Legislation to stop councils rating some mining land passes lower house of parliament

An outback local government says it could be bankrupted, as a "David and Goliath" battle moves through the West Australian parliament's upper house.

Last week, the lower house passed an amendment to the Local Government Act which would block shires from rating certain mining land.

Mount Magnet chief executive Tralee Cable said, if legislated, the shire's rates income would shrink from $3 million a year to about $300,000.

"Effectively, this bill will bankrupt this local government,"

Ms Cable said.

It was sparked by a landmark Supreme Court decision in July, ruling that the Shire of Mount Magnet, about 570 kilometres north-east of Perth, could levy rates on a mining camp covered by "miscellaneous licenses".

Miscellaneous licenses are typically levied on land with mining infrastructur