Wisconsin May Waive Environmental Rules for $10B Foxconn Deal

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By Stephen Joyce

Foxconn wouldn’t have to comply with several Wisconsin environmental standards if legislation to facilitate its deal to invest $10 billion in a proposed manufacturing plant is approved.

The Wisconsin legislature could hold its first hearings by Aug. 4 to consider a bill that would change state laws to approve the construction project by Taiwan-based Hon Hai Precision Industry Co. Ltd., more commonly known by its exchange-trading name, Foxconn Technology Group.

At stake is the single largest economic project in Wisconsin’s history and the largest greenfield company investment from a foreign-based company in U.S. history measured by jobs, Gov Scott Walker (R)said July 26 at the White House. The investment will build a facility to manufacture liquid crystal display screens among other products, and would create about 10,000 construction jobs, along with 13,000 direct permanent jobs and an additional 22,000 indirect and induced jobs, Walker said.

Republicans control both Wisconsin legislative chambers, and state Assembly Speaker Robin Vos (R) will push to introduce and hold hearings on the bill no later than Aug. 4, Kit Beyer, a Vos spokeswoman, told Bloomberg BNA.

In addition to various tax provisions, the legislation bill would ease environmental regulations on the manufacturing giant. Under the legislation, Foxconn would not be required to obtain permits from the state’s Department of Natural Resources to discharge dredged material into wetlands, construct an artificial water body that connects with an existing navigable waterway, or change the course of a navigable stream.

Despite those concessions, environmental groups told Bloomberg BNA the legislation will likely be approved in some form.

“My guess is it will pass, and pass quickly,” Bill Davis, Sierra Club Wisconsin chapter director, told Bloomberg BNA in an email. The Sierra Club has received funding from Bloomberg Philanthropies, the charitable organization founded by Michael Bloomberg, founder of Bloomberg L.P. Bloomberg BNA is an affiliate of Bloomberg L.P.

Though the bill proposes to waive state environmental rules, all federal permitting and water quality statutes and regulations would apply to the manufacturing facility and its construction.

Tony Palese, spokesman for state Senate minority leader Jennifer Shilling (D), told Bloomberg BNA Democrats continue to have questions about the proposed legislation, the cost to taxpayers, and the impact of possibly borrowing money to improve roadways in southeastern Wisconsin.

No Impact Statements

The bill would create an “electronics and information technology manufacturing zone” and allow the state to provide up to $2.8 billion in tax credits, plus a sales and use tax exemption for the sale of building materials, supplies, and equipment used to construction projects within the zone.

The bill would essentially exempts the company from being subject to rules requiring state agencies to prepare environmental impact statements. It would also allow—contrary to typical state regulatory practice—Foxconn to discharge dredged or fill material into federal or nonfederal wetlands located in the zone without a state-issued permit.

Wisconsin also would waive state water quality certification within the zone, as well as not require a permit if the company wants to:

  •  construct or maintain a bridge on or over navigable waters;
  •  dredge or enlarge any artificial water body that connects with an existing navigable waterway; or
  •  grade or move topsoil from the bank of any navigable water where the area exposed by the grading will exceed 10,000 square feet.

To contact the reporter on this story: Stephen Joyce in Chicago at sjoyce@bna.com

To contact the editor responsible for this story: Rachael Daigle at rdaigle@bna.com

For More Information

The Wisconsin legislature's bill can be found at http://src.bna.com/reU

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