" or "unit" means lands allocated by the
239	239	8.12commissioner to a single gas well or multiple gas wells for developing gas resources under
240	240	8.13a spacing order.
241	241	8.14 Sec. 9. [93.5172] SPACING UNIT.
242	242	8.15 Subdivision 1.Spacing unit.An operator must propose to the commissioner a new
243	243	8.16spacing unit for each gas well or set of gas wells that the operator plans to drill at a gas
244	244	8.17resource development location. A spacing unit must include the maximum area that can be
245	245	8.18efficiently and effectively drained by the operator's well or set of wells. The minimum area
246	246	8.19of a proposed spacing unit is a quarter-quarter section of land.
247	247	8.20 Subd. 2.Spacing unit application.An operator must apply to the commissioner for a
248	248	8.21spacing unit under this section. An operator must submit with the application a certified
249	249	8.22check, cashier's check, or bank money order payable to the Department of Natural Resources
250	250	8.23in the sum of $100 as a fee for filing the application. The application fee must not be refunded
251	251	8.24under any circumstances. The state reserves the right to reject any or all applications for a
252	252	8.25spacing unit. The commissioner must prescribe the information to be included in a spacing
253	253	8.26unit application. Until the commissioner adopts rules regarding spacing, a spacing unit
254	254	8.27application must include but is not limited to:
255	255	8.28 (1) for at least one portion of a mineral tract within the proposed unit, documentation
256	256	8.29showing the applicant's status as an owner or lessee within the unit. Acceptable forms of
257	257	8.30documentation include but are not limited to:
258	258	8.31 (i) a mineral deed;
259	259	8.32 (ii) a mineral lease or memorandum of lease;
260	260	8Article 1 Sec. 9.
261	261	REVISOR CKM/AD 25-0462203/12/25 9.1 (iii) any other agreement confirming the applicant's right to drill into and produce from
262	262	9.2a pool or a memorandum of such agreement; or
263	263	9.3 (iv) for federal minerals, certification that the applicant will comply with any applicable
264	264	9.4federal unit agreement or communitization agreement requirements;
265	265	9.5 (2) certification that the operations in the spacing unit will be conducted in a reasonable
266	266	9.6manner to protect and minimize adverse impacts to public health, safety, and welfare; the
267	267	9.7environment; and wildlife resources;
268	268	9.8 (3) a description of the unit boundary and, if proposing more than one well within a
269	269	9.9spacing unit, the setback distances between each well;
270	270	9.10 (4) geologic and operational data used by the operator to establish the boundaries of a
271	271	9.11spacing unit;
272	272	9.12 (5) the total number of wells within the proposed unit;
273	273	9.13 (6) the gas resource development locations that are proposed for the unit; and
274	274	9.14 (7) identification of the associated gas resource development permit application. If the
275	275	9.15proposed spacing unit and drilling operations are tied to an existing gas resource development
276	276	9.16plan, the operator must identify both the approved plan and associated application for a
277	277	9.17permit amendment.
278	278	9.18 Subd. 3.Establishing spacing unit.(a) After notice and a public meeting in the county
279	279	9.19or counties where the proposed spacing unit is located, the commissioner may establish
280	280	9.20spacing units by issuing a spacing order. The commissioner may modify the size or shape
281	281	9.21of the spacing unit proposed in the application.
282	282	9.22 (b) Until the commissioner adopts rules regarding spacing, in determining whether to
283	283	9.23approve, approve with modifications, or deny a proposed spacing unit, the commissioner
284	284	9.24must consider whether the proposed spacing unit:
285	285	9.25 (1) prevents waste of gas resources;
286	286	9.26 (2) avoids drilling unnecessary wells; and
287	287	9.27 (3) protects correlative rights.
288	288	9.28 Subd. 4.Amending established spacing unit.(a) The commissioner may amend or
289	289	9.29modify a spacing unit established under a spacing order upon application or upon the
290	290	9.30commissioner's own initiative. The size of the established spacing unit may be decreased
291	291	9.31or increased or additional wells permitted to be drilled within the established unit to prevent
292	292	9Article 1 Sec. 9.
293	293	REVISOR CKM/AD 25-0462203/12/25 10.1or assist in preventing waste, to avoid drilling unnecessary wells, or to protect correlative
294	294	10.2rights.
295	295	10.3 (b) An operator or interested party may file an application to amend an established
296	296	10.4spacing unit with the commissioner.
297	297	10.5 Subd. 5.Temporary exploratory spacing unit.If the commissioner is unable to
298	298	10.6determine, based on information in the spacing unit application or presented at the public
299	299	10.7meeting, the existence of a pool, the appropriate acreage to be included within a spacing
300	300	10.8unit, or the shape of the spacing unit, the commissioner may establish an exploratory spacing
301	301	10.9unit to obtain evidence as to the existence of a pool and the appropriate size and shape of
302	302	10.10the spacing unit to be applied to the pool. In establishing the size and shape of the exploratory
303	303	10.11spacing unit, the commissioner may consider, but is not limited to considering, the size and
304	304	10.12shape of spacing units previously established by the commissioner for the same gas-bearing
305	305	10.13rock units in other areas of the same geologic rock formation.
306	306	10.14 Subd. 6.Appeals.Spacing orders issued by the commissioner may be appealed according
307	307	10.15to section 93.5181.
308	308	10.16Sec. 10. [93.5173] POOLING.
309	309	10.17 Subdivision 1.Voluntary pooling.When two or more separately owned tracts, including
310	310	10.18any state-owned tracts, are embraced within a spacing unit or when there are separately
311	311	10.19owned interests in all or a part of a spacing unit, the persons owning the interests may pool
312	312	10.20their interests for developing and operating the spacing unit.
313	313	10.21 Subd. 2.Involuntary pooling.In the absence of voluntary pooling, the commissioner,
314	314	10.22upon the application of a person that owns or leases at least 50 percent of the mineral interests
315	315	10.23to be pooled, may issue an order pooling all interests in the spacing unit, including those
316	316	10.24interests of nonconsenting owners, for developing and operating the spacing unit. The
317	317	10.25commissioner must issue a draft pooling order after notice and a public meeting in the
318	318	10.26county or counties where the pooling area is located. The order must be upon terms and
319	319	10.27conditions that protect all owners' correlative rights and that afford to the owner of each
320	320	10.28tract or interest in the spacing unit the opportunity to recover or receive, without unnecessary
321	321	10.29expense, a just and equitable share. The goal of a pooling order is to allow for equitable and
322	322	10.30efficient development of gas resources while minimizing waste and the drilling of
323	323	10.31unnecessary wells. The commissioner must serve a copy of a draft pooling order by certified
324	324	10.32mail on all owners listed in the affidavit provided under subdivision 3. The applicant, any
325	325	10.33party served with the order, or any interested party within the spacing unit may demand a
326	326	10.34contested case hearing within 30 days of the date of mailing. The contested case hearing
327	327	10Article 1 Sec. 10.
328	328	REVISOR CKM/AD 25-0462203/12/25 11.1must be conducted according to chapter 14. After the contested case hearing, if any, the
329	329	11.2commissioner must issue a final order.
330	330	11.3 Subd. 3.Pooling order application.(a) An operator must submit an application for a
331	331	11.4pooling order under this section to the commissioner. An operator must submit with the
332	332	11.5application a certified check, cashier's check, or bank money order payable to the Department
333	333	11.6of Natural Resources in the sum of $100 as a fee for filing the application. The application
334	334	11.7fee must not be refunded under any circumstances. The state reserves the right to reject any
335	335	11.8or all applications for a pooling order. The commissioner must prescribe the information
336	336	11.9to be included in a pooling order application.
337	337	11.10 (b) An application for a pooling order must include:
338	338	11.11 (1) proof that the applicant controls at least 50 percent of the mineral interests to be
339	339	11.12pooled;
340	340	11.13 (2) a map showing the location of ownership interests within the spacing unit;
341	341	11.14 (3) identification of mineral interests within the spacing unit that the applicant does not
342	342	11.15own or lease and the location of and owner's name and address for all such interests; and
343	343	11.16 (4) an affidavit by the applicant that the applicant made a good faith effort to lease the
344	344	11.17mineral interests identified in clause (3) within the spacing unit, which must contain
345	345	11.18information as to any lease offer made to a mineral interest owner or efforts to contact a
346	346	11.19mineral interest owner.
347	347	11.20 Subd. 4.Drilling and extraction prohibited before pooling order issued.If a spacing
348	348	11.21unit contains the mineral interests of any unleased mineral interest owner who has rejected
349	349	11.22an offer to lease, an operator must not drill or extract gas resources from the spacing unit
350	350	11.23before the commissioner issues a pooling order.
351	351	11.24 Subd. 5.Lands excluded from pooling order.(a) Notwithstanding any provision in
352	352	11.25this section to the contrary, the commissioner must not issue a pooling order that pools the
353	353	11.26mineral interests of an unleased mineral interest owner if the owner is:
354	354	11.27 (1) the federal government;
355	355	11.28 (2) an American Indian Tribe or Band; or
356	356	11.29 (3) a Tribal member and the land is located within that Tribe's reservation or community.
357	357	11.30 (b) If a pooling order application proposes to pool mineral interests described in paragraph
358	358	11.31(a), the commissioner must deny the application unless the applicant amends the application
359	359	11.32to no longer request the pooling of the unleased mineral interests described in paragraph
360	360	11Article 1 Sec. 10.
361	361	REVISOR CKM/AD 25-0462203/12/25 12.1(a). Nothing in this subdivision affects, limits, or expands the authority of the federal
362	362	12.2government or an American Indian Tribe or Band to lease, refuse to lease, voluntarily pool,
363	363	12.3or otherwise dispose of their unleased mineral interests.
364	364	12.4 Subd. 6.Pooling orders.(a) On any portion of a spacing unit covered by a pooling
365	365	12.5order, all operations incident to well drilling are deemed to be the conduct of operations on
366	366	12.6each separately owned tract by the several owners of each separately owned tract. Any
367	367	12.7portion of production allocated or applicable to each tract included in a spacing unit covered
368	368	12.8by a pooling order is deemed to have been produced from the tract by a well drilled on the
369	369	12.9tract.
370	370	12.10 (b) Each pooling order must:
371	371	12.11 (1) provide for drilling one or more wells, if not already drilled, within the spacing unit
372	372	12.12in such a manner as to prevent waste;
373	373	12.13 (2) provide for payment of the reasonable actual cost of the wells, including drilling and
374	374	12.14operating the wells, and a reasonable charge for supervision and storage;
375	375	12.15 (3) provide for the proportionate share of the costs and risks of drilling and operating
376	376	12.16wells for each owner, including each nonconsenting owner, as follows:
377	377	12.17 (i) except as provided in subdivision 7, as to each nonconsenting owner who refuses to
378	378	12.18bear a proportionate share of the costs and risks of drilling and operating the wells, the
379	379	12.19pooling order must provide for reimbursement to consenting owners to be paid out of, and
380	380	12.20only out of, production from the unit representing the nonconsenting owner's interest;
381	381	12.21 (ii) such reimbursement must exclude any royalty or other interest not obligated to pay
382	382	12.22any part of the costs of drilling and operating the wells if, and to the extent that, the royalty
383	383	12.23is consistent with the lease terms prevailing in the area and is not designed to avoid the
384	384	12.24recovery of costs provided for in paragraph (c); and
385	385	12.25 (iii) in the event of any dispute as to the allocation of any costs of drilling and operating
386	386	12.26the wells, the commissioner must determine the allocation of costs as specified in paragraph
387	387	12.27(c);
388	388	12.28 (4) determine the interest of each owner in the spacing unit and provide that each
389	389	12.29consenting owner is entitled to receive a share of the production from the wells applicable
390	390	12.30to the owner's interest in the wells, subject to royalty or similar obligations;
391	391	12.31 (5) provide that each consenting owner is entitled to receive a proportionate part of any
392	392	12.32nonconsenting owner's share of the production until costs are recovered;
393	393	12Article 1 Sec. 10.
394	394	REVISOR CKM/AD 25-0462203/12/25 13.1 (6) provide that each nonconsenting owner is entitled to own and receive that share of
395	395	13.2the production applicable to the nonconsenting owner's interest in the spacing unit after all
396	396	13.3consenting owners have recovered the nonconsenting owner's share of the costs out of
397	397	13.4production;
398	398	13.5 (7) specify that any nonconsenting owner is immune from liability for costs arising from
399	399	13.6spills, releases, damage, or injury resulting from gas resource development operations on
400	400	13.7the spacing unit, to the extent that such liability is not the fault of the nonconsenting owner;
401	401	13.8and
402	402	13.9 (8) prohibit operators from using the surface owned by a nonconsenting owner without
403	403	13.10express permission from the nonconsenting owner.
404	404	13.11 (c) The commissioner must determine proper costs recoverable by the consenting owners
405	405	13.12of a spacing unit from the nonconsenting owner's share of production from the unit as
406	406	13.13follows:
407	407	13.14 (1) 100 percent of the nonconsenting owner's share of the cost of surface equipment
408	408	13.15beyond the wellhead connections, including stock tanks, separators, treaters, pumping
409	409	13.16equipment, and piping, plus 100 percent of the nonconsenting owner's share of the cost of
410	410	13.17operating the well or wells beginning with first production and continuing until the consenting
411	411	13.18owners have recovered such costs. Any nonconsenting owner's share of the costs of
412	412	13.19equipment and operation is that interest that would have been chargeable to the nonconsenting
413	413	13.20owner had the owner initially agreed to pay the owner's share of the costs of the well or
414	414	13.21wells from the beginning of the operation; and
415	415	13.22 (2) 200 percent of that portion of the costs and expenses of permitting, environmental
416	416	13.23review, surveying, well site preparation, obtaining rights-of-way, rigging up, drilling,
417	417	13.24reworking, deepening or plugging back, testing, and completing the well, after deducting
418	418	13.25any cash contributions received by the consenting owners, and 200 percent of that portion
419	419	13.26of the cost of equipment in the well, including the wellhead connections.
420	420	13.27 Subd. 7.Costs and royalties for nonconsenting owners.A nonconsenting owner of a
421	421	13.28tract within a spacing unit that is not subject to any lease or other contract for gas
422	422	13.29development is entitled to a landowner's proportionate royalty of 18.75 percent until the
423	423	13.30consenting owners recover the costs specified in subdivision 6, paragraph (c). Until costs
424	424	13.31are recovered, the remaining 81.25 percent of the nonconsenting owner's proportionate
425	425	13.32share is allocated to reimburse costs to the consenting owners, as described in subdivision
426	426	13.336, paragraph (b), clause (3). After recovery of costs, the nonconsenting owner is deemed to
427	427	13Article 1 Sec. 10.
428	428	REVISOR CKM/AD 25-0462203/12/25 14.1own their full proportionate share of the wells, surface facilities, and production and is then
429	429	14.2liable for any further costs as if the nonconsenting owner had been a consenting owner.
430	430	14.3 Subd. 8.Good faith effort of lease offer to nonconsenting owners.(a) The
431	431	14.4commissioner must not enter an order pooling an unleased, nonconsenting mineral interest
432	432	14.5owner under this section over the protest of the owner unless the commissioner receives
433	433	14.6evidence that the unleased mineral interest owner has been:
434	434	14.7 (1) tendered, no less than 60 days before the hearing, a reasonable offer, made in good
435	435	14.8faith, to participate and pay their proportionate share of costs or to lease upon terms no less
436	436	14.9favorable than those currently prevailing in the area at the time application for the order is
437	437	14.10made; and
438	438	14.11 (2) furnished, in writing, the owner's share of the estimated drilling and completion cost
439	439	14.12of the gas wells, the location and objective depth of the gas wells, and the estimated spud
440	440	14.13date for the gas wells or range of time within which spudding is to occur.
441	441	14.14 (b) The offer to participate or lease must include a copy of or link to a brochure supplied
442	442	14.15by the commissioner that clearly and concisely describes the pooling procedures specified
443	443	14.16in this section and the mineral interest owner's options under those procedures.
444	444	14.17 Subd. 9.Disputes between owners and operators.(a) During the period of cost recovery
445	445	14.18provided for under this section, the commissioner does not have jurisdiction to determine
446	446	14.19the reasonableness of costs of operating the wells attributable to the interest of the
447	447	14.20nonconsenting owner. Any owners, consenting or nonconsenting, may file actions in district
448	448	14.21court, against the operators or each other, to challenge the reasonableness of costs.
449	449	14.22 (b) The commissioner does not have jurisdiction to resolve disputes among owners or
450	450	14.23operators regarding the ownership of mineral interests contained within spacing units.
451	451	14.24 Subd. 10.Duty of operator to nonconsenting owners.The operator of gas wells under
452	452	14.25a pooling order in which there is a nonconsenting owner must furnish the nonconsenting
453	453	14.26owner with a monthly statement of all costs incurred, together with the quantity of gas
454	454	14.27produced, and the amount of proceeds realized from the sale of production during the
455	455	14.28preceding month. If the consenting owners recover the costs specified in subdivision 6, the
456	456	14.29nonconsenting owner must own the same interest in the wells and the production from the
457	457	14.30wells and be liable for the further costs of the operation as if the nonconsenting owner had
458	458	14.31participated in the initial drilling operations.
459	459	14Article 1 Sec. 10.
460	460	REVISOR CKM/AD 25-0462203/12/25 15.1 Sec. 11. [93.5174] DUTIES AND AUTHORITY OF COMMISSIONER.
461	461	15.2 The commissioner must administer and enforce sections 93.517 to 93.5182 and the rules
462	462	15.3adopted thereunder and authorized by section 93.514. In so doing, the commissioner may:
463	463	15.4 (1) conduct investigations and inspections that the commissioner deems necessary for
464	464	15.5the proper administration of sections 93.517 to 93.5182;
465	465	15.6 (2) enter upon any part of a gas resource development location in connection with an
466	466	15.7investigation and inspection without liability to the operator or landowner, provided the
467	467	15.8commissioner gives the operator or landowner reasonable prior notice of the intent to do
468	468	15.9so;
469	469	15.10 (3) conduct research or enter into contracts related to gas resource development locations
470	470	15.11and the reclamation of gas resources that the commissioner deems necessary to implement
471	471	15.12sections 93.517 to 93.5182; and
472	472	15.13 (4) allocate surplus wetland credits that are approved by the commissioner under a gas
473	473	15.14resource development permit and that are not otherwise deposited in a state wetland bank.
474	474	15.15Sec. 12. [93.5175] VARIANCE.
475	475	15.16 The commissioner may, upon application by an operator, modify or permit variance
476	476	15.17from the rules adopted under sections 93.514 and 93.517 to 93.5182 if the commissioner
477	477	15.18determines that the modification or variance is consistent with the general welfare.
478	478	15.19Sec. 13. [93.5176] GAS RESOURCE DEVELOPMENT PERMIT.
479	479	15.20 Subdivision 1.Permit required; application.A person must not engage in or carry out
480	480	15.21gas resource development operations at gas resource development locations within the state,
481	481	15.22including drilling gas wells or extracting gas resources, unless the person has first obtained
482	482	15.23a gas resource development permit from the commissioner. All persons engaged in the
483	483	15.24operation must jointly hold the permit, including all parent companies of persons involved
484	484	15.25in the operation. A person applying to the commissioner for a gas resource development
485	485	15.26permit must submit information required by the commissioner, including but not limited
486	486	15.27to:
487	487	15.28 (1) an application fee of $10,000;
488	488	15.29 (2) a certificate issued by an insurance company authorized to do business in the United
489	489	15.30States certifying that the applicant has a public liability insurance policy in force for the
490	490	15.31development of gas resources for which the permit is sought, or evidence that the applicant
491	491	15Article 1 Sec. 13.
492	492	REVISOR CKM/AD 25-0462203/12/25 16.1has satisfied other state or federal self-insurance requirements, to provide personal injury
493	493	16.2and property damage protection in an amount adequate to compensate any persons who
494	494	16.3might be damaged as a result of the gas resource development operations or any reclamation
495	495	16.4or restoration operations connected with gas resource development locations;
496	496	16.5 (3) a map that identifies the location of established or applicant-proposed spacing units
497	497	16.6and the location and extent of all proposed gas resource development locations, access roads,
498	498	16.7gas wells and setback distances between each gas well, and areas with special land uses
499	499	16.8within the proposed spacing unit;
500	500	16.9 (4) a plan map that shows the planned locations of gas resource development facilities
501	501	16.10on all gas resource development locations, including drill pads, gas enrichment facilities,
502	502	16.11storage tanks, and flow lines;
503	503	16.12 (5) a proposed plan for constructing gas resource development facilities, including but
504	504	16.13not limited to gas wells, processing or gas enrichment plants, and connecting flow lines;
505	505	16.14 (6) a proposed plan for gas resource development operations, including but not limited
506	506	16.15to the duration of the project; processes and procedures for gas extraction, enrichment,
507	507	16.16storage, and gas transport to market; and the isolation and management of noncommercial
508	508	16.17gases extracted from gas wells;
509	509	16.18 (7) a proposed plan, including a timeline, for the reclamation or restoration, or both, of
510	510	16.19any gas resource development location affected by operations to be conducted on and after
511	511	16.20the date on which permits are required for the development of gas resources under this
512	512	16.21section;
513	513	16.22 (8) characterization of any exploration and production waste to be stored temporarily
514	514	16.23or permanently at a gas resource development location;
515	515	16.24 (9) plans for financial assurance instruments addressing the cost to close all gas resource
516	516	16.25development facilities and reclaim all gas resource development locations; and
517	517	16.26 (10) a copy of the applicant's advertisement of the ownership, location, and boundaries
518	518	16.27of the proposed gas resource development locations, which advertisement must be published
519	519	16.28in a legal newspaper in the locality of the proposed site at least once a week for four
520	520	16.29successive weeks before the application is filed.
521	521	16.30 Subd. 2.Permits issued during rulemaking.A gas resource development permit issued
522	522	16.31during the pendency of expedited rulemaking authorized under section 93.514 does not
523	523	16.32expire once the rules are adopted if the person holding the permit continues to operate under
524	524	16Article 1 Sec. 13.
525	525	REVISOR CKM/AD 25-0462203/12/25 17.1permitted conditions. If a person holding such a permit applies for a permit amendment
526	526	17.2after rules are adopted:
527	527	17.3 (1) the adopted rules apply to operations covered by both the amendment and the original
528	528	17.4permit; and
529	529	17.5 (2) the application for a permit amendment must include information for the entire project
530	530	17.6that is required under subdivision 1 and the adopted rules.
531	531	17.7 Subd. 3.Commissioner's review; hearing.After receiving an application that the
532	532	17.8commissioner has deemed complete and filed, the commissioner must grant the permit
533	533	17.9applied for, with or without modifications or conditions, or deny the application unless a
534	534	17.10contested case hearing is requested or ordered under section 93.5178. The commissioner's
535	535	17.11decision to grant the permit, with or without modifications or conditions, or deny the
536	536	17.12application is a final order for purposes of section 93.5181. The commissioner, in granting
537	537	17.13a permit with or without modifications or conditions, must determine that the reclamation
538	538	17.14or restoration planned for the operation complies with lawful requirements and can be
539	539	17.15accomplished under available technology and that a proposed reclamation or restoration
540	540	17.16technique is practical and workable under available technology. The commissioner may
541	541	17.17hold public meetings on the application.
542	542	17.18 Subd. 4.Term of permit; amendment.(a) A permit issued by the commissioner under
543	543	17.19this section must be granted for the term determined necessary by the commissioner for
544	544	17.20completing the proposed gas resource development plan, including reclamation or restoration.
545	545	17.21 (b) A permit may be amended upon written application to the commissioner. A permit
546	546	17.22amendment application fee must be submitted with the written application. The permit
547	547	17.23amendment application fee is ten percent of the amount provided for in subdivision 1, clause
548	548	17.24(1), for an application for a gas resource development permit. If the commissioner determines
549	549	17.25that the proposed amendment constitutes a substantial change to the permit, the applicant
550	550	17.26must publish notice in the same manner as for a new permit. The commissioner may grant
551	551	17.27an amendment if the commissioner determines that lawful requirements have been met.
552	552	17.28 Subd. 5.Revocation; modification; suspension.(a) A permit is irrevocable during its
553	553	17.29term except that the commissioner may:
554	554	17.30 (1) revoke the permit if the permittee has not commenced substantial construction of
555	555	17.31gas resource development facilities or actual production and reclamation or restoration
556	556	17.32operations covered by the permit within 36 months of permit issuance;
557	557	17Article 1 Sec. 13.
558	558	REVISOR CKM/AD 25-0462203/12/25 18.1 (2) cancel a permit at the request of or with the consent of the permittee upon such
559	559	18.2conditions as the commissioner determines necessary to protect the public interests;
560	560	18.3 (3) subject to paragraph (b), modify or revoke the permit:
561	561	18.4 (i) in case of any breach of the permit terms or conditions;
562	562	18.5 (ii) in case of a violation of law pertaining to the permit by the permittee or agents of
563	563	18.6the permittee;
564	564	18.7 (iii) when the commissioner finds that the modification or revocation is necessary to
565	565	18.8protect the public health or safety;
566	566	18.9 (iv) to protect the public interests in lands or waters against injury resulting in any manner
567	567	18.10or to any extent not expressly authorized by the permit; or
568	568	18.11 (v) to prevent injury to persons or property resulting in any manner or to any extent not
569	569	18.12authorized by the permit; and
570	570	18.13 (4) by written order to the permittee, suspend operations under a permit if the
571	571	18.14commissioner finds it necessary in an emergency to protect the public health or safety; to
572	572	18.15protect public interests in lands or waters against imminent danger of substantial injury in
573	573	18.16any manner or to any extent not expressly authorized by the permit; or to protect persons
574	574	18.17or property against such danger, and the commissioner may require the permittee to take
575	575	18.18any measures necessary to prevent or remedy such injury. No suspension order under this
576	576	18.19clause may be in effect more than 30 days after the date of the order without giving the
577	577	18.20permittee at least ten days' written notice of the order and an opportunity to be heard on the
578	578	18.21matter.
579	579	18.22 (b) Modification or revocation under paragraph (a), clause (3), is subject to the rights
580	580	18.23of the permittee to contest the commissioner's actions under sections 14.57 to 14.59 and
581	581	18.24related sections. The commissioner must give 30 days' written notice to the permittee, stating
582	582	18.25the grounds of the proposed modification or revocation or providing a reasonable time of
583	583	18.26not less than 15 days in which to take corrective action.
584	584	18.27 Subd. 6.Assignment.A permit may not be assigned or otherwise transferred without
585	585	18.28the written approval of the commissioner. A permit assignment application fee must be
586	586	18.29submitted with the written application. The permit assignment application fee is ten percent
587	587	18.30of the amount provided for in subdivision 1, clause (1). A permit assignment application
588	588	18.31may be combined with a permit.
589	589	18.32 Subd. 7.Gas resource administration account.The gas resource administration account
590	590	18.33is established as an account in the natural resources fund. Fees charged to owners, operators,
591	591	18Article 1 Sec. 13.
592	592	REVISOR CKM/AD 25-0462203/12/25 19.1or managers of operations under sections 93.515 to 93.5182 must be credited to the gas
593	593	19.2resource administration account and are appropriated to the commissioner to cover the costs
594	594	19.3of providing and monitoring gas resource development permits. Earnings accruing from
595	595	19.4investment of the account remain with the account.
596	596	19.5 Subd. 8.Temporary regulatory framework.(a) To support a temporary regulatory
597	597	19.6framework for permitting gas production projects during rulemaking, this subdivision applies
598	598	19.7until rules are adopted for siting, permitting, and reclamation requirements for gas production
599	599	19.8projects, as required under section 93.514.
600	600	19.9 (b) All gas resource development locations must incorporate setbacks or separations
601	601	19.10that are needed to comply with air, water, and noise pollution standards; local land use
602	602	19.11regulations; and the requirements of other applicable jurisdictions. Nothing in this section
603	603	19.12is intended to supersede any more restrictive siting or setback requirements that may exist
604	604	19.13in state or federal laws for the specific land designations listed in this subdivision. Gas
605	605	19.14resource development operations at gas resource development locations must not modify
606	606	19.15or alter the gas resources of certain areas, except in the event of a national emergency
607	607	19.16declared by Congress.
608	608	19.17 (c) A gas resource development location must not be located within or alter the gas
609	609	19.18resources of:
610	610	19.19 (1) the Boundary Waters Canoe Area Wilderness, as legally described in the Federal
611	611	19.20Register, volume 45, number 67 (April 4, 1980), with state restrictions specified in section
612	612	19.2184.523, subdivision 3;
613	613	19.22 (2) Voyageurs National Park, with state restrictions specified in section 84B.03,
614	614	19.23subdivision 1; or
615	615	19.24 (3) the federal Agassiz and Tamarac Wilderness areas and Pipestone and Grand Portage
616	616	19.25National Monuments.
617	617	19.26 (d) Passive subsurface gas resource development activities are allowed, but gas resource
618	618	19.27development locations and subsurface directional drilling are prohibited in:
619	619	19.28 (1) state wilderness areas;
620	620	19.29 (2) state scientific and natural areas;
621	621	19.30 (3) within state peatland scientific and natural areas where directional drilling would
622	622	19.31significantly modify or alter the peatland water levels or flows, peatland water chemistry,
623	623	19.32plant or animal species or communities, or natural features of the peatland scientific and
624	624	19.33natural areas, except in the event of a national emergency declared by Congress;
625	625	19Article 1 Sec. 13.
626	626	REVISOR CKM/AD 25-0462203/12/25 20.1 (4) calcareous fens identified under section 103G.223;
627	627	20.2 (5) a state park, except that gas resource development operations must be allowed if the
628	628	20.3park has been established as a result of its association with mining; and
629	629	20.4 (6) designated trout streams and lakes.
630	630	20.5 (e) Subsurface gas resource development activities, including subsurface directional
631	631	20.6drilling, are allowed, but gas resource development locations are prohibited:
632	632	20.7 (1) in the Boundary Waters Canoe Area Wilderness Mineral Management Corridor,
633	633	20.8identified on the Department of Natural Resources map entitled Minnesota Department of
634	634	20.9Natural Resources B.W.C.A.W. Mineral Management Corridor (February 1991);
635	635	20.10 (2) within 0.25 miles of Voyageurs National Park;
636	636	20.11 (3) within 0.25 miles of a state wilderness area;
637	637	20.12 (4) within 0.25 miles of the federal Agassiz and Tamarac Wilderness areas and Pipestone
638	638	20.13and Grand Portage National Monuments;
639	639	20.14 (5) within 0.25 miles of a state scientific and natural area;
640	640	20.15 (6) within 0.25 miles of a state park, except surface and subsurface disturbances must
641	641	20.16be allowed if the park has been established as a result of its association with mining;
642	642	20.17 (7) within 0.25 miles of a calcareous fen identified under section 103G.223;
643	643	20.18 (8) on sites designated in the National Register of Historic Places, except that gas resource
644	644	20.19development operations must be allowed if the sites have been established as a result of
645	645	20.20their association with mining;
646	646	20.21 (9) on sites designated in the registry of state historic sites, except gas resource
647	647	20.22development operations must be allowed if the sites have been established as a result of
648	648	20.23their association with mining;
649	649	20.24 (10) within national wild, scenic, or recreational river districts of a national wild, scenic,
650	650	20.25or recreational river and within the areas identified by the document entitled A Management
651	651	20.26Plan for the Upper Mississippi River, produced by the Mississippi Headwaters Board
652	652	20.27(January 1981);
653	653	20.28 (11) within designated state land use districts of a state wild, scenic, or recreational river;
654	654	20.29 (12) within the area adjacent to the north shore of Lake Superior identified in the
655	655	20.30document entitled North Shore Management Plan, produced by the North Shore Management
656	656	20.31Board (December 1988); and
657	657	20Article 1 Sec. 13.
658	658	REVISOR CKM/AD 25-0462203/12/25 21.1 (13) in the following areas, provided they were in existence before a gas resource
659	659	21.2development permit was issued:
660	660	21.3 (i) within 500 feet of an occupied dwelling, public school, church, public institution, or
661	661	21.4county or municipal park, unless allowed by the owner; or
662	662	21.5 (ii) within 100 feet of a cemetery or the outside right-of-way line of a public roadway.
663	663	21.6 (f) Gas resource development locations must be allowed in the following areas only if
664	664	21.7the commissioner determines that there is no prudent and feasible siting alternative:
665	665	21.8 (1) in a national wildlife refuge, a national waterfowl protection area, or on a national
666	666	21.9trail;
667	667	21.10 (2) in a state wildlife management area or on a state-designated trail either listed in
668	668	21.11section 85.015 or acquired under the authority of section 84.029, subdivision 2;
669	669	21.12 (3) in peatlands identified as peatland watershed protection areas in the Department of
670	670	21.13Natural Resources report entitled Protection of Ecologically Significant Peatlands in
671	671	21.14Minnesota (November 1984); and
672	672	21.15 (4) in waters identified in the public waters inventory under section 103G.201 that have
673	673	21.16not been created or substantially altered in size by human activities or in the adjoining
674	674	21.17shorelands, as defined in section 103F.205, subdivision 4, of the unaltered waters.
675	675	21.18 (g) A gas resource development permit must include as a permit condition a requirement
676	676	21.19that a permittee submit to the commissioner a preproduction report at least 60 days before
677	677	21.20the commercial extraction of gas resources from gas wells drilled at gas resource development
678	678	21.21locations. The report must include data and test results from completed gas wells that can
679	679	21.22be used to evaluate the production rates and extraction areas that were incorporated by the
680	680	21.23permittee into their permit application before drilling the gas wells. The commissioner must
681	681	21.24identify the specific types of data and other report components in the associated gas resource
682	682	21.25development permit.
683	683	21.26 (h) A permittee must submit an annual report to the commissioner by March 31 each
684	684	21.27year that describes actual gas production and reclamation completed during the past year,
685	685	21.28gas production and reclamation activities planned for the upcoming year, and a contingency
686	686	21.29reclamation plan to be implemented if operations cease or gas wells are idled for more than
687	687	21.3036 months. The annual report must include at a minimum:
688	688	21.31 (1) reporting for the previous calendar year and projections for the upcoming calendar
689	689	21.32year on the volume and average composition of raw gas extracted from each gas well covered
690	690	21.33by the gas resource development plan;
691	691	21Article 1 Sec. 13.
692	692	REVISOR CKM/AD 25-0462203/12/25 22.1 (2) quantities and final grades of commercial gas products transported to market;
693	693	22.2 (3) any changes in the production or gas enrichment processes;
694	694	22.3 (4) a description of reclamation activities and corrective actions;
695	695	22.4 (5) evidence of continued liability insurance; and
696	696	22.5 (6) a discussion of any changes in ownership and organization structure of the permittee.
697	697	22.6 Sec. 14. [93.5177] FEES.
698	698	22.7 Subdivision 1.Annual gas resource development permit fee.The commissioner must
699	699	22.8charge every person holding a gas resource development permit an annual permit fee of
700	700	22.9$25,000. The fee is payable to the Department of Natural Resources by June 30 each year,
701	701	22.10beginning in 2025. If a temporary permit is issued after June 30 of any year, the permittee
702	702	22.11must pay the annual fee within 60 days of permit issuance.
703	703	22.12 Subd. 2.Supplemental application fee.(a) In addition to the application fee specified
704	704	22.13in section 93.5176, the commissioner must assess a person submitting an application for a
705	705	22.14gas resource development permit the reasonable costs for reviewing the application and
706	706	22.15preparing the permit. The commissioner must also assess reasonable costs for monitoring
707	707	22.16construction of the gas resource development facilities.
708	708	22.17 (b) The commissioner must give the applicant an estimate of the supplemental application
709	709	22.18fee under this subdivision. The estimate must include a brief description of the tasks to be
710	710	22.19performed and the estimated cost of each task. The application fee under section 93.5176
711	711	22.20must be subtracted from the estimate of costs to determine the supplemental application
712	712	22.21fee.
713	713	22.22 (c) The applicant and the commissioner must enter into a written agreement to cover
714	714	22.23the estimated costs to be incurred by the commissioner.
715	715	22.24 (d) The commissioner must not issue the gas resource development permit until the
716	716	22.25applicant has paid all fees in full. Upon completion of construction of all gas resource
717	717	22.26development facilities, the commissioner must refund the unobligated balance of the
718	718	22.27supplemental application fee revenue.
719	719	22.28Sec. 15. [93.5178] CONTESTED CASE.
720	720	22.29 Subdivision 1.Petition for contested case hearing.Any person owning property that
721	721	22.30will be affected by the proposed gas resource development operations or any federal, state,
722	722	22.31or local government having responsibilities affected by the proposed operation identified
723	723	22Article 1 Sec. 15.
724	724	REVISOR CKM/AD 25-0462203/12/25 23.1in an application for a gas resource development permit under section 93.5176 may file a
725	725	23.2petition with the commissioner to hold a contested case hearing on the completed application.
726	726	23.3To be considered by the commissioner, a petition must be submitted in writing, must contain
727	727	23.4the information specified in subdivision 2, and must be submitted to the commissioner
728	728	23.5within 30 days after the application is deemed complete and filed. The commissioner may,
729	729	23.6on the commissioner's own motion, order a contested case hearing on the completed
730	730	23.7application.
731	731	23.8 Subd. 2.Petition contents.(a) A petition for a contested case hearing must include:
732	732	23.9 (1) a statement of reasons or proposed findings supporting the commissioner's decision
733	733	23.10to hold a contested case hearing according to the criteria in subdivision 3; and
734	734	23.11 (2) a statement of the issues proposed to be addressed by a contested case hearing and
735	735	23.12the specific relief requested or resolution of the matter.
736	736	23.13 (b) To the extent known by the petitioner, a petition for a contested case hearing may
737	737	23.14also include:
738	738	23.15 (1) a proposed list of prospective witnesses to be called, including experts, with a brief
739	739	23.16description of the proposed testimony or a summary of evidence to be presented at a contested
740	740	23.17case hearing;
741	741	23.18 (2) a proposed list of publications, references, or studies to be introduced and relied
742	742	23.19upon at a contested case hearing; and
743	743	23.20 (3) an estimate of time required for the petitioner to present the matter at a contested
744	744	23.21case hearing.
745	745	23.22 (c) A petitioner is not bound or limited to the witnesses, materials, or estimated time
746	746	23.23identified in the petition if the commissioner grants the request for a contested case hearing.
747	747	23.24 (d) Any person may serve timely responses to a petition for a contested case hearing.
748	748	23.25The commissioner must establish deadlines for responses to be submitted.
749	749	23.26 Subd. 3.Commissioner's decision to hold hearing.(a) The commissioner must grant
750	750	23.27a petition to hold a contested case hearing or order upon the commissioner's own motion
751	751	23.28that a contested case hearing be held if the commissioner finds that:
752	752	23.29 (1) there is a material issue of fact in dispute concerning the completed application before
753	753	23.30the commissioner;
754	754	23.31 (2) the commissioner has jurisdiction to make a determination on the disputed material
755	755	23.32issue of fact; and
756	756	23Article 1 Sec. 15.
757	757	REVISOR CKM/AD 25-0462203/12/25 24.1 (3) there is a reasonable basis underlying a disputed material issue of fact so that a
758	758	24.2contested case hearing would allow the introduction of information that would aid the
759	759	24.3commissioner in resolving the disputed facts in order to make a final decision on the
760	760	24.4completed application.
761	761	24.5 (b) The commissioner must make the determination of whether to grant a petition or
762	762	24.6otherwise order a contested case hearing within 120 days after the commissioner deems the
763	763	24.7application complete and filed.
764	764	24.8 Subd. 4.Hearing upon request of applicant.The applicant may, within 30 days after
765	765	24.9the application is deemed complete and filed, submit a request for a contested case hearing.
766	766	24.10Within 30 days of the applicant's request, the commissioner must grant the petition and
767	767	24.11initiate the contested case hearing process.
768	768	24.12 Subd. 5.Scope of hearing.If the commissioner decides to hold a contested case hearing,
769	769	24.13the commissioner must identify the issues to be resolved and limit the scope and conduct
770	770	24.14of the hearing in accordance with applicable law, due process, and fundamental fairness.
771	771	24.15The commissioner may, before granting or ordering a contested case hearing, develop a
772	772	24.16proposed permit or permit conditions to inform the contested case. The contested case
773	773	24.17hearing must be conducted according to sections 14.57 to 14.62. The final decision by the
774	774	24.18commissioner to grant, with or without modifications or conditions, or deny the application
775	775	24.19after a contested case hearing is a final order for purposes of section 93.5181.
776	776	24.20Sec. 16. [93.5180] FINANCIAL ASSURANCE OF OPERATOR.
777	777	24.21 Subdivision 1.Requirement for financial assurance.The commissioner must require
778	778	24.22from a permittee a bond, another security, or other financial assurance satisfactory to the
779	779	24.23commissioner. The commissioner must review at least annually the extent of each operator's
780	780	24.24financial assurance under this section.
781	781	24.25 Subd. 2.Temporary regulatory framework.(a) To support a temporary regulatory
782	782	24.26framework for permitting gas production projects during rulemaking, this subdivision applies
783	783	24.27until rules are adopted under section 93.514 for financial assurance requirements for gas
784	784	24.28production projects.
785	785	24.29 (b) Financial assurance for reclamation and for corrective action must ensure that:
786	786	24.30 (1) funds will be available to cover the costs estimated in paragraph (c);
787	787	24.31 (2) funds will be made payable to the commissioner when needed;
788	788	24.32 (3) funds will be fully valid, binding, and enforceable under state and federal law;
789	789	24Article 1 Sec. 16.
790	790	REVISOR CKM/AD 25-0462203/12/25 25.1 (4) funds will not be dischargeable through bankruptcy;
791	791	25.2 (5) funds will not include any corporate guarantees unless a guarantee is deemed
792	792	25.3necessary by the commissioner as an additional layer of assurance beyond the use of bonds,
793	793	25.4other securities, or other financial assurance mechanisms under clauses (1) to (4) and (6),
794	794	25.5and in no case may a corporate guarantee be approved as a standalone financial assurance;
795	795	25.6and
796	796	25.7 (6) all terms and conditions of the financial assurance are approved by the commissioner.
797	797	25.8 (c) A person intending to develop gas resources must submit, as part of an application
798	798	25.9for a gas resource development permit, a documented estimate of costs necessary for the
799	799	25.10reclamation or restoration, or both, of any gas resource development locations upon which
800	800	25.11the person proposes to conduct gas resource development operations. The commissioner
801	801	25.12must determine the procedures for completing the cost estimate and its required elements.
802	802	25.13 (d) If a corrective action is required during implementation of the gas resource
803	803	25.14development plan to minimize waste and protect human health or the environment, the
804	804	25.15permittee must submit to the commissioner a cost estimate for completing the required
805	805	25.16actions. The commissioner must determine the procedures and required elements for
806	806	25.17completing this corrective action cost estimate.
807	807	25.18 (e) The commissioner must ensure that submitted cost estimates and cost estimate
808	808	25.19adjustments are evaluated by individuals with documented experience in material handling
809	809	25.20and reclamation or restoration of gas resource development locations. The applicant must
810	810	25.21pay the costs incurred by the commissioner to hire third parties to perform the evaluation.
811	811	25.22 (f) Financial assurance in the amount equal to the contingency reclamation cost estimate
812	812	25.23must be submitted to the commissioner for approval before issuance of a gas resource
813	813	25.24development permit and before granting an amendment to the permit, must be continuously
814	814	25.25maintained by the permittee, and must be annually adjusted based on the new cost estimate.
815	815	25.26 (g) Financial assurance in the amount equal to the corrective action cost estimate under
816	816	25.27paragraph (d) must be submitted to the commissioner for approval as part of the corrective
817	817	25.28action cost estimate, must be continuously maintained by the permittee until the commissioner
818	818	25.29determines it is no longer necessary, and must be annually adjusted based on the new cost
819	819	25.30estimate.
820	820	25.31 (h) Financial assurance may be canceled by the permittee, upon approval by the
821	821	25.32commissioner, only after the financial assurance is replaced by an alternate mechanism or
822	822	25Article 1 Sec. 16.
823	823	REVISOR CKM/AD 25-0462203/12/25 26.1after the permittee is released from financial assurance once the commissioner determines,
824	824	26.2through inspection of the permitted gas resource development locations, that:
825	825	26.3 (1) all reclamation activities have been completed according to the gas resource
826	826	26.4development permit;
827	827	26.5 (2) any conditions necessitating postclosure maintenance no longer exist and are not
828	828	26.6likely to recur; and
829	829	26.7 (3) any corrective actions have been successfully accomplished.
830	830	26.8 (i) The permittee must ensure that the provider of financial assurance gives the
831	831	26.9commissioner 120 days' notice before cancellation of the financial assurance mechanism.
832	832	26.10Upon receipt of the notice, the commissioner must initiate a proceeding to access the financial
833	833	26.11assurance.
834	834	26.12 (j) If the gas resource development permit is assigned, the new permittee must be in
835	835	26.13compliance with sections 93.517 to 93.5182 before the commissioner approves the
836	836	26.14assignment. On the assignee's demonstration of compliance, the former permittee must be
837	837	26.15released from the compliance requirements.
838	838	26.16 (k) Financial assurance must be made available to the commissioner when the operator
839	839	26.17is not in compliance with either a contingency reclamation plan or a corrective action plan.
840	840	26.18 (l) The commissioner may deny, suspend, revoke, or modify a gas resource development
841	841	26.19permit or assess civil penalties if the permittee fails to comply with sections 93.517 to
842	842	26.2093.5182.
843	843	26.21Sec. 17. [93.5181] APPEAL.
844	844	26.22 Any person aggrieved by a final order, ruling, or decision of the commissioner may
845	845	26.23obtain judicial review of the order, ruling, or decision under sections 14.63 to 14.69.
846	846	26.24Sec. 18. [93.5182] PENALTIES FOR VIOLATION.
847	847	26.25 Subdivision 1.Civil penalty.If a person fails to comply with sections 93.517 to 93.5180,
848	848	26.26any rules adopted thereunder, or any permit condition required under sections 93.517 to
849	849	26.2793.5180 or rules adopted thereunder, then for 15 days after notice of the failure or after the
850	850	26.28expiration of time for corrective action as provided for in section 93.5176, subdivision 5,
851	851	26.29the person is liable for a civil penalty of not more than $10,000 per day per violation for
852	852	26.30each day that the failure continues. The commissioner may assess and collect any penalty
853	853	26.31for deposit in the gas resource administration account.
854	854	26Article 1 Sec. 18.
855	855	REVISOR CKM/AD 25-0462203/12/25 27.1 Subd. 2.Criminal penalty; injunctive relief.A person who knowingly and willfully
856	856	27.2violates or refuses to comply with any rule, decision, order, or ruling of the commissioner
857	857	27.3under sections 93.517 to 93.5180 is, upon conviction, guilty of a gross misdemeanor. At
858	858	27.4the request of the commissioner, the attorney general may institute a civil action in a district
859	859	27.5court of the state for a restraining order or injunction or other appropriate remedy to prevent
860	860	27.6or preclude a violation of the terms and conditions of any rules adopted under sections
861	861	27.793.517 to 93.5180. The district court of the state of Minnesota in which district the affected
862	862	27.8extraction operation is conducted has jurisdiction to issue such order or injunction or to
863	863	27.9provide other appropriate remedies.
864	864	27.10Sec. 19. Minnesota Statutes 2024, section 93.55, subdivision 1a, is amended to read:
865	865	27.11 Subd. 1a.Lease of forfeited interest.If the owner of a severed mineral interest fails to
866	866	27.12record the verified statement required by section 93.52 before the dates specified in
867	867	27.13subdivision 1, the commissioner of natural resources may lease the mineral interest as
868	868	27.14provided in this subdivision and subdivision 3 before completing the procedures set forth
869	869	27.15in subdivision 2. In any lease issued under this subdivision, the commissioner shall cite, as
870	870	27.16authority for issuing the lease, this subdivision, subdivision 3, and the United States Supreme
871	871	27.17Court decision in Texaco, Inc., et al. v. Short, et al., 454 U.S. 516 (1982), where the Supreme
872	872	27.18Court determined, under Amendment XIV to the Constitution of the United States, that
873	873	27.19enactment of a state law requiring an owner of severed mineral interests to timely record a
874	874	27.20statement of claim to the mineral interests was constitutional, without individual advance
875	875	27.21notice of operation of the law, before the owner loses the mineral interests for failing to
876	876	27.22timely record the statement of claim. A lessee holding a lease issued under this subdivision
877	877	27.23may not mine or extract gas or other mineral resources under the lease until the commissioner
878	878	27.24completes the procedures set forth in subdivision 2 and a court has adjudged the forfeiture
879	879	27.25of the mineral interest to be absolute. "Mine" for the purposes of this subdivision is defined
880	880	27.26to exclude exploration activities, exploratory boring, trenching, test pitting, test shafts and
881	881	27.27drifts, and related activities.
882	882	27.28Sec. 20. APPROPRIATIONS; GAS EXPLORATION AND PRODUCTION
883	883	27.29PERMITTING PROGRAM.
884	884	27.30 (a) $660,000 in fiscal year 2026 and $660,000 in fiscal year 2027 are appropriated from
885	885	27.31the general fund to the commissioner of natural resources for use as provided under
886	886	27.32Minnesota Statutes, chapter 93, for mineral resource management, including permitting
887	887	27.33activities associated with gas resource development.
888	888	27Article 1 Sec. 20.
889	889	REVISOR CKM/AD 25-0462203/12/25 28.1 (b) $330,000 in fiscal year 2026 and $330,000 in fiscal year 2027 are appropriated from
890	890	28.2the minerals management account in the natural resources fund to the commissioner of
891	891	28.3natural resources for uses allowed under Minnesota Statutes, section 93.2236, paragraph
892	892	28.4(c), including activities associated with leasing for gas exploration and development.
893	893	28.5 Sec. 21. REPEALER.
894	894	28.6 Minnesota Statutes 2024, section 93.513, subdivision 2, is repealed.
895	895	28.7 ARTICLE 2
896	896	28.8 HEALTH
897	897	28.9 Section 1. Minnesota Statutes 2024, section 103I.001, is amended to read:
898	898	28.10 103I.001 LEGISLATIVE INTENT.
899	899	28.11 This chapter is intended to protect the health and general welfare by providing a means
900	900	28.12for the development and protection of the natural resource of groundwater in an orderly,
901	901	28.13healthful, and reasonable manner.
902	902	28.14Sec. 2. Minnesota Statutes 2024, section 103I.005, subdivision 9, is amended to read:
903	903	28.15 Subd. 9.Exploratory boring."Exploratory boring" means a surface drilling done to
904	904	28.16explore or prospect for oil, natural gas, apatite, diamonds, graphite, gemstones, kaolin clay,
905	905	28.17and metallic minerals, including iron, copper, zinc, lead, gold, silver, titanium, vanadium,
906	906	28.18nickel, cadmium, molybdenum, chromium, manganese, cobalt, zirconium, beryllium,
907	907	28.19thorium, uranium, aluminum, platinum, palladium, radium, tantalum, tin, and niobium, and
908	908	28.20a drilling or boring for petroleum.
909	909	28.21Sec. 3. Minnesota Statutes 2024, section 103I.005, is amended by adding a subdivision
910	910	28.22to read:
911	911	28.23 Subd. 10a.Gas."Gas" includes both hydrocarbon and nonhydrocarbon gases.
912	912	28.24Sec. 4. Minnesota Statutes 2024, section 103I.005, is amended by adding a subdivision
913	913	28.25to read:
914	914	28.26 Subd. 10b.Gas well."Gas well" means an excavation that is constructed to locate,
915	915	28.27extract, or produce gas.
916	916	28Article 2 Sec. 4.
917	917	REVISOR CKM/AD 25-0462203/12/25 29.1 Sec. 5. Minnesota Statutes 2024, section 103I.005, is amended by adding a subdivision
918	918	29.2to read:
919	919	29.3 Subd. 10c.Gas well contractor."Gas well contractor" means a person with a gas well
920	920	29.4contractor's license issued by the commissioner.
921	921	29.5 Sec. 6. Minnesota Statutes 2024, section 103I.005, subdivision 21, is amended to read:
922	922	29.6 Subd. 21.Well."Well" means an excavation that is drilled, cored, bored, washed, driven,
923	923	29.7dug, jetted, or otherwise constructed if the excavation is intended for the location, diversion,
924	924	29.8artificial recharge, monitoring, testing, remediation, or acquisition of groundwater. Well
925	925	29.9includes environmental wells, drive point wells, and dewatering wells. "Well" does not
926	926	29.10include:
927	927	29.11 (1) an excavation by backhoe, or otherwise for temporary dewatering of groundwater
928	928	29.12for nonpotable use during construction, if the depth of the excavation is 25 feet or less;
929	929	29.13 (2) an excavation made to obtain or prospect for oil, natural gas, minerals, or products
930	930	29.14of mining or quarrying;
931	931	29.15 (3) an excavation to insert media to repressure oil or natural gas bearing formations or
932	932	29.16to store petroleum, natural gas, or other products;
933	933	29.17 (4) an excavation for nonpotable use for wildfire suppression activities; or
934	934	29.18 (5) borings; or
935	935	29.19 (6) gas and oil wells.
936	936	29.20Sec. 7. Minnesota Statutes 2024, section 103I.601, subdivision 1, is amended to read:
937	937	29.21 Subdivision 1.Definitions.(a) For the purposes of this section, the following words
938	938	29.22have the meanings given them.
939	939	29.23 (b) "Data" includes samples and factual noninterpreted data obtained from exploratory
940	940	29.24borings and samples including analytical results.
941	941	29.25 (c) "Parcel" means a government section, fractional section, or government lot.
942	942	29.26 (d) "Samples" means at least a one-quarter portion of all samples from exploratory
943	943	29.27borings that are customarily collected by the explorer. When the exploratory borings are
944	944	29.28being done to explore or prospect for kaolin clay, "samples" means a representative sample
945	945	29.29of at least two cubic inches of material per foot from exploratory borings of the material
946	946	29.30that is customarily collected by the explorer.
947	947	29Article 2 Sec. 7.
948	948	REVISOR CKM/AD 25-0462203/12/25 30.1 (e) "Gas exploratory boring" means an exploratory boring encountering gas for at least
949	949	30.224 hours and in which gas has not dissipated prior to sealing.
950	950	30.3 Sec. 8. Minnesota Statutes 2024, section 103I.601, is amended by adding a subdivision
951	951	30.4to read:
952	952	30.5 Subd. 10.Borings encountering gas.(a) Requirements in this subdivision apply only
953	953	30.6for gas exploratory borings.
954	954	30.7 (b) An explorer must notify the commissioners of health and natural resources:
955	955	30.8 (1) within 24 hours of drilling a gas exploratory boring; and
956	956	30.9 (2) prior to beginning a permanent sealing of a gas exploratory boring.
957	957	30.10 (c) An explorer must submit a permanent sealing notification and fee of $125 to the
958	958	30.11commissioner prior to permanently sealing a gas exploratory boring.
959	959	30.12 (d) An explorer must begin permanently sealing a gas exploratory boring within ten
960	960	30.13days of encountering gas.
961	961	30.14 (e) A gas exploratory boring is exempt from paragraph (d) if the boring is constructed
962	962	30.15to prevent movement of gas and water from one formation to another. The boring must be
963	963	30.16permanently sealed within 30 days after the completion of drilling unless gas is no longer
964	964	30.17present in the boring.
965	965	30.18 (f) A gas exploratory boring must be permanently sealed from the bottom of the boring
966	966	30.19to within two feet of the established ground surface.
967	967	30.20 (g) A permanent sealing report as required by subdivision 9 must also contain information
968	968	30.21indicating gas was encountered during construction and at what depth it was encountered.
969	969	30.22 (h) A person must not use an exploratory boring to extract gas for production.
970	970	30.23Sec. 9. Minnesota Statutes 2024, section 103I.601, is amended by adding a subdivision
971	971	30.24to read:
972	972	30.25 Subd. 11.Conversion of a gas well prohibited.A person must not convert a gas well
973	973	30.26to any other type of well or boring.
974	974	30.27Sec. 10. Minnesota Statutes 2024, section 103I.601, is amended by adding a subdivision
975	975	30.28to read:
976	976	30.29 Subd. 12.Conversion of a well or boring to a gas well.A person must not convert a
977	977	30.30well or boring to a gas well, except that an exploratory boring constructed before enactment
978	978	30Article 2 Sec. 10.
979	979	REVISOR CKM/AD 25-0462203/12/25 31.1of section 103I.707 may be converted to a gas well if constructed in accordance with
980	980	31.2provisions of section 103I.707, except that the outermost casing may be:
981	981	31.3 (1) ASTM Standard A53;
982	982	31.4 (2) ASTM Standard A589, Types I, II, and III;
983	983	31.5 (3) API Specification 5L; or
984	984	31.6 (4) API Specification 5CT.
985	985	31.7 Sec. 11. [103I.706] GAS WELLS.
986	986	31.8 Subdivision 1.Rulemaking authority.The commissioner of health must adopt rules
987	987	31.9for gas wells. In adopting rules under this section, the commissioner must use the expedited
988	988	31.10procedure in section 14.389. The commissioner must publish notice of intent to adopt
989	989	31.11expedited rules within 24 months after May 22, 2024.
990	990	31.12 Subd. 2.Fees.(a) License, certification, and registration renewals are not prorated and
991	991	31.13expire on December 31 of each year.
992	992	31.14 (b) An applicant must meet the gas well contractor license requirements and fee
993	993	31.15requirements to construct, repair, or seal a gas well. The fee for a gas well contractor license
994	994	31.16is $300. The annual renewal fee for a gas well contractor license is $300.
995	995	31.17 (c) A gas well contractor must designate a certified representative. The certified
996	996	31.18representative must meet the application and fee requirements. The application fee for a
997	997	31.19certified representative is $100. The annual renewal fee for a certified representative is
998	998	31.20$100.
999	999	31.21 (d) A gas well contractor must meet the registration and fee requirements for rigs used
1000	1000	31.22to construct, repair, service, or seal a gas well. The fee to register gas well rigs is $125. The
1001	1001	31.23annual renewal fee for gas well rig registration is $125.
1002	1002	31.24 (e) If a gas well contractor or certified representative under paragraphs (b) and (c) fails
1003	1003	31.25to submit all information required for renewal or submits the application and information
1004	1004	31.26after the required renewal date:
1005	1005	31.27 (1) the gas well contractor or certified representative must include a late fee of $75; and
1006	1006	31.28 (2) the gas well contractor or certified representative may not conduct activities authorized
1007	1007	31.29by the gas well contractor's license or certified representative's certification until the renewal
1008	1008	31.30application, renewal application fee, and all other information required is submitted.
1009	1009	31Article 2 Sec. 11.
1010	1010	REVISOR CKM/AD 25-0462203/12/25 32.1 (f) A gas well contractor must submit a notification for construction of a proposed gas
1011	1011	32.2well on a form prescribed by the commissioner, with a fee of $10,000.
1012	1012	32.3 (g) A gas well contractor must submit a notification for sealing a gas well on a form
1013	1013	32.4prescribed by the commissioner, with a fee of $7,500.
1014	1014	32.5 Subd. 3.Rig registration.(a) Rigs used to drill, maintain, repair, or seal a gas well,
1015	1015	32.6including drilling rigs and workover rigs, must be registered with the commissioner.
1016	1016	32.7 (b) A person must file an application to register a rig on a form provided by the
1017	1017	32.8commissioner with the fee under subdivision 2, paragraph (d), with the commissioner.
1018	1018	32.9 (c) A registration is valid until the date prescribed by the commissioner in the registration.
1019	1019	32.10 (d) A person must file an application with the fee under subdivision 2, paragraph (d), to
1020	1020	32.11renew the registration by the date prescribed by the commissioner in the registration.
1021	1021	32.12 Subd. 4.Gas well contractor's license.(a) A person must not construct, repair, or seal
1022	1022	32.13a gas well without a gas well contractor's license issued by the commissioner.
1023	1023	32.14 (b) A person must file a complete application for a gas well contractor's license on a
1024	1024	32.15form provided by the commissioner with the fee under subdivision 2, paragraph (b), with
1025	1025	32.16the commissioner. The person applying must meet the qualifications for a gas well contractor
1026	1026	32.17license.
1027	1027	32.18 (c) A gas well contractor's license is valid until the date prescribed by the commissioner
1028	1028	32.19in the license.
1029	1029	32.20 (d) A gas well contractor must file a complete application with the fee under subdivision
1030	1030	32.212, paragraph (b), to renew the license by the date prescribed by the commissioner in the
1031	1031	32.22license. A person must not construct, repair, or seal a gas well until a gas well contractor's
1032	1032	32.23license is renewed. The commissioner may not renew a license until the renewal fee is paid.
1033	1033	32.24 (e) A gas well contractor must include information at the time of renewal that the
1034	1034	32.25applicant has met the continuing education requirements established by the commissioner
1035	1035	32.26for gas wells.
1036	1036	32.27 (f) A gas well contractor must designate a certified representative to supervise and
1037	1037	32.28oversee regulated work on gas wells.
1038	1038	32.29 (g) A person must file a complete application on a form provided by the commissioner
1039	1039	32.30with the fee under subdivision 2, paragraph (c), to qualify as a certified representative.
1040	1040	32.31 (h) A certified representative must file an application with the fee under subdivision 2,
1041	1041	32.32paragraph (c), to renew the certification by the expiration date prescribed by the commissioner
1042	1042	32Article 2 Sec. 11.
1043	1043	REVISOR CKM/AD 25-0462203/12/25 33.1on the certification. A certified representative may not supervise or oversee regulated work
1044	1044	33.2on a gas well until the renewal application and application fee are submitted. The
1045	1045	33.3commissioner may not review a certification until the renewal fee is paid.
1046	1046	33.4 (i) A certified representative must include information at the time of renewal that the
1047	1047	33.5applicant has met the continuing education requirements established by the commissioner
1048	1048	33.6for gas wells.
1049	1049	33.7 (j) The commissioner of natural resources may require a bond, security, or other assurance
1050	1050	33.8from a gas well contractor if the commissioner of natural resources has reasonable doubts
1051	1051	33.9about the person's financial ability to comply with the requirements of law relating to
1052	1052	33.10reclamation of a gas well and the process to restore the land disturbed by a gas well drilling
1053	1053	33.11and production operations back to the condition of original state.
1054	1054	33.12 (k) The commissioner may suspend or revoke a licensee's license according to section
1055	1055	33.13144.99.
1056	1056	33.14 Subd. 5.Construction notification.(a) A gas well contractor must not begin drilling
1057	1057	33.15or constructing a gas well unless it is included in a valid gas resource development permit
1058	1058	33.16issued by the commissioner of natural resources.
1059	1059	33.17 (b) The contractor must submit a notification to the commissioner to construct a gas
1060	1060	33.18well after receiving permit approval from the commissioner of natural resources and prior
1061	1061	33.19to drilling or constructing a gas well. A gas well contractor must file the gas well notification
1062	1062	33.20with the fee under subdivision 2, paragraph (f), with the commissioner.
1063	1063	33.21 Subd. 6.Access to drill sites.(a) The commissioner of health shall have access to gas
1064	1064	33.22well sites to inspect gas wells, including the drilling, construction, and sealing of gas wells.
1065	1065	33.23 (b) The commissioner of health has enforcement authority according to section 144.99.
1066	1066	33.24 Subd. 7.Emergency notification.In the event of an occurrence during construction,
1067	1067	33.25repair, or sealing of a gas well that has a potential for significant adverse public health or
1068	1068	33.26environmental effects, the person drilling or constructing a gas or well must promptly:
1069	1069	33.27 (1) take reasonable action to minimize the adverse effects; and
1070	1070	33.28 (2) notify the commissioners of health, natural resources, and the Pollution Control
1071	1071	33.29Agency immediately by informing the Minnesota Duty Officer.
1072	1072	33.30 Subd. 8.Sealing notification.(a) A gas well, including an unsuccessful gas well, that
1073	1073	33.31is not in use must be sealed by a gas well contractor.
1074	1074	33Article 2 Sec. 11.
1075	1075	REVISOR CKM/AD 25-0462203/12/25 34.1 (b) A gas well contractor must file a notification and fee with the commissioner prior
1076	1076	34.2to sealing a gas well.
1077	1077	34.3 Subd. 9.Report of work.Within 60 days after completion or sealing of a gas well, the
1078	1078	34.4gas well contractor must submit a verified report to the commissioner on a form prescribed
1079	1079	34.5by the commissioner or in a format approved by the commissioner.
1080	1080	34.6 Sec. 12. [103I.707] GAS WELL NOTIFICATION AND CONSTRUCTION.
1081	1081	34.7 Subdivision 1.Definitions.(a) For the purposes of this section, the following terms have
1082	1082	34.8the meanings given.
1083	1083	34.9 (b) "Casing" means an impervious durable pipe placed in a well to prevent the walls
1084	1084	34.10from caving in and to seal off surface drainage or undesirable water, gas, or other fluids to
1085	1085	34.11prevent entering the well and the groundwater.
1086	1086	34.12 (c) "Confining layer" means a geological material that restricts water movement relative
1087	1087	34.13to an aquifer. A confining layer includes:
1088	1088	34.14 (1) a stratum of unconsolidated materials or bedrock ten feet or more in vertical thickness
1089	1089	34.15that has a vertical hydraulic conductivity of [10-6] centimeters per second or less;
1090	1090	34.16 (2) a stratum of clay, sandy clay, or silty clay ten feet or more in vertical thickness, as
1091	1091	34.17defined in the Soil Survey Manual, United States Department of Agriculture Handbook; or
1092	1092	34.18 (3) any portion of the Decorah, Glenwood, St. Lawrence, or Eau Claire sedimentary
1093	1093	34.19bedrock formations as described in George Austin, "Paleozoic Lithostratigraphy of
1094	1094	34.20Southeastern Minnesota," in Geology of Minnesota: A Centennial Volume.
1095	1095	34.21 (d) "Drilling fluid additive" is a substance added to the air or water used in the fluid
1096	1096	34.22system of drilling a gas well.
1097	1097	34.23 (e) "Hydraulic Fracturing Treatment" means all stages of the treatment of a well by the
1098	1098	34.24application of fluid under pressure that is expressly intended to initiate or propagate fractures
1099	1099	34.25in a target geologic formation to enhance production of oil and gas.
1100	1100	34.26 (f) "Neat cement grout" means a mixture in the proportion of 94 pounds of Portland
1101	1101	34.27cement and not more than six gallons of clean water. Bentonite up to five percent by weight
1102	1102	34.28of cement (4.7 pounds of bentonite per 94 pounds of Portland cement) may be used to reduce
1103	1103	34.29shrinkage. Admixtures meeting the standard specifications of ASTM Standard C494 may
1104	1104	34.30be used to reduce permeability or control time of set.
1105	1105	34.31 (g) "Production" includes extraction and beneficiation of gas from consolidated or
1106	1106	34.32unconsolidated formations in the state.
1107	1107	34Article 2 Sec. 12.
1108	1108	REVISOR CKM/AD 25-0462203/12/25 35.1 (h) "Surface casing" means a string of casing set and cemented in a gas well to prevent
1109	1109	35.2lost circulation while drilling deeper and to protect strata known or reasonably expected to
1110	1110	35.3serve as a source of drinking water for human consumption.
1111	1111	35.4 (i) "Tremie pipe" means a pipe or hose used to insert grout into an annular space or to
1112	1112	35.5seal a gas well.
1113	1113	35.6 Subd. 2.Gas well contractor's license qualifications.(a) A person must have a gas
1114	1114	35.7well contractor's license to supervise and oversee regulated work on gas wells.
1115	1115	35.8 (b) A certified representative must be a professional engineer or geoscientist licensed
1116	1116	35.9under sections 326.02 to 326.15 or a professional geologist certified by the American Institute
1117	1117	35.10of Professional Geologists.
1118	1118	35.11 Subd. 3.Gas well construction notification requirements.(a) A gas well contractor
1119	1119	35.12must file a gas well notification, under section 103I.706, subdivision 5, with the fee under
1120	1120	35.13section 103I.706, subdivision 2, paragraph (f).
1121	1121	35.14 (b) A gas well construction notification is valid for 18 months.
1122	1122	35.15 (c) A new notification must be filed with the commissioner:
1123	1123	35.16 (1) if a gas well contractor other than the one listed on the original notification will be
1124	1124	35.17constructing the gas well;
1125	1125	35.18 (2) if the gas well is completed on a property other than that listed in the original
1126	1126	35.19notification; and
1127	1127	35.20 (3) before a gas well is deepened or before a casing is installed or removed below the
1128	1128	35.21frost line.
1129	1129	35.22 (d) A gas well contractor intending to construct a gas well must notify the commissioner
1130	1130	35.23at least 24 hours prior to:
1131	1131	35.24 (1) beginning gas well construction;
1132	1132	35.25 (2) setting casing; and
1133	1133	35.26 (3) placing grout.
1134	1134	35.27 Subd. 4.Injection prohibited.A gas well must not be used to inject or dispose surface
1135	1135	35.28water, groundwater, or any other liquid, gas, or chemical. This does not prohibit the injection:
1136	1136	35.29 (1) of approved drilling fluids as provided in subdivision 7; or
1137	1137	35.30 (2) if a class 2 injection well permit is obtained for a gas well, as authorized by the
1138	1138	35.31Environmental Protection Agency.
1139	1139	35Article 2 Sec. 12.
1140	1140	REVISOR CKM/AD 25-0462203/12/25 36.1 Subd. 5.Hydraulic fracturing treatment prohibited.Hydraulic fracturing treatment
1141	1141	36.2is prohibited in a gas well until the commissioner adopts rules under section 103I.706. The
1142	1142	36.3commissioner must consider authorization of hydraulic fracturing during rulemaking.
1143	1143	36.4 Subd. 6.Disposal of material.Drilling fluid, cuttings, treatment chemicals, and discharge
1144	1144	36.5water must be:
1145	1145	36.6 (1) containerized;
1146	1146	36.7 (2) disposed of off site or a class 2 injection well permit obtained and authorized by the
1147	1147	36.8Environmental Protection Agency; and
1148	1148	36.9 (3) disposed of according to federal, state, and local requirements.
1149	1149	36.10 Subd. 7.Drilling fluids.(a) Drilling fluids used for a gas well must be water or air based.
1150	1150	36.11Water must come from a potable water system and contain a free chlorine residual at all
1151	1151	36.12times.
1152	1152	36.13 (b) Drilling fluid additives must meet the requirements of ANSI/NSF Standard 60.
1153	1153	36.14 Subd. 8.Casing and grout.(a) Casing for a gas well must be steel casing that meets
1154	1154	36.15API Specification 5CT and is of appropriate grade for the pressures and conditions. Casing
1155	1155	36.16installed for the construction of a gas well must be new casing. Casing must be marked by
1156	1156	36.17the manufacturer according to API Specification 5CT.
1157	1157	36.18 (b) Centralizers must be installed at a minimum of 20-foot intervals on the casing.
1158	1158	36.19 (c) A blowout preventer that is appropriate for the gas pressures expected must be
1159	1159	36.20installed on the casing during all drilling after a surface casing has been installed.
1160	1160	36.21 (d) Casing offsets are prohibited.
1161	1161	36.22 (e) Casing must not be driven.
1162	1162	36.23 (f) The diameter of the drilled hole in which surface casing will be set must be least 1.5
1163	1163	36.24inches greater than the nominal outside diameter of the casing that will be installed. All
1164	1164	36.25other casings must have at least 0.84 inches between the nominal outside diameter of the
1165	1165	36.26casing being cemented and the previously set casing's inside nominal diameter.
1166	1166	36.27 (g) A gas well must be cased and grouted from the bottom of the casing up to the
1167	1167	36.28established surface area with neat cement to prevent interconnection of different locations
1168	1168	36.29within the uncased portion of the well encountering:
1169	1169	36.30 (1) gas and water; and
1170	1170	36.31 (2) water.
1171	1171	36Article 2 Sec. 12.
1172	1172	REVISOR CKM/AD 25-0462203/12/25 37.1 (h) Neat cement grout must be used for all grouting.
1173	1173	37.2 (i) Grouting must start immediately on completion of drilling.
1174	1174	37.3 (j) Grout must be pumped into the annular space from the bottom up through the casing,
1175	1175	37.4drill rods, or a tremie pipe. Neat cement grout must be allowed to set a minimum of 24
1176	1176	37.5hours. Rapid setting cement must be allowed to set a minimum of 12 hours. Drilling is
1177	1177	37.6prohibited during the time the cement is setting.
1178	1178	37.7 (k) The annular space between an inner casing and an outer casing must be grouted for
1179	1179	37.8its entire length by pumping neat cement grout through a tremie pipe, a drill rod, or the
1180	1180	37.9casing. Neat cement grout must be allowed to set a minimum of 24 hours. Rapid setting
1181	1181	37.10cement must be allowed to set a minimum of 12 hours. Drilling is prohibited during the
1182	1182	37.11time the cement is setting.
1183	1183	37.12 (l) The casing or inner casing of a multi-cased gas well must extend vertically at least
1184	1184	37.13one foot above the established ground surface and at least five feet above the regional flood
1185	1185	37.14level. The established ground surface immediately adjacent to the casing must be graded
1186	1186	37.15to divert water away from the casing. Termination of the top of the casing below the
1187	1187	37.16established ground surface, such as in a vault or pit, is prohibited. Outer casings must
1188	1188	37.17terminate no less than four feet below the established ground surface.
1189	1189	37.18 (m) The casing of a gas well must be covered with a threaded or bolted and flanged gas
1190	1190	37.19tight cover equivalent to the casing in weight and strength.
1191	1191	37.20 (n) The casing of a gas well must be protected by placing three posts at least four inches
1192	1192	37.21square or four inches in diameter around the boring at equal distances from each other and
1193	1193	37.22two feet from the gas well. The posts must extend two feet above the established ground
1194	1194	37.23surface and four feet below the established ground surface, or to a depth of two feet if each
1195	1195	37.24post is set in concrete to a depth of two feet. The posts must be made of reinforced concrete,
1196	1196	37.25decay-resistant wood, or schedule 40 steel pipe. Steel pipe must be covered with an
1197	1197	37.26overlapping, threaded, or welded steel or iron cap or be filled with concrete or cement.
1198	1198	37.27 Subd. 9.Isolation distance.A person must not place, construct, or install a gas well
1199	1199	37.28less than 500 feet from a residential building, 500 feet from a water supply well, or 2,000
1200	1200	37.29feet from a school facility or child care center.
1201	1201	37.30 Subd. 10.Groundwater protection.(a) During the drilling and sealing process, the gas
1202	1202	37.31well must be constructed and maintained to prevent the introduction of surface contaminants
1203	1203	37.32into the well and to prevent the passage of water from one aquifer to another and covered
1204	1204	37.33and protected to prevent vandalism or entry of debris into the well.
1205	1205	37Article 2 Sec. 12.
1206	1206	REVISOR CKM/AD 25-0462203/12/25 38.1 (b) A gas well must not be constructed to interconnect aquifers separated by a confining
1207	1207	38.2layer.
1208	1208	38.3 Subd. 11.Sealing gas wells.(a) A gas well contractor must file a notification under
1209	1209	38.4section 103I.706, subdivision 8, with the fee under section 103I.706, subdivision 2, to the
1210	1210	38.5commissioner.
1211	1211	38.6 (b) A gas well sealing notification is valid for 18 months.
1212	1212	38.7 (c) A new sealing notification must be filed with the commissioner if a gas well contractor
1213	1213	38.8other than the one listed on the original notification will seal the gas well.
1214	1214	38.9 (d) The gas well contractor must notify the commissioner of health:
1215	1215	38.10 (1) after receiving authorization from the department of natural resources to decommission
1216	1216	38.11a gas well; and
1217	1217	38.12 (2) at least 24 hours prior to the start of sealing the gas well.
1218	1218	38.13 (e) Materials, debris, and obstructions that may interfere with sealing must be removed
1219	1219	38.14from the gas well.
1220	1220	38.15 (f) A gas well must be sealed by filling the gas well, including any open annular space,
1221	1221	38.16with neat cement grout. The grout must be pumped through a tremie pipe or the casing from
1222	1222	38.17the bottom of the gas well or annular space upward to within two feet of the established
1223	1223	38.18ground surface. The bottom of the tremie pipe must remain submerged in grout while
1224	1224	38.19grouting.
1225	1225	38.20 (g) Open annular space surrounding a casing must be grouted by:
1226	1226	38.21 (1) filling the annular space with grout according to clause (3);
1227	1227	38.22 (2) removing the casing and filling the well with grout. If casing is to be removed from
1228	1228	38.23a collapsing formation, grout must be inserted so the bottom of the casing remains submerged
1229	1229	38.24in grout;
1230	1230	38.25 (3) perforating the casing with a minimum of one 1/2-square-inch hole in each foot of
1231	1231	38.26casing and forcing grout through the perforations; or
1232	1232	38.27 (4) ripping a minimum of five feet of casing for every 20 feet of casing and forcing grout
1233	1233	38.28through the ripped casing, except that casing must be ripped through the entire length of a
1234	1234	38.29confining layer.
1235	1235	38.30 (h) The gas resource development permittee must have a licensed gas well contractor
1236	1236	38.31seal a gas well if:
1237	1237	38Article 2 Sec. 12.
1238	1238	REVISOR CKM/AD 25-0462203/12/25 39.1 (1) the gas well contributes to the spread of contamination;
1239	1239	39.2 (2) the gas well was attempted to be sealed but was not sealed according to the provisions
1240	1240	39.3of this chapter; or
1241	1241	39.4 (3) the gas well is located, constructed, or maintained in a manner that its continued use
1242	1242	39.5or existence endangers groundwater quality or is a safety or health hazard.
1243	1243	39.6 (i) The licensed gas well contractor must seal the gas well consistent with provisions of
1244	1244	39.7this chapter.
1245	1245	39.8 Subd. 12.Rules.A person requesting to construct a gas well must comply with this
1246	1246	39.9section until permanent rules for gas wells adopted by the commissioner are published in
1247	1247	39.10the State Register.
1248	1248	39.11 Subd. 13.Expiration.This section expires on December 31 of the year that the permanent
1249	1249	39.12rules are adopted pursuant to section 103I.706.
1250	1250	39.13Sec. 13. [103I.708] OIL WELLS.
1251	1251	39.14 A person shall not explore, prospect, or construct an oil well until an environmental
1252	1252	39.15review has been completed and a production permit has been obtained from the commissioner
1253	1253	39.16of natural resources.
1254	1254	39.17Sec. 14. APPROPRIATION; GAS WELL CONSTRUCTION AND SEALING
1255	1255	39.18NOTIFICATION.
1256	1256	39.19 Subdivision 1.Programs; registration; licensing; rulemaking.$863,000 in fiscal year
1257	1257	39.202026 is appropriated from the general fund to the commissioner of health for the development
1258	1258	39.21of a legislatively authorized gas well and sealing notification program, rig registration,
1259	1259	39.22licensing program, inspection program, rulemaking, credentialing in an information
1260	1260	39.23technology system for the electronic submission of gas well records, licensure, and
1261	1261	39.24registration that accepts online fee payments, issues unique identifiers, has the ability to
1262	1262	39.25retrieve records, and contains a searchable database. This is a onetime appropriation that is
1263	1263	39.26available until December 31, 2027.
1264	1264	39.27 Subd. 2.Staffing.$395,000 in fiscal year 2026 and $395,000 in fiscal year 2027 are
1265	1265	39.28appropriated from the general fund to the commissioner of health to hire staff who will
1266	1266	39.29inspect, enforce, and manage oversight of a legislatively authorized gas well and sealing
1267	1267	39.30notification, licensing, and inspection program in Minnesota. Staff will serve as subject
1268	1268	39.31matter experts in gas well construction and sealing of Minnesota's newly discovered gas
1269	1269	39Article 2 Sec. 14.
1270	1270	REVISOR CKM/AD 25-0462203/12/25 40.1reserves. The base appropriation for this subdivision in fiscal year 2028 and thereafter shall
1271	1271	40.2be $........
1272	1272	40.3 Sec. 15. EFFECTIVE DATE.
1273	1273	40.4 This article is effective the day following final enactment.
1274	1274	40.5 ARTICLE 3
1275	1275	40.6 TAXATION
1276	1276	40.7 Section 1. Minnesota Statutes 2024, section 272.02, subdivision 97, is amended to read:
1277	1277	40.8 Subd. 97.Property used in business of mining subject to gross proceeds tax.The
1278	1278	40.9following property used in the business of mining that is subject to the gross proceeds tax
1279	1279	40.10under section 298.015 is exempt:
1280	1280	40.11 (1) deposits of ores, metals, and minerals, gas, and oil, and the lands in which they are
1281	1281	40.12contained;
1282	1282	40.13 (2) all real and personal property used in mining, quarrying, producing, or refining ores,
1283	1283	40.14minerals, or metals, gas, or oil, including lands occupied by or used in connection with the
1284	1284	40.15mining, quarrying, production, or ore refining facilities; and
1285	1285	40.16 (3) concentrate.
1286	1286	40.17 This exemption applies for each year that a person subject to tax under section 298.015
1287	1287	40.18uses the property for mining, quarrying, producing, or refining ores, metals, or minerals,
1288	1288	40.19gas, or oil.
1289	1289	40.20 EFFECTIVE DATE.This section is effective for assessment year 2025 and thereafter.
1290	1290	40.21Sec. 2. Minnesota Statutes 2024, section 272.03, subdivision 1, is amended to read:
1291	1291	40.22 Subdivision 1.Real property.(a) For the purposes of taxation, but not for chapter 297A,
1292	1292	40.23"real property" includes the land itself, rails, ties, and other track materials annexed to the
1293	1293	40.24land, and all buildings, structures, and improvements or other fixtures on it, bridges of bridge
1294	1294	40.25companies, and all rights and privileges belonging or appertaining to the land, and all mines,
1295	1295	40.26iron ore and taconite minerals not otherwise exempt, quarries, fossils, and trees on or under
1296	1296	40.27it.
1297	1297	40.28 (b) A building or structure shall include the building or structure itself, together with all
1298	1298	40.29improvements or fixtures annexed to the building or structure, which are integrated with
1299	1299	40.30and of permanent benefit to the building or structure, regardless of the present use of the
1300	1300	40Article 3 Sec. 2.
1301	1301	REVISOR CKM/AD 25-0462203/12/25 41.1building, and which cannot be removed without substantial damage to itself or to the building
1302	1302	41.2or structure.
1303	1303	41.3 (c)(i) Real property does not include tools, implements, machinery, and equipment
1304	1304	41.4attached to or installed in real property for use in the business or production activity
1305	1305	41.5conducted thereon, regardless of size, weight or method of attachment, and mine shafts,
1306	1306	41.6tunnels, and other underground openings used to extract ores and, minerals, metals, gas, or
1307	1307	41.7oil taxed under chapter 298 together with steel, concrete, and other materials used to support
1308	1308	41.8such openings.
1309	1309	41.9 (ii) The exclusion provided in clause (i) shall not apply to machinery and equipment
1310	1310	41.10includable as real estate by paragraphs (a) and (b) even though such machinery and equipment
1311	1311	41.11is used in the business or production activity conducted on the real property if and to the
1312	1312	41.12extent such business or production activity consists of furnishing services or products to
1313	1313	41.13other buildings or structures which are subject to taxation under this chapter.
1314	1314	41.14 (iii) The exclusion provided in clause (i) does not apply to the exterior shell of a structure
1315	1315	41.15which constitutes walls, ceilings, roofs, or floors if the shell of the structure has structural,
1316	1316	41.16insulation, or temperature control functions or provides protection from the elements, unless
1317	1317	41.17the structure is primarily used in the production of biofuels, wine, beer, distilled beverages,
1318	1318	41.18or dairy products. Such an exterior shell is included in the definition of real property even
1319	1319	41.19if it also has special functions distinct from that of a building, or if such an exterior shell is
1320	1320	41.20primarily used for the storage of ingredients or materials used in the production of biofuels,
1321	1321	41.21wine, beer, distilled beverages, or dairy products, or for the storage of finished biofuels,
1322	1322	41.22wine, beer, distilled beverages, or dairy products.
1323	1323	41.23 (d) The term real property does not include tools, implements, machinery, equipment,
1324	1324	41.24poles, lines, cables, wires, conduit, and station connections which are part of a telephone
1325	1325	41.25communications system, regardless of attachment to or installation in real property and
1326	1326	41.26regardless of size, weight, or method of attachment or installation.
1327	1327	41.27 EFFECTIVE DATE.This section is effective for assessment year 2025 and thereafter.
1328	1328	41.28Sec. 3. Minnesota Statutes 2024, section 273.12, is amended to read:
1329	1329	41.29 273.12 ASSESSMENT OF REAL PROPERTY.
1330	1330	41.30 It shall be the duty of every assessor and board, in estimating and determining the value
1331	1331	41.31of lands for the purpose of taxation, to consider and give due weight to every element and
1332	1332	41.32factor affecting the market value thereof, including its location with reference to roads and
1333	1333	41.33streets and the location of roads and streets thereon or over the same, and to take into
1334	1334	41Article 3 Sec. 3.
1335	1335	REVISOR CKM/AD 25-0462203/12/25 42.1consideration a reduction in the acreage of each tract or lot sufficient to cover the amount
1336	1336	42.2of land actually used for any improved public highway and the reduction in area of land
1337	1337	42.3caused thereby. It shall be the duty of every assessor and board, in estimating and determining
1338	1338	42.4the value of lands for the purpose of taxation, to consider and give due weight to lands
1339	1339	42.5which are comparable in character, quality, and location, to the end that all lands similarly
1340	1340	42.6located and improved will be assessed upon a uniform basis and without discrimination
1341	1341	42.7and, for agricultural lands, to consider and give recognition to its earning potential as
1342	1342	42.8measured by its free market rental rate.
1343	1343	42.9 When mineral, clay, or gravel deposits exist on a property, and their extent, quality, and
1344	1344	42.10costs of extraction are sufficiently well known so as to influence market value, such deposits
1345	1345	42.11shall be recognized in valuing the property; except for mineral and energy-resource deposits,
1346	1346	42.12metals, gas, and oil, which are subject to taxation under section 298.015, and except for
1347	1347	42.13taconite and iron-sulphide deposits which are exempt from the general property tax under
1348	1348	42.14section 298.25.
1349	1349	42.15 EFFECTIVE DATE.This section is effective for assessment year 2025 and thereafter.
1350	1350	42.16Sec. 4. Minnesota Statutes 2024, section 289A.02, subdivision 6, is amended to read:
1351	1351	42.17 Subd. 6.Mining company."Mining company" means a person engaged in the business
1352	1352	42.18of mining or producing ores, minerals, metals, gas, or oil in Minnesota subject to the taxes
1353	1353	42.19imposed by section 298.01 or 298.015.
1354	1354	42.20 EFFECTIVE DATE.This section is effective for taxable years beginning after December
1355	1355	42.2131, 2024.
1356	1356	42.22Sec. 5. Minnesota Statutes 2024, section 289A.12, is amended by adding a subdivision to
1357	1357	42.23read:
1358	1358	42.24 Subd. 19.Informational report by mining companies.(a) A mining company required
1359	1359	42.25to file an annual tax return under section 289A.08, subdivision 15, for the payment of taxes
1360	1360	42.26imposed under section 298.015, must also file an annual informational report with the
1361	1361	42.27commissioner that contains the following information:
1362	1362	42.28 (1) sales used to compute gross proceeds under section 298.016;
1363	1363	42.29 (2) the location of the mine or well where the ore, mineral, metal, gas, or oil product is
1364	1364	42.30mined, extracted, refined or produced that is used to compute gross proceeds under section
1365	1365	42.31298.016; and
1366	1366	42Article 3 Sec. 5.
1367	1367	REVISOR CKM/AD 25-0462203/12/25 43.1 (3) other information necessary to collect tax under section 298.015 and to distribute
1368	1368	43.2the tax proceeds under section 298.018.
1369	1369	43.3 (b) The commissioner must prescribe the format and manner of the annual informational
1370	1370	43.4report. A mining company must file the report on or before May 1 following the close of
1371	1371	43.5the calendar year.
1372	1372	43.6 (c) The extension of time provided in section 289A.19, subdivision 2, for the filing of
1373	1373	43.7the annual tax return required under section 289A.08, subdivision 15, does not apply to the
1374	1374	43.8filing of the annual informational report.
1375	1375	43.9 EFFECTIVE DATE.This section is effective for annual informational reports due
1376	1376	43.10after December 31, 2024.
1377	1377	43.11Sec. 6. Minnesota Statutes 2024, section 289A.19, subdivision 2, is amended to read:
1378	1378	43.12 Subd. 2.Corporate franchise and mining company taxes.(a) Except as provided in
1379	1379	43.13paragraph (b), corporations or mining companies shall receive an extension of seven months
1380	1380	43.14or the amount of time granted by the Internal Revenue Service, whichever is longer, for
1381	1381	43.15filing the return of a corporation subject to tax under chapter 290 or for filing the return of
1382	1382	43.16a mining company subject to tax under sections 298.01 and 298.015. Interest on any balance
1383	1383	43.17of tax not paid when the regularly required return is due must be paid at the rate specified
1384	1384	43.18in section 270C.40, from the date such payment should have been made if no extension was
1385	1385	43.19granted, until the date of payment of such tax.
1386	1386	43.20 If a corporation or mining company does not:
1387	1387	43.21 (1) pay at least 90 percent of the amount of tax shown on the return on or before the
1388	1388	43.22regular due date of the return, the penalty prescribed by section 289A.60, subdivision 1,
1389	1389	43.23shall be imposed on the unpaid balance of tax; or
1390	1390	43.24 (2) pay the balance due shown on the regularly required return on or before the extended
1391	1391	43.25due date of the return, the penalty prescribed by section 289A.60, subdivision 1, shall be
1392	1392	43.26imposed on the unpaid balance of tax from the original due date of the return.
1393	1393	43.27 (b) If a mining company does not file the annual informational report required under
1394	1394	43.28section 289A.12, subdivision 19, by May 1 following the close of the calendar year, then
1395	1395	43.29the mining company subject to tax under section 298.015 must not receive the extension of
1396	1396	43.30time for filing its annual tax return.
1397	1397	43.31 EFFECTIVE DATE.This section is effective for annual informational reports due
1398	1398	43.32after December 31, 2024.
1399	1399	43Article 3 Sec. 6.
1400	1400	REVISOR CKM/AD 25-0462203/12/25 44.1 Sec. 7. Minnesota Statutes 2024, section 290.0134, subdivision 9, is amended to read:
1401	1401	44.2 Subd. 9.Exempt mining and production income.Income or gains from the business
1402	1402	44.3of mining or the production of gas or oil as defined in section 290.05, subdivision 1, clause
1403	1403	44.4(a), that are not subject to Minnesota franchise tax are a subtraction.
1404	1404	44.5 EFFECTIVE DATE.This section is effective for taxable years beginning after December
1405	1405	44.631, 2024.
1406	1406	44.7 Sec. 8. Minnesota Statutes 2024, section 290.0135, is amended to read:
1407	1407	44.8 290.0135 BASIS MODIFICATIONS AFFECTING GAIN OR LOSS ON
1408	1408	44.9DISPOSITION OF PROPERTY.
1409	1409	44.10 (a) For individuals, estates, and trusts, the basis of property is its adjusted basis for
1410	1410	44.11federal income tax purposes except as set forth in paragraphs (e) and (f). For corporations,
1411	1411	44.12the basis of property is its adjusted basis for federal income tax purposes, without regard
1412	1412	44.13to the time when the property became subject to tax under this chapter or to whether
1413	1413	44.14out-of-state losses or items of tax preference with respect to the property were not deductible
1414	1414	44.15under this chapter, except that the modifications to the basis for federal income tax purposes
1415	1415	44.16set forth in paragraphs (b) to (i) are allowed to corporations, and the resulting modifications
1416	1416	44.17to federal taxable income must be made in the year in which gain or loss on the sale or other
1417	1417	44.18disposition of property is recognized.
1418	1418	44.19 (b) The basis of property shall not be reduced to reflect federal investment tax credit.
1419	1419	44.20 (c) For property acquired before January 1, 1933, the basis for computing a gain is the
1420	1420	44.21fair market value of the property as of that date. The basis for determining a loss is the cost
1421	1421	44.22of the property to the taxpayer less any depreciation, amortization, or depletion, actually
1422	1422	44.23sustained before that date. If the adjusted cost exceeds the fair market value of the property,
1423	1423	44.24then the basis is the adjusted cost regardless of whether there is a gain or loss.
1424	1424	44.25 (d) The basis is reduced by the allowance for amortization of bond premium if an election
1425	1425	44.26to amortize was made pursuant to Minnesota Statutes 1986, section 290.09, subdivision 13,
1426	1426	44.27and the allowance could have been deducted by the taxpayer under this chapter during the
1427	1427	44.28period of the taxpayer's ownership of the property.
1428	1428	44.29 (e) For assets placed in service before January 1, 1987, corporations, partnerships, or
1429	1429	44.30individuals engaged in the business of mining or producing minerals, metals, gas, oil, or
1430	1430	44.31ores other than iron ore or taconite concentrates subject to the occupation tax under chapter
1431	1431	44.32298 must use the occupation tax basis of property used in that business.
1432	1432	44Article 3 Sec. 8.
1433	1433	REVISOR CKM/AD 25-0462203/12/25 45.1 (f) For assets placed in service before January 1, 1990, corporations, partnerships, or
1434	1434	45.2individuals engaged in the business of mining iron ore or taconite concentrates subject to
1435	1435	45.3the occupation tax under chapter 298 must use the occupation tax basis of property used in
1436	1436	45.4that business.
1437	1437	45.5 (g) In applying the provisions of sections 301(c)(3)(B), 312(f) and (g), and 316(a)(1) of
1438	1438	45.6the Internal Revenue Code, the dates December 31, 1932, and January 1, 1933, shall be
1439	1439	45.7substituted for February 28, 1913, and March 1, 1913, respectively.
1440	1440	45.8 (h) In applying the provisions of section 362(a) and (c) of the Internal Revenue Code,
1441	1441	45.9the date December 31, 1956, shall be substituted for June 22, 1954.
1442	1442	45.10 (i) The basis of property shall be increased by the amount of intangible drilling costs
1443	1443	45.11not previously allowed due to differences between this chapter and the Internal Revenue
1444	1444	45.12Code.
1445	1445	45.13 (j) The adjusted basis of any corporate partner's interest in a partnership is the same as
1446	1446	45.14the adjusted basis for federal income tax purposes modified as required to reflect the basis
1447	1447	45.15modifications set forth in paragraphs (b) to (i). The adjusted basis of a partnership in which
1448	1448	45.16the partner is an individual, estate, or trust is the same as the adjusted basis for federal
1449	1449	45.17income tax purposes modified as required to reflect the basis modifications set forth in
1450	1450	45.18paragraphs (e) and (f).
1451	1451	45.19 (k) The modifications contained in paragraphs (b) to (i) also apply to the basis of property
1452	1452	45.20that is determined by reference to the basis of the same property in the hands of a different
1453	1453	45.21taxpayer or by reference to the basis of different property.
1454	1454	45.22 EFFECTIVE DATE.This section is effective for taxable years beginning after December
1455	1455	45.2331, 2024.
1456	1456	45.24Sec. 9. Minnesota Statutes 2024, section 290.05, subdivision 1, is amended to read:
1457	1457	45.25 Subdivision 1.Exempt entities.The following corporations, individuals, estates, trusts,
1458	1458	45.26and organizations shall be exempted from taxation under this chapter, provided that every
1459	1459	45.27such person or corporation claiming exemption under this chapter, in whole or in part, must
1460	1460	45.28establish to the satisfaction of the commissioner the taxable status of any income or activity:
1461	1461	45.29 (a) corporations, individuals, estates, and trusts engaged in the business of mining or
1462	1462	45.30producing iron ore and; mining, producing, or refining other ores, metals, and minerals,; or
1463	1463	45.31producing gas or oil, the mining, production, or refining of which is subject to the occupation
1464	1464	45.32tax imposed by section 298.01; but if any such corporation, individual, estate, or trust
1465	1465	45.33engages in any other business or activity or has income from any property not used in such
1466	1466	45Article 3 Sec. 9.
1467	1467	REVISOR CKM/AD 25-0462203/12/25 46.1business it shall be subject to this tax computed on the net income from such property or
1468	1468	46.2such other business or activity. Royalty shall not be considered as income from the business
1469	1469	46.3of mining or producing iron ore; mining, producing, or refining other ores, metals, and
1470	1470	46.4minerals; or producing gas or oil, within the meaning of this section;
1471	1471	46.5 (b) the United States of America, the state of Minnesota or any political subdivision of
1472	1472	46.6either agencies or instrumentalities, whether engaged in the discharge of governmental or
1473	1473	46.7proprietary functions; and
1474	1474	46.8 (c) any insurance company, other than a disqualified captive insurance company.
1475	1475	46.9 EFFECTIVE DATE.This section is effective for taxable years beginning after December
1476	1476	46.1031, 2024.
1477	1477	46.11Sec. 10. Minnesota Statutes 2024, section 290.923, subdivision 1, is amended to read:
1478	1478	46.12 Subdivision 1.Definition.In this section, "royalty" means the amount in money or value
1479	1479	46.13of property received by any person having any right, title, or interest in any tract of land in
1480	1480	46.14this state for permission to explore, mine, take out, and remove ore, mineral, metal, gas, or
1481	1481	46.15oil from the land.
1482	1482	46.16 EFFECTIVE DATE.This section is effective for taxable years beginning after December
1483	1483	46.1731, 2024.
1484	1484	46.18Sec. 11. Minnesota Statutes 2024, section 297A.68, subdivision 5, is amended to read:
1485	1485	46.19 Subd. 5.Capital equipment.(a) Capital equipment is exempt.
1486	1486	46.20 "Capital equipment" means machinery and equipment purchased or leased, and used in
1487	1487	46.21this state by the purchaser or lessee primarily for manufacturing, fabricating, mining, or
1488	1488	46.22refining tangible personal property to be sold ultimately at retail if the machinery and
1489	1489	46.23equipment are essential to the integrated production process of manufacturing, fabricating,
1490	1490	46.24mining, or refining. Capital equipment also includes machinery and equipment used primarily
1491	1491	46.25to electronically transmit results retrieved by a customer of an online computerized data
1492	1492	46.26retrieval system.
1493	1493	46.27 (b) Capital equipment includes, but is not limited to:
1494	1494	46.28 (1) machinery and equipment used to operate, control, or regulate the production
1495	1495	46.29equipment;
1496	1496	46.30 (2) machinery and equipment used for research and development, design, quality control,
1497	1497	46.31and testing activities;
1498	1498	46Article 3 Sec. 11.
1499	1499	REVISOR CKM/AD 25-0462203/12/25 47.1 (3) environmental control devices that are used to maintain conditions such as
1500	1500	47.2temperature, humidity, light, or air pressure when those conditions are essential to and are
1501	1501	47.3part of the production process;
1502	1502	47.4 (4) materials and supplies used to construct and install machinery or equipment;
1503	1503	47.5 (5) repair and replacement parts, including accessories, whether purchased as spare parts,
1504	1504	47.6repair parts, or as upgrades or modifications to machinery or equipment;
1505	1505	47.7 (6) materials used for foundations that support machinery or equipment;
1506	1506	47.8 (7) materials used to construct and install special purpose buildings used in the production
1507	1507	47.9process;
1508	1508	47.10 (8) ready-mixed concrete equipment in which the ready-mixed concrete is mixed as part
1509	1509	47.11of the delivery process regardless if mounted on a chassis, repair parts for ready-mixed
1510	1510	47.12concrete trucks, and leases of ready-mixed concrete trucks; and
1511	1511	47.13 (9) machinery or equipment used for research, development, design, or production of
1512	1512	47.14computer software.
1513	1513	47.15 (c) Capital equipment does not include the following:
1514	1514	47.16 (1) motor vehicles taxed under chapter 297B;
1515	1515	47.17 (2) machinery or equipment used to receive or store raw materials;
1516	1516	47.18 (3) building materials, except for materials included in paragraph (b), clauses (6) and
1517	1517	47.19(7);
1518	1518	47.20 (4) machinery or equipment used for nonproduction purposes, including, but not limited
1519	1519	47.21to, the following: plant security, fire prevention, first aid, and hospital stations; support
1520	1520	47.22operations or administration; pollution control; and plant cleaning, disposal of scrap and
1521	1521	47.23waste, plant communications, space heating, cooling, lighting, or safety;
1522	1522	47.24 (5) farm machinery and aquaculture production equipment as defined by section 297A.61,
1523	1523	47.25subdivisions 12 and 13;
1524	1524	47.26 (6) machinery or equipment purchased and installed by a contractor as part of an
1525	1525	47.27improvement to real property;
1526	1526	47.28 (7) machinery and equipment used by restaurants in the furnishing, preparing, or serving
1527	1527	47.29of prepared foods as defined in section 297A.61, subdivision 31;
1528	1528	47.30 (8) machinery and equipment used to furnish the services listed in section 297A.61,
1529	1529	47.31subdivision 3, paragraph (g), clause (6), items (i) to (vi) and (viii);
1530	1530	47Article 3 Sec. 11.
1531	1531	REVISOR CKM/AD 25-0462203/12/25 48.1 (9) machinery or equipment used in the transportation, transmission, or distribution of
1532	1532	48.2petroleum, liquefied gas, natural gas, water, or steam, in, by, or through pipes, lines, tanks,
1533	1533	48.3mains, or other means of transporting those products. This clause does not apply to machinery
1534	1534	48.4or equipment used to blend petroleum or biodiesel fuel as defined in section 239.77; or
1535	1535	48.5 (10) any other item that is not essential to the integrated process of manufacturing,
1536	1536	48.6fabricating, mining, or refining.
1537	1537	48.7 (d) For purposes of this subdivision:
1538	1538	48.8 (1) "Equipment" means independent devices or tools separate from machinery but
1539	1539	48.9essential to an integrated production process, including computers and computer software,
1540	1540	48.10used in operating, controlling, or regulating machinery and equipment; and any subunit or
1541	1541	48.11assembly comprising a component of any machinery or accessory or attachment parts of
1542	1542	48.12machinery, such as tools, dies, jigs, patterns, and molds.
1543	1543	48.13 (2) "Fabricating" means to make, build, create, produce, or assemble components or
1544	1544	48.14property to work in a new or different manner.
1545	1545	48.15 (3) "Integrated production process" means a process or series of operations through
1546	1546	48.16which tangible personal property is manufactured, fabricated, mined, or refined. For purposes
1547	1547	48.17of this clause, (i) manufacturing begins with the removal of raw materials from inventory
1548	1548	48.18and ends when the last process prior to loading for shipment has been completed; (ii)
1549	1549	48.19fabricating begins with the removal from storage or inventory of the property to be assembled,
1550	1550	48.20processed, altered, or modified and ends with the creation or production of the new or
1551	1551	48.21changed product; (iii) mining begins with the removal of overburden from the site of the
1552	1552	48.22ores, minerals, stone, peat deposit, metals, gas, oil, or surface materials and ends when the
1553	1553	48.23last process before stockpiling is completed; and (iv) refining begins with the removal from
1554	1554	48.24inventory or storage of a natural resource and ends with the conversion of the item to its
1555	1555	48.25completed form.
1556	1556	48.26 (4) "Machinery" means mechanical, electronic, or electrical devices, including computers
1557	1557	48.27and computer software, that are purchased or constructed to be used for the activities set
1558	1558	48.28forth in paragraph (a), beginning with the removal of raw materials from inventory through
1559	1559	48.29completion of the product, including packaging of the product.
1560	1560	48.30 (5) "Machinery and equipment used for pollution control" means machinery and
1561	1561	48.31equipment used solely to eliminate, prevent, or reduce pollution resulting from an activity
1562	1562	48.32described in paragraph (a).
1563	1563	48Article 3 Sec. 11.
1564	1564	REVISOR CKM/AD 25-0462203/12/25 49.1 (6) "Manufacturing" means an operation or series of operations where raw materials are
1565	1565	49.2changed in form, composition, or condition by machinery and equipment and which results
1566	1566	49.3in the production of a new article of tangible personal property. For purposes of this
1567	1567	49.4subdivision, "manufacturing" includes the generation of electricity or steam to be sold at
1568	1568	49.5retail.
1569	1569	49.6 (7) "Mining" means the extraction of minerals, ores, stone, or peat, metals, gas, or oil.
1570	1570	49.7"Gas and oil" have the meaning given to those terms in section 298.001, subdivisions 14
1571	1571	49.8and 15.
1572	1572	49.9 (8) "Online data retrieval system" means a system whose cumulation of information is
1573	1573	49.10equally available and accessible to all its customers.
1574	1574	49.11 (9) "Primarily" means machinery and equipment used 50 percent or more of the time in
1575	1575	49.12an activity described in paragraph (a).
1576	1576	49.13 (10) "Refining" means the process of converting a natural resource to an intermediate
1577	1577	49.14or finished product, including the treatment of water to be sold at retail.
1578	1578	49.15 (11) This subdivision does not apply to telecommunications equipment as provided in
1579	1579	49.16subdivision 35a, and does not apply to wire, cable, or poles for telecommunications services.
1580	1580	49.17 EFFECTIVE DATE.This section is effective for sales and purchases made after
1581	1581	49.18December 31, 2025.
1582	1582	49.19Sec. 12. Minnesota Statutes 2024, section 297A.71, subdivision 14, is amended to read:
1583	1583	49.20 Subd. 14.Mineral production facilities.Building materials, equipment, and supplies
1584	1584	49.21used for the construction of the following mineral production facilities are exempt.
1585	1585	49.22 The mineral production facilities that qualify for this exemption are:
1586	1586	49.23 (1) a value added iron products plant, which may be either a new plant or a facility
1587	1587	49.24incorporated into an existing plant that produces iron upgraded to a minimum of 75 percent
1588	1588	49.25iron content or any iron alloy with a total minimum metallic content of 90 percent;
1589	1589	49.26 (2) a facility used for the manufacture of fluxed taconite pellets as defined in section
1590	1590	49.27298.24;
1591	1591	49.28 (3) a new capital project that has a total cost of over $40,000,000 that is directly related
1592	1592	49.29to production, cost, or quality at an existing taconite facility that does not qualify under
1593	1593	49.30clause (1) or (2); and
1594	1594	49Article 3 Sec. 12.
1595	1595	REVISOR CKM/AD 25-0462203/12/25 50.1 (4) a new mine or minerals processing plant for any mineral, ore, metal, gas, or oil subject
1596	1596	50.2to the gross proceeds tax imposed under section 298.015.
1597	1597	50.3 The tax must be imposed and collected as if the rate under section 297A.62, subdivision
1598	1598	50.41, applied, and then refunded in the manner provided in section 297A.75.
1599	1599	50.5 EFFECTIVE DATE.This section is effective for sales and purchases made after
1600	1600	50.6December 31, 2025.
1601	1601	50.7 Sec. 13. Minnesota Statutes 2024, section 298.001, subdivision 3a, is amended to read:
1602	1602	50.8 Subd. 3a.Producer."Producer" means a person engaged in the business of mining or
1603	1603	50.9producing iron ore, taconite concentrate, or direct reduced ore, other ore, minerals, metals,
1604	1604	50.10gas, or oil in this state.
1605	1605	50.11 EFFECTIVE DATE.This section is effective for taxable years beginning after December
1606	1606	50.1231, 2024.
1607	1607	50.13Sec. 14. Minnesota Statutes 2024, section 298.001, is amended by adding a subdivision
1608	1608	50.14to read:
1609	1609	50.15 Subd. 10a.Producing."Producing" means and is limited to producing:
1610	1610	50.16 (1) gas or oil products, the drilling, extracting, separating, or beneficiating of which are
1611	1611	50.17subject to tax under section 298.015; and
1612	1612	50.18 (2) carried out by the entity, or affiliated entity, that drilled, extracted, separated, or
1613	1613	50.19beneficiated the gas or oil products.
1614	1614	50.20 EFFECTIVE DATE.This section is effective for taxable years beginning after December
1615	1615	50.2131, 2024.
1616	1616	50.22Sec. 15. Minnesota Statutes 2024, section 298.001, is amended by adding a subdivision
1617	1617	50.23to read:
1618	1618	50.24 Subd. 14.Gas."Gas" means all gases, both hydrocarbon and nonhydrocarbon, that occur
1619	1619	50.25naturally beneath the ground surface in Minnesota. Gas includes, but is not limited to, natural
1620	1620	50.26gas, hydrogen, carbon dioxide, nitrogen, hydrogen sulfide, helium, methane and a mixture
1621	1621	50.27of some or all of these gases.
1622	1622	50.28 EFFECTIVE DATE.This section is effective for taxable years beginning after December
1623	1623	50.2931, 2024.
1624	1624	50Article 3 Sec. 15.
1625	1625	REVISOR CKM/AD 25-0462203/12/25 51.1 Sec. 16. Minnesota Statutes 2024, section 298.001, is amended by adding a subdivision
1626	1626	51.2to read:
1627	1627	51.3 Subd. 15.Oil."Oil" means all oils that occur naturally beneath the ground surface in
1628	1628	51.4Minnesota. Oil includes, but is not limited to, petroleum, crude oil, condensate, casinghead
1629	1629	51.5gasoline, or other mineral oils and a mixture of some or all of these oils.
1630	1630	51.6 EFFECTIVE DATE.This section is effective for taxable years beginning after December
1631	1631	51.731, 2024.
1632	1632	51.8 Sec. 17. Minnesota Statutes 2024, section 298.001, is amended by adding a subdivision
1633	1633	51.9to read:
1634	1634	51.10 Subd. 16.Gas or oil production."Gas or oil production," "the production of gas or oil,"
1635	1635	51.11and "producing gas or oil" mean the action of taking gas or oil, in its natural state, out from
1636	1636	51.12beneath the ground surface in Minnesota and includes drilling, extracting, separating or
1637	1637	51.13beneficiating that gas or oil in Minnesota.
1638	1638	51.14 EFFECTIVE DATE.This section is effective for taxable years beginning after December
1639	1639	51.1531, 2024.
1640	1640	51.16Sec. 18. Minnesota Statutes 2024, section 298.01, subdivision 3, is amended to read:
1641	1641	51.17 Subd. 3.Occupation tax; other ores; gas and oil.Every person engaged in the business
1642	1642	51.18of mining, refining, or producing ores, metals, or minerals, or producing gas or oil, in this
1643	1643	51.19state, when these resources are extracted in their natural state from beneath the ground
1644	1644	51.20surface in Minnesota, except iron ore or taconite concentrates, shall pay an occupation tax
1645	1645	51.21to the state of Minnesota as provided in this subdivision. For purposes of this subdivision,
1646	1646	51.22mining includes the application of hydrometallurgical processes. Hydrometallurgical
1647	1647	51.23processes are processes that extract the ores, metals, or minerals, by use of aqueous solutions
1648	1648	51.24that leach, concentrate, and recover the ore, metal, or mineral. The tax is determined in the
1649	1649	51.25same manner as the tax imposed by section 290.02, except that sections 290.05, subdivision
1650	1650	51.261, clause (a), 290.17, subdivision 4, and 290.191, subdivision 2, do not apply, and the
1651	1651	51.27occupation tax must be computed by applying to taxable income the rate of 2.45 percent.
1652	1652	51.28 The tax is in addition to all other taxes.
1653	1653	51.29 EFFECTIVE DATE.This section is effective for taxable years beginning after December
1654	1654	51.3031, 2024.
1655	1655	51Article 3 Sec. 18.
1656	1656	REVISOR CKM/AD 25-0462203/12/25 52.1 Sec. 19. Minnesota Statutes 2024, section 298.01, subdivision 3a, is amended to read:
1657	1657	52.2 Subd. 3a.Gross income.(a) For purposes of determining a person's taxable income
1658	1658	52.3under subdivision 3, gross income is determined by the amount of gross proceeds from
1659	1659	52.4mining, refining, or producing ores, metals, or minerals or producing gas or oil in this state
1660	1660	52.5Minnesota under section 298.016 and includes any gain or loss recognized from the sale or
1661	1661	52.6disposition of assets used in the business in this state. If more than one ore, mineral, or
1662	1662	52.7metal, gas, or oil referred to in section 298.016 is mined and processed or produced at the
1663	1663	52.8same mine, well, and plant, a gross income for each ore, mineral, or metal, gas, and oil must
1664	1664	52.9be determined separately. The gross incomes may be combined on one occupation tax return
1665	1665	52.10to arrive at the gross income of all production.
1666	1666	52.11 (b) In applying section 290.191, subdivision 5, transfers of ores, metals, or minerals,
1667	1667	52.12gas, or oil that are subject to tax under this chapter are deemed to be sales in this state.
1668	1668	52.13 EFFECTIVE DATE.This section is effective for taxable years beginning after December
1669	1669	52.1431, 2024.
1670	1670	52.15Sec. 20. Minnesota Statutes 2024, section 298.01, subdivision 3b, is amended to read:
1671	1671	52.16 Subd. 3b.Deductions.(a) For purposes of determining taxable income under subdivision
1672	1672	52.173, the deductions from gross income include only those expenses necessary to convert raw
1673	1673	52.18ores, metals, minerals, gas, or oil to marketable quality. Such expenses include costs
1674	1674	52.19associated with refinement but do not include expenses such as transportation, stockpiling,
1675	1675	52.20marketing, or marine insurance that are incurred after marketable ores, metals, minerals,
1676	1676	52.21gas, or oil are produced, unless the expenses are included in gross income. The allowable
1677	1677	52.22deductions from a mine, well, or plant that mines and produces more than one ore, mineral,
1678	1678	52.23metal, or energy resource, gas, or oil must be determined separately for the purposes of
1679	1679	52.24computing the deduction in section 290.0133, subdivision 9. These deductions may be
1680	1680	52.25combined on one occupation tax return to arrive at the deduction from gross income for all
1681	1681	52.26production.
1682	1682	52.27 (b) The provisions of sections 290.0133, subdivisions 7 and 9, and 290.0134, subdivisions
1683	1683	52.287 and 9, are not used to determine taxable income.
1684	1684	52.29 EFFECTIVE DATE.This section is effective for taxable years beginning after December
1685	1685	52.3031, 2024.
1686	1686	52Article 3 Sec. 20.
1687	1687	REVISOR CKM/AD 25-0462203/12/25 53.1 Sec. 21. Minnesota Statutes 2024, section 298.01, subdivision 4a, is amended to read:
1688	1688	53.2 Subd. 4a.Gross income.(a) For purposes of determining a person's taxable income
1689	1689	53.3under subdivision 4, gross income is determined by the mine value of the ore mined in
1690	1690	53.4Minnesota and includes any gain or loss recognized from the sale or disposition of assets
1691	1691	53.5used in the business in this state.
1692	1692	53.6 (b) Mine value is the value, or selling price, of iron ore or taconite concentrates, f.o.b.
1693	1693	53.7mine. The mine value is calculated by multiplying the iron unit price for the period, as
1694	1694	53.8determined by the commissioner, by the tons produced and the weighted average analysis.
1695	1695	53.9 (c) In applying section 290.191, subdivision 5, transfers of iron ore and taconite
1696	1696	53.10concentrates are deemed to be sales in this state.
1697	1697	53.11 (d) If iron ore or, taconite and a any other ore, mineral, metal, or energy resource, gas,
1698	1698	53.12or oil referred to in section 298.016 is mined and processed or produced at the same mine,
1699	1699	53.13well, and plant, a gross income for each other ore, mineral, metal, or energy resource, gas,
1700	1700	53.14or oil must be determined separately from the mine value for the iron ore or taconite. The
1701	1701	53.15gross income may be combined on one occupation tax return to arrive at the gross income
1702	1702	53.16from all production.
1703	1703	53.17 EFFECTIVE DATE.This section is effective for taxable years beginning after December
1704	1704	53.1831, 2024.
1705	1705	53.19Sec. 22. Minnesota Statutes 2024, section 298.01, subdivision 4b, is amended to read:
1706	1706	53.20 Subd. 4b.Deductions.For purposes of determining taxable income under subdivision
1707	1707	53.214, the deductions from gross income include only those expenses necessary to convert raw
1708	1708	53.22iron ore or taconite concentrates to marketable quality. Such expenses include costs associated
1709	1709	53.23with beneficiation and refinement but do not include expenses such as transportation,
1710	1710	53.24stockpiling, marketing, or marine insurance that are incurred after marketable iron ore or
1711	1711	53.25taconite pellets are produced. The allowable deductions from a mine, well, or plant that
1712	1712	53.26mines and produces iron ore or taconite and one or more mineral or, metal, gas, or oil referred
1713	1713	53.27to in section 298.016 must be determined separately for the purposes of computing the
1714	1714	53.28deduction in section 290.0133, subdivision 9. These deductions may be combined on one
1715	1715	53.29occupation tax return to arrive at the deduction from gross income for all production.
1716	1716	53.30 EFFECTIVE DATE.This section is effective for taxable years beginning after December
1717	1717	53.3131, 2024.
1718	1718	53Article 3 Sec. 22.
1719	1719	REVISOR CKM/AD 25-0462203/12/25 54.1 Sec. 23. Minnesota Statutes 2024, section 298.01, subdivision 5, is amended to read:
1720	1720	54.2 Subd. 5.If declared unconstitutional.If the taxes imposed in subdivisions 3 and 4 are
1721	1721	54.3found unconstitutional by any court of last resort, then persons engaged in the business of
1722	1722	54.4mining or producing iron ore or other ores, metals, minerals, gas, or oil shall pay the
1723	1723	54.5occupation taxes imposed in Minnesota Statutes 1986, chapter 298. For purposes of applying
1724	1724	54.6Minnesota Statutes 1986, chapter 298, the term "other ores" as used in that chapter includes
1725	1725	54.7ores other than iron ore as well as minerals, metals, gas, or oil.
1726	1726	54.8 EFFECTIVE DATE.This section is effective for taxable years beginning after December
1727	1727	54.931, 2024.
1728	1728	54.10Sec. 24. Minnesota Statutes 2024, section 298.01, subdivision 6, is amended to read:
1729	1729	54.11 Subd. 6.Deductions applicable to mining both taconite and other ores, gas, or oil;
1730	1730	54.12ratio applied.If a person is engaged in the business of mining or producing both iron ores,
1731	1731	54.13taconite concentrates, or direct reduced ore, and other ores, minerals, metals, gas, or oil
1732	1732	54.14from the same mine or facility, that person must separately determine the mine value of (1)
1733	1733	54.15the iron ore, taconite concentrates, and direct reduced ore, and (2) the amount of gross
1734	1734	54.16proceeds from mining other ores, minerals, metals, gas, or oil in Minnesota. The ratio of
1735	1735	54.17mine value from iron ore, taconite concentrates, and direct reduced ore to gross proceeds
1736	1736	54.18from mining other ores, minerals, metals, gas, or oil must be applied to deductions common
1737	1737	54.19to both processes to determine taxable income for tax paid pursuant to subdivisions 3 and
1738	1738	54.204.
1739	1739	54.21 EFFECTIVE DATE.This section is effective for taxable years beginning after December
1740	1740	54.2231, 2024.
1741	1741	54.23Sec. 25. Minnesota Statutes 2024, section 298.015, subdivision 1, is amended to read:
1742	1742	54.24 Subdivision 1.Tax imposed.(a) Except as provided in paragraph (b), a person engaged
1743	1743	54.25in the business of mining shall pay to the state of Minnesota for distribution as provided in
1744	1744	54.26section 298.018 a gross proceeds tax equal to 0.4 percent of the gross proceeds from mining
1745	1745	54.27in Minnesota. The tax applies to all ores, metals, and minerals, gas, or oil mined, extracted,
1746	1746	54.28produced, or refined within the state of Minnesota, when these resources are extracted in
1747	1747	54.29their natural state from beneath the ground surface in Minnesota, except for sand, silica
1748	1748	54.30sand, gravel, building stone, crushed rock, limestone, granite, dimension granite, dimension
1749	1749	54.31stone, horticultural peat, clay, soil, iron ore, and taconite concentrates. The tax is in addition
1750	1750	54.32to all other taxes provided for by law.
1751	1751	54Article 3 Sec. 25.
1752	1752	REVISOR CKM/AD 25-0462203/12/25 55.1 (b) The following tax rates apply to the gas products listed:
1753	1753	55.2 (1) ... percent of the gross proceeds for carbon dioxide products;
1754	1754	55.3 (2) ... percent of the gross proceeds for helium products; and
1755	1755	55.4 (3) ... percent of the gross proceeds for hydrogen products.
1756	1756	55.5 (c) A person engaged in the business of producing gas or oil in this state is not subject
1757	1757	55.6to the minimum payment under subdivision 3.
1758	1758	55.7 EFFECTIVE DATE.This section is effective for taxable years beginning after December
1759	1759	55.831, 2024.
1760	1760	55.9 Sec. 26. Minnesota Statutes 2024, section 298.016, subdivision 1, is amended to read:
1761	1761	55.10 Subdivision 1.Computation; arm's-length transactions.When a metal or, mineral,
1762	1762	55.11gas, or oil product is sold by the producer in an arm's-length transaction, the gross proceeds
1763	1763	55.12are equal to the proceeds from the sale of the product. This subdivision applies to sales
1764	1764	55.13realized on all metal or, mineral, gas, or oil products produced from mining or production,
1765	1765	55.14including reduction, beneficiation, or any treatment or process used by a producer to obtain
1766	1766	55.15a metal or, mineral, gas, or oil product which is commercially marketable.
1767	1767	55.16 EFFECTIVE DATE.This section is effective for taxable years beginning after December
1768	1768	55.1731, 2024.
1769	1769	55.18Sec. 27. Minnesota Statutes 2024, section 298.016, subdivision 2, is amended to read:
1770	1770	55.19 Subd. 2.Other transactions.When a metal or, mineral, gas, or oil product is used by
1771	1771	55.20the producer or disposed of in a non-arm's-length transaction, the gross proceeds must be
1772	1772	55.21determined using the alternative computation in subdivision 3. Transactions subject to this
1773	1773	55.22subdivision include, but are not limited to, shipments to a wholly owned smelter, transactions
1774	1774	55.23with associated or affiliated companies, and any other transactions which are not at arm's
1775	1775	55.24length.
1776	1776	55.25 EFFECTIVE DATE.This section is effective for taxable years beginning after December
1777	1777	55.2631, 2024.
1778	1778	55.27Sec. 28. Minnesota Statutes 2024, section 298.016, subdivision 3, is amended to read:
1779	1779	55.28 Subd. 3.Alternative computation.(a) Except as provided in paragraphs (c) and (d),
1780	1780	55.29the commissioner of revenue shall determine the alternative computation of gross proceeds
1781	1781	55.30using the following procedure:
1782	1782	55Article 3 Sec. 28.
1783	1783	REVISOR CKM/AD 25-0462203/12/25 56.1 (1) Metal and mineral prices shall be determined by using the average annual market
1784	1784	56.2price as published in the Engineering and Mining Journal;
1785	1785	56.3 (2) For metals or mineral products with a monthly or weekly price quotation in the
1786	1786	56.4Engineering and Mining Journal, but for which no average annual price has been published,
1787	1787	56.5an arithmetic average of the monthly or weekly prices published in the Engineering and
1788	1788	56.6Mining Journal shall be used; and
1789	1789	56.7 (3) If the price of a particular metal or mineral product is not published in the Engineering
1790	1790	56.8and Mining Journal, another recognized published price, as established by the commissioner
1791	1791	56.9of revenue will be used.
1792	1792	56.10 (b) The quantity of each particular metal or mineral product recovered and paid or
1793	1793	56.11credited for by the smelter will be multiplied by the average annual market price as
1794	1794	56.12determined in clause paragraph (a). Special smelter charges for particular metals will be
1795	1795	56.13allowed as a deduction from this price. The resulting amount will be the gross proceeds for
1796	1796	56.14calculating the tax in section 298.015.
1797	1797	56.15 (c) A recognized published price, as established by the commissioner of revenue, must
1798	1798	56.16be used to determine the alternative computation of gross proceeds for gas or oil products.
1799	1799	56.17 (d) If a recognized published price is not currently available, the commissioner must
1800	1800	56.18use either a recognized price published historically or an arm's length transaction price paid
1801	1801	56.19by other parties for gas or oil products of like quantity to determine the greatest market
1802	1802	56.20value of the gas or oil product. If the commissioner uses a historical published price, it must
1803	1803	56.21be adjusted for inflation, as provided in section 270C.22, using the year in which the most
1804	1804	56.22recent historical price is published as the statutory year. If the commissioner uses an arm's
1805	1805	56.23length transaction price, the commissioner may adjust the arm's length transaction price to
1806	1806	56.24account for differences in quality, recency, inflation, terms and conditions, and other relevant
1807	1807	56.25circumstances under which the arm's length transaction price was paid in relation to the
1808	1808	56.26non-arm's-length transaction price computed under this subdivision.
1809	1809	56.27 EFFECTIVE DATE.This section is effective for taxable years beginning after December
1810	1810	56.2831, 2024.
1811	1811	56.29Sec. 29. Minnesota Statutes 2024, section 298.016, subdivision 4, is amended to read:
1812	1812	56.30 Subd. 4.Metal or, mineral, gas, or oil products; definition.For the purposes of this
1813	1813	56.31section, "metal or, mineral, gas, or oil products" means all those ores, metals, and minerals,
1814	1814	56.32gases, or oils subject to the tax provided in section 298.015.
1815	1815	56Article 3 Sec. 29.
1816	1816	REVISOR CKM/AD 25-0462203/12/25 57.1 EFFECTIVE DATE.This section is effective for taxable years beginning after December
1817	1817	57.231, 2024.
1818	1818	57.3 Sec. 30. Minnesota Statutes 2024, section 298.016, is amended by adding a subdivision
1819	1819	57.4to read:
1820	1820	57.5 Subd. 4a.Gas or oil products; definition.For purposes of this section, "gas or oil
1821	1821	57.6products" mean all gases and oils subject to the tax imposed in section 298.015.
1822	1822	57.7 EFFECTIVE DATE.This section is effective for taxable years beginning after December
1823	1823	57.831, 2024.
1824	1824	57.9 Sec. 31. Minnesota Statutes 2024, section 298.018, subdivision 1, is amended to read:
1825	1825	57.10 Subdivision 1.Within taconite assistance area.(a) Except as provided in subdivision
1826	1826	57.111b, the proceeds of the tax paid under sections 298.015 and 298.016 on ores, metals, or
1827	1827	57.12minerals mined or extracted within the taconite assistance area defined in section 273.1341,
1828	1828	57.13shall be allocated as follows:
1829	1829	57.14 (1) except as provided under paragraph (b), five percent to the city or town within which
1830	1830	57.15the ores, metals, minerals, or energy resources are mined or extracted, or within which the
1831	1831	57.16concentrate was produced. If the mining and concentration, or different steps in either
1832	1832	57.17process, are carried on in more than one taxing district, the commissioner shall apportion
1833	1833	57.18equitably the proceeds among the cities and towns by attributing 50 percent of the proceeds
1834	1834	57.19of the tax to the operation of mining or extraction, and the remainder to the production plant
1835	1835	57.20or concentrating plant and to the processes of production and concentration, and with respect
1836	1836	57.21to each thereof giving due consideration to the relative extent of the respective operations
1837	1837	57.22performed in each taxing district;
1838	1838	57.23 (2) ten percent to the taconite municipal aid account to be distributed as provided in
1839	1839	57.24section 298.282, subdivisions 1 and 2, on the dates provided under this section;
1840	1840	57.25 (3) ten percent to the school district within which the ores, metals, minerals, or energy
1841	1841	57.26resources are mined or extracted, or within which the concentrate was produced. If the
1842	1842	57.27mining, production, and concentration, or different steps in either process those processes,
1843	1843	57.28are carried on in more than one school district, distribution among the school districts must
1844	1844	57.29be based on the apportionment formula prescribed in clause (1);
1845	1845	57.30 (4) 20 percent to a group of school districts comprised of those school districts wherein
1846	1846	57.31the ore, metal, mineral, or energy resource was mined or extracted or in which there is a
1847	1847	57.32qualifying municipality as defined by section 273.134, paragraph (b), in direct proportion
1848	1848	57Article 3 Sec. 31.
1849	1849	REVISOR CKM/AD 25-0462203/12/25 58.1to school district indexes as follows: for each school district, its pupil units determined
1850	1850	58.2under section 126C.05 for the prior school year shall be multiplied by the ratio of the average
1851	1851	58.3adjusted net tax capacity per pupil unit for school districts receiving aid under this clause
1852	1852	58.4as calculated pursuant to chapters 122A, 126C, and 127A for the school year ending prior
1853	1853	58.5to distribution to the adjusted net tax capacity per pupil unit of the district. Each district
1854	1854	58.6shall receive that portion of the distribution which its index bears to the sum of the indices
1855	1855	58.7for all school districts that receive the distributions;
1856	1856	58.8 (5) ten percent to the county within which the ores, metals, minerals or, energy resources,
1857	1857	58.9oils, or gases are mined or extracted, or within which the concentrate was produced. If the
1858	1858	58.10mining, production, and concentration, or different steps in either process those processes,
1859	1859	58.11are carried on in more than one county, distribution among the counties must be based on
1860	1860	58.12the apportionment formula prescribed in clause (1), provided that any county receiving
1861	1861	58.13distributions under this clause shall pay one percent of its proceeds to the Range Association
1862	1862	58.14of Municipalities and Schools;
1863	1863	58.15 (6) five percent to St. Louis County acting as the counties' fiscal agent to be distributed
1864	1864	58.16as provided in sections 273.134 to 273.136;
1865	1865	58.17 (7) 20 percent to the commissioner of Iron Range resources and rehabilitation for the
1866	1866	58.18purposes of section 298.22;
1867	1867	58.19 (8) three percent to the Douglas J. Johnson economic protection trust fund;
1868	1868	58.20 (9) seven percent to the taconite environmental protection fund; and
1869	1869	58.21 (10) ten percent to the commissioner of Iron Range resources and rehabilitation for
1870	1870	58.22capital improvements to Giants Ridge Recreation Area.
1871	1871	58.23 (b) If the materials ores, metals, minerals, or energy resources are mined, extracted, or
1872	1872	58.24concentrated in School District No. 2711, Mesabi East, then the amount under paragraph
1873	1873	58.25(a), clause (1), must instead be distributed pursuant to this paragraph. The cities of Aurora,
1874	1874	58.26Babbitt, Ely, and Hoyt Lakes must each receive 20 percent of the amount. The city of
1875	1875	58.27Biwabik and Embarrass Township must each receive ten percent of the amount.
1876	1876	58.28 (c) For the first five years that tax paid under section 298.015, subdivisions 1 and 2, is
1877	1877	58.29distributed under this subdivision, ten percent of the total proceeds distributed in each year
1878	1878	58.30must first be distributed pursuant to this paragraph. The remaining 90 percent of the total
1879	1879	58.31proceeds distributed in each of those years must be distributed as outlined in paragraph (a).
1880	1880	58.32Of the amount available under this paragraph, the cities of Aurora, Babbitt, Ely, and Hoyt
1881	1881	58.33Lakes must each receive 20 percent. Of the amount available under this paragraph, the city
1882	1882	58Article 3 Sec. 31.
1883	1883	REVISOR CKM/AD 25-0462203/12/25 59.1of Biwabik and Embarrass Township must each receive ten percent. This paragraph applies
1884	1884	59.2only to tax paid by a person engaged in the business of mining within the area described in
1885	1885	59.3section 273.1341, clauses (1) and (2).
1886	1886	59.4 EFFECTIVE DATE.This section is effective for taxable years beginning after December
1887	1887	59.531, 2024.
1888	1888	59.6 Sec. 32. Minnesota Statutes 2024, section 298.018, subdivision 1a, is amended to read:
1889	1889	59.7 Subd. 1a.Distribution date.The proceeds of the tax allocated under subdivision
1890	1890	59.8subdivisions 1 and 2 shall be distributed on December 15 each year. Any payment of proceeds
1891	1891	59.9received after December 15 shall be distributed on the next gross proceeds tax distribution
1892	1892	59.10date.
1893	1893	59.11 EFFECTIVE DATE.This section is effective for taxable years beginning after December
1894	1894	59.1231, 2024.
1895	1895	59.13Sec. 33. Minnesota Statutes 2024, section 298.018, is amended by adding a subdivision
1896	1896	59.14to read:
1897	1897	59.15 Subd. 1b.Gas and oil distributions.The proceeds of the tax paid under sections 298.015
1898	1898	59.16and 298.016 on gas or oil produced within the taconite assistance area defined in section
1899	1899	59.17273.1341, must be allocated as follows: .....
1900	1900	59.18 EFFECTIVE DATE.This section is effective for taxable years beginning after December
1901	1901	59.1931, 2024.
1902	1902	59.20Sec. 34. Minnesota Statutes 2024, section 298.018, subdivision 2, is amended to read:
1903	1903	59.21 Subd. 2.Outside taconite assistance area.(a) Except as provided in paragraph (b), the
1904	1904	59.22proceeds of the tax paid under sections 298.015 and 298.016 on ores, metals, or minerals
1905	1905	59.23mined or extracted outside of the taconite assistance area defined in section 273.1341, shall
1906	1906	59.24be deposited in the general fund.
1907	1907	59.25 (b) The proceeds of the tax paid under sections 298.015 and 298.016 on gas or oil
1908	1908	59.26produced outside the taconite assistance area defined in section 273.1341, must be allocated
1909	1909	59.27as follows: .....
1910	1910	59.28 EFFECTIVE DATE.This section is effective for taxable years beginning after December
1911	1911	59.2931, 2024.
1912	1912	59Article 3 Sec. 34.
1913	1913	REVISOR CKM/AD 25-0462203/12/25 60.1 Sec. 35. Minnesota Statutes 2024, section 298.17, is amended to read:
1914	1914	60.2 298.17 OCCUPATION TAXES TO BE APPORTIONED.
1915	1915	60.3 (a) All occupation taxes paid by persons, copartnerships, companies, joint stock
1916	1916	60.4companies, corporations, and associations, however or for whatever purpose organized,
1917	1917	60.5engaged in the business of mining or producing iron ore or, other ores, metals, minerals,
1918	1918	60.6gases, or oils, when collected shall be apportioned and distributed in accordance with the
1919	1919	60.7Constitution of the state of Minnesota, article X, section 3, in the manner following: 90
1920	1920	60.8percent shall be deposited in the state treasury and credited to the general fund of which
1921	1921	60.9four-ninths shall be used for the support of elementary and secondary schools; and ten
1922	1922	60.10percent of the proceeds of the tax imposed by this section shall be deposited in the state
1923	1923	60.11treasury and credited to the general fund for the general support of the university.
1924	1924	60.12 (b) Except as provided in paragraph (e), of the money apportioned to the general fund
1925	1925	60.13by this section: (1) there is annually appropriated and credited to the mining environmental
1926	1926	60.14and regulatory account in the special revenue fund an amount equal to that which would
1927	1927	60.15have been generated by a 2-1/2 cent tax imposed by section 298.24 on each taxable ton
1928	1928	60.16produced in the preceding calendar year. Money in the mining environmental and regulatory
1929	1929	60.17account is appropriated annually to the commissioner of natural resources to fund agency
1930	1930	60.18staff to work on environmental issues and provide regulatory services for ferrous and
1931	1931	60.19nonferrous mining and production operations in this state. Payment to the mining
1932	1932	60.20environmental and regulatory account shall be made by July 1 annually. The commissioner
1933	1933	60.21of natural resources shall execute an interagency agreement with the Pollution Control
1934	1934	60.22Agency to assist with the provision of environmental regulatory services such as monitoring
1935	1935	60.23and permitting required for ferrous and nonferrous mining and production operations; (2)
1936	1936	60.24there is annually appropriated and credited to the Iron Range resources and rehabilitation
1937	1937	60.25account in the special revenue fund an amount equal to that which would have been generated
1938	1938	60.26by a 1.5 cent tax imposed by section 298.24 on each taxable ton produced in the preceding
1939	1939	60.27calendar year, to be expended for the purposes of section 298.22; and (3) there is annually
1940	1940	60.28appropriated and credited to the Iron Range resources and rehabilitation account in the
1941	1941	60.29special revenue fund for transfer to the Iron Range schools and community development
1942	1942	60.30account under section 298.28, subdivision 7a, an amount equal to that which would have
1943	1943	60.31been generated by a six cent tax imposed by section 298.24 on each taxable ton produced
1944	1944	60.32in the preceding calendar year. Payment to the Iron Range resources and rehabilitation
1945	1945	60.33account shall be made by May 15 annually.
1946	1946	60.34 (c) The money appropriated pursuant to paragraph (b), clause (2), shall be used (i) to
1947	1947	60.35provide environmental development grants to local governments located within any county
1948	1948	60Article 3 Sec. 35.
1949	1949	REVISOR CKM/AD 25-0462203/12/25 61.1in region 3 as defined in governor's executive order number 60, issued on June 12, 1970,
1950	1950	61.2which does not contain a municipality qualifying pursuant to section 273.134, paragraph
1951	1951	61.3(b), or (ii) to provide economic development loans or grants to businesses located within
1952	1952	61.4any such county, provided that the county board or an advisory group appointed by the
1953	1953	61.5county board to provide recommendations on economic development shall make
1954	1954	61.6recommendations to the commissioner of Iron Range resources and rehabilitation regarding
1955	1955	61.7the loans. Payment to the Iron Range resources and rehabilitation account shall be made by
1956	1956	61.8May 15 annually.
1957	1957	61.9 (d) Of the money allocated to Koochiching County, one-third must be paid to the
1958	1958	61.10Koochiching County Economic Development Commission.
1959	1959	61.11 (e) Of the money apportioned to the general fund under this section, the proceeds of the
1960	1960	61.12tax paid under section 298.01, subdivision 3, on gas or oil produced must be allocated as
1961	1961	61.13follows: .....
1962	1962	61.14 EFFECTIVE DATE.This section is effective for taxable years beginning after December
1963	1963	61.1531, 2024.
1964	1964	61Article 3 Sec. 35.
1965	1965	REVISOR CKM/AD 25-0462203/12/25 Page.Ln 1.18NATURAL RESOURCES.....................................................................ARTICLE 1
1966	1966	Page.Ln 28.7HEALTH.................................................................................................ARTICLE 2
1967	1967	Page.Ln 40.5TAXATION............................................................................................ARTICLE 3
1968	1968	1
1969	1969	APPENDIX
1970	1970	Article locations for 25-04622 93.513 PROHIBITION ON PRODUCTION OF GAS OR OIL WITHOUT PERMIT.
1971	1971	Subd. 2.Moratorium.Until rules are adopted under section 93.514, the commissioner may
1972	1972	not grant a permit for the production of gas or oil unless the legislature approves a temporary permit
1973	1973	framework that allows issuance of temporary permits.
1974	1974	1R
1975	1975	APPENDIX
1976	1976	Repealed Minnesota Statutes: 25-04622