Bill would let miners get out of road deals

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By Dan Shaw

A bill before state lawmakers would let mine operators send a letter to undo agreements used to pay for road damage.

Senate Bill 349 would take away many of local governments’ powers to regulate nonmetallic mines, such as those in the fracking industry.

The bill also would set limits on the sort of fees that can be imposed to pay for road damage caused by mining operators. The sponsor of the legislation, state Sen. Tom Tiffany, R-Hazelhurst, said at a public hearing Thursday that he believes most agreements to pay for road damage would continue to exist under the bill, which he said is aimed at egregious cases.

At a Senate Committee on Workforce Development, Forestry, Mining and Revenue hearing on SB 349, Tiffany said he only sought fairness in proposing a provision that would let companies, by sending a letter to a town or other local government, renegotiate a previous agreement to pay for road damage. He said he thinks most of those deals were reached in good faith and would stay in place if his legislation passed.

“I believe you will see hardly any, if any, of these road agreements reopened,” Tiffany said.

After the meeting, Rick Stadelman, executive director of the Wisconsin Towns Association, said such assurances probably would hold for larger companies. But he is worried about small operators, which are more susceptible to fluctuations in demand. If the current boom in the sand-mining industry starts to slow, Stadelman said, he can imagine some of those companies seeking to cut costs any way they can.

“We have operators that are not as responsible as others,” he said, “and they may be looking for a way out.”

SB 349 also would take away local officials’ ability to say how much mine operators should contribute for road damage, instead putting that determination in the hands of independent engineers who would be paid half by a local government and half by the company.

Current law should be changed, Tiffany said, because those fines can now be set arbitrarily. His proposal, he said, would allow a professional third party to solve disagreements on responsibility.

But Stadelman said many local governments’ road budgets could be broken by the cost of hiring an independent engineer to evaluate damage. He said the engineering cost for $1 million in repairs could easily run to $100,000. Half of that amount, $50,000, could eat up most of a town’s yearly road budget, he said.

Stadelman also complained about one of the bill’s provisions that would let local governments demand mine operators put up three-year surety bonds to provide a means of paying for possible future road damage. Providing assurance only for three years will provide inadequate protection, he said, to towns that could be dealing with road damage for years to follow.

He said many of the agreements towns reached require mining companies to pay a set fee for every ton of material extracted from a mine site.

“Tonnage is a good proxy,” Stadelman said, “for weight and the damage that is done.”

Tiffany and other proponents of SB 349, including various unions representing the building trades, argued the legislation is needed to bring consistency to the regulation of nonmetallic mines, particularly mines in western Wisconsin that provide sand used to extract petroleum and natural gas through fracking. Tiffany said local governments gained the power to regulate the mines in a capricious way through the state Supreme Court’s 2012 decision in Zwiefelhofer v. Town of Cooks Valley.

In that case, state justices concluded that Cooks Valley, in Chippewa County, could use so-called police powers outside of its zoning authority to regulate frack sand mines. Tiffany said the ruling actually gave local governments powers they had not had or seldom used before, and his bill is meant to return the regulatory system to a pre-Zwiefelhofer state.

To that end, cities, villages, towns and counties would retain their ability to use zoning to control mining operations. They simply would no longer be able to issue licensing permits that set local water and air standards, force a mine operator to conduct environmental monitoring and place certain restrictions on blasting.

The bill is one of several that Republican lawmakers have put forward recently to center control over environmental regulations in the state Department of Natural Resources. As part of the current budget, for instance, they passed a provision that prevents local governments from passing erosion-control ordinances that are stricter than those set by the DNR.

Another part of the same budget took away some of the reasons local officials could cite in denying permits for communications towers.

Frack sand mining has in the past few years undergone a boom in Wisconsin. Only five of the mines were operating in the state in 2010. This year, more than 115 are in service, according to the DNR.

Because Thursday’s meeting was a public hearing, the committee members did not take a vote on SB 349. For the legislation to take effect, it still must be passed by the state Assembly, Senate and signed by Gov. Scott Walker.

Tiffany said he is open to considering changes such as those suggested by Stadelman as the bill moves through the Legislature.

“This,” he said, “is the starting point.”

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