Rule-Making Notices (Hearing Notices)

Hearing impaired persons may request an interpreter for these hearings. Please make reservations for a hearing interpreter by August 1, 2005, by writing to Kevin LeRoy, Division of Trade and Consumer Protection, P.O. Box 8911, Madison, WI 53708-8911, telephone [phone]. Alternatively, you may contact the Department TDD at [phone]. Handicap access is available at the hearings.

Written Comments and Copies of Rule

Written comments should be sent to the Wisconsin Department of Agriculture, Trade and Consumer Protection, Division of Trade and Consumer Protection attention Kevin LeRoy, 2811 Agriculture Drive, P.O. Box 8911, Madison WI 53708. Written comments can be submitted via email to [e-mail].

You may obtain a free copy of this rule by contacting the Wisconsin Department of Agriculture, Trade and Consumer Protection, Division of Trade and Consumer Protection, 2811 Agriculture Drive, P.O. Box 8911, Madison, WI 53708. You can also obtain a copy by calling [phone] or emailing [e-mail]. Copies will also be available at the hearings. To view the proposed rule online, go to:
  https://apps4.dhfs.state.wi.us/admrules/public/Home

Analysis Prepared by the Dept. of Agriculture, Trade and Consumer Protection

Statutory authority:   Sections 93.07 (1), 126.15 (1) (intro.), 126.30 (1) (intro.), 126.46 (1) (intro.), 126.60 (1) (intro.), 126.81 and 126.88 (intro.), Stats.

Statutes interpreted:   Chapter 126, Stats.

The Department of Agriculture, Trade and Consumer Protection (“DATCP") administers the agricultural producer security program under ch. 126, Stats. DATCP has broad general authority, under s. 93.07 (1), Stats., to adopt rules related to programs under its jurisdiction. DATCP has specific authority under ch. 126, Stats., to adopt rules for the agricultural producer security program.

This rule modifies current rules related to the agricultural producer security program under ch. 126, Stats. The program is designed to protect agricultural producers from catastrophic financial defaults by grain dealers, grain warehouse keepers, milk contractors and vegetable contractors (collectively referred to as “contractors") who procure agricultural commodities from producers.

This rule does all of the following:

•   It permits a licensed contractors to file voluntary security for the benefit of producers if the contractor's estimated default exposure exceeds the maximum amount payable from the Wisconsin agricultural producer security fund. A contractor who files voluntary security may pay lower fund assessments and make more favorable disclosures to producers. A voluntary security filing does not relieve a contractor of any other duty to file security or pay fund assessments.

•   It changes and simplifies the disclosures that contractors must give to producers.

•   It clarifies current grain warehouse keeper record keeping requirements.

Background. Under current law, contractors must be licensed by DATCP. Most contractors must contribute to an agricultural producer security fund (the “fund"). Fund assessments are based on contractor size, financial condition and risk practices. If a contributing contractor defaults, DATCP will pay producers out of the fund. The total payment may not exceed 60% of the fund balance at the time of default (the current fund balance is approximately $5.5 million).

The current fund capacity is adequate to cover most, but not all, potential defaults by contributing contractors. Some large contractors have an “estimated default exposure" that exceeds current fund capacity (in some cases, by a very large amount). Some of these contractors are currently required to file security to cover at least part of the difference, but others are not (DATCP lacks statutory authority to require security filings for some of the contractors).

Voluntary Security. Under this rule, a licensed contractor may file voluntary security with DATCP if the contractor's estimated default exposure exceeds the maximum amount payable from the fund (this rule does not change current mandatory security filing requirements). A contractor who files security with DATCP may pay lower fund assessments and make more favorable disclosures to producers.

Reduced Fund Assessment. Under current rules, certain contractors who file security with DATCP are entitled to a reduction in their annual fund assessments (current rules specify the amount of the reduction). Under this rule, certain contractors who file security with DATCP (required or voluntary) may pay reduced fund assessments if their “estimated default exposure" is equal to or less than the sum of the following:

•   The maximum amount payable from the fund, if the contractor defaults.

•   The total amount of security (required or voluntary) filed by the contractor.

Disclosures to Producers. Under current rules, a contractor must periodically disclose to producers the contractor's license, security and fund contribution status. The current rules specify the exact language that contractors must use. The disclosures are intended to help producers assess the degree of financial risk involved in dealing with any particular contractor. The current disclosures are rather complex, and in some cases overstate the amount of security coverage afforded to producers.

This rule changes and simplifies the current disclosure requirements. This rule, like the current rules, specifies the exact language to be used. Disclosure requirements vary slightly between grain, milk and vegetable contractors, because of differences in the security program for each industry. But for all contractors, the disclosure alternatives are basically as follows:

•   If the contractor's “estimated default exposure" is equal to or less than the amount of fund coverage and security on file, the disclosure states that the security program may provide full compensation for producers if the contractor defaults (subject to statutory limits).

•   If the contractor's “estimated default exposure" is greater than the amount of fund coverage and security on file, the disclosure states that the security program may provide some compensation for producers if the contractor defaults. But compensation may cover only a fraction of a producer's loss.

•   If the contractor does not contribute to the fund or file any security with DATCP, the disclosure states that the security program will provide no compensation to producers if the contractor defaults.

Definition of “Affiliate". Under current rules, contractor financial statements must disclose accounts and notes payable from “affiliates." These accounts and notes are excluded from the balance sheet before financial ratios are calculated. An “affiliate" is currently defined as an owner, major stockholder, partner, officer, director, member, employee or agent (or a person owned, controlled or operated by one of those persons). This rule clarifies an “affiliate" also includes any other person who has significant control or influence over the contractor.

Grain Warehouse Records. This rule clarifies current grain warehouse record keeping requirements. Under current law, warehouse keepers must keep “daily position" records related to grain in storage. This rule clarifies that daily position records must identify all grain kept by the warehouse keeper, whether in licensed or unlicensed storage. Records must clearly distinguish between grain owned by the warehouse keeper and that held for others. Records must also show the amount of grain entering and leaving storage each day. Records must be based on individual grain transaction records required under current law.

Fiscal Impact

This rule will have no significant fiscal impact on DATCP or local government.

Business Impact

This rule will affect agricultural producers, grain dealers, grain warehouse keepers, milk contractors and vegetable contractors. Many of these businesses are small businesses.

This rule will have a minimal impact on most affected businesses, and effects will be positive in many cases (especially for agricultural producers). The Wisconsin legislature has spelled out detailed statutory requirements for grain dealers, grain warehouse keepers, milk contractors and vegetable contractors (ch. 126, Stats.). DATCP has limited authority to change these requirements by rule.

This rule will make minor changes to current rules. Among other things, this rule:

•   Allows licensed contractors to file voluntary security (it does not change current mandatory security requirements).

•   Allows some contractors to pay reduced fund assessments.

•   Changes and simplifies current contractor disclosures to producers. In some cases, current disclosures overstate the amount of security coverage afforded to producers. Some contractors may incur one-time costs to change their disclosure forms.

•   Clarifies current grain warehouse record keeping requirements (this rule does not add major new record keeping requirements).

This rule will not have a significant adverse economic impact on small business. Therefore, it is not subject to the delayed small business effective date provision in s. 227.22 (2) (e), Stats.

Under 2003 Wis. Act 145, DATCP and other agencies must adopt rules spelling out their rule enforcement policy for small businesses. DATCP has not incorporated a small business enforcement policy in this rule, but it will propose a separate rule on that subject. DATCP will, to the maximum extent feasible, seek voluntary compliance with this rule.

Wisconsin's Security Program

Wisconsin has an agricultural producer security program for grain, milk and vegetables. The Wisconsin legislature has spelled out detailed statutory requirements for grain dealers, grain warehouse keepers, milk contractors and vegetable contractors (ch. 126, Stats.). Contractors must be licensed by DATCP, and most contractors must contribute to an agricultural producer security fund administered by DATCP. A few contractors must also file security with DATCP.

Federal Programs

There is no federal producer security program related to milk. The U.S. department of agriculture (USDA) administers a producer security program for federally licensed grain warehouses that store grain for producers. Grain warehouses may choose whether to be licensed under state or federal law. Federally-licensed warehouses are exempt from state warehouse licensing and security requirements. State-licensed warehouses are likewise exempt from federal requirements.

The federal grain warehouse program provides little or no protection against financial defaults by grain dealers. Grain dealers are persons who buy and sell grain. Sometimes, grain dealers also operate grain warehouses. DATCP currently licenses grain dealers. Licensed warehouse keepers must also hold a state grain dealer license if they engage in grain dealing.

USDA proposes to regulate grain dealer activities (grain “merchandising") by federally licensed warehouse keepers, to the exclusion of state regulation. But USDA has not yet finalized its regulations. In any case, the federal regulations would not apply to state-licensed grain warehouses, or to grain dealers who do not operate a warehouse.

There is a federal security program for vegetables. This security program is mainly limited to fresh market vegetables, and consists of a priority lien against vegetable-related assets. Wisconsin's vegetable security program applies only to processing vegetables (not fresh market vegetables covered by federal regulations). There may be some limited overlap between the Wisconsin and federal programs (the overlap may be justified because the scope of federal coverage is not entirely clear).

State Comparisons

In Minnesota, contractors must be licensed to procure grain, milk or processing vegetables from producers, or to operate grain warehouses. Regulated contractors must file bonds as security against default.

Neither Iowa nor Illinois have producer security programs for milk or vegetables. However, both states maintain indemnity funds to protect grain producers. Fund assessments are based solely on grain volume. In Wisconsin, by contrast, fund assessments are based on grain volume and financial condition.

Michigan has the following producer security programs:

•   Potato dealers must be licensed, and must post bonds as security against defaults. (Wisconsin's vegetable security program includes, but is not limited to, potatoes.)

•   Dairy plants that fail to meet minimum financial standards must file security or pay cash for milk.

•   Grain producers have the option of paying premiums into a state fund. In the event of a grain default, the fund reimburses participating producers.

Agency Contact

Questions or comments related to this rule may be sent to the following address:

Dept. of Agriculture, Trade and Consumer Protection
Trade and Consumer Protection Division
Bureau of Trade Practices
P.O. Box 8911
Madison, WI 53708-8911

Attn.:   Kevin LeRoy
Telephone:   [phone]
E-Mail:   [e-mail]

Notice of Hearing

Commerce

[CR 05-064]

NOTICE IS HEREBY GIVEN that pursuant to s. 101.125, Stats., the Department of Commerce will hold a public hearing on proposed rules under ch. Comm 72, relating to cleaning methods for historic buildings.

Hearing Information

The public hearing will be held as follows:

Date and Time:	Location:
August 1, 2005 at 10:00 a.m.	Thompson Commerce Center 201 W. Washington Avenue Conference Room #3C Madison, Wisconsin

Interested persons are invited to appear at the hearing and present comments on the proposed rules. Persons making oral presentations are requested to submit their comments in writing. Persons submitting comments will not receive individual responses. The hearing record on this proposed rulemaking will remain open until August 15, 2005, to permit submittal of written comments from persons who are unable to attend the hearing or who wish to supplement testimony offered at the hearing. Written comments should be submitted to Diane Meredith, at the Department of Commerce, P.O. Box 2689, Madison, WI 53701-2689, or Email at [e-mail].

This hearing is held in an accessible facility. If you have special needs or circumstances that may make communication or accessibility difficult at the hearing, please call [phone] or [phone] (TTY) at least 10 days prior to the hearing date. Accommodations such as interpreters, English translators, or materials in audio tape format will, to the fullest extent possible, be made available upon a request from a person with a disability.

Analysis Prepared by Department of Commerce

Statutory authority: ss. 101.02 (1) and (15), and 101.1215, Stats.

Statutes interpreted: ss. 101.02 (1) and (15), and 101.1215, Stats.

Under the statutes cited, the Department of Commerce protects public health, safety, and welfare by promulgating comprehensive construction requirements for public buildings and places of employment. In accordance with s. 101.1215, Stats., the Department is required to develop requirements for prohibiting the use of abrasive cleaners on the exterior of qualified historic buildings, including both commercial buildings and one-and two-family dwellings.

The proposed rules under ch. Comm 72 are being created to comply with s. 101.1215, Stats., relating to the prohibition of abrasive cleaning methods and identification of acceptable methods for cleaning the exterior facades of qualified historic buildings The Division of Safety and Buildings will enforce the proposed rules by doing an investigative inspection when a complaint is received by the agency. If a violation is found, the Division may refer the violation on to the appropriate authority responsible for assessing penalties as specified in s. 101.1215 (4), Stats.

The proposed rules include the following:

1. The requirements apply to both public buildings and places of employment, and one-and two-family dwellings that are qualified historic buildings. [Comm 72.02]

2. Administration and enforcement of these rules is by complaint. Penalties as specified under s. 101.1215, Stats., may be assessed for violation of these rules. [Comm 72.03 and 70.04]

3. The term “abrasive cleaning method" has the meaning given in s. 101.1215, Stats., and identifies as abrasive, cleaning procedures that employ certain materials or tools, such as sand, glass, rice husks carried in high or low-pressure air or water, or the use of high pressure water. [Comm 72.05 (1)]

4. The term “qualified historic building" has the meaning given in s. 101.121 (2) (c), Stats. [Comm 72.05 (3)]

5. Specific prohibition of any abrasive cleaning method on a qualified historic building. [Comm 72.06 (1)]

6. Identifies where abrasive cleaners may be used, and identifies a non-abrasive cleaning methods. [Comm 72.06 (2)]

Federal Comparison

An Internet-based search for “abrasive cleaning of exterior surfaces of historic buildings" in the Code of Federal Regulations identified the following existing federal regulations that address abrasive cleaning of historic buildings:

1.   36CFR67– Historic Preservation Certifications Pursuant to Sec. 48(g) and Sec. 170(h) of the Internal Revenue Code of 1986

2. 36CFR68– The Secretary of the Interior Standards for the Treatment of Historic Properties.

3. 36CFR800– Protection of Historic Properties

Under these existing federal regulations, chemical or physical treatments may be used on historic properties for preservation, rehabilitation, or restoration; however, the treatments used must be the gentlest means possible. Treatments that cause damage to historic materials are not to be used.

An Internet-based search for “abrasive cleaning of exterior surfaces of historic buildings" of the 2003 and 2004 issues of the Federal Register did not identify any proposed federal regulations that address abrasive cleaning of exterior surfaces of historic buildings.

State Comparisons

An Internet-based search of adjacent states identified that Illinois, Minnesota, Michigan and Iowa do not have any specific rules relating to cleaning methods for the exterior facades of historic buildings.

Council Members and Representation

The proposed rules were developed with the assistance of the Historic Building Code Council, Dan Stephans, from the Department of Administration, and James Draeger, Wisconsin Historical Society. The members of the Historic Building Code Council are as follows:

Name	Representing
Bruce Johnson	Wisconsin Builders Association
Steve Gleisner	City of Milwaukee Fire Dept.
Charles Quagliana	AIA-Wisconsin Department of Commerce
Chris Rute	Milwaukee Historic Preservation Commission
Jim Sewell	Wisconsin Historical Society
Harry Sulzer	City of Madison
David Vos	Project Developer/Alexander Company

Copies of Rule

The proposed rules and an analysis of the proposed rules are available on the Internet at the Safety and Buildings Division Web site at www.commerce.wi.gov/SB/. Paper copies may be obtained without cost from Roberta Ward, at the Department of Commerce, Program Development Bureau, P.O. Box 2689, Madison, WI 53701-2689, or Email at [e-mail], or at telephone [phone] or [phone] (TTY). Copies will also be available at the public hearing.