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2011 - 2012 LEGISLATURE
SENATE SUBSTITUTE AMENDMENT 3,
TO 2011 ASSEMBLY BILL 426
March 6, 2012 - Offered by Senators Jauch, Schultz, King, Holperin, Hansen,
Erpenbach, T. Cullen, C. Larson, Wirch, S. Coggs, Taylor, Vinehout
and
Lassa.
AB426-SSA3,2,2 1An Act to amend 20.566 (7) (title), 70.375 (2) (a), 70.395 (1e), 70.395 (2) (dc) 1.,
270.395 (2) (dc) 2., 70.395 (2) (dc) 3., 70.395 (2) (dg), 289.645 (3), 293.01 (18),
3293.32 (2), 293.35 (5), 293.43 (3) (b) (intro.), 293.49 (1) (a) (intro.) and 293.49 (2)
4(intro.); and to create 20.192 (1) (q), 20.566 (7) (w), 25.17 (1) (jd), 25.49 (2m),
570.375 (2b), 70.375 (2c), 70.395 (2) (gm), 227.43 (1) (bd), 238.14, 281.34 (5) (am),
6293.01 (2m), 293.01 (4e), 293.01 (4m), 293.13 (1) (c), 293.31 (7), 293.32 (4),
7293.35 (4), 293.43 (5) (bm), 293.43 (6), 293.495 and 293.50 (4) of the statutes;
8relating to: the process for issuance of prospecting and mining permits for
9certain iron mining, standards for activities related to iron mining, fees related

1to iron mining, the net proceeds occupation tax on iron mining, and making
2appropriations.
Analysis by the Legislative Reference Bureau
Processing of application for iron mining permit
Under current law, a person who proposes to mine for metallic minerals must
obtain a mining permit from the Department of Natural Resources (DNR), as well
as any other permit, license, certification, or other authorization (approval) that is
required under other environmental and natural resources laws. The law requires
DNR to prepare an environmental impact statement (EIS) for every proposed
metallic mine and to hold an informational meeting on a preliminary version of the
EIS. After the EIS is finalized, DNR must hold a public hearing, including a
contested case hearing, before acting on the application for the mining permit and
other environmental and natural resources approvals. Current law does not specify
a time, after the application for a mining permit is filed, within which DNR must act
on a metallic mining permit application. It does require the mining hearing to be
held between 120 days and 180 days after DNR issues the EIS and requires DNR to
act on the permit within 90 days after the completion of the record for the public
hearing.
This substitute amendment establishes additional deadlines for DNR to act on
the application for a mining permit if the proposed mine is an iron mine and DNR
determines, based on information provided by the applicant, that it is not likely that
any of the areas disturbed by the mining will contain significant amounts of sulfide
minerals (nonsulfide iron mine). Under the substitute amendment, DNR must
generally hold the informational meeting on the preliminary EIS for a proposed
nonsulfide iron mine within 270 days after the application for the permit is complete
and must generally issue or deny the mining permit application within 270 days
after that informational meeting concludes. The applicant may propose any number
of extensions to the deadlines and any extensions proposed by the applicant
automatically take effect. DNR may not propose more than three extensions for any
one permit application. If DNR and the applicant do not agree to an extension
proposed by DNR, including the length of the extension, DNR may request a hearing
examiner appointed by the administrator of the Division of Hearing and Appeals in
the Department of Administration (the division) to resolve the disagreement. The
hearing examiner determines whether there is good cause for an extension and, if so,
specifies the length of the extension. The deadlines may also be extended by DNR
if the U.S. Army Corps of Engineers notifies DNR that an extension is necessary to
allow DNR and the U.S. Army Corps of Engineers to jointly prepare the EISs for the
proposed nonsulfide iron mine.
The substitute amendment requires the administrator of the division to
appoint a hearing examiner to conduct the informational meeting and the public
hearing on the application for a mining permit for proposed nonsulfide iron mining
and to appoint the same hearing examiner to resolve any disagreements over

extensions of deadlines for DNR actions. The substitute amendment requires the
hearing examiner to conduct a conference with the parties before the hearing on the
permit application, to determine which issues will be considered at the hearing, and
to establish a schedule that will allow DNR to act on the mining permit application
by the deadline specified under the substitute amendment.
Other changes to the laws regulating iron mining
Current law requires a person who proposes to conduct metallic mining to pay
fees to DNR that equal the costs that DNR incurs in connection with the proposed
mining.
Under this substitute amendment, the fees that must be paid to DNR by a
person who proposes to conduct nonsulfide iron mining may not exceed $2,000,000,
except that, as under current law, the person is also required to pay the full costs of
the preparation of the EIS for the proposed mining.
Current law imposes on generators of solid waste several fees based on the
tonnage of solid waste disposed of at solid waste disposal facilities. This kind of fee
is often referred to as a tipping fee. The recycling tipping fee is $7 per ton. Under
current law there are some exemptions from the recycling tipping fee and the other
tipping fees.
The substitute amendment exempts iron mining waste from the recycling
tipping fee.
Current law (often called the mining moratorium law) prohibits DNR from
issuing a mining permit for the mining of a sulfide ore body until DNR makes two
determinations, based on information provided by the applicant. A sulfide ore body
is a mineral deposit in which metals are mixed with sulfide minerals. The
determinations are that a mining operation in the United States or Canada has
operated in a sulfide ore body with an acid generating capacity for at least ten years
without polluting groundwater or surface water from acid drainage or the release of
heavy metals and that such a mining operation has been closed for at least ten years
without polluting groundwater or surface water from acid drainage or the release of
heavy metals.
The substitute amendment exempts a proposal for a nonsulfide iron mine from
the mining moratorium law.
Under current law, a person may not prospect for metallic ore without a
prospecting permit from DNR. Prospecting is examining an area to determine the
quantity and quality of metallic minerals by means other than drilling, for example,
by excavating. Under current law, DNR determines whether it must prepare an EIS
for a prospecting permit in the same way that it determines whether it must prepare
an EIS for other actions for which an EIS is not specifically required.
The substitute amendment specifies that DNR is not required to prepare an
EIS for a prospecting permit for nonsulfide iron ore. The substitute amendment also
provides that DNR is not required to hold a hearing on a prospecting permit for
nonsulfide iron ore.
Under the substitute amendment, if an iron mining operation is located in an
area ceded by the Chippewa to the United States, any wetland mitigation that is
authorized or required by DNR must occur within the ceded territory.

Current law requires a person who proposes to construct a high capacity well
to obtain approval from DNR. Under the law, if DNR determines that a high capacity
well may impair the water supply of a public water utility, DNR may not approve the
proposed high capacity well unless it includes conditions that will ensure that the
water supply of the public utility will not be impaired.
The substitute amendment provides that, if DNR determines that a high
capacity well proposed in connection with iron mining may impair a privately owned
well, DNR may not approve the proposed high capacity well unless it includes
conditions that will ensure that the privately owned well will not be impaired.
Net proceeds occupation tax
Under current law, the state imposes a net proceeds occupation tax on the
mining of metallic minerals in this state. The tax is based, generally, on a percentage
of net income from the sale of ore or minerals after certain mining processes have
been applied to the ore or minerals. Under the substitute amendment, for the first
60 months in which a person is extracting ferrous metallic minerals in this state, the
annual amount of the tax imposed on that person is the greater of the amount of the
net proceeds occupation tax computed for that person or an amount equal to $416,667
for each month in which extraction occurs. If the amount of the net proceeds
occupation tax computed for that person is less than the minimum amount required
under the substitute amendment, the person may claim the difference between the
net proceeds occupation tax amount and the minimum amount paid as a credit
against the tax imposed in subsequent years as long as the person's tax liability is
not less than the minimum amount, less any credit the person claims for construction
fees, as allowed under current law.
Under current law, in addition to paying the net proceeds occupation tax, a
person who intends to apply for a mining permit must make an additional three
payments of $50,000 each to the investment and local impact fund. Under the
substitute amendment, a person who intends to apply for a mining permit must also
make an additional three payments of $75,000 each to the investment and local
impact fund.
Under current law, the revenue collected from the net proceeds occupation tax
is deposited into the investment and local impact fund. The fund is managed by the
local impact fund board. The revenue is then, generally, distributed to the counties
and municipalities in which metallic minerals are being mined.
Under the substitute amendment, 70 percent of the revenue collected from the
net proceeds occupation tax on extracting ferrous metallic minerals in this state is
deposited into the investment and local impact fund, 10 percent of the revenue is
deposited into a mining transportation fund, and 20 percent of the revenue is used
for a regional Wisconsin diversification program that the substitute amendment
requires the Wisconsin Economic Development Corporation (WEDC) to establish.
Under the substitute amendment, the local impact fund board disburses moneys
from the mining transportation fund for highway, rail, or shipping infrastructure
relating to mining for ferrous metallic minerals. The substitute amendment
authorizes WEDC to use the moneys it receives for the regional Wisconsin
diversification program for the purpose of making business diversification grants or

loans in coordination with appropriate units of local government to businesses that
are located in close proximity to, but no more than 100 miles from, the site of a mine
for ferrous metallic minerals. The substitute amendment also authorizes WEDC to
use those moneys for the purpose of catastrophe abatement or response, as
determined by WEDC.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
AB426-SSA3, s. 1 1Section 1. 20.192 (1) (q) of the statutes is created to read:
AB426-SSA3,5,42 20.192 (1) (q) Regional Wisconsin diversification program. From the economic
3development fund, all moneys received under s. 70.395 (1e) for grants, loans, and
4disbursements under s. 238.14.
AB426-SSA3, s. 2 5Section 2. 20.566 (7) (title) of the statutes is amended to read:
AB426-SSA3,5,76 20.566 (7) (title) Investment and local impact fund; mining transportation
7fund
.
AB426-SSA3, s. 3 8Section 3. 20.566 (7) (w) of the statutes is created to read:
AB426-SSA3,5,119 20.566 (7) (w) Mining transportation fund. From the mining transportation
10fund, all moneys received under s. 70.395 (1e) to be disbursed under s. 70.395 (2)
11(gm).
AB426-SSA3, s. 4 12Section 4. 25.17 (1) (jd) of the statutes is created to read:
AB426-SSA3,5,1313 25.17 (1) (jd) Mining transportation fund (s. 70.395 (2) (gm));
AB426-SSA3, s. 5 14Section 5. 25.49 (2m) of the statutes is created to read:
AB426-SSA3,5,1615 25.49 (2m) The moneys transferred under s. 70.395 (1e) to the appropriation
16account under s. 20.192 (1) (q).
AB426-SSA3, s. 6 17Section 6. 70.375 (2) (a) of the statutes is amended to read:
AB426-SSA3,6,618 70.375 (2) (a) In Except as provided in subs. (2b) and (2c), with respect to mines
19not in operation on November 28, 1981, there is imposed upon persons engaged in

1mining metalliferous minerals in this state a net proceeds occupation tax effective
2on the date on which extraction begins to compensate the state and municipalities
3for the loss of valuable, irreplaceable metalliferous minerals. The amount of the tax
4shall be determined by applying the rates established under sub. (5) to the net
5proceeds of each mine. The net proceeds of each mine for each year are the difference
6between the gross proceeds and the deductions allowed under sub. (4) for the year.
AB426-SSA3, s. 7 7Section 7. 70.375 (2b) of the statutes is created to read:
AB426-SSA3,6,138 70.375 (2b) Minimum tax. With respect to mines in operation after December
931, 2011, beginning with the first month of extraction, for the first 60 months in
10which a person is extracting ferrous metallic minerals in this state, the amount of
11the tax imposed on that person is the greater of the tax computed under sub. (2) for
12the year in which extraction occurs or an amount equal to $416,667 for each month
13in which extraction occurs.
AB426-SSA3, s. 8 14Section 8. 70.375 (2c) of the statutes is created to read:
AB426-SSA3,6,2515 70.375 (2c) Credit. With respect to mines in operation after December 31,
162011, if a person subject to sub. (2b) would have paid less tax under sub. (2) than
17under sub. (2b), the person may claim as a credit against the tax imposed under sub.
18(2) or (2b) an amount equal to the difference between the amount paid under sub. (2b)
19and the amount that the person would have paid under sub. (2), except that the
20person may not claim a credit amount that would result in less than the total
21minimum tax liability computed under sub. (2b), less any credit amount claimed
22under s. 70.395 (2) (dg), for the first 60 months in which a person is extracting ferrous
23metallic minerals in this state. The person may carry forward the amount of any
24unused credit under this subsection to claim against the person's tax liability in
25subsequent years until the total amount of the credit is used.
AB426-SSA3, s. 9
1Section 9. 70.395 (1e) of the statutes is amended to read:
AB426-SSA3,7,102 70.395 (1e) Distribution. Fifteen days after the collection of the tax under ss.
370.38 to 70.39, the department of administration, upon certification of the
4department of revenue, shall transfer the amount collected in respect to mines not
5in operation on November 28, 1981, to the investment and local impact fund, except
6that the department of administration shall transfer 70 percent of the amount
7collected from each person extracting ferrous metallic minerals to the investment
8and local impact fund, 20 percent to the appropriation under s. 20.192 (1) (q) for the
9regional Wisconsin diversification program under s. 238.14, and 10 percent to the
10mining transportation fund
.
AB426-SSA3, s. 10 11Section 10. 70.395 (2) (dc) 1. of the statutes is amended to read:
AB426-SSA3,7,1512 70.395 (2) (dc) 1. Each person intending to submit an application for a mining
13permit shall pay $50,000 $75,000 to the department of revenue for deposit in the
14investment and local impact fund at the time that the person notifies the department
15of natural resources under s. 293.31 (1) of that intent.
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