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Back to the future — Mining battle back in Senate

By   /   November 29, 2012  /   8 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 rekvall@wisconsinreporter.com

— Edited by John Trump at jtrump@watchdog.org

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  • Barak the thinker

    Mining, drilling, and such are dirty old school concepts. We needs to invest in green stuff, propellers, and such to create the jobs for this new century!

  • Bett Bauer

    Yeah yeah Barak just like the pipeline to Canada was a bad idea and now China gets the benefits of that.Would you please elaborate on the Green stuff and propellers dont sustain very many jobs..I don’t say NOT do it but it is not a cure all or even comes close to solving the huge problem around energy and jobs.

  • Bob the Builder

    That is a great idea, where do we get all the raw material for those propeller things. What is wrong with mining, is it to dirty for you?

  • Chris Mack

    You do realize iron ore is not a fossil fuel. over 99% of iron ore commercially used is for steel making. Steel is used in construction (housing/housing appliances), aircrafts, automobiles and containers (steel cans). So if you want good appliances, safe aircrafts, safe cars and the like we need iron ore. Otherwise how else will you produce the above products? Plastic? HA!!!!

  • Brad

    The democrats are there to obstruct job creation. We know this because of their voting record. When and how taxes are collected is their only interest, as indicated in the above story.

  • Craig

    Hey “Barak the thinker” Try thinking a little harder! Where do you get the copper and other metals that actually convert the propellers motion into electricity? And where do you get the metals to make the cables to carry the generated power to the grid (more cables) so it can be used in your home (and more cables and wires and switches all made of base metals) or did you just think the wind blew and the electricity just magically appeared in the outlet your wii is plugged in to?

  • Charie

    This is iron ore that is being mined. There is no acid involved or anything else that will pollute streams or the land if the proper care is taken. Sounds to me as though Barak the stinker doesn’t keep up with his reading and would rather do things the old way which is to allow the U.S. to be dragged around by the hair by whichever Mideast oil-producing country cares to do so. Regardless of what the green lovers know or think they know, there is no way anything in this country can be made without metals or oil. They keep forgetting that plastics are made of oil, too.

    If you greens are really interested in getting on line with green energy, why don’t you form a consortium of private citizens to get this done. Obama just keeps throwing money at green companies that contribute to his campaign funds and they get nothing done as far as affordable energy goes and then go bankrupt. The only thing they manufacture is waste!

    Disgusting!

  • dbaur

    When and how the revenue is spent, is what the Dems are really concerned about.