On February 8, 1999, this department transmitted the above rule for legislative committee review. On February 9, the rule was Assigned to the Assembly Committee on Agriculture and on February 10, the rule was assigned to the Senate Committee on Agriculture, Environmental Resources and Campaign Finance Reform.
The Assembly Committee on Agriculture held a public hearing on March 11 and on April 1, the committee released the rule not taking any action on it. The Senate Committee on Agriculture, Environmental Resources and Campaign Finance Reform did not take any action on the rule during its review period.
2.
Agriculture, Trade & Consumer Protection
(CR 98-123)
Chs. ATCP 10 & 11 - Fish Farms, Fish Diseases and Imports of Live Fish and Fish Eggs
Summary of Final Regulatory Flexibility Analysis:
General Overview
This rule establishes policies and procedures for the department of agriculture, trade and consumer protection to implement 1997 Wisconsin Act 27 which transferred the primary authority for regulating fish farms from the department of natural resources to the department of agriculture, trade and consumer protection.
This rule will affect small businesses in Wisconsin. It includes provisions which relate to small businesses engaged in fanning fish and importing live fish and fish eggs into Wisconsin.
Fish Farm Registration
The statute requires that any person who operates a fish farm must annually register the fish farm with the department. This rule identifies two categories of fish farms that must register and imposes annual registration fees, as follows:
Type 1 ($25 annual fee): The holder of a type 1 registration certificate may operate a fish farm. The operator may not sell or distribute live fish, except to a food processing plant, retail food establishment or restaurant. However, the operator may allow public fishing for a fee.
Type 2 ($50 annual fee): The holder of a type 2 registration certificate may operate a fish farm and may engage in any of the activities authorized under a type 1 certificate. In addition, the operator may sell or distribute live fish and fish eggs from the fish farm.
All private fish hatcheries previously licensed by the department of natural resources in 1997 were eligible for renewal with the department of agriculture, trade and consumer protection under the department's fish farm emergency rule in 1998. This rule establishes a permanent registration system for fish farms. In registering, fish farm operators will need to complete a form providing owner and custodian name and address and fish farm information such as the species of fish kept on the fish farm and a description of the fish farm.
The rule requires fish farm operators to maintain records for at least five years relating to all fish and fish eggs which the operator receives from or delivers to another person, including the names, addresses and fish farm registration numbers, if applicable, of the parties involved, the date and location of each transaction and the size or class, quantity and species of fish or fish eggs involved in each transaction.
The rule also requires that a person obtaining a registration certificate for any calendar year beginning after December 31, 2001, must have a health certificate issued by an accredited veterinarian or certified fish inspector for the fish farm not earlier than January 1 of the preceding calendar year. This annual health certificate must certify that the fish farm is free of all visible signs of infectious or contagious disease, whirling disease (Myxobolus cerebralis, or WD), if trout, salmon or other salmonids are kept on the fish farm and any other disease which the department of agriculture, trade and consumer protection specifies on the health certification form. A type I fish farm may meet this requirement by obtaining health certificates, issued not earlier than January 1 of the preceding calendar year, for each fish farm from whom the type 1 fish farm operator received fish or fish eggs in the preceding calendar year.
About 2,400 fish farms scattered across Wisconsin will be affected by the fish farm requirements in this rule. These farms were previously licensed by the department of natural resources, by completing an annual license application form, paying an annual fee ($5, $25 or $50 depending upon the classification) and submitting year end reports on business operations. Under the department of agriculture, trade and consumer protection, the proposed annual fees are $25 for a type 1 and $50 for a type 2 registration. Most small business fish farms will have no change in fees. Recordkeeping requirements will be less burdensome for fish farm operators since they will only be required to maintain records and not file year end reports.
Beginning in 2002, the requirement for an annual health certificate for all registered fish farms will increase the costs of operating a fish farm. The requirement for an annual health certificate is a statutory requirement. The department provided a phase-in time with its rule designating a date of after 12/3 1/01 to obtain a health certificate.. Therefore, the rule does not cause additional expense. Rather, it mitigates expense caused by the statute. The weight of this expense will be offset in the future with better fish health leading to increased production and marketability of product due to higher fish health standards.
The statute requires any person who brings live fish or fish eggs into this state for the purpose to introduction into the waters of the state, of use as bait or of rearing in a fish farm to have an annual permit issued by the department of agriculture, trade and consumer protection. Under this rule, the permit may authorize multiple import shipments, thereby minimizing the paperwork that small businesses are required to complete. A copy of the permit must accompany every import shipment. There is no fee for an import permit given by the department of agriculture, trade and consumer protection. In addition, the statute states a person importing non-native species must also obtain a permit from the department of natural resources.
In requesting an import permit, a person will need to complete a form providing name and address information of the requester, fish farm registration number, if applicable, the size or class, quantity and species of fish or fish eggs to be imported, the type of import recipient the fish will be imported to and source location information.
The rule requires a person who imports live fish or fish eggs to obtain a health certificate for each shipment of fish, if the fish originate from a wild source, or an annual health certificate, if the fish originate from an out-of-state fish farm. Issued by an accredited veterinarian or certified fish inspector, the health certificate must certify that the shipment or fish farm is free of all the following:
Visible signs of infectious or contagious disease.
Infectious hematopoietic necrosis (IHN), viral hemorrhagic septicemia (VHS) and whirling disease (Myxobolus cerebralis, orWD), if the health certificate is for salmonid imports.
White sturgeon iridovirus (WSI) if the health certificate is for sturgeon imports.
Other diseases, if any, which the department specifies on the health certification form.
The rule requires a person importing live fish or fish eggs to maintain records for at least five years relating to each import shipment, including the import source, the import date and destination, and the size or class, quantity and species of fish or fish eggs imported.
The department of natural resources required a person importing live fish and fish eggs to acquire a permit and for salmonid fish or fish eggs, to provide health certification for five specific diseases. The department of agriculture, trade and consumer protection is requiring a permit and health certification for all imports of live fish or fish eggs. The fish or fish eggs must be certified free of the diseases listed above. The requirement of health certification might increase the cost of importing live fish and fish eggs from out-of-state fish farms and will increase the cost of importing from wild sources, since this requirement did not exist before. It is assumed the source of the fish and fish eggs will pass the cost of the certification on to the importer. Health certification for imports will offer some degree of assurance that a healthy product is being imported which will result in savings for fish farms in the long run and reduced risks of diseased fish being released into the waters of the state. The requirement to maintain import records will add minimal costs since these records are standard business operational records.
Summary of Comments from Legislative Committees:
On February 8, 1999, this department transmitted the above rule for legislative committee review. On February 9, the rule was assigned to the Assembly Committee on Agriculture and on February 10, the rule was assigned to the Senate Committee on Agriculture, Environmental Resources and Campaign Finance Reform.
On March 9, the Assembly Committee on Agriculture notified the department that they were requesting a meeting with the department. On April 8, the 30 day review period for the committee expired with the committee taking no further action on the rule. The Senate Committee on Agriculture, Environmental Resources and Campaign Finance Reform did not take any action on the rule during its review period.
3.
Agriculture, Trade & Consumer Protection
(CR 98-182)
Ch. ATCP 81 - Grade Standards for Colby and Monterey (Jack) Cheese
The Department of Agriculture, Trade and Consumer Protection hereby submits the following information for filing the above rule.
Summary of Final Regulatory Flexibility Analysis:
This rule modifies current rules under ch. ATCP 81, Wis. Adm. Code, related to grade standards for body and texture characteristics of colby and monterey (jack) cheese. This rule would implement, on a “permanent” basis, the revised grade standards which the department established by emergency rule on August 8, 1998.
Under current DATCP rules, colby and monterey (jack) cheese must have numerous mechanical openings in order to be labeled or sold as Wisconsin certified premium grade AA or Wisconsin grade A (Wisconsin state brand).
The recently adopted emergency rule temporarily eliminated rule provisions requiring mechanical openings in colby and monterey (jack) cheese. Under the emergency rule, colby and monterey (jack) cheese may have either mechanical openings or a closed body. When mechanical openings are present, their size and distribution are two of many factors which determine the specific grade category assigned to the cheese. This rule makes the same changes on a permanent basis.
This rule will not impose any direct costs on small businesses. The amendments do not require any additional reporting or recordkeeping. In addition, no other new procedures are required. No additional knowledge or professional skills are needed to meet the requirements of these amendments.
High volume manufacturers (typically larger businesses) using newer technology, equipment and packaging have experienced difficulties in manufacturing cheese to meet the current grade requirements for mechanical openings. Small cheese factories and packaging operations using more traditional technology, equipment and packaging could more easily achieve the open body characteristics currently required for Wisconsin certified premium grade AA and Wisconsin grade A (Wisconsin state brand). As a consequence of the rule change and the elimination of the requirement for mechanical openings, these small businesses may now experience increased competition in the marketplace in the sale of Wisconsin graded cheese which may now have an open or closed body. However, an apparent majority of the cheese industry believes that small cheese processors will be able to maintain or grow a niche market for open-bodied colby and monterey (jack) cheese in the retail deli case.
Summary of Comments from Legislative Committees:
On March 5, 1999, the department transmitted the above rule for legislative committee review. The rule was assigned to the Senate Committee on Agriculture, Environmental Resources and Campaign Finance Reform on March 10 and the Assembly Committee on Agriculture on March 15. No action was taken during the review period by either committee.
4.
Agriculture, Trade & Consumer Protection
(CR 98-97)
Chs. ATCP 102 & 105 - Motor Vehicle Fuel Sales Below Cost.
Summary of Final Regulatory Flexibility Analysis:
This rule interprets s. 100.30, Wis. Stats., which prohibits sales below cost. The legislature recently modified this statute with 1997 Wis. Act 55. The department is proposing changes to the rule at this time to bring the rule into conformity with the amended statute. The proposed rule does not include any substantive provisions that are not already addressed in the statute. Therefore, the small business impacts are based on an analysis of the impacts of Wis. Act 55.
Small business in Wisconsin that sell motor vehicle fuels at either wholesale or retail are effected by the statutory change. There will be some increased reporting required and some retailers may need to purchase additional information services. However, these increased burdens on small business may be offset by the potential for increased revenues.
New definitions for “cost”
Under the new law, cost of motor vehicle fuel is based on “the average posted terminal price” of the fuel. This is the average of all the refining companies' selling prices at the petroleum terminal located nearest to the retail station. Under the old law, cost of motor vehicle fuel was based on the seller's invoice cost. The new definitions of cost should help sellers of motor vehicle fuel increase their revenue.
Under the old law, a seller who is able to purchase gasoline at low wholesale cost has two choices. They could either set their price at the minimum and hope to capture increased market share because of a low price, or they could set their price at a medium or high level and enjoy increased profits. If this seller chooses the first option, this forces other sellers with higher wholesale costs to set their price below the minimum markup so they do not lose market share.
(This is perfectly legal because of the “meeting competition” exception.) This scenario leads to an equilibrium retail price that is approximately 9.18% over the lowest terminal price.
Under the new law, all sellers in a certain area have the same “cost” for minimum markup purposes. All sellers must base their price on the average terminal price. This change leads to an equilibrium retail price that may be a couple pennies higher per gallon than the scenario discussed above because the 9.18% is over the average terminal price. This may result in higher revenues for some gasoline dealers.
Petroleum Pricing Service
The new definitions of cost rely on the “average posted terminal price.” This price is valuable proprietary information that, until recently, could only be obtained by subscribing to a service. The minimum cost of this service is roughly $55 per month. The service will report prices via fax, e-mail, satellite, or allow their customers to search through the database (requires a modem and computer). Motor vehicle fuel sellers who wish to make their pricing decisions based on statutory costs (as opposed to competition) will need to subscribe to this service.
Shortly after Act 55 went into effect, the Wisconsin Petroleum Marketers Association arranged for one of the services (Axxiss - a Minnesota firm) to provide an 800 number that reports the average posted terminal price. Therefore, small business currently are able to obtain this service free of charge. However, it is uncertain whether or not this is a permanent arrangement.
Many petroleum dealers already subscribe to one of the services to determine where and when to buy fuel. At first glance 1997 Wis. Act 55 does not present an additional expense to this group. However, many of these business receive their prices early in the day. But these prices are irrelevant for determining minimum markup. The new law specifies that the average posted terminal price is at the “close of business” on the determination date. Therefore, petroleum dealers who already subscribe to the service must carefully determine whether the information they are already getting is relevant to the Unfair Sales Act. They may have to increase their spending on this service to get the information needed to comply with the statute.
Other petroleum dealers, typically small business, rely on a distributor or jobber to sell them fuel. These people have had no need for a subscription to a pricing service until now. Under the new law, a subscription to a pricing service will be essential to determine whether or not their price is in compliance with the law.
Although this could be a significant cost to the seller, it should be stressed that the neither the department nor the new statute requires small business to absorb this expense. Sellers could choose to simply always meet their competitor's prices or estimate the “average posted terminal price” based on their own invoices or price reports pulled earlier in the day. However, if they chose one of these options, they must submit a notice to the department to take advantage of the meeting competition defense.
Private cause of action
Beginning August 1, 1998, sellers of motor vehicle fuel who are injured or threatened with injury may bring suit against their competitors who violate the Unfair Sales Act. Maximum damages are treble any monetary loss or $2,000 per day, whichever is greater, plus attorney fees. Obviously, this could significantly impact small business. All business who sell gasoline will need to carefully asses their pricing policies and procedures and determine their level of risk of having to pay damages. In addition there will be a cost associated with bringing a suit or successfully defending against a suit.
Notification for meeting competition
The Unfair Sales Act has always granted certain exceptions where sales below cost are acceptable. The exception most widely used by motor vehicle fuel sellers is the “meeting competition defense.” It is acceptable to sell fuel below cost if the seller is doing so to meet the price of a competitor. However, under the new statute, sellers who “notify the department” that they are lowering their price below the minimum in order to meet a competitor's price enjoy immunity from liability under private and state enforcement actions.
There will be a cost associated with submitting notifications. The department will accept notices via: fax, e-mail, U.S. mail, courier, or hand delivery. Because of the immunity that sellers will receive if they submit a notice, the department predicts that many sellers will wish to submit a notice on a very regular basis, simply as a risk management precaution. This will involve a significant paperwork burden for small business.
It should be stressed that submitting a notice is decision that the motor vehicle fuel sellers make for themselves. It is not mandated by the department or by the statute. Alternatively, a seller could chose to not sell below the minimum markup -- regardless of what their competitors are doing -- or they could simply take their chances on being sued for selling fuel below the minimum markup. Failing to provide notice does not mean that the seller will automatically lose any case that may be brought against them. However, there is a small forfeiture ($50 to $200) penalty for failing to provide notice.
Conclusion
It is very difficult to estimate the statute and rule's overall impact on small businesses. There may be a potential for increased revenues. However this could be offset by increases in expenses for a subscription to an oil pricing service and the expense of filing a notification with the department. These potential increases in expenses are entirely at the discretion of the business.
Rule Contents
“Cost” of motor vehicle fuel
Act 55 extensively changed the method sellers use to determine their “cost” as defined in the statute. This rule clarifies and interprets some portions of the new rule. For example, the rule defines new statutory phrases such as: “terminal located closest to the retail station.” In addition, the rule states some basic cost accounting methodology that must be used when determining the “cost of doing business
“Meeting competition” notice
This rule prescribes the form and content of the notice which a motor vehicle fuel seller must file with the department to establish a presumptive “meeting competition” defense under the Unfair Sales Act.
Under Act 55, a person who lowers their price to meet the price of a direct competitor must file a “meeting competition” notice with the department. This rule prescribes the form and manor of notice required by the department.
Summary of Comments of Legislative Review Committees:
On March 11, 1999, the Assembly Committee on Consumer Affairs held a hearing on this rule. Several people offered testimony in support and nobody registered or spoke in opposition to the rule. The committee did not take action on the rule and the legislative review period expired on April 11, 1999.
5.
Barbering & Cosmetology Examining Board
(CR 98-133)
BC Code - The licensure, examinations and practice of barbering and cosmetology practitioners, managers, manicurists, electrologists, aestheticians and apprentices, and renewal and reinstatement of licenses.
Summary of Final Regulatory Flexibility Analysis:
The proposed rules will have no significant economic impact on small businesses, as defined in s. 227.114 (1)(a), Stats.
Summary of Comments:
No comments were reported.
Ch. HSS 51 - The applicability of the Department's rules that establish criteria and procedures for placement of special needs children in adoptive homes.
Summary of Final Regulatory Flexibility Analysis:
These rules will not directly affect small businesses as “small business” is defined in s. 227.114 (1) (a), Stats. The amendments make clear that the rules apply to county agencies providing adoption services under contract to the Department, and not only to the Department and private child-placing agencies, and in the process define “child-placing agency” and “county agency” and update addresses and organization names that appear in ch. HSS 51.
Summary of Comments:
No comments were reported.
Ch. HSS 98 - Lie detector testing of sex offenders who are in community placements.
Summary of Final Regulatory Flexibility Analysis:
These rules are not directly affect small businesses as “small business” is defined in s. 227.114 (1)(a), Stats. The rules apply to the Department and to persons who are sex offenders, that is, who meet any of the criteria under s. 301.45 (1), Stats., and are committed to the Department for treatment, and who are in or are scheduled to be in community placements under supervision of agents of the Department.
Summary of Comments:
