Hamilton Political Tidbits - Feb. 1, 2012
Introduction
Whether or not the groundhog sees his shadow, there are only six more scheduled weeks in the 2011-2012 legislative session, and they are going to be full of activity.
Although the impending recalls are impacting legislative action, Gov. Walker called for action in his State of the State Address. The state Assembly passed the mining bill, and much committee work has been done on other bills. Read Hamilton's analysis of these actions below.
The Department of Natural Resources announced it will not attempt to further regulate frac sand mining, however, two bills were recently introduced to do just that. Hamilton explores the status of fracking regulation.
Visit Hamilton Consulting Group's Blog for timely news updates.
Read more Political Tidbits on our website.
Walker Delivers State of the State
By Amy Boyer
Republican Governor Scott Walker delivered his second State of the State Address before a joint session of the legislature and crowded viewing gallery. Governor Walker stayed on message as he has this past year, touting the difficult decisions that were made to balance a $3.6 billion deficit while avoiding major tax increases and mass government employee layoffs.
Throughout the speech, Walker focused on his continued goal of job creation, an improved business climate and on his Wisconsin Working jobs plan, which is intended to direct policies and resources towards Wisconsin’s workforce through training investments and recruitment services. Additionally, Walker indicated his support for mining reforms which can possibly create thousands of jobs throughout Wisconsin.
Governor Walker used the address to announce the creation of the Waste, Fraud and Abuse Elimination Taskforce that stems from a recently released final report of the Commission on Waste, Fraud and Abuse, which identified over $400 million in potential savings. This new taskforce will be charged with implementing and tracking those recommendations and will coordinate state agency sub-groups that will be formed to continually identify waste as well as potential efficiencies.
Wisconsin Eye’s video of the Address, and the video responses from Senate Minority Leader Mark Miller and Assembly Minority Leader Peter Barca are available for streaming online.
The address was not without interruption by random outbursts from Walker opponents who were quickly removed from the gallery.
Assembly Passes Mining Bill
By Andrew Cook
Last week, the Wisconsin Assembly passed the controversial iron ore mining legislation on a party-line vote with all the Republicans voting for AB 426 and all Democrats opposing it.
Proponents of the bill argue that the legislation will bring badly needed jobs to northern Wisconsin, where mining company Gogebic Taconite is planning to construct an iron ore mine. Opponents argue that mining will harm the environment. Proponents counter that the legislation will still require a mining company to obtain state and federal environmental permits and comply with all environmental regulations.
The legislation requires the Wisconsin Department of Natural Resources to approve a mining permit within a year, and removes contested case hearings, which are typically used by environmentalists to stall the permit process.
The bill now heads to the Senate where passing it will prove more difficult given the slim majority held by Senate Republicans. Senator Neal Kedzie (R-Elkhorn), chair of the Senate Select Mining Jobs Committee, had indicated it is likely the Senate will amend the bill.
If the Senate makes changes to the bill, the Assembly would have to approve or reject those changes.
To learn more about the mining legislation, please see Hamilton Consulting Group’s mining webpage.
Recall Update
By Andrew Cook
It is all but certain Gov. Scott Walker, Lt. Gov. Rebecca Kleefisch, and four Wisconsin State Senators will face recall elections in 2012. Certification of the signatures is an ongoing process playing out in the courts and online, where you can watch Government Accountability Board employees work to verify signatures.
Governor & Lieutenant Governor
Recall supporters turned in over one million signatures against Governor Scott Walker, and roughly 845,000 against Lt. Gov. Rebecca Kleefisch. Under Wisconsin law, it takes 540,000 signatures to trigger a recall election for the Governor and Lieutenant Governor, so it is likely that the recall organizers will succeed.
Both the Government Accountability Board (GAB) and Republicans are now scrambling to verify the petitions, culling multiple signatures and irregularities such as fake names and addresses.
A court increased, from 31 to 61, the number of days the GAB has to examine the petitions and determine whether recall elections should be held. The GAB verification process is being conducted in an undisclosed location. The public’s only access to the top secret bunker comes via a camera set up to allow external monitoring of the process. The recall cam has become an internet sensation, drawing thousands of viewers and inspiring a parody account on twitter.
The court also granted additional review time to the recall targets, and ordered that their review periods not start until they had received copies of the petitions from the GAB. The countdown has begun for the recall targets as the candidates and the public now have access to all petitions on the GAB website, except those against Lt. Gov. Kleefisch since they are still being scanned.
Although it is still unclear who will appear on the Democratic ticket for the gubernatorial race, a recent poll by Marquette University showed Gov. Walker with a lead against each potential candidate. Announced candidate, former Dane County Executive Kathleen Falk, comes the closest to beating Walker at 50 percent to 44 percent. Gov. Walker also leads former Congressman David Obey 49 percent to 43 percent and Janesville Democratic State Senator Tim Cullen 50 percent to 40 percent.
State Senators
Recall groups turned in what appear to be enough signatures to recall four Senate Republicans: Senate Majority Leader Scott Fitzgerald (Beaver Dam), Pam Galloway (Wausau), Terry Moulton (Chippewa Falls), and Van Wanggaard (Racine).
There is no definite candidate running against Fitzgerald, but the other senators’ challengers have emerged. Rep. Donna Seidel, D-Wausau, will challenge Galloway; former Rep. Kristen Dexter, D-Eau Claire, will take on Moulton; and former Sen. John Lehman, D-Racine, will seek a rematch of his 2010 race against Wanggaard.
The GAB has posted scans of the senate recall petitions, but the agency is not currently working to verify those signatures, focusing first on the Governor and Lieutenant Governor petitions.
State Regulation of Frac Sand Mining
By Andrew Cook
The Wisconsin Department of Natural Resources (DNR) this week denied a rulemaking petition by opponents of silica sand mining in western and northern Wisconsin. The same day it denied the rulemaking request, the DNR issued a comprehensive Silica Sand Mining Study.
Sand mining is becoming increasingly more common in Wisconsin due to a surge in hydrofracking (commonly referred to as “fracking”), a technique used by the petroleum industry to extract natural gas and crude oil from underground rock formations.
Those opposed to sand mining in Wisconsin petitioned DNR in November 2011 requesting the Department promulgate rules governing silica sand mining to address concerns with alleged health and environmental effects. Specifically, the petition asked DNR to regulate Respirable Crystalline Silica (RCS) as a hazardous air pollutant (HAP).
In its decision denying the rulemaking petition, DNR explained that if a certain type of air pollutant is not regulated under federal law, the Department may only create an emission standard if first it finds that the standard is needed to protect the public health or welfare. The DNR explained that RCS is not currently regulated under federal law.
Moreover, the DNR concluded that based on its recent Silica Sand Study, it could not make such a finding that warrants the Department to grant the rulemaking petition. The DNR explained that it worked with officials from the Department of Health Services, who concluded there is “no published evidence of health effects from intermittent or occasional off-site exposures to people living near sand mining operations.”
The DNR further determined that current particulate matter administrative rules “provide adequate regulatory authority to protect public health and welfare.”
This post, originally appeared on the Great Lakes Legal Foundation Blog.
Survey of Mining Executives Reveals Perception that Wisconsin is a Worse Place to Mine than Third World Countries
By Robert Fassbender and Emily Kelchen
Though Wisconsin has a rich history of mining, current perceptions of the state’s regulations and the administration of those regulations makes that history seem mythical. The state’s current reputation makes it one of the least likely mining sites in the world.
Since 1997, the Fraser Institute has conducted an annual survey of metal mining and exploration companies to assess how mineral endowments and public policy factors such as taxation and regulation affect exploration investment. Survey results represent the opinions of executives and exploration managers in mining and mining consulting companies operating around the world. The survey now includes data on 79 jurisdictions around the world, on every continent except Antarctica, including sub-national jurisdictions in Canada, Australia, and the United States.
Overall, the 2010-2011 report concludes that “the bottom 10 scorers are Indonesia, Zimbabwe, Wisconsin, Madagascar, India, Guatemala, Bolivia, DRC (Congo), Venezuela, and Honduras.” Of those areas, the report notes that: “Unfortunately, except for Wisconsin these are all developing nations which most need the new jobs and increased prosperity mining that can produce.”
Environmental Regulations
With respect to the current mining legislation debate, the most pertinent questions posed relate to the impact of regulations and the administration of those regulations. The five options for answers were whether the factors: 1) Encourages investment; 2) Not a deterrent to investment; 3) Mild deterrent; 4) Strong deterrent; or, 5) Would not pursue investment due to this factor. The graphs below reflect the worse ten jurisdictions by adding the “strong deterrent” and “would not pursue” answers.
Of all 79 jurisdictions included in the survey, Wisconsin is the jurisdiction where regulations were the most severe deterrence to investment.
The state can address, at least in theory, the impediment for investment due to our regulatory programs through legislation such as AB 426. However, the implementation of the state’s laws is just as important as the letter of the law.
Figure 1: Environmental Regulations
Administration of Regulations
A perception that the government does not fairly or predictably enforce its laws raises concerns that legislation may not be able to address. Unfortunately, Wisconsin also scores badly in this area. Of all 79 jurisdictions included in the survey, only Hugo Chávez’s Venezuela is ranked worse than Wisconsin in its administration of its laws.
Figure 2: Uncertainty Concerning the Administration, Interpretation, and Enforcement of Existing Regulations
Conclusion
Although the state has a poor reputation in the global mining community, Wisconsin today has an opportunity to permit the largest iron mine in the state’s history. The reforms to Wisconsin’s ferrous mining law contained in Assembly Bill 426, coupled with the Department of Natural Resources’ commitment to helping businesses in the state navigate the permitting process, presents an opportunity for Wisconsin to improve its reputation with the international mining community before the next Fraser Report is published.
Boiler MACT Update: The EPA's Proposed Amendments & the Court's Vacatur of the Stay
By Emily Kelchen
The EPA’s Boiler MACT rules were reconsidered and stayed after their publication in March 2011. This article provides analysis of the federal court case that overturned the stay, and details on the EPA’s reconsidered rules which are now available for comment.
Background
In March of 2011, the EPA published final rules titled "National Emission Standards for Hazardous Air Pollutants for Major Sources: Industrial, Commercial, and Institutional Boilers and Process Heaters" and "Standards of Performance for New Sources and Emission Guidelines for Existing Sources: Commercial and Industrial Solid Waste Incineration Units," commonly known as the Boiler MACT and CISWI rules.
At the same time final rules were issued, the EPA announced that it would "reconsider" certain aspects of the boiler and commercial/industrial solid waste incinerator (CISWI) rules in order to fully address technical issues raised during the comment period.
On May 18, 2011 the EPA announced it would delay the effective date for the Boiler MACT and CISWI rules until the proceedings for judicial review of the rules are completed or the EPA completes its reconsideration of the rules, whichever is earlier.
Reconsideration
On December 2, 2011, the EPA proposed amendments to the standards regulating the emissions of hazardous air pollutants (HAPs) from new and existing boilers and process heaters, as well as Commercial and Industrial Solid Waste Incinerators (CISWI). The EPA also proposed revisions to the Non-Hazardous Secondary Material (NHSM) Rule. The proposal is a reconsideration of certain provisions of the final Boiler MACT rule and other final rules issued on March 21, 2011. The EPA announced its plans to reconsider the rules at the same time the final rules were issued.
The EPA is proposing the following changes, among others, in the reconsideration of the rule for boilers and process heaters at major sources: creating new subcategories; setting new limits for particulate matter (PM) and carbon monoxide (CO); replacing emission limits for dioxins/furans emissions with work practice standards; increasing compliance monitoring flexibility; revising standards for units outside the continental U.S.; and providing more flexibility and achievability for units burning clean gases.
Proposed revisions to the area source rule include, among others, the creation of a new subcategory for seasonally-operated boilers and an exemption for temporary boilers.
The EPA also issued proposed revisions to the New Source Performance Standards (NSPS) for Commercial and Industrial Solid Waste Incineration Units (CISWI rule) and the rule defining what is a non-hazardous secondary material (NHSM Final Rule) for purposes of determining whether a unit is covered by the CISWI rule or the Boiler rule.
Comments on the proposed rules are due by February 21, 2012. The EPA intends to finalize the rules this April.
Federal Court Vacates Boiler MACT Stay
The EPA was required by a court to finalize the Boiler MACT standards in 2011, but almost as soon as the new rules were released, the EPA began the reconsideration process discussed above. The EPA stayed the rule during the reconsideration, but the stay was challenged in the ongoing Sierra Club v. Jackson case.
On January 9th, the United States District Court for the District of Columbia vacated the EPA’s May 20, 2012 effective date of revised hazardous air pollution standards for boilers and incinerators while the agency undertakes a process of reconsideration of the final rule. Among other things, the court held that the EPA had used the wrong legal standard when it decided to issue the Delay Notice.
The court determined that the EPA should have used four-part test for determining whether the stay should have been issued. According to the court, the EPA should have considered: (1) whether there was a likelihood of success on the merits in challenging the Boiler MACT and CISWI Rules; (2) whether industry would be irreparably harmed if the stay were not issued; (3) whether a balancing of equities supported granting of the stay; and (4) whether the public’s interest would be served by a stay. The EPA instead relied on a finding that “justice so requires” issuing the stay since the rules were already being reconsidered.
The court’s vacatur of the stay means the original deadlines and requirements in the Boiler MACT and CISWI Rules apply immediately.
Implementation
Although the EPA’s stay of the Boiler MACT rules was vacated, the agency has stated it will not to enforce those standards immediately. In a letter to Sen. Ron Wyden (D-OR), EPA Administrator Lisa Jackson made clear that the EPA will not take actions to enforce the standards that the court reinstated.
"Regarding the impact of the recent court decision, we have carefully reviewed the effect that vacating the stay may have on new and existing sources and plan to address potential impacts. Specifically, using our enforcement discretion, the EPA will issue a no action assurance letter shortly, informing sources that EPA will not enforce any of the administrative notification requirements for new or existing boilers and incinerators in the 2011 Rules for a period of time while the EPA works to take final action on the proposal to reset these dates. For existing boilers and incinerators, these administrative notification requirements are the only obligations sources would otherwise have under the 2011 Rules prior to when the EPA intends to finalize the reconsideration process….
With respect to new boilers and incinerators, based on the information currently available, it appears that there are no sources that are subject to requirements other than administrative notifications under the 2011 standards that are being reconsidered. If, however, the EPA becomes aware of any such sources facing permitting or compliance challenges as a result of the stay being vacated, the EPA will issue a 90day stay of the rule under the Clean Air Act. Furthermore, if necessary, the EPA will issue a longer stay under the Administrative Procedures Act consistent with the court's opinion or take other such action as may be appropriate."
Additional information on the boiler rules is available on the Great Lakes Legal Foundation boiler rules webpage.
January Natural Resources Board Meeting
By Emily Kelchen
The Wisconsin Natural Resources Board met January 24th and 25th in Madison. Important topics addressed by the Board included approval of an economic impact solicitation process, a reduction of the bear harvest quota for 2012, and discussions of EPA-identified deficiencies in the state’s water program and frac sand mining.
On the 24th, the Board heard an informational presentation on the health effects of air pollution. The seminar focused on the health effects themselves, not any specific rule or regulation.
The Board resumed its business meeting on the 25th with two requests for approval to solicit comments on economic impact and hold public hearings. Board Order WT-23-11, concerning sewage collection systems and sewage treatment facilities regulated under the WPDES Program, and Board Order RR-04-11, updating the rules related to the Department’s Remediation and Redevelopment Program, were both approved.
Later in the meeting, the Board approved the process to be used in the new economic impact solicitation process. 2011 Wisconsin Act 21 modified the state’s administrative rulemaking process. Under Wis. Stat. 227.137, agencies are now required to complete an Economic Impact Analysis (EIA) for each rule.
The EIA must include information on the economic effect of the proposed rule on specific businesses, business sectors, public utility ratepayers, local governmental units, and the state's economy as a whole. In preparing the analysis, the agency must solicit information and advice from businesses, associations representing businesses, local governmental units, and individuals that may be affected by the proposed rule and must prepare the analysis in coordination with local governmental units that may be affected by the proposed rule.
Prior to this new law, the public was not allowed to view a proposed DNR rule until the Natural Resouces Board approved it for public hearing. The Board approved a process that will allow the public to view and comment on the economic impacts of the proposed rule before it is approved by the Board for public hearing.
Continuing with the theme of public involvement, the Board also approved the 2012 Wildlife and Fisheries Management spring meeting advisory questions and heard an informational presentation on the Wisconsin Conservation Congress 2012 Spring Hearing Advisory Questions.
The Board also approved:
- the bear harvest quotas for the 2012 season;
- the Point Beach State Forest Master Plan;
- an American Marten Management and Conservation Plan; and
- real estate actions regarding the Paradise Valley Wildlife Area in Waukesha County and the White River Marsh Wildlife Area in Waushara County.
After all action items were addressed, the Board heard two informational presentations.
The first informational presentation was on the DNR’s response to the EPA’s July 2011 letter regarding the state’s water program. The DNR proposed several different courses of action for various issues identified by the EPA: rulemaking, legislative changes, an Attorney General's opinion or an Addendum to the Memorandum of Agreement with EPA to administer the National Pollutant Discharge Elimination System (NPDES) permit program. The DNR has begun rulemaking to address some issues, and is waiting on a response from the Attorney General’s office which will determine whether additional rulemaking is required. The EPA, at the DNR’s request, is researching whether some issues may be resolved through an Addendum to the Memorandum of Agreement between the EPA and the DNR.
The second informational presentation was an update on frac sand mining. Sand mines are currently required to obtain air, water, wetland and high capacity well permits, and DNR officials said there are no plans to advance new restrictions on frac sand mines and processing plants. The DNR announced it will release an environmental assessment next week on sand mining, covering myriad issues the agency says could help both the DNR and local units of government work with the industry.
At the end of the meeting, the seven-member citizen board held elections. Chairman Dave Clausen of Amery, Vice Chairman Preston Cole of Milwaukee, and Secretary Christine Thomas of Stevens Point were re-elected unanimously to one-year terms.
News Clips:
- DNR has no plans for new limits on growing sand mining industry, Milwaukee Journal Sentinel, January 25, 2012
- Purchase of 125 acres by DNR approved, Milwaukee Journal Sentinel, January 25, 2012
- Natural Resources Board OKs plan for endangered American marten, Wisconsin State Journal, January 25, 2012
- Bear population a popular topic, Milwaukee Journal Sentinel, January 25, 2012
This post originally appeared on the Great Lakes Legal Foundation Regulatory Watch blog.
Business Day in Madison
Wisconsin Manufacturers & Commerce will host Business Day in Madison on February 16th. Business Day will provide a preview of the hottest topics confronting our state and nation. In 2012, America will decide if we stay the course or go a new direction. Dominating the landscape will be the economy, the price of energy and the elections – the Three E’s of America’s future.
Business Day will feature speakers on each of the Three E's.
Elections:
Frank Luntz
Political Pollster and Communications Consultant
“What’s Really on the Mind of America?”
Energy:
Robert Bryce
Senior Fellow, Manhattan Institute - Center for Energy Policy and the Environment
Inventing the Future: 5 Reasons to be Optimistic About Future Energy
Economy:
Todd Buchholz
Former White House Economic Policy Advisor; Economic Forecaster
The Economy in the Age of Obama
WMC is a client of the Hamilton Consulting Group.
Governor's Conference on Economic Development
The Wisconsin Economic Development Association’s 17th Annual Governor’s Conference on Economic Development will be held February 8-10 in Madison. The topic of this year’s conference is “The Power of Deliberate Practice”.
Three conference sessions will illustrate how Wisconsin can increase its productivity by helping its companies compete, nationally and globally.
- Mature and Emerging Clusters
- Forestry, Water, & Energy
- Marine, Aeronautics & Defense
- Cheese, Wine, and Beer... Local Artisan Food and its Opportunity for Economic Impact
- Insights on Foreign Direct Investment and EB5
The conference will also play host to a number of outstanding speakers including:
Governor Scott Walker
Tony Aggarwal, Founder, Kinetic Cubed Ltd.
Aaron Brickman, Deputy Executive Director, SelectUSA, U.S. Department of Commerce
Secretary Richard Chandler, Wisconsin Department of Revenue
Morris Davis, UW Professor Real Estate Urban & Land Economics
Paul Jadin, Chief Executive Officer, Wisconsin Economic Development Corporation
Peter Kageyama, Author of “For the Love of Cities”
Online registration for the conference is ongoing.
WEDA is a client of the Hamilton Consulting Group.