2013 - 2014 LEGISLATURE
SENATE SUBSTITUTE AMENDMENT 3,
TO SENATE BILL 1
February 27, 2013 - Offered by Senators T. Cullen, Miller,
Vinehout, Carpenter, Jauch, Hansen, Lassa, C. Larson, Risser, Wirch,
Taylor, Erpenbach and Schultz.
1An Act to repeal
293.43 (3) (a) and 293.43 (5); to amend
70.375 (2) (a), 70.375 2
(5) (intro.), 70.395 (1e), 70.395 (2) (dc) 1., 70.395 (2) (dc) 2., 70.395 (2) (dc) 3., 3
70.395 (2) (g) (intro.), 227.42 (4), 281.93 (3), 283.63 (3), 285.81 (3), 289.05 (2), 4
289.27 (3), 289.29 (5), 293.31 (1), 293.35 (5), 293.43 (title), 293.43 (1m), 293.43 5
(2), 293.43 (3) (c), 293.43 (4), 293.45 (1) and (2), 293.49 (1) (a) (intro.), 293.49 (1) 6
(a) 3., 293.49 (2) (intro.) and 293.51 (3); to repeal and recreate
293.43 (1) and 7
293.43 (3) (b) (intro.); and to create
20.192 (1) (g), 70.375 (7), 70.395 (2) (L), 8
238.14, 289.645 (4) (g), 293.313, 293.37 (2) (gm), 293.42, 293.43 (2m), 293.44, 9
293.45 (2m), 293.49 (4g), 293.51 (2m) and 293.64 of the statutes; relating to:
1regulation of metallic mining, an occupation tax on iron mining, and making an
Analysis by the Legislative Reference Bureau
Regulation of metallic mining
Processing application for 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 that is required
under other environmental and natural resources laws (approval).
Current law requires DNR to prepare an environmental impact statement
(EIS) for every proposed metallic mine. After the EIS is finalized, DNR must hold
a public hearing (called the master hearing), that includes a public informational
hearing and a contested case hearing with sworn testimony and the opportunity for
cross-examination, before acting on the application for the mining permit and other
approvals. Current law does not specify a time, after the application for a mining
permit is filed, within which DNR must act on a mining permit application. It does
require the master hearing to be held between 120 days and 180 days after DNR
issues the EIS and requires DNR to act on the permit application within 90 days after
the completion of the record for the master hearing.
Under this substitute amendment, DNR must hold a public informational
hearing after the EIS for a proposed metallic mine is finalized. After the public
informational hearing, the substitute amendment requires DNR to hold a contested
case hearing covering the application for the mining permit and other approvals if
any person notifies DNR that the person wishes to be a party within 30 days after
DNR provides notice about the contested case hearing. The substitute amendment
requires DNR to give the notice no more than 520 days after the application for the
mining permit is complete, unless the deadline is extended as provided in the
substitute amendment. The substitute amendment authorizes DNR to extend the
deadline for a total of not more than 180 days if the applicant changes its proposal
for the mine or if additional time is needed to ensure collaboration with a federal
agency with responsibilities related to the proposed mine or to evaluate new
information related to the mine. The substitute amendment authorizes the
applicant to extend the deadline as often and for as long as it decides is necessary.
The substitute amendment also authorizes DNR and the applicant to negotiate an
agreement for a timeline for processing the mining permit application that includes
a different deadline for DNR to provide notice of the contested case hearing.
The substitute amendment requires that the contested case hearing on a
proposed metallic mine be concluded and the record of the hearing be completed no
more than 680 days after the application for the mining permit is complete, except
that if the deadline for providing notice concerning the contested case hearing is
extended, the deadline for concluding the hearing and completing the record of the
hearing is extended by the same number of days. The substitute amendment
requires DNR to act on the application for the mining permit and other approvals no
more than 730 days after the application for the mining permit is complete, except
that if the deadline for providing notice concerning the contested case hearing is
extended, the deadline for acting on the applications is extended by the same number
Processing application for prospecting permit
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, an EIS is not mandatory for proposed prospecting.
DNR determines whether it must prepare an EIS for prospecting in the same way
that it determines whether it must prepare an EIS for other actions for which an EIS
is not mandatory. Under current law, the rest of the procedure for processing an
application for a prospecting permit is similar to that for processing the application
for a mining permit.
This substitute amendment provides an expedited procedure for processing a
prospecting permit if the application for the permit shows that less than 10,000 tons
of material is proposed to be excavated. Under the expedited process:
1. An EIS is not required.
2. DNR must hold a public informational hearing.
3. DNR must act on the application for the prospecting permit and, generally,
for other approvals covered in the informational hearing no later than 60 days after
the application for the prospecting permit is complete.
4. No contested case hearing is available on the application for the permit or
for other approvals covered in the informational hearing.
For an application for a prospecting permit to which the expedited process does
not apply, the substitute amendment makes changes to the permitting process that
are the similar to those made for processing the application for a mining permit,
including the deadlines for DNR action.
Notice of intent
Under current law, a person who intends to apply for a permit for mining or
prospecting for metallic ore must notify DNR before collecting data intended to be
used to support the application.
This substitute amendment requires a person who intends to apply for a permit
for mining for metallic ore, but not for prospecting, to provide notice of that intent
at least 12 months before filing the application.
This substitute amendment requires DNR to do all of the following in relation
to proposed metallic mining:
1. Provide assistance to a person who notifies DNR of the person's intent to
apply for a mining or prospecting permit during the processes related to obtaining
2. Work and consult with American Indian tribes and bands during the
processes related to proposed mining in which the tribes and bands have an interest.
3. Work with and provide assistance to other regulatory agencies, including
local and federal agencies, during the processes relating to proposed mining in which
the agencies have an interest.
4. Seek to enter into a memorandum of understanding with any federal agency
with responsibilities related to a potential mining operation covering timelines and
other issues of mutual concern.
5. Seek to be the lead agency in matters related to processing an application
for a mining permit that are undertaken in coordination with a federal agency.
Currently, DNR's rules on metallic mining require a person to whom a mining
permit is issued to establish an irrevocable trust to ensure adequate funds to
undertake preventive measures to avoid adverse environmental consequences and
to take measures in response to a spill of hazardous substances or the failure of a
mining waste facility to contain the waste. DNR determines the level of funding
required based on the likelihood of the need for preventive or response measures and
the range of costs of the measures.
Under this substitute amendment, the level of funding for the irrevocable trust
for a metallic mine is equal to the sum of the following:
1. Twenty percent of the amount of the bond or other security required under
current law to ensure the availability of funds for reclamation of the mining site.
2. Twenty percent of the amount of the bond or other security required under
current law as proof of financial responsibility for closure and long-term care of the
mining waste facility.
Recycling tipping fee
Current law imposes several fees, often referred to as tipping fees, on
generators of solid waste that are based on the tonnage of solid waste disposed of at
solid waste disposal facilities. The recycling tipping fee is $7 per ton. Under current
law there are some exemptions from the recycling tipping fee and the other tipping
The substitute amendment exempts metallic prospecting and mining waste
from the recycling tipping fee.
Under current law, among other conditions, to approve the application for a
permit for metallic mining DNR must find that the proposed mine will comply with
groundwater laws and rules. Under the groundwater laws, DNR and the
Department of Health Services establish groundwater quality standards for
substances that contaminate groundwater. Also under current law, for certain
facilities, such as waste disposal facilities, the groundwater law requires DNR to
establish a three-dimensional design management zone (DMZ) within the property
boundaries. DNR's current rules require the applicant for a mining permit to submit
information based on predictive modeling to demonstrate whether there is a
reasonable certainty that a mining waste facility will result in the violation of a
groundwater standard beyond the DMZ. There is no time frame specified for this
This substitute amendment requires an applicant for a mining permit to
submit information based on predictive modeling to demonstrate whether there is
a reasonable certainty that a mining waste facility will result in the violation of a
groundwater standard beyond the DMZ within 250 years after the facility is planned
to be closed.
Currently, for metallic mining waste sites, in addition to the DMZ, DNR's rules
provide for a mandatory intervention boundary that is generally 150 feet from the
outer waste boundary. Under the rules, if a preventive action limit or an enforcement
standard is exceeded beyond the mandatory intervention boundary, DNR must
require a response by the operator.
This substitute amendment provides that DNR and an applicant for a mining
permit may agree to use a mandatory intervention boundary that is a longer
distance, up to 600 feet, from the outer waste boundary.
The substitute amendment also requires DNR to study whether, in connection
with metallic mining, groundwater standards should apply in an aquifer containing
saline (salty) water and to report its conclusions to the legislature.
Mining waste characterization
Current law requires DNR to promulgate rules for the identification and
regulation of metallic mining wastes. This substitute amendment requires DNR to
adopt, in those rules, standards of the American Society for Testing and Materials
for testing and other methodologies related to the evaluation of mining waste.
Occupation tax on mining
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. The tax rates are annually adjusted to reflect
the change in gross national product. Gross national product, generally, measures
the output generated by U.S. enterprises, regardless of whether those enterprises
are located in this country.
Under this substitute amendment, instead of paying a net proceeds occupation
tax based on net income, a person who is mining ferrous minerals in this state would
pay a tax equal to $2 for each 2,240 pounds of ferrous minerals extracted from mines
in this state, based on a three-year average. The tax rate would be annually adjusted
to reflect the change in the gross domestic product.