Grant Hauschild

REGIONAL— The state of Minnesota would create a “helium tax relief area” under legislation advancing in St. Paul under the guidance of state Sen. Grant Hauschild. An amendment to create the tax relief area and establish a gross proceeds tax on helium produced commercially was expected to be on the docket before the Senate Tax Committee on Thursday this week, after the Timberjay’s weekly press time.
The measure would allow a portion of the revenue produced by taxes on helium production to be retained in northeastern Minnesota, where the recent discovery of what could be the world’s richest helium deposit is attracting interest. The percentage of the tax revenue to be retained in the region wasn’t finalized as of press time.
The arrangement would be similar in structure to the taconite tax relief area established throughout the state’s three Iron Ranges.
Pulsar Helium, the company currently exploring the helium deposit near Babbitt, would also pay what’s known as an occupation tax, which is assessed on taconite mining operations already.
Hauschild said he’s figuring the gross proceeds tax would start at seven percent and increase to nine percent after two years if the deposit is still producing. That’s considerably higher than taconite production taxes but Hauschild said that reflects the fact that there are few jobs produced through the helium production process. “This is more purely extractive in nature,” he said.
Hauschild wasn’t certain if his measure would win passage this session, but he’s hopeful to get some kind of tax structure in place before the company starts production, currently slated for 2028 or later. Hauschild said he’s worried the evenly-divided House could slow progress on legislation this session.
The tax proposal comes in the wake of the work completed by the Gas Resources Technical Advisory Committee, or GTAC, which was formed by the Legislature last year to develop a framework for regulating and taxing helium production. It’s the first time that a major gas deposit has been discovered in Minnesota, so lawmakers wanted some expert advice on how to regulate the potential new industry. The GTAC included representatives from the Department of Natural Resources, the Environmental Quality Board, Department of Health, Pollution Control Agency and the Department of Revenue.
Their recommendation cover taxes, permitting, environmental review, as well as rules for gas well construction. The GTAC issued its recommendations in a 222-page report released in January of this year.