Amendment ASA2-AB426

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2011 - 2012 LEGISLATURE

ASSEMBLY SUBSTITUTE AMENDMENT 2, TO 2011 ASSEMBLY BILL 426

January 26, 2012 - Offered by Representative Bewley.

AB426-ASA2,1,6 An Act to amend 70.375 (2) (a), 70.375 (5) (intro.), 70.375 (6), 70.395 (2) (dc) 1., 70.395 (2) (dc) 2., 70.395 (2) (dc) 3., 293.32, 293.33 (3), 293.49 (1) (a) 3. and 293.51 (3); and to create 70.375 (7), 293.01 (4e), 293.01 (4m), 293.39 (4) and (5) and 293.495 of the statutes; relating to: environmental review of proposed iron mines, the process for issuance of mining permits and other approvals for iron mines, and taxes imposed on iron mining operations.

Analysis by the Legislative Reference Bureau

Permitting process for iron mines

Overview

Under current law, the Department of Natural Resources (DNR) regulates mining for metallic minerals. The laws under which DNR regulates metallic mining apply to mining for ferrous minerals (iron mining) and mining for nonferrous minerals, such as copper or zinc. Under current law, a person who proposes to mine for metallic minerals must obtain a mining permit and any other permit, license, certification, or other authorization (approval) that is required under the environmental and natural resources laws other than the mining laws, for example, an air pollution control permit or a water quality certification for wetlands.

This substitute amendment changes the process for reviewing mining permit applications and applications for other DNR approvals for iron mining, except that the changes do not apply if DNR determines that it is likely that any of the disturbed areas will contain significant amounts of sulfide minerals. The substitute amendment does not change substantive standards applicable to iron mining under current environmental or natural resources laws.

Notice of intent

Current law requires a person who intends to submit an application for a metallic mining permit to notify DNR before collecting data intended to be used to support the permit application. The substitute amendment requires a person who intends to submit an application for an iron mining permit to notify DNR at least 12 months before submitting the application for the mining permit or an environmental impact report, whichever is earlier, rather than before collecting data.

Coordination of mining permit and other applications; master hearing

Under current law, the process for reviewing mining permit applications also applies to applications for other DNR approvals for the proposed mine, that is, the processing of the applications is coordinated. Under the substitute amendment, the process for reviewing an application for an iron mining permit is not coordinated with the review of applications for other DNR approvals required for an iron mine. Instead the current process for reviewing an application not related to mining applies for each other kind of DNR approval.

Current law requires a person who proposes to conduct metallic mining to have applied for other DNR approvals and for any necessary zoning approvals before applying for a mining permit. Under the substitute amendment, this requirement does not apply to proposed iron mining.

Under current law, DNR holds one master hearing on the application for the mining permit, the environmental impact statement (EIS), and, generally, the applications for all other DNR approvals before DNR acts on the applications for the permit and other approvals. The master hearing includes a public informational hearing and a contested case hearing. The substitute amendment does not provide for a master hearing for proposed iron mining, instead, a contested case hearing is available on each application for a DNR approval, as provided under this state's administrative procedure laws.

Iron mining permit process

The substitute amendment requires DNR to determine whether an application for an iron mining permit is complete within 30 days after receiving the application, except that the period may be extended with the consent of the applicant. After DNR notifies the applicant that the permit application is complete, the applicant must publish a notice about the proposed iron mining in a newspaper in the area of the proposed mine once a week for four successive weeks and then notify DNR that it has done so.

As mentioned above, current law requires DNR to consider the application for a metallic mining permit as part of a required master hearing.

Under the substitute amendment, within 30 days after the publication of the last notice about a proposed iron mine, a person owning property that will be affected by the proposed mine or a federal, state, or local governmental agency with responsibilities affected by the proposed mine may file objections to the mining permit application, in which case, DNR must hold a hearing no more than 30 days after receiving the objections. DNR may hold a hearing without receiving objections if it determines that a hearing is necessary to protect public health, safety, or the environment.

Current law does not specify a time, after the application for a metallic mining permit is filed, within which DNR must act on the permit application. It does require the mining master hearing to be held between 120 days and 180 days after DNR issues the EIS for the proposed mine and requires DNR to act on the permit within 90 days after the completion of the record for the public hearing.

This substitute amendment requires DNR to act on an application for an iron mining permit no later than 120 days after being notified that the applicant has complied with the requirement to publish notice or, if a hearing is held, 120 days after holding the hearing, except that DNR may not act on the application for the iron mining permit before it has determined that the EIS is adequate.

Environmental review process for iron mines

Current law requires DNR to prepare an EIS for every proposed metallic mine. An EIS contains detailed information about the environmental impact of a proposed project, including any adverse environmental effects that cannot be avoided if the proposal is implemented, alternatives to the proposed project, the beneficial aspects of the proposal, and the economic advantages and disadvantages of the proposal.

The substitute amendment retains the requirement that DNR prepare an EIS for every proposed iron mine.

Under current law, when a person applies for a permit or other approval for which DNR is required to complete an EIS, DNR is generally authorized to require the applicant to prepare an environmental impact report (EIR) that discloses environmental impacts of the proposed project to assist DNR in preparing the EIS. The substitute amendment requires the applicant for mining permit for an iron mine to prepare an EIR.

Under current law, the EIS is prepared and reviewed as part of the metallic mining permit process described above. The law requires DNR to prepare a preliminary EIS and to hold at least one informational meeting on the preliminary EIS within 60 days of its issuance and before conducting the master hearing.

The substitute amendment establishes a process and timeline for the preparation and review of an EIS for proposed iron mining, including all of the following provisions:

1. DNR must determine whether an EIR is adequate not later than 30 days after receiving the EIR and must notify the applicant no more than five days after making that determination.

2. DNR must prepare a draft statement of the scope of matters to be considered in the EIS no more than 30 days after providing the notice under item 1.

3. DNR must publish public notice about the proposed mine and the proposed scoping statement no more than ten days after preparing the draft scoping statement and provide the notice to specified federal, local, and tribal governmental bodies.

4. DNR must hold at least one public informational meeting to discuss the scope of the EIS.

5. DNR must issue its decision on the scope of the EIS no more than 45 days after publishing the notice under item 3.

6. No later than 30 days after issuing the scoping decision, DNR must submit to the applicant a proposed agreement for payment of its costs for preparing the EIS. The applicant may request changes in the proposed cost agreement. If, within 30 days after DNR submits the proposed cost agreement, DNR and the applicant have not signed a cost agreement, either party may refer the matter to the secretary of administration for resolution.

7. The applicant must pay half of the amount it is required to pay under the cost agreement no later than ten days after finalizing the cost agreement.

8. No later than 45 days after receiving that payment, DNR must publish a notice containing a summary of the scoping decision.

9. After publishing the notice, DNR prepares a preliminary EIS, provides notice of completion of the preliminary EIS, and holds a public informational meeting on the adequacy of the preliminary EIS.

10. After the meeting, DNR prepares a final EIS, taking into consideration the comments on the preliminary version, publishes notice of the final EIS, and accepts written comments on the adequacy of the final EIS.

11. DNR must determine whether the final EIS is adequate within 280 days after publication of the notice under item 8., except that the deadline may be extended by consent of the applicant or by the governor for good cause.

12. If DNR determines that the EIS is inadequate, it must prepare an adequate EIS within 60 days of that determination.

The substitute amendment prohibits DNR from making final decisions on any approvals for the iron mine that were considered in the EIS process, including the mining permit, before the EIS is determined to be adequate. DNR must generally make final decisions on those approvals within 90 days after the determination of adequacy, but the deadline may be extended with the consent of the applicant and the deadline does not apply if a longer period is required for an approval by federal law or other state law.

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. 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 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 distributed to the counties and municipalities in which metallic minerals are being mined. 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. Those payment amounts are not annually adjusted to reflect the change in gross national product.

Under the 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 $2.38 for each 2,240 pounds of mining product sold, based on a three-year average. The tax rate would be annually adjusted to reflect the change in the gross domestic product. Gross domestic product, generally, measures the total output produced within the United States, regardless of whether the output is produced by foreign companies. Under the substitute amendment, a person who intends to apply for a mining permit must also make an additional three payments of $100,000 each to the investment and local impact fund. Those payment amounts are annually adjusted to reflect the change in gross domestic product.

The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:

AB426-ASA2, s. 1 Section 1. 70.375 (2) (a) of the statutes is amended to read:

AB426-ASA2,5,9 70.375 (2) (a) In Except as provided in sub. (7), with respect to mines 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 on the date on which extraction begins to compensate the state and municipalities for the loss of valuable, irreplaceable metalliferous minerals. The amount of the tax shall be determined by applying the rates established under sub. (5) to the net proceeds of each mine. The net proceeds of each mine for each year are the difference between the gross proceeds and the deductions allowed under sub. (4) for the year.