On December 8, 2011, the highly anticipated “mining bill” legislation, AB 426, aimed at streamlining the permit process for iron mining, was introduced in the state Assembly. The mining bill has received considerable interest by the media and legislators because of its impacts on the approval process of a proposed mine near Hurley, Wis. that would add thousands of jobs and millions in tax revenues to the state and local economies.
Background
Generally, Wisconsin mining activities fall into one of two categories: metallic and nonmetallic. Metallic mining operations, such as copper, zinc, gold, lead and iron, are regulated primarily by federal and state law. Nonmetallic operations, such as rock quarries and gravel pits, are regulated at the county level. While nonmetallic mining operations are common in Wisconsin - with approximately 2,500 to 3,000 in operation today - metallic mines have not operated in Wisconsin since 1997.
Under current Wisconsin law, all metallic mining activities are regulated in generally the same manner. In other words, the current permit approval process does not differentiate between ferrous minerals, such as iron, and nonferrous minerals, such as copper and zinc.
One of the key issues related to the mining bill is whether iron mining should be subject to a different permit process than other metallic mining operations. Proponents of the mining bill argue that iron mining should not be subject to the same approval process as copper and zinc mining because iron mining does not present the same environmental threat as copper and zinc mining. Specifically, iron mining does not use chemicals to separate the iron from the rock, and thus water quality is not impaired by the use of acid or other chemicals. While opponents have raised concerns about specific provisions in the bill, they have not yet argued that iron mining should be treated the same.
Overview of the mining bill
As indicated above, the mining bill creates a different, more streamlined permitting process for iron mining. Specifically, the bill does the following:
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Limits time: Shortens decision-making timeline to 360 days, but establishes clear environmental standards that must be met.
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Wetlands: Allows current wetlands on the property to be filled, but requires mitigation at a 1 to 1.5 ratio.
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Permit timelines: Establishes specific timelines for requesting additional information from the permit applicant and completeness determinations by the DNR.
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No contested case hearings: Contested case hearings for iron mining permits would be prohibited, and legal challenges would be allowed only after the permit is approved.
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No extra permit conditions: The DNR’s authority to put extra conditions on the mitigation of wetlands would be limited. Currently, the DNR must issue a water quality certification before a federal permit can be issued. In the bill, if the DNR found that mitigation offsets adverse impacts from iron ore mining, the DNR could not impose any additional conditions.
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More money for Wisconsin: Sixty percent of the net proceeds occupation tax on iron mining would be deposited into the state’s general fund, with the remaining forty percent going into the investment and local impact fund. Currently, all the net proceeds tax revenue, which is garnered from net income of sale of ore or minerals, is put into the investment and local impact fund. Most of that money is distributed to counties and municipalities where the mining occurs.
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Caps the cost to conduct an environmental impact study: Permit applicants would be charged a fee equal to the DNR’s costs for evaluating a mining project, but the fee would be capped at $2.0 million.
Impacts of the Hurley Iron Mine
While the mining bill only addresses the permit approval process and does not actually approve any mines, the Hurley mine has become the focus of the bill, and most of the arguments in favor and against the bill are related to the mine. So far, the proposed mine has received tremendous support because of the possible impact on jobs, the economy and tax revenues in both northern Wisconsin and in other parts of the state. Supporters of the bill have indicated that the mine will create the following number of jobs:
- 300+ construction jobs
- 700 long-term mining jobs
- An additional 2,000 service and transportation-related jobs
In addition to the direct mining jobs, experts maintain that the new mine would have a multiplier effect in creating two to three jobs in other industries in Wisconsin. For example, two of the nation’s premier mining equipment manufacturers, P&H Mining and Bucyrus, are located in southeastern Wisconsin. Many of these jobs will reportedly have an average pay and benefits equal to $80,000 or more per year.
In addition to creating jobs, the mine will also increase state and local revenues. Experts estimate that the mine will generate over $600 million in the 12-county region of northern Wisconsin. Moreover, the mine will reportedly create approximately $17.5 million in annual state and local revenue over the 50-year life of the mine.
Opponents of the Hurley mine, however, argue that significant environmental damage could occur if the mine is approved. They are specifically concerned that the sizable mining operation, which will be 22 miles long and 1200 yards at its widest point, could harm valuable wetlands, groundwater, scenic beauty and wildlife.
The bill was passed by the state Assembly on January 26th and now will be considered by the state Senate during the next two months.
If you have questions on the mining bill, please contact Tom Larson at tlarson@wra.org or at (608) 240-8254.
Tom Larson is Vice President of Legal and Public Affairs for the WRA.