Legislating Underground Space Use: 's Mined Underground Space Development Act

Susan Nelson and Walter H. Rockenstein II

Introduction costs in outlying areas, where develop• remedy would mean that court cases n May 23, 1985, Governor Rudy ment is traditionally less expensive. The might be needed to establish the city's Perpich of Minnesota performed smdy's legal analysis indicated that some authority to develop mined underground 0 an historic act by signing the Min• institutional barriers to mined under• space- an expensive and time- nesota Mined Underground Space De• ground space development existed. How• consum• ing approach with uncertain velopment Act into law. The law is ever, many potential issues were already results. And the prospect of such a court thought to be the first of its kind in the covered in state law because of Minne• test could discourage potential United States and, perhaps, the world. sota's extensive mining industry and ac• developers. Regular readers of Underground Space companying mining rules and regula• Consequently, the City are aware that the subsurface of Minne• tions. (see "The City of Minneapolis's Council directed SUBSPACE ASSOCI• apolis has been the subject of much re• Authority To Develop Mined Under• ATES to prepare enabling legislation that search in recent years. The city's substan• ground Space: A Case Study of the De• would remedy the legal problems iden• tial potential for mined underground velopment of Legislative Policy in Min• tified in the SUBSPACE smdy, for intro• space has been recognized for several nesota," Underground Space 9:2-3). duction in the 1985 Minnesota Legisla• years, and was quantified in 1983 (see While the legal issues were important, tive Session. This initial bill became the "Planning the Development of Under• the consensus was that they could be ad• act that Governor Perpich signed in May ground Space," Underground Space dressed through enabling legislation that 1985. 7:2,86-103). While those findings cre• would modify existing statues to explic• The Minnesota Mined Underground ated considerable interest among city of• itly include mined underground space de• Space Development Act enables cities to ficials, several questions remained unan• velopment. Failure to seek a legislative develop mined underground space for in• swered. Were subsurface development dustrial and commercial purposes by au- and use economic? Were there substan• tial instirutional or legal barriers to its development? In 1984-5, a smdy of the legal and economic feasibility of mined underground space development was performed by SUBSPACE ASSOCI• ATES, an interdisciplinary Minneapolis consulting group, for the city of Minne• apolis to address these issues (see Under• ground Space 9:2-3,143-47). The SUBSPACE smdy found that the cost of developing mined underground space in the Minneapolis downtown area is extremely competitive with surface de• velopment, and is even competitive with

Susan Nelson is a planner and member of sub• space Associates, Minneapolis. She currently serves as Executive Director of the American Underground-Space Association.

Walter H. Rockenstein II is a partner with the Minneapolis law firm of Faegre & Benson. He specializes in real estate development, land use Minnesota Governor Rudy Perpich (seated) signs the Minnesota Mined Underground Space planning, and environmental law. From 1974 Development Act into law. Standing, left to right: Melva Radke, lobbyist for the city of Min• through 1983, Mr. Rockenstein was a member neapolis; State Senator , chief Senate author of the bill; Susan Nelson and of the Minneapolis City Council. He is also a Walter Rockenstein of the SUBSPACE consulting group; and State Representative Sydney Pauley, member of Subspace Associates. chief House author of the bill.

Underg round Spare, Vol. 9, pp. 289-292, 1985. 0362-0565/ 85 $3.00 + .00 Primed in [he U .S.A. All rights reserved. 289 Copyright © 1986 Pergamon Journals Ltd. thorizing them to use in subsurface areas Second, a significant anti-urban bias ex• long interest in geology. Rep. Pauley had those development and redevelopment isted in the 1985 session of the Minnesota also demonstrated considerable interest powers they now exercise on the surface. Legislature, primarily as a function of re• in mined underground space by attend• The key powers authorized by the act apportionment. Reapportionment re• ing all sessions of the Subspace '83 con• include: flected a nationwide trend in which the ference. Senator Larry Pogemiller, a population-and, therefore, the political member of the Senate Tax Committee ( 1) The power to undertake mined un• power-is shifting to the suburban and and a two-term Democrat from Minne• derground space projects; rural areas. Tactically, a Minneapolis-only apolis, agreed to be the chief author in (2) The power to eminent domain to ac• bill might suffer an early defeat. the Senate. quire suitable subsurface areas; There were several reasons for drafting Next, the city sought legislators with (3) The power to bond; a bill that would affect only the seven• valuable expertise in underground space ( 4) The power to use tax increment fi• county metropolitan region of Minne• as co-authors. Many of the senior mem• nancing; sota. The primary reason was that the bers of each house of the legislature were ( 5) The power to provide public facili• geologic structure that underlies Minne• familiar with the concepts and potential ties; apolis also underlies most of the metro• of underground space. Senate Majority (6) The power to use industrial revenue politan region. A regional bill would Leader had attended the bonds; have facilitated the process of describing 1980 Rockstore Conference in Stock• (7) The power to enter into contracts. the affected geologic strata in the legis• holm, Sweden. House Minority Leader lation-an early concern of the bill's Fred Norton had been an active member The act specifically authorizes cities to drafters. Also, some supporters of the bill of the University of Minnesota's Under• use their comprehensive planning, zon• argued that the most significant devel• ground Space Center Advisory Board for ing, and other land use controls to protect opment to occur in the state in the fore• several years, and had been Speaker of subsurface areas designed as suitable for seeable future will be in the metropolitan the House in a previous session. Both mined underground space by both public region because of the area's healthy econ• men agreed to co-author the legislation and private entities. The act also contains omy and the declining agricultural and in their respective houses. unique provisions to protect the unde• mining economies in the rest of the state. Also asked to author the bill in the veloped subsurface resource from dam• But the arguments for statewide leg• House were Rep. Todd Otis, a four-term age due to haphazard drilling. islation were the most persuasive. First, Democrat from Minneapolis who has although geologic formations vary, specialized in energy policy and conser• mined underground space development vation; Rep. David Bishop, a two-term Early Decisions appears possible in most of Minnesota. Republican from Rochester, Minnesota While some cities may not have the need (in the southeastern part of the state); and Areas Affected by Legislation to develop large contiguous areas of Rep. Don Valento, a four-term Repub• A major strategic decision was whether mined space, they may want to develop lican from suburban St. Paul, who is a to introduce legislation that affected Min• smaller areas to meet unique objectives civil engineer and chairman of the Local neapolis only, the seven-county metro• or for energy conservation reasons. A and Urban Affairs Committee, which politan region, or the state as a whole. state-wide bill would assure all cities in would hear the bill. Senate Minority There were arguments for and against the state this opportunity without their Leader Glenn Taylor, from south-central each position. having to return to the legislature to ask Minnesota, was also asked to be an author Traditionally, a bill presenting a new for special premission. Second, since sup• in the Senate. All of these individuals concept such as development of subsur• port for the issue in the legislature was agreed and contributed to the eventual face space has a greater chance of passage not confined to metropolitan-area legis• passage of the act. if it is introduced as a local bill. But in lators, city officials concluded that, tacti• this case a Minneapolis-only bill would cally, it would be possible to pass a state• Supporters Identified have had two strikes against it from the wide bill. The risk was that mining start. First, although the city had funded interests might see a threat in the bill and It is a well-known fact that a piece of the research that provided the impetus move to block it. Since the city was pre• legislation is easier to defeat than to pass. for the bill, city policymakers did not pared to work with mining interests if Passage requires the cooperation and sup• have the resources to support a Minne• objections arose, it appeared that a state• port of all involved parties, while defeat apolis-only bill. Passage of the Minnesota wide bill could succeed. requires only one obstacle-one com• Mined Underground Space Develop• mittee, one house, or the governor in ment Act, while enthusiastically endorsed The Act's Authors opposition. Thus, an early task for the and supported by many city officials, wits The next early strategic decision con• bill's proponents was to identify and con• not a high priority in the city's legislative cerned authors for the act. The first con• solidate support for the Mined Space Act program. City Council members viewed cern was with choosing the chief author both within and outside the legislature. state funding issues and immediate re• in each legislative house, because those Early in the 1985 Legislative session, development bills as their top priority in people really carry the bill. The city supporters of the Minnesota Mined Space the 1985 legislative session, and felt they sought as chief authors individuals who Development Act visited with members could only ask for so much. Therefore, have credibility in their respective of Governor Perpich's staff to gain his the city's Intergovernmental Relations houses, but who are not overburdened support for the bill. His representative in Committee had given the Minnesota with so many responsibilities that they the meeting included the director and Mined Underground Space Develop• would not be able to devote the time staff of the Minnesota State Planning ment Act the low priority rating of "C" necessary to secure passage of the act. Agency, and a representative of the Min• ("D" being the lowest possible rating.) Representative Sidney Pauley (Inde• nesota Department of Energy and Eco• In practical terms this meant that city lob• pendent-Republican), from the Minne• nomic Development. Present also were byists were directed to concentrate on apolis suburb of Eden Prairie, agreed to the authors of this article and the chief those issues that had been assigned higher be chief author in the House. A graduate lobbyist for the city of Minneapolis. priority and to tend to the Development of the University of Minnesota, with a Questions from the governor's repre• Act if they had time. B.S. in natural science, she had had a life- sentatives centered on the content of the

290 UNDERGROUND SPACE Volume 9, Number 5 -6, 1985 bill, the identity of any anticipated op• Generally, when a new idea is introduced that address statutory development au• position, and whether the bill or any of at the legislature, prolonged debate last• thority and other municipal matters are its provisions were considered to be con• ing several sessions is required before those which deal with local and urban troversial. The provisions were explained passage is achieved. This problem was ad• government. Therefore, the authors in to the staffs satisfaction. The bill's sup• dressed in several ways. each house decided to request that the porters pointed out that no opposition to First, an information packet was bill be sent to the Local and Urban Affairs the bill had surfaced at that point, an no prepared for the legislators. The packet Committee after introduction. serious opposition was expected. contained: To assure that all necessary business is As for controversy, the only provisions accomplished and that the session ad• that were expected to raise legislative 1 ) A short summary of the bill and the journs on schedule (May 20 in 1985), a eyebrows were the broad condemnation reason for it; series of deadlines are established by the power and the authorization to use tax 2) A map of Minnesota, showing where legislature. The first deadline was the increment financing to fund mined space the potential for mined under• date by which policy bills had to be heard development. Since these are powers that ground space was known or thought in policy committees in the house of or• cities may already exercise when devel• to exist; igin. This meant that H.F. 922/S.F. 925 oping on the surface, the controversy 3) A graphic illustration of the Univer• had to be heard and passed out of the would arise over the granting of broader sity of Minnesota's new Civil and Local and Urban Committees in the re• powers of condemnation than are granted Mineral Engineering building, spective houses by April 7. Because of on the surface, and the use of tax incre• which uses many forms of under• the work load of these committees and ment financing, which is inherently un• ground space; the slow start on committee work, the popular with many lawmakers. The tacit 4) A copy of the legislation. bill's supporters feared that the legislation understanding at the end of the meeting would not be heard before the deadline was that if the bill passed both houses of The packets were given to key legis• and would therefore languish until the legislature, the governor would sign it lators in person, by either a supporter or Legislature reconvened in February into law. an author of the bill. 1986. The authors in each house persev• The Legislative Commission on Min• Second, expert witnesses were avail• ered and, out of deference to them, the nesota Resources (LCMR) is a bipartisan able to legislators who had questions re• bills were heard before the deadline was panel of 14 senators and representatives lated to particular aspects of the issue or reached. who are charged with monitoring the the legislation. Charles Nelson, a geo• As the legislation passed through the state's natural resources and sponsoring technical engineer in the metropolitan re• committee structure, several modifica• appropriate research and demonstration gion, and attorney Walter Rockenstein, tions were made to meet legislative con• projects. Over the past decade LCMR has who had drafted the original bill, testified cerns. None of them seriously limited the shown considerable interest in all forms several times before committees and bill. of underground space, and has funded made informal visits to the legislators. The Minnesota Department of Natural earth-shelter demonstration projects, and Another potential barrier to passage of Resources (DNR) raised several con• other underground space-related re• the legislation arose because the majority cerns that resulted in amendments to the search. The membership of LCMR has in the House of Representatives had bill. First, the DNR wanted to review all changed each session, resulting in a group passed to the Republican Party after 12 plans for mined underground space that of senators and representatives in both years of Democratic control. This re• involved dewatering of underground for• houses of the legislature and CQnsiderable sulted in a total reorganization in House mations. Second, DNR wanted an ex• knowledge regarding underground structure- leadership, staff, plicit provision stating that any mined un• space. These legislators became a consid• committee membership and committee derground space project affecting erable resource in the debate surround• chairman• ships were all undergiong quantity or quality of groundwater must ing the Mined Underground Space De• change. This time-consuming obtain a groundwater appropriation per• velopment Act. changeover process meant that policy mit. Third, DNR asked for certain lan• At the behest of Minneapolis City committees were slow to begin their guage changes to establish that cities Council Member Steve Cramer, the Min• work. Compounding the problem was could not regulate exploratory drilling. nesota League of Cities, passed a reso• the large number of fresh• man Fourth, DNR suggested eliminating lution of their 1984 Annual Meeting in legislators who were learning leg• counties and towns from the bill. favor of underground space develop• islative procedures as well as the sub• Representatives of the mining industry ment. The resolution enabled the Lea• stance of the numerous issues they were expressed concern that the bill's eminent gue's lobbyist to testify in favor of the act voting on. domain authority could be used to thwart on the League's behalf. mineral development. In response to this The Underground Space Center at the concern, the authors added language pro• Legislative History University of Minnesota was a valuable viding that the eminent domain power ally in getting the bill passed. Dr. Ray The Mined Space Act began its legis• could not be used to prevent "the de• Sterling, director of the Center, had lative journey in March 1985. House File velopment, mining, and use of mineral worked with legislators both on LCMR 922 was introduced by Rep. Pauley on resources." projects and in other capacities over the March 14, 1985. Its companion, Senate Several amendments were made to as• previous decade. His active support of File 925, was introduced in the Senate sure that the development and redevel• the bill aided its passage. by Sen. Pogemiller on March 18. The opment powers being granted to cities for committee(s) to which a bill is assigned use in the subsurface were the same as existing powers that could be exercised Potential Problems for hearings can often determine the fate of legislation. There were at least two on the surface. The greatest single barrier to passage committees in each house to which it In the section of the bill authorizing of the Mined Space Act was that even would have been appropriate to assign the use of tax increment financing for with the considerable interest in under• the Mined Underground Space Devel• mined underground space development, ground space in Minnesota, the idea was opment Act-Energy, Environment, language was added to restrict the use of (and remains) a new one to most people. Economic Development, or Local and tax increment revenue to "pay for the Urban Affairs. Normally, the committees

Volume 9, Number 5-6, 1985 UNDERGROUND SPACE 291

costs of excavating, and supporting the In the House, because of the slow start Conclusion space, of providing public access ••· in• and the myriad issues being heard by the cluding roadways, and of installing utili• Local and Urban Affairs Committee, it The ability to develop mined under• ground space has been incorporated into ties including fire sprinkler systems in the was questionable whether the bill would Minnesota law. Although there are still space." This language would prohibit the be heard before the deadline. The bill use of tax increment revenue to finish the was scheduled late on the agenda during hurdles to be overcome, the first devel• mined underground space for occupancy. a night hearing. There was considerable opers of mined space in Minnesota will Finally, language was added to prevent sentiment to lay the bill over for further be assured that they will not face a costly development of mined underground study during the interim. Persuaded by and time-consuming court test. And, im• space "for long-term storage or disposal Charles Nelson that underground space portantly, municipalities are enabled to use their considerable financial tools to of hazardous waste or high level nuclear development was not a new idea, and that aid such development. waste." in fact he had been working on the issue An added significance of the bill is that The bill encountered several proce• for nearly 20 years, that motion was de• policymakers from all over the state• dural obstacles that threatened its final feated. The difficulty then was maintain• legislators-became educated about un• passage. For instance, in the Senate the ing a quorum. Supporters of the bill pre• derground space. They may, in turn, en• bill was heard early in the session by the vailed and the bill passed out of the courage their constituencies to consider Local and Urban Government Commit• committee. However, because it had use of the subsurface to meet local de• tee and passed easily. However, it was been heard too late in the session, it came velopment needs. Passage of the bill took then referred to the Senate Tax Com• under the purview of the Rules Com• the issue of underground space legisla• mittee, which was confronted with the mittee, which was prioritizing bills for ac• tion out of the realm of the distant future major issues of the 1985 Session. The bill tion by the full House. The bill was "spe• and proved that it can be done now. passed, but was amended substantially by cial ordered" and eventually passed the 0 the Tax Committee. House on a unanimous vote- a very rare occurrence.

292 UNDERGROUND SPACE Volume 9. NnmhPr-.-.; 1no<