2011 - 2012 LEGISLATURE
SENATE SUBSTITUTE AMENDMENT 3,
TO 2011 SENATE BILL 488
March 6, 2012 - Offered by Senators
Jauch, Schultz, King, Holperin, Hansen,
Erpenbach, T. Cullen, C. Larson, Wirch, S. Coggs, Taylor and Vinehout.
1An Act to amend
20.566 (7) (title), 70.375 (2) (a), 70.395 (1e), 70.395 (2) (dc) 1., 2
70.395 (2) (dc) 2., 70.395 (2) (dc) 3., 70.395 (2) (dg), 289.645 (3), 293.01 (18), 3
293.32 (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), 5
70.375 (2b), 70.375 (2c), 70.395 (2) (gm), 227.43 (1) (bd), 238.14, 281.34 (5) (am), 6
293.01 (2m), 293.01 (4e), 293.01 (4m), 293.13 (1) (c), 293.31 (7), 293.32 (4), 7
293.35 (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
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
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
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
The substitute amendment exempts iron mining waste from the recycling
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
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
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:
(q) Regional Wisconsin diversification program.
From the economic 3
development fund, all moneys received under s. 70.395 (1e) for grants, loans, and 4
disbursements under s. 238.14.
SB488-SSA3, s. 2
20.566 (7) (title) of the statutes is amended to read:
(title) Investment and local impact fund; mining transportation
(w) Mining transportation fund.
From the mining transportation 10
fund, all moneys received under s. 70.395 (1e) to be disbursed under s. 70.395 (2) 11
SB488-SSA3, s. 4
25.17 (1) (jd) of the statutes is created to read:
(jd) Mining transportation fund (s. 70.395 (2) (gm));
The moneys transferred under s. 70.395 (1e) to the appropriation 16
account under s. 20.192 (1) (q).
SB488-SSA3, s. 6
70.375 (2) (a) of the statutes is amended to read:
(a) In Except as provided in subs. (2b) and (2c), with
respect to mines 19
not in operation on November 28, 1981, there is imposed upon persons engaged in
mining metalliferous minerals in this state a net proceeds occupation tax effective 2
on the date on which extraction begins to compensate the state and municipalities 3
for the loss of valuable, irreplaceable metalliferous minerals. The amount of the tax 4
shall be determined by applying the rates established under sub. (5) to the net 5
proceeds of each mine. The net proceeds of each mine for each year are the difference 6
between the gross proceeds and the deductions allowed under sub. (4) for the year.
70.375 (2b) Minimum tax.
With respect to mines in operation after December 9
31, 2011, beginning with the first month of extraction, for the first 60 months in 10
which a person is extracting ferrous metallic minerals in this state, the amount of 11
the tax imposed on that person is the greater of the tax computed under sub. (2) for 12
the year in which extraction occurs or an amount equal to $416,667 for each month 13
in which extraction occurs.
70.375 (2c) Credit.
With respect to mines in operation after December 31, 16
2011, if a person subject to sub. (2b) would have paid less tax under sub. (2) than 17
under 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) 19
and the amount that the person would have paid under sub. (2), except that the 20
person may not claim a credit amount that would result in less than the total 21
minimum tax liability computed under sub. (2b), less any credit amount claimed 22
under s. 70.395 (2) (dg), for the first 60 months in which a person is extracting ferrous 23
metallic minerals in this state. The person may carry forward the amount of any 24
unused credit under this subsection to claim against the person's tax liability in 25
subsequent years until the total amount of the credit is used.
70.395 (1e) Distribution.
Fifteen days after the collection of the tax under ss. 3
70.38 to 70.39, the department of administration, upon certification of the 4
department of revenue, shall transfer the amount collected in respect to mines not 5
in 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
SB488-SSA3, s. 10
70.395 (2) (dc) 1. of the statutes is amended to read:
(dc) 1. Each person intending to submit an application for a mining 13
permit shall pay $50,000 $75,000
to the department of revenue for deposit in the 14
investment and local impact fund at the time that the person notifies the department 15
of natural resources under s. 293.31 (1) of that intent.
SB488-SSA3, s. 11
70.395 (2) (dc) 2. of the statutes is amended to read:
(dc) 2. A person making a payment under subd. 1. shall pay an 18
additional $50,000 $75,000
upon notification by the board that the board has 19
distributed 50% of the payment under subd. 1.
SB488-SSA3, s. 12
70.395 (2) (dc) 3. of the statutes is amended to read:
(dc) 3. A person making a payment under subd. 2. shall pay an 22
additional $50,000 $75,000
upon notification by the board that the board has 23
distributed all of the payment under subd. 1. and 50% of the payment under subd. 24
(dg) Each person constructing a metalliferous mining site shall pay 2
to the department of revenue for deposit in the investment and local impact fund, as 3
a construction fee, an amount sufficient to make the construction period payments 4
under par. (d) 5. in respect to that site. Any person paying a construction fee under 5
this paragraph may credit against taxes due under s. 70.375 an amount equal to the 6
payments that the taxpayer has made under this paragraph, provided that the credit 7
does not reduce the taxpayer's liability under s. 70.375 below the amount needed to 8
make the first-dollar payments under par. (d) 1., 2. and 2m. for that year in respect 9
to the taxpayer's mine. The taxpayer may use the credit to reduce the taxpayer's
10liability under s. 70.375 below the minimum amount required under s. 70.375 (2b). 11
Any amount not creditable because of that limitation in any year may be carried 12
(gm) There is created a mining transportation fund under the 15
jurisdiction and management of the investment and local impact board, as created 16
under s. 15.435. The board may disburse moneys from the mining transportation 17
fund, as it determines is necessary, for highway, rail, or shipping infrastructure 18
related to mining ferrous metallic minerals in this state.
(bd) Assign a hearing examiner to preside over the informational 21
meeting under s. 293.43 (3) (b) and over the hearing under s. 293.43 (1m) for an 22
application for a permit to mine for ferrous minerals and assign the same hearing 23
examiner to any request under s. 293.495 (3) (c) 1. for the same mining permit 24
1238.14 Regional Wisconsin diversification program.
The corporation 2
may use moneys received under s. 20.192 (1) (q) only as follows:
The corporation may make a grant or loan of those moneys to a business that 4
is located within 100 miles from the site of a mine for ferrous metallic minerals in 5
this state, and the corporation shall give preference for that grant or loan to a 6
business that is located in close proximity to the site of the mine. In making a grant 7
or loan under this subsection, the corporation shall coordinate with an appropriate 8
unit of local government, as defined in s. 238.133 (1) (b), to make that grant or loan 9
on a competitive basis for the purpose of business diversification.
The corporation may disburse those moneys for the purpose of catastrophe 11
abatement or response related to a mine for ferrous metallic minerals, as determined 12
by the corporation.
(am) Iron mining.
If the department determines that a high capacity 15
well proposed in connection with iron mining may impair a privately owned well, the 16
department may not approve the proposed high capacity well unless it is able to 17
include and includes in the approval conditions, which may include conditions as to 18
location, depth, pumping capacity, rate of flow, and ultimate use, that will ensure 19
that the privately owned well will not be impaired.
289.645 (3) Amount of recycling fee.
The fee imposed under this section is 22
$7 per ton for all solid waste other than high-volume industrial waste
23waste from mining for ferrous minerals, as defined in s. 293.01 (4e)
"Ceded territory" means the territory in Wisconsin ceded by the 2
Chippewa Indians to the United States in the treaty of 1837, 7 Stat. 536, and the 3
treaty of 1842, 7 Stat. 591.
"Ferrous mineral" means an ore or earthen material in natural 6
deposits in or on the earth that primarily exists in the form of an iron oxide, including 7
taconite, magnetite, and hematite.
"Ferrous mining" means the mining of ferrous minerals at a 10
mining site where the department determines, based on information provided under 11
s. 293.31 (7) (a) by a person proposing to mine for ferrous minerals, that it is not likely 12
that any of the disturbed areas will contain significant amounts of sulfide minerals.
"Prospecting" means engaging in the examination of an area for the 15
purpose of determining the quality and quantity of minerals, other than for 16
exploration but including the obtaining of an ore sample, by such physical means as 17
excavating, trenching, construction of shafts, ramps and tunnels and other means, 18
other than for exploration, which the department, by rule, identifies, and the 19
production of prospecting refuse and other associated activities. "Prospecting" shall 20
not include such activities when the activities are, by themselves, intended for and 21
capable of commercial exploitation of the underlying ore body. However, the fact that 22
prospecting activities and construction may have use ultimately in mining, if 23
approved, shall not mean that prospecting activities and construction constitute 24
mining within the meaning of sub. (9), provided such activities and construction are 25
reasonably related to prospecting requirements. When conducted in contemplation
1of ferrous mining, "prospecting" does not include any activities that result in the
2removal of 10,000 or more tons of material.