At its September meeting, the Natural Resources Board tabled action on the Petition for Rules until it received a memorandum from me discussing several of the issues addressed in the Petition that were not discussed in detail at the September meeting.

At the September meeting both the Department's presentation and most of the discussion from public speakers focused on what appear to be the two major concerns of the Petitioners-that one mine rather than two be used to meet the test of the law, and that any such mine be in a similar environment to Wisconsin's in order to be used as an example mine. My previous memorandum to you attached to the September greensheet, as well as Stan Druckenmiller's presentation in Sturgeon Bay, explain our position on these two issues.

From the content of the Petition and the testimony in Sturgeon Bay in support of the Petition, it is clear that those supporting the Petition are especially dissatisfied with the ultimate wording of the law with respect to two mines, rather than one, being used as examples of non-polluting mines. However, as Mr. Druckenmiller stressed in September, not only does the Department interpret the law as not precluding two mines being used, the Legislature's legal staff concurs this is the best interpretation of what the Legislature passed. Simply put, the Board does not have authority to overturn, by adoption of administrative rules, fundamental decisions made by the Legislature in adoption of the mining moratorium law.

The petitioners' other main concern is that example mines may be from quite different geologic environments than exist in Wisconsin. At one point in the legislative process, Department staff was asked by legislators supporting a moratorium to provide language that would require mines to be from a similar environment to that of a proposed mine in Wisconsin in order to be used as example mines. Staff suggested the legislation include the requirement that example mines have "similar geologic characteristics" to any mine being proposed in Wisconsin. That language was debated by the Legislature, before ultimately being dropped in favor of the present language.' In fact, as the final wording of the law' was debated on the Senate floor, Senator Welch questioned the value of examining other mine sites because they may be in vastly different environments. He specifically referenced desert and permafrost environments as being eligible for consideration under the law. However, as Mr. Druckenmiller stated in September, in the end the Legislature decided it wanted the test to be whether acid-generating mines, anywhere in the United States or Canada, have been successfully operated and closed.

That example mines be acid-generating was the linchpin in the legislation; that an example mine be from somewhere in the United States or Canada was a principal condition. Because a mine is in an and or

I     Attached is correspondence between legal staff members of the Department and of the Legislature which discusses in detail the various concepts which were considered by the Legislature, before ultimately passing the Moratorium Law.

frozen environment does not mean that it won't produce acid. The issue in those environments, as elsewhere, is whether environmental problems are caused where acid is produced. Certainly if legislators did not know at the outset of the debate on the moratorium, they knew by the end of the debate, that most of the acid-generating mines in the United States have been located in the and western states and in Canada, where the environment is very different from Wisconsin's.

The moratorium law is intended to address whether environmental problems were caused by acidgeneration at example mines designed, constructed, operated and closed in years past. As Mr. Druckenmiller stated in September, the moratorium law was never intended to help the Department address acid-generation at a mine proposed in Wisconsin in the late 1990's. Whether a mine in Wisconsin will cause environmental problems must be answered by application of technology of the 1990's and the regulations of the State of Wisconsin, taking into account unique and specific aspects of each project and the environment in which the project is located.

Following are the remainder of the requests appearing in the Petition and the Department staff s reaction to them. The staff reaction is to the specifics of each proposal, and is separate from our overall belief that any interpretation of the content of the mining law is best done at the master hearing.

What constitutes significance is always difficult to identify in advance of factual information. Department staff conducted an electronic search of the word "significant" and found approximately 250 usages in the statutes and twice that many in environmental administrative codes. But definitions of "significant" were not found. Even if this search missed a definition that may exist, the clear evidence of the search is that legislative and administrative agency policy is

to avoid adopting definitions of "significant" in favor of making the determination of significance in the context of specific decisions.

Under the present schedule, the Draft Environmental Impact Statement for the proposed Crandon mine will be issued prior to the time a rule could likely be promulgated. So, this request would likely not be implemented in time for the only mining project on the horizon.

More importantly, as the Department has already publicly stated, it will make available at the time of released of the Draft Environmental Impact Statement its preliminary findings regarding compliance with the terms of the mining moratorium law of the mines identified by the Nicolet Minerals Company. The findings will be preliminary because the Department desires to receive feedback,and perhaps additional information not yet in our possession, from interested members of the public. At the time of the Final Environmental Impact, or shortly thereafter, Department staff will make public its judgments regarding compliance of the mines identified by the Nicolet Minerals Company. However, the final decision of the Department on compliance with the mining moratorium law will be made for the Department by the administrative law judge following receipt of all testimony at the master hearing, and of all legal briefs filed after the close of testimony.

Department staff believes a rule which would precisely define when a mine has been opened and when closed could easily turn out to be a misfit with the facts associated with particular mines. For example, Department staff indicate that the potential for acid generation can be present in some mines during the construction phase, long before ore extraction begins. Even more problematic is the request that closure be measured from the discontinuation of water treatment facilities. More recent, well-regulated mines can be obligated by governmental agencies to continue to provide wastewater treatment for years after mining operations have ceased. One of the mines identified by Nicolet Minerals Company as a properly operating mine has a condition in its permit that water treatment continue for at least 50 years after the mine discontinues removing ore. Other mine closure plans may include ongoing long-term water treatment. A rule of the type requested *in the Petition could preclude usage of the very kinds of mines that would be most helpful in getting at the Legislature's concerns-whether mines of the late twentieth century can be operated safely and can be properly closed without causing environmental problems.

Determinations of when mines have been opened and closed need to be made case-by-case based on the facts and regulatory requirements associated with each mine.

Information received by the Department on the mines identified by Nicolet Minerals comprises many boxes. Most of the data was collected at the behest of a number of state, provincial and federal regulatory agencies in order to comply With their regulatory requirements. By the very nature of the mining moratorium law, the data submitted is largely historic-some as old as 25 years. Verification of the type requested in the Petition is simply not possible for much of the data the mining moratorium law requires a mining permit applicant to submit. In fact, adoption of the definition of "verification" proposed by the Petition would inhibit the breadth of data authentication that will occur through reaction on a case-by-case basis to information submitted for each mine.

By way of information, the Department has already sent a team to the two states and one Canadian province in which mines identified by Nicolet Minerals Company are located. Staff have consulted with all regulatory agencies to verify that the data submitted by the Company comports with the records of the agencies. Department staff have further asked of every person with whom they have spoken whether there is someone else they may be aware of who has information regarding the mines.

How to characterize the qualifications for example mines was the subject of extensive scrutiny by the Legislature, with a number of different statutory wordings discussed. Initially, the wording would have allowed the mines in southwestern Wisconsin to qualify as example mines. That language was changed to provide that mines be located in "similar geologic conditions." The Legislature ultimately discarded the "similar geologic conditions" language in favor of the present language calling for any example mine to have "net acid generating potential." The Petition essentially calls for the Board to change the legislative decision back to one that disallows some example mines because they are located in certain geologic settings.

Department staff believes the phrase "net acid generating potential" needs no further definition. It is a widely used and accepted concept among chemists and geologists related to the physical, chemical and mineralogic characteristics of the geologic materials. For each example mine, the issue of whether there is a potential for net acid generation is a technical issue that chemists and

recommendation made by the Department can be countered by any person or organization that participates in the master hearing.

A rule requiring "tailings", §293.50(2)(a), (b) and §293.50(2m)(b), to be defined as, but not

limited to

1)waste material resulting from the benefication of crushed ore at a concentrator. NR 132.03(24)

2)"waste material resulting from the washing, concentration or treatment of crushed ore." Wis.

Stat. § 107.30(3) and

3)"the remaining portion of a metal-bearing ore after some or all of such metal, such as uranium,

has been extracted." 42 U.S.C. 7911(8)

As noted in the first of the definitions requested in the Petition, a definition of "tailings" already appears in § NR 132.03(24). It is acceptable, and it effectively encompasses the concepts that appear in the other proposed definitions. No rule revision is needed.

The term "tailings site" as used in the mining moratorium law is clear. It simply and plainly refers to the site or facility related to the example mine at which tailings, as already defined in ch. NR 132, are deposited. Further, the law clearly requires that evaluation of example mining operations include analysis of both the mining site and any related tailings sites, regardless of their relative locations.

This proposed rule goes well beyond the intent of the mining moratorium law. While smelting is sometimes done on the site of a mining operation, it is normally done at another location. Other post-smelting processes that would produce waste will almost definitely be off-site, and depending on the interpretation placed on this language, could include metal fabrication at any number of locations. That law is intended to answer the question of whether a mine has successfully operated without causing pollution at the mine. The proposed rule would extend the review to off-site wastes the Department believes were not intended to be reviewed under the mining moratorium law. No further definition of "tailings site" is needed.

Based on the above analysis, the Department believes rules sought in the Petition are either unnecessary or go beyond the authority vested in the Department in the Mining Moratorium Law. Therefore Department staff recommend the Petition be denied.

SUBJECT: Mining Moratorium Law - Review of Legislative History Regarding Similarity of Example Mines

As your are aware, the Department has received a Petition to adopt administrative rules interpreting the Mining Moratorium Law. One of the requests in the Petition was that the Natural Resources Board adopt administrative rules mandating that any example mines submitted to comply with the Moratorium Law must have geology similar to a mine under consideration by the Department for approval.

At the September meeting of the Natural Resources Board, Stan Druckenmiller relayed the Department staff's conclusion that the Legislature fully considered, then rejected, requiring example mines be from similar geologic environments as exists for any mining project under consideration for approval in Wisconsin. Accordingly, we advised the Board against adopting administrative rules interpreting the

Mining Moratorium Law to include a requirement that any example mine have geology similar to a mine under consideration for approval in Wisconsin. The Board postponed its decision on the Petition until its December 8, 1999 meeting.

At the October 27, 1999 meeting of the Natural Resources Board, one Board member, concerned about this outcome of the Moratorium Law, requested that the Department verify its interpretation of the Law. We recognize that your office does not weigh in on issues associated with when an administrative agency does or does not have to adopt administrative rules. However, we are asking your assistance on the

limited question of whether our characterization of the legislative history of the Mining Moratorium Law is accurate. We believe the legislative history can provide valuable information to the Board on the degree to which the Legislature looked into this issue. However, we want to make sure we don't provide incorrect information to the Board.

Following is a summary of the Department's review of the legislative history of the Mining Moratorium Law as it relates specifically to this issue. I am requesting that you review your records of the history of the Mining Moratorium Law. After having done so, I would appreciate it if you could respond to me regarding our characterization of the history of the Legislation on this one point. If you can respond to this request, it would help much if we could receive your response prior to December V. That would allow us time to provide Board with a report in time for its December meeting.

This issue first came to light in the 1995 legislative session when the predecessors to the Mining Moratorium Law, SB 516 and AB 758, were considered. Those proposals simply required the example mines to have operated in a sulfide ore body. Neither of these bills was acted on by the Legislature.

Senate Bill 3 was introduced in 1997. This proposal required that the candidate example mines had to have operated in a sulfide ore body of "similar geological characteristics" to the mine under permitting consideration. The Senate specifically considered this qualifier as it debated SB 3. Senate Amendment I included a provision to delete the phrase. In response, Senate Amendment 3 to Senate Amendment I proposed to reinstate the qualifier, but this amendment was defeated. The full Senate subsequently adopted senate Amendment I to SB-3, deleting the "similar geologic characteristics" requirement on March 11, 1997.

During the same Senate debate, two additional amendments related to this issue were also considered. First, Senate Amendment 2 to SB-3 proposed that the example mines had to have operated in volcanogenic massive sulfide ore bodies, the same specific type of ore body as the Crandon Deposit. The Senate tabled this amendment. Finally, Senate Amendment 3 to SB-3 inserted language to specify that the example mines had to be in ore bodies which are not capable of neutralizing acid mine drainage. The Senate adopted this amendment, also on March 11, 1997.

The Assembly modified the Senate provisions when it considered SB-3 in early 1998. Assembly Amendment 3 to SB 3 replaced the qualifier on the example mines which read "is not capable of neutralizing acid mine drainage" with the term "has a net acid generating potential". Assembly Amendment I to Assembly Amendment 3 to SB-3 further modified the provision so that the "net acid generating potential" criteria also takes into consideration the nature of the host rock in addition to the ore body itself. These changes were adopted by the Assembly and subsequently concurred in by the Senate.

That's it. Hope your files track ours.

Thanks.

STATE OF WISCONSIN

LEGISLATIVE COUNCIL STAFF

BUREAU OF LEGAL SERVICES

Mr. Charles Hammer, Attorney
Bureau of Legal Services
Department of Natural Resources
101 South Webster Street, LS/5
Madison, WI 53703

Dear Mr. Hammer:

This letter is in response to your request that I review, based on information contained in Legislative Council Staff files, your description of certain predecessor legislation and amendments proposed to 1997 Senate Bill 3. This bill related to requirements for the issuance of permits for the mining of sulfide ore bodies, was enacted into law as 1997 Wisconsin Act. 171 and is commonly referred to as the "mining moratorium law."

In a memorandum to me dated October 28, 1999 (copy enclosed), you described the legislative history of certain predecessor bills and amendments to Senate Bill 3 that relate to the characteristics of an ore body that are required to be present in order for a mining permit applicant to use the mine as an example for the purpose of complying with the mining moratorium law. The following bills and amendments are cited in your October 28, 1999 memorandum.

1. 1995 Senate Bill 516 and 1995 Assembly Bill 758, both of which would have required a mine to have operated in a "sulfide ore body." Neither of these bills was enacted into law.

2. 1997 Senate Bill 3 (the original bill) which would have required a mine to have operated in a "sulfide ore body" "of similar geological characteristics" to the mine for which a permit had been applied for.

3. Senate Amendment I to 1997 Senate Bill 3, which was adopted on March 11, 1997, deleted the phrase "of similar geological characteristics" from the bill. In addition, Senate Amendment I was adopted after Senate Amendment 3 to Senate Amendment 1, which would have restored the language "of similar geological characteristics" to the bill, was defeated.

4. Senate Amendment 2 to 1997 Senate Bill 3, which would have required a mine to have operated in an ore body "that is a volcanogenic massive sulfide ore body" was tabled on March 11, 1997.

5. Senate Amendment 3 to 1997 Senate Bill 3, which required a mine to have operated in a sulfide ore body that is "not capable of neutralizing acid mine drainage" was adopted on March 11, 1997.

6. Assembly Amendment 3 to 1997 Senate Bill 3 substituted the requirement that the example mine had -to have a "net acid generating potential" for the requirement in Senate Amendment 3 that the mine have operated in an ore body that is "not capable of neutralizing acid mine drainage" and was adopted on January 21, 1998. in addition, Assembly Amendment I to Assembly Amendment 3 to 1997 Senate Bill 3 further modified the bill so that the provision for requiring that the mine have operated in an ore body with a "net acid generating potential" would also have to take into consideration the nature of the host rock in which the ore body is located in addition to the ore

Based upon information on file at the Legislative Council Staff offices, your description of the legislative history of the predecessor bills and amendments to 1997.Senate Bill 3, as described above, is accurate. I hope this information is useful to you.

William L. Ford
Senior Staff Attorney