News from around Wisconsin: Legislative proposal prevents new regulation of existing sand mines

The need for fracking sand has created intense pressure to open new sand mines and expand operations in existing mines in many Midwestern states.  In the Wisconsin legislature, a new bill would prohibit local governments from imposing new zoning ordinances that are more restrictive than existing zoning rules on existing operations. The bill also would shield sand mines from any other new ordinance or license requirement if the mines are operating within the year preceding the ordinance or requirement’s adoption.

The full article from Fox 11 News website in Madison is here.

Environmental Assessment Worksheet required for parcel where previously permitted gravel mining was taking place

by Kaitlin Heinen

Duininck, Inc. v. Renville County Board of Commissioners
(Minnesota Court of Appeals, April 15, 2013)

Duininck, Inc. applied to Renville County Board of Commissioners for an interim use permit (IUP) to allow gravel mining on 44 acres of land in the County. Duininck has been mining at Molenaar site since 2000 under conditional use permits (CUPs) from the County for 39 acres of the area. The County now requires an IUP instead of a CUP for gravel mining, so Duininck applied for an IUP to expand the site by 5 acres. The County’s director of environment and community development, Mark Erickson, reviewed the application and concluded that an environmental assessment worksheet (EAW) might be mandatory under Minnesota Rules because the application encompassed more than 40 acres.

Before the county board’s next meeting, Duininck filed another application for an IUP that only covered the permitted 39 acres “to ensure that it would be able to continue existing mining operations if its CUP expired during the environmental-review process.” If the board decided to require an EAW, Duininck would pursue the 39 -acre application instead. The board voted to require an EAW for the 44-acre application, so Duininck withdrew the 44-acre application after the meeting. The County then reviewed and granted the 39-acre application. However, Duininck still appealed to the Minnesota Court of Appeals regarding the EAW and the 44-acre application.

In reviewing an EAW challenge, the Court of Appeals must determine whether the decision was “unreasonable, arbitrary or capricious, made under an erroneous theory of law, or unsupported by substantial evidence.” The Court noted, “Minnesota Rule 4410.4300 describes the types of projects for which an EAW must be prepared…Preparation of an EAW is mandatory for projects that meet or exceed the thresholds identified in rule 4410.4300…which requires preparation of an EAW in connection with a project for the ‘development of a facility for the extraction or mining of sand, gravel, stone, or other nonmetallic minerals, other than peat, which will excavate 40 or more acres of land to a mean depth of ten feet or more during its existence.'” Duininck’s project involves mining gravel on 44 acres of land, and because this falls within the definition of ” project” in 4410.4300, the Court concluded that an EAW is required with the 44-acre IUP application.

Duininck argued that the scope of the project in determining whether an EAW is required should not include the 39 acres it had been mining under CUPs since 2000. In support, Duininck cited part of the rules that provides a 3-year look-back rule for determining whether to include original project acreage in determining whether the mandatory EAW threshold is met. However, Duininck’s CUPS expired on their own terms. So Duininck filed the 44-acre application, intending to continuing and expanding its mining operations. Because all 44 acres were considered a part of the current project, the rule cited by Duininck did not apply. Duininck also argued that the county erred by treating the 5-acre expansion as a phased action. “Phased actions are multiple projects to be undertaken by the same proposer that ‘will have environmental effects on the same geographic area’ and ‘are substantially certain to be undertaken sequentially over a limited period of time.'” Though the county argued that Duininck’s expansion can be considered a phased action, the record did not reflect this as a basis for its decision. Further the rules governing phased actions do not apply again because all 44 acres are part of the current project.

Having applied the plain language of the EAW rules to ongoing mining operations, which require permit renewals whether or not the proposer has completed any particular area, the Minnesota Court of Appeals affirmed the county’s decision to require an EAW in connection with the 44-acre application.

Wisconsin town’s non-metallic mining ordinance is not zoning

by Victoria Heldt

Zwiefelhofer, et al., v. Town of Cooks Valley
(Supreme Court of Wisconsin, February 8, 2012)

The plaintiffs in this case (Zweifelhofer, Schindler, Sarauer, and La Gesse) are all residents of Cooks Valley.  In 2008, the Town adopted a Nonmetallic Mining Ordinance that prohibited nonmetallic mining unless a permit was obtained from the Town Board.  The plaintiffs, who have all engaged in nonmetallic mining in the past, sought to have the Ordinance declared invalid in the event that they want to engage in nonmetallic mining in the future.  Their argument claimed the Ordinance was invalid because it did not have the approval of the County Board.  In the Town of Cooks Valley, zoning ordinances must gain approval of the Board.  The Town claims that the ordinance is not a zoning ordinance, but rather an exercise of its police power.  Consequently, they argue that the ordinance does not require approval of the Board.  The Court had to discern whether the Ordinance constituted a zoning ordinance or an exercise of the Town’s police power.

The Ordinance begins with a preamble stating that the intent of the statute is to “promote the health, safety, prosperity, aesthetics, and the general welfare of the people and communities.”  Specifically, it attempts to regulate land mining so as to protect the population from disease and pestilence and to further the conservation of land and water use.  It describes nonmetallic mining as commercial land and mining pits and all activities associated with it.  The Ordinance allows for nonmetallic mining only if a permit is obtained from the Town Board.  The Town may place a number of restrictions on any nonmetallic mining permit that it issues.  The Ordinance does not apply to previously existing mines, but does apply to the expansion of any existent mines.

The Court conceded that the line between a zoning ordinance and a building code enacted pursuant to a Town’s police power is fine and that the two are similar in nature.  Wis. Stat. §62.23 (7) governs zoning and, within the statute, the grant of zoning power overlaps with police power.  Zoning is a subset of the police power.   In addition, both powers serve the same general purpose of promoting the health, safety, and welfare of the community.  In its analysis, the Court compared the characteristics of the Ordinance to those of typical zoning ordinances to determine whether the Ordinance in question is a zoning or non-zoning ordinance.  It identified and focused on six main criteria.

First, the Court recognized that zoning ordinances typically divide property into separate zones or districts.  The Ordinance in question does not.  It applies universally to all land within the Town.  Second, zoning ordinances usually allow explicitly stated uses and prohibit those not stated.  The Town’s nonmetallic ordinance does not permit anything as of right or automatically prohibit anything since a permit could be obtained to engage in nonmetallic mining.  Third, a zoning ordinance typically regulates where an activity takes place, not the activity itself.  This Ordinance is comparable to a license in that it regulates an entire activity and not the location of the activity.

The fourth criterion that the Court focused on was a zoning ordinance’s tendency to comprehensively address all possible uses of a specified area of land.  The Wisconsin Attorney General was quoted as saying “The more comprehensive the ordinance, the more likely it will be characterized by a court as a zoning ordinance.”  The Town’s ordinance applies to only one activity – nonmetallic mining.  The plaintiffs argued that, since the Ordinance comprehensively regulates nonmetallic mining, it should be considered comprehensive.  The Court clarified that the term “comprehensive” should not be interpreted as “thoroughly” regulating a single activity for the purpose of zoning ordinances.  It is intended to mean all-inclusive.  The plaintiffs and some friend-of-the court briefs attempted to argue that the Ordinance is a zoning ordinance because it “pervasively” regulates the use of land.  They look to a previous case in which the Attorney General stated “when an ordinance constitutes a pervasive regulation of, and in many instances a prohibition on the use of, land, [it must be concluded] that such an ordinance is a zoning ordinance which requires county board approval.”  The Court in this case deemed the phrase “pervasive regulation” as over-inclusive in application.  It noted that the phrase does not create an effective bright-line rule to guide the Court.

The fifth criterion was that zoning ordinances operate by fixed rules that allow many land uses to proceed without discretionary decisions by administrative officials (i.e., permitted uses).  The Ordinance in question, conversely, operates only on a case-by-case basis and does not allow any non-metallic mining operation to proceed without administrative action.  The plaintiffs urge that the Ordinance must be a zoning ordinance because it allows for “conditional use” permits, which have historically been associated with zoning ordinances.  The Court said that that logic placed too much emphasis on the terminology of the Ordinance.  Licenses required under non-zoning police powers could also be considered similar to conditional use permits.  Just because the language of the Ordinance includes the phrase “conditional use permit” does not mean it is a zoning ordinance.

The sixth and final criterion addressed a zoning ordinance’s tendency to exempt pre-existing activities from the new regulation.  In this way, the Ordinance in question is similar to zoning ordinances because it does not apply to pre-existing nonmetallic mines.  The Court noted that the differences between the characteristics of the Town’s nonmetallic mining ordinance and those of typical zoning ordinances exceeded the similarities.

The Court finally looked to the general purpose of zoning ordinances in comparison to the general purpose of the Town’s nonmetallic mining ordinance.  The Court acknowledged that, in a broad sense, the Ordinance has the same purpose as that of zoning ordinances (to promote the welfare of the community as a whole); however, this broad definition of purpose is not helpful in an analysis of whether an ordinance is zoning or non-zoning.  It looked instead to the more specific purpose of zoning ordinances to “separate incompatible land uses.”  The Ordinance does not share that purpose in that it does not explicitly separate different land uses or declare any land uses incompatible with others.

After looking to the Ordinance’s specific characteristics and its general purpose, the Court concluded that the Town’s non-metallic mining ordinance is not a zoning ordinance, but rather a general welfare ordinance enacted pursuant to the Town’s police powers.  Consequently, it did not require the Board’s approval and is therefore valid as enacted.  The Court reversed the lower court’s decision.

With no vested right to develop under old ordinance, clock requiring agency action does not start

by Victoria Heldt

Kraemer Mining & Materials, Inc v. City of Sauk Rapids
(Minnesota Court of Appeals, July 5, 2011)

In 2004, Kraemer Mining Materials leased 164 acres of land located within the Sauk Rapids Township with the intent to mine granite deposits from the property.    At that time, Joint Board Ordinance 13 governed land use regarding mining operations.  It stated that mining was a conditional use and required a conditional use permit that would expire automatically in five years.  On May 11, 2007 Kraemer requested a conditional use permit and a variance from the five-year limit in Ordinance 13 since they anticipated the project to last between 20 and 40 years.    The Board was informed of Kraemer’s request, but did not review it because the size of the proposed mine required an Environmental Assessment Worksheet (EAW).  Kraemer was notified of the need for an EAW on May 29, 2007.  The same notification also stated that the 60-day deadline for an agency to act on a zoning request (required by Minn. Stat. § 15.99) would not begin to toll until the EAW process was complete.

During the 15 months that it took Kraemer to complete the EAW, the Board amended its zoning ordinances.  The goal of the amendment was to ensure that similar conditions were placed on future mines as those that the Board previously placed on a mine operated by Bauerly Bros. Inc.  In 2005, the Board granted an interim-use permit to Bauerly that contained conditions that were not contained in Ordinance 13.  In August of 2007, the Board adopted Ordinance 23 which it later included as Section 14 in Ordinance 25.  Ordinance 25 codified Ordinance 13 and all subsequent amendments into one easy, user-friendly ordinance.

On August 27, 2008 Kramer was notified that the EAW process was complete, and that it did not need to file an environmental impact statement.  Two days later, on August 29, 2008, Kraemer received a notice from Marney Curfman (City Planner) stating its conditional use permit application was now incomplete as it did not contain all of the information required by Section 14 under Ordinance 25.  The notice also informed Kramer that the 60-day deadline for acting on an application would not start until a complete application was received Although Kraemer felt that Ordinance 13 still applied to their application since it was in effect when the request was submitted, they submitted a second application for a conditional interim use permit (CIUP) that conformed to Ordinance 25.  In January of 2009 the Board unanimously approved Kraemer’s conditional use permit but denied its request for a variance from the five-year limit.

In district court, Kraemer argued that the Board violated the Minn. Stat. § 15.99, requirement that an agency address a permit application within 60 days.  They also claimed that several conditions in Section 14 were invalid under state law a lacked a rational basis.  Kraemer attempted to depose several people (i.e. the City Attorney, City Planner, and Community Development Director) but the Board objected to the depositions.  The court granted summary judgment for the Board.

On appeal, Kraemer brought forth its original two claims in addition to a challenge of the district court’s decision to deny Kraemer’s motion to compel depositions.  Kraemer argued that the Board violated Minn. Stat. § 15.99 based on two points.  It was of the opinion that Ordinance 13, and not Ordinance 25, applied to its application for a permit.  If this were the case, the clock on the 60-day limit would have begun to tick on August 27, 2008, when the environmental review process was complete, and the Board would have had to address it by October 27, 2008.  The Court disagreed with this logic.  It noted that the language of Ordinance 25 was clear in that it was to be “effective immediately.”  This means it applies to pending applications, consistent with the well-recognized principle that “there is no vested right in zoning.”  Only if a development has “progressed sufficiently with the physical aspects of the project or made a binding commitment to develop the property” can a developer use the vested rights principle to avoid the application of new rules.  Kraemer attempted to counter this decision with a previous case (Eagle Lake) where the Court ruled that a new zoning rule should not be retroactively applied.  This argument was rejected because the decision in Eagle Lake in fact held that the city could have discretion on which zoning rule to apply.  In this case, the Board has the discretion to apply the new ordinance if it so chooses.  The second part of Kraemer’s first claim asserts that the Board violated section 15.99 on the grounds that the letter received from the City Planner did not constitute notification by an “agency action” as required by the statute.  The Court dismissed this claim, stating that Curfman’s status as an employee of the City of Sauk Rapids is sufficient evidence that her letter is an agency action.

Next Kraemer contends that a CIUP is a “hybrid” permit that the Board is not authorized to make.  The Court disagreed, noting that Minn. Stat. § 462.3597 specifically allows municipalities to grant permits for interim uses of property.” The fact that the Board referred to the permit as a conditional interim use permit (as opposed to an interim use permit, with conditions) is irrelevant.  It is still simply an interim use permit regardless of its title.  Finally, Kraemer claimed that the five-year limitation on conditional permits lacks a rational basis because it does not “minimize conflicts with future development.”  All future development is hypothetical and the Board cannot predict when development will begin.  The Court decided that the five year limit is reasonably related to the purpose of preserving the transitional nature of the area, which will minimize conflicts with future development.  The Court also dismissed Kraemer’s claim that the mine will not have a detrimental effect on the surrounding property based on many complaints from property owners surrounding the Bauerly mine.

The Court ruled that the district court was correct in its refusal to compel depositions since the Board’s decision would be limited to the administrative record, the information was irrelevant, and the depositions would “impermissibly inquire into the mental impressions of the Board and its staff as well as information protected by attorney-client privilege.”

The Court of Appeals affirmed the district court decision.

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