TO: Wisconsin Media
FROM: Jim Pugh, WMC Public Relations Director
RE: Iron Mining Reform Coverage
DATE: Feb. 15, 2012
Below is an article from Wisconsin Reporter regarding iron mining reform currently under consideration in the Wisconsin Legislature.
An iron mining bill proposed in the Senate is expected to worsen Wisconsin’s climate for mining, which is among the worst in the world. A bill passed by the Assembly would improve Wisconsin’s chances of creating thousands of high-wage mining and related jobs.
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Critics: Something for everyone to dislike in WI Senate mining bill
Wisconsin Reporter, February 14, 2012
By Ryan Ekvall
MADISON — Once again, the Wisconsin Legislature seems to be uniting Wisconsinites through division.
The Senate’s long-anticipated version of a mining bill makes some changes to the Assembly’s recently passed legislation, hailed by Republicans and detested by Democrats.
But the Senate proposal doesn’t silence critics, and it manages to create some new ones.
“I think it’s pretty clear if the Senate bill were adopted, it would make mining regulation and the tax structure worse than current law,” said James Buchen, senior vice president of government relations with Wisconsin Manufacturers and Commerce, a business association that represents the interests of manufacturers, service companies, local chambers of commerce and trade associations.
“Since the current scheme is viewed as one of the worst in the world, I don’t think anybody would come here,” he said.
On the other side of the political spectrum, liberals and conservationists hate the bill.
“If the Senate and Assembly Republicans want to get the bill done, they need to address the basic issues raised at the public hearings. If they don’t address them, it’s their own fault,” said state Rep. Louis Molepske Jr., D-Stevens Point. “They’re not being proactive on their No. 1 job creator bill.”
The bill addresses some complaints raised by Assembly Democrats.
For example, the Assembly version of the bill gives the state Department of Natural Resources, or DNR, 360 days from receiving an application to decide on a mining permit. If DNR fails to decide, the permit is granted automatically.
In the Senate draft, the 360-day deadline still is in place. But DNR can extend its decision indefinitely by filing 30-day extensions.
The Senate proposal also proposes to refund the application fee to the company seeking a permit if DNR denies the permit or fails to come to a decision, drawing the ire of at least one Assembly Democrat.
”The other concern I have is this is a money-back-guarantee bill. It says to the mining company, ’If you apply for the permit and don’t get it, the cost of the permit will be returned to you.’ …Taxpayers will have to pick up the tab,” said state Rep. Brett Hulsey, D-Madison.
But Buchen said the refundable permit costs are small potatoes for mining companies that spend upward of $30 million on engineers, scientists and consultants for the background material to develop an application.
The larger issue, he said, is the timeline.
“It really takes us back to where we were, to where the permit process is indefinite and potentially forever. And fundamentally that’s one of the things that needed to be fixed about our law. … It allows the bureaucrats to never come to closure,” Buchen said
Molepske agreed, albeit in a different way.
“I think if streamlining is the goal, then we still are not there with this bill,” he said. “If you do not have the locals, the tribes and various communities concerned about this bill at the table, there’s still going to problems in the back end getting legislation into law.”
’Doom’ provision
The Assembly bill offers a 60-40 net proceeds tax split for local and state governments.
The Senate version retains the net proceeds tax, but it changes the revenue split to 70-30, and creates an additional tax at the rate of $2 per long ton — or 2,240 pounds — of mining product sold beginning in the third year of mining.
Buchen said any other company that would spend a proposed $1.5 billion on the mine and its hundreds of jobs, as mine company Gogebic Taconite LLC proposes, would receive plenty of incentives from the state.
“It’s clearly not an inducement to come to Wisconsin,” he said. “It will very likely doom the project.”
Buchen said he preferred the tax structure created in the original Assembly bill, noting that if iron prices were to drop, mining companies would have an incentive to stop spending so much to produce a heavily taxed commodity.
Molepske criticized the proposed size of the state’s take.
“Why is there still such a large skim coming back to state coffers?” he asked. “If this is about helping impoverished communities, they should have 100 percent of the tax revenue.”
Jessica Bolich, director of the Chamber of Commerce in Hurley, in the heart of mine country, said the proposal shouldn’t be “either-or.”
“I think we would lean more towards the production tax, because you see benefits right away rather than (waiting and seeing) if they’re going to make a profit,” she said.
Environmental concerns
Hulsey called the Senate bill “new vinegar in a different bottle.”
“It still has the main provisions that affect over 16,000 homeowners across the state,” he said, pointing to the Assembly bill’s exemption of strip mines from floodplain rules, jeopardizing the state’s flood insurance program with the Federal Emergency Management Agency.
The Senate proposal, he said, doesn’t address the issue.
In the Assembly bill, no person can have a contested case hearing against a DNR decision. The Senate version allows for a contested case hearing.
However, critics note that such a hearing comes after DNR grants a permit, and not before mining begins.
The Wisconsin League of Conservation Voters, a nonpartisan nonprofit that advocates for conservation policies, highlighted three concerns in a news release earlier Tuesday:
The mining company can go forward with breaking ground on a project until a judge stops them.
The burden of proof is higher to get a permit overturned than if the contested case hearing happens on a proposed permit.
The judge is evaluating the DNR’s decision and not the information provided by the company.
The Assembly bill provides for a maximum 1.5 acres of mitigation per acre of damaged wetlands, while the Senate version provides for a stricter minimum 1.5 acres of mitigation. It’s another provision critics say could tie up potential mining companies in red tape.
“The environmental issues that critics are raising are completely bogus,” Buchen said. “They raise issues to whip up public hysteria because the honest truth won’t succeed for them.”
State Sen. Neal Kedzie, R-Elkhorn, has called the bill a “work in progress,” although he has added a sense of urgency in getting a reconciled proposal through the Legislature by March 15, the end of the regular session.
“Only a few short weeks are left for the committee to complete its task, and there is still a lot of work to be done,” Kedzie, chairman of the Senate Select Committee on Mining Jobs, said in a statement.
Several GOP lawmakers contacted by Wisconsin Reporter did not return phone calls.
A public hearing on the draft will be held 10 a.m. Friday at University of Wisconsin-Platteville.
