August 12, 2012
The Mining Journal
By JOHN PEPIN –
MARQUETTE – Marquette County officials are hoping two new opportunities to communicate with state officials will result in agreement on the provisions of a proposed non-ferrous mining severance tax.
Since a draft copy of potential legislation surfaced in December from state Rep. Matt Huuki, R-Atlantic Mine, the idea of developing a severance tax for mines, including the Rio Tinto Eagle Mine, has been explored by lawmakers, local taxing units and officials with Gov. Rick Snyder’s administration.
Former Michigan Department of Agriculture and Rural Development Director Ken Creagh remains the Snyder administration’s point man on the severance tax issue, despite his recent appointment as director of the Michigan Department of Natural Resources.
Marquette County Board Chairwoman Deborah Pellow said Creagh is slated to provide the latest draft proposal from state officials today. On Tuesday, a conference call is scheduled between state and county officials in hopes of resolving outstanding issues.
“I’d like to give them at least these two meetings to see what we can come up with,” Pellow said.
In June, Creagh said the basic premise of the administration’s proposal is instead of having four different taxes for non-ferrous mining (real property, personal property, corporate income, and sales and use), a single severance tax (set percentage charge of gross ore sales revenue) would be developed.
The tax would not apply to related milling or other operations unless they are contiguous to the above-ground mining operations.
Under the administration plan, the severance tax would be collected by the locals with a percentage of the revenue maintained by the impacted counties, townships, school districts, intermediate school district and school aid fund.
The distribution of funding was to follow the current property tax distribution and offset revenue that would have been provided to the locals under the current property tax distribution model. The remaining percentage of the severance tax will go into a rural development fund to support long-term regional economic opportunities.