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WI: Back to the future — Mining battle back in Senate

By   /   November 30, 2012  /   News  /   No Comments

By Ryan Ekvall | Wisconsin Reporter

MADISON – A little more than a month from ceding legislative control to Republicans, Senate Democrats continued to steer the discussion of mining reform away from Assembly Bill 426, the mining bill which passed the Assembly on party lines last session only to fail in Senate.

State Sen. Tim Cullen, D–Janesville, the current chairman of the Senate Select Committee on Mining, held another informational hearing Thursday, this time focused on how tax revenue should be generated from mining operations and the regulatory climate of mining in other states versus Wisconsin‘s.

If this sounds like the same old debate circling like tires in deep mud it’s because you’ve been paying attention.

State Sen. Tim Cullen, D-Janesville, leads the Senate’s mining committee.

The issues of contention now, as they were when the bill failed in March, are environmental protection, the timeline for the permitting process, the streams of tax revenue and the timing of contested case hearings.

Bill Williams, CEO of iron ore mine interest Gogebic Taconite, in late March called the bill’s contested hearing language a “game-stopper,” just before the company halted its pursuit of a reported $1.5 billion operation in the Penoke range in Ashland and Iron counties. The project was reportedly expected to create thousands of jobs.

“That essentially says you can contest something before a decision’s been made. Well what are you contesting?” Williams said after a failed final push to get legislation passed. “Let’s get a decision on the table and if there’s a part of that decision that doesn’t make sense, then that’s what you contest.”

The Senate committee did not directly address the contested case issue at this week’s hearing.

But while Democrats and Republicans argue over the number of days from mine permit application to approval, or the amount of pollution acceptable for a project, federal agencies such as the Army Corps of Engineers have regulations in place that supersede arguably lax state law.

“We found out that if we have unreasonable timelines that the Army Corps of Engineers, the feds can’t comply with, they will go their own way and they will take charge of it,” Cullen told Wisconsin Reporter after Thursday’s hearing. “Wisconsin will be sitting on the sidelines of whether or not there’s a mine permitted in our own state.”

According to testimony at the hearing, the federal government taking the lead on a mining project would result in increased costs, extended timelines and greater opportunities for litigation.

Cullen, the Democrats and Sen. Dale Schultz, R-Richland Center, the lone dissenting Republican in the spring mining bill saga, received an endorsement on the need to refine AB 426 from Tim Sullivan, chairman of the Wisconsin Mining Association

Sullivan, the former President and CEO of Bucyrus International Inc., the largest mining machinery company in the world, said AB 426 can and should be improved before putting it to a vote, but failed to elaborate on what changes should be made.

Sen. Bob Jauch, D-Poplar, who represents the Northwoods area where a mine site has been proposed, said he was “extremely disappointed with the vagueness” of Sullivan’s presentation.

As late as March, Sullivan said he and the (mining) association were “happy with (AB 426)” and that it was “extremely fair.”

While he now says the bill should be changed, Sullivan also made clear that “Wisconsin’s mining laws need to be changed now.”

“Wisconsin’s mining laws do not reflect state-of-the-art thinking in terms of permitting, oversight, or economic development,” Sullivan said as part of his presentation. “Wisconsin’s current law is, for all practical purposes, a ban on mining, and investors around the world have recognized it as such by refusing to invest in our state.”

Gov. Scott Walker said Wednesday he would like a bill on his desk soon after the Legislature begins next session in January.

“If we could pass this early in 2013, if the process could begin early in 2013, they’d start coming in and making their investment and taking the initial steps to move forward with a mine which would put people to work right off the bat,” Walker told an audience Thursday at a Wisconsin Manufacturers and Commerce business conference at Monona Terrace in Madison.

Cullen said the committee would meet next week to discuss putting together a bill as an alternative to AB 426. With an 18-15 Republican majority in the state Senate, the committee may be doing little more than spinning its wheels.

Sen. Glenn Grothman, R-West Bend, said he would like a bill that has bi-partisan support, but that he would support AB 426 on party lines if that’s what it takes to move mining forward.

“We believe we will have the votes to pass a bill like 426,” Grothman said. “It is always better to have a bi-partisan bill and we felt last time the only reason it wasn’t bi-partisan is there were some people who put pressure on Democrats to vote against any bill to make Governor Walker look bad (during the recall campaign) … It’s disappointing that despite the fact that this committee has met for four months, at least, we still don’t have that bill before us.”

The mining tax debate

Another sticking point between Democrats and Republicans is how much tax revenue will flow, and to where.

In AB 426, Republicans proposed a 60-40 split between the Investment and Local Impact Fund, ILIF, which funds local government units impacted by mining, and the state government. State Sen. Jauch, D-Poplar, said he’d prefer all the tax revenue to stay in the region impacted by the mine, which is current law.

According to the Legislative Fiscal Bureau, the state’s most recent mine — Flambeau mine in Rusk County – generated about $14 million in tax revenue from 1993 to 1998.

Democrats also want to change the tax structure so that more taxes are taken in sooner.

Currently, mining companies pay a net proceeds tax – taxes after a company deducts qualified expenses, such as machinery and labor, from its sales. Jauch said he’d prefer to also have a tonnage tax, which is based off the amount of iron ore extracted from the mine.

Contact Ryan Ekvall at [email protected]

— Edited by John Trump at [email protected]


M.D. Kittle is bureau chief of Wisconsin Watchdog and First Amendment Reporter for Watchdog.org. Kittle is a 25-year veteran of print, broadcast and online media. He is the recipient of several awards for journalism excellence from The Associated Press, Inland Press, the Wisconsin Broadcasters Association, and others. He is also a member of Investigative Reporters & Editors. Kittle's extensive series on Wisconsin's unconstitutional John Doe investigations was the basis of a 2014 documentary on Glenn Beck's TheBlaze. His work has been featured in Town Hall, Fox News, NewsMax, and other national publications, and his reporting has been cited by news outlets nationwide. Kittle is a fill-in talk show host on the Jay Weber Show and the Vicki McKenna Show in Milwaukee and Madison.