The Governor's emergency declaration directly or impliedly exempts the sale from coverage under the emergency declaration.
Under this rule, DATCP may require a seller to submit written, documented answers to DATCP questions related to the seller's compliance with this rule, including information related to any of the following:
The highest price at which the seller sold a consumer good or service to like customers in the relevant trade area during the 60-day period immediately preceding the emergency declaration.
The scope of the relevant trade area.
Any defenses claimed by the seller under this rule.
Other information relevant to DATCP's investigation.
Federal and Surrounding State Regulations
Federal Law
At various times in United States history, the federal government has imposed price controls. There are no federal “price gouging" prohibitions currently in effect. However, there are federal laws that set or limit prices for certain products or services in certain sectors. Some of these laws may preempt state “price gouging" provisions related to the federally-regulated products or services. For example, state law may not regulate interest rates charged by federally chartered banks, or certain prices charged by certain federally regulated common carriers. The scope and effect of federal regulation varies by industry sector, and is highly specific to individual federal programs.
Other States
Many states have prohibited price gouging during declared periods of emergency. Most of those states prohibit prices above pre-emergency prices, except that most states allow sellers to pass on increased costs. Four states prohibit increased markups over cost, and 6 states cap price increases at some percentage such as 10% or 25%.
Nineteen states prohibit prices that are “unconscionably excessive," “exorbitant," “unjustified," or “grossly excessive" without defining those terms or establishing more specific standards. However, the New York attorney general found that New York's broad prohibition against “unconscionably excessive" prices was unworkable without more specific standards.
The states surrounding Wisconsin have the following regulations:
Illinois, on September 2, 2005, adopted an emergency rule (now expired) which prohibited “unconscionably high prices for petroleum products."
Indiana prohibits price gouging in the sale of fuel. Price gouging occurs if a retailer charges a price that grossly exceeds the average price at which the fuel was readily available during the 7 days immediately preceding the declared emergency and the increase is not attributable to cost factors to the retailer.
Iowa regulates prices on “merchandise needed by disaster victims." The Iowa regulation prohibits “unjustified prices" during times of disaster and recovery (60 day maximum) in a declared disaster zone.
Michigan's consumer act prohibits, among other things, a price that is “grossly in excess" of the price at which similar property or services are sold.
Minnesota does not regulate price gouging.
Ohio prohibits, during a state of emergency, prices that are substantially higher than “the price at which the goods or services were readily obtainable during the 30 days immediately preceding the state of emergency" or “the average price of the goods or services during the 30 days immediately preceding the state of emergency."
Business Impact Analysis
Depending on the scope of a declared emergency, this rule could conceivably affect nearly every business that sells consumer goods in the state (whether at wholesale or retail). A declared emergency may be statewide or localized in scope, and may be broad-based or confined to certain economic sectors. The impact of this rule will vary accordingly.
This rule could have a substantial impact on a wide array of businesses. But it is not possible to predict the impact on individual businesses or on business generally.
Whenever it applies in an emergency, this rule will limit the prices that may be charged by affected businesses. This rule prohibits prices that are more than 10% higher than pre-emergency prices, unless sellers can document that their higher prices do not exceed their cost plus normal markup. Sellers are thus free to pass on relevant cost increases, if they can document those increases.
This rule applies only when the Governor, by executive order, issues an emergency declaration. The emergency declaration determines the scope of coverage, and may exempt certain business sectors from coverage. This rule applies only for the period of time that the emergency declaration remains in effect.
This rule provides some latitude for price adjustments in response to supply and demand, and allows sellers to pass on bona fide cost increases. However, this rule does ultimately set limits on the prices that manufacturers, wholesaler distributors and retailers may charge. Some sellers may withhold goods or services from the market rather than sell at those limited prices. Retailers may benefit from wholesale price limitations, but may suffer from wholesaler decisions to withhold goods or services from distribution.
Under 2003 Wis. Act 145, DATCP and other agencies must adopt rules spelling out their rule enforcement policy for small businesses. DATCP has adopted a separate rule outlining its small business enforcement policy (see ATCP 1, subch. VII). DATCP will follow that rule in the administration of this price gouging rule. DATCP will, to the maximum extent feasible, seek voluntary compliance with this price gouging rule.
This rule first applies to small businesses 2 months after it first applies to other businesses, as required by s. 227.22 (2) (e), Stats. This rule will not apply to small businesses during declared emergencies that fall within that 2-month period, but will apply to small businesses during subsequent declared emergencies. If a declared emergency period starts before the small business effective date, but extends beyond the small business effective date, this rule will apply to small businesses for that portion of the emergency period that occurs after the small business effective date.
Notice of Hearings
Agriculture, Trade and Consumer Protection
[CR 07-006]
(Reprinted from 1/31/07 Wis. Adm. Register)
The state of Wisconsin Department of Agriculture, Trade and Consumer Protection (DATCP) announces that it will hold public hearings on proposed amendments to chapters ATCP 60, 69, 77, 80 and 82, Wis. Adm. Code, relating to safe production, processing, distribution and sale of milk and dairy products.
DATCP will hold four public hearings at the times and places shown below. DATCP invites the public to attend the hearings and comment on the proposed rule. Following the public hearings, the hearing record will remain open until Monday, March 19, 2007, for additional written comments. Comments may be sent to the Division of Food Safety at the address below, by email to
debbie.mazanec@datcp.state.wi.us, or online at: https://apps4.dhfs.state.wi.us/admrules/public/Home.
You may obtain a free copy of this rule by contacting the Wisconsin Department of Agriculture, Trade and Consumer Protection, Division of Food Safety, 2811 Agriculture Drive, P.O. Box 8911, Madison, WI 53708. You can also obtain a copy by calling (608) 224-4712 or emailing debbie.mazanec@datcp.state.wi.us. 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.
To provide comments or concerns relating to small business, please contact DATCP's small business regulatory coordinator Keeley Moll at the address above, by emailing to Keeley.Moll@datcp.state.wi.us or by telephone at (608) 224-5039.
Hearing impaired persons may request an interpreter for these hearings. Please make reservations for a hearing interpreter by February 12, 2007, by writing to Deb Mazanec, Division of Food Safety, P.O. Box 8911, Madison, WI 53708-8911, telephone (608) 224-4712. Alternatively, you may contact the DATCP TDD at (608) 224-5058. Handicap access is available at the hearings.
Hearing Dates and Locations
Tuesday, February 20, 2007
10:00 a.m. to 1:00 p.m.
Appleton Public Library, Room C
225 N. Oneida Street
Appleton, WI 54911
Wednesday, February 21, 2007
10:00 a.m. to 1:00 p.m.
State of Wisconsin Office Building, Room 105
718 W. Clairemont Avenue
Eau Claire, WI 54701
Friday, February 23, 2007
10:00 a.m. to 1:00 p.m.
Green County Agriculture Building Auditorium
2841 6th Street
Monroe, WI 53566
Monday, February 26, 2007
1:00 p.m. to 4:00 p.m.
Department of Agriculture, Trade and Consumer Protection
2811 Agriculture Drive, Board Room (CR-106)
Madison, Wisconsin, 53718-6777
Analysis Prepared by the Department of Agriculture, Trade and Consumer Protection
This rule updates current rules related to safe production, processing, distribution and sale of milk and dairy products. This rule affects dairy farms, dairy plants, milk haulers, milk testing laboratories, buttermakers, cheesemakers and others. Among other things, this rule:
Brings Wisconsin rules into conformity with the Interstate Pasteurized Milk Ordinance (“PMO"). Milk and fluid milk products must be produced in compliance with the PMO, in order for Wisconsin to be able to ship those products in interstate commerce.
Updates current rules to accommodate new dairy industry technology and practices.
Clarifies current statutory prohibitions against the sale of raw milk to consumers, consistent with administrative law judge decisions.
Clarifies some rule provisions, so they will be easier to read and understand.
Statutory Authority
Statutory authority:   ss. 93.07(1) and (2), 93.09 (1), 93.12 (3) and (5), 97.09 (1) and (4), 97.20 (4), 97.21 (6), 97.22 (8), 97.24 (3), and 97.52.
Statutes interpreted: ss. 93.09, 93.12, 97.02, 97.03, 97.09, 97.12, 97.17, 97.175, 97.20, 97.21, 97.22, 97.24, 97.50, 97.52, 98.145 and 98.146.
The Department of Agriculture, Trade and Consumer Protection (“DATCP") is responsible for administering Wisconsin food safety and labeling laws, including laws related to the safety of milk and dairy products. DATCP licenses and regulates dairy farms, dairy plants, milk haulers, milk testing laboratories and analysts, bulk milk weighers and samplers, and others. DATCP has broad authority to regulate these entities, to ensure safe and wholesome dairy products and fair business practices.
Milk and fluid milk products must be produced and distributed in compliance with “Grade A" standards under the Interstate Pasteurized Milk Ordinance (“PMO"). If Wisconsin fails to comply with the PMO, Wisconsin may be precluded from shipping milk and fluid milk products in interstate commerce. Under s. 97.24, Stats., DATCP must adopt “Grade A" rules that are in substantial accord with the PMO.
DATCP has broad authority, under s. 93.07(1), Stats., to adopt rules needed to interpret and implement laws under its jurisdiction. In addition, DATCP has the following rulemaking authority:
Under s. 93.07 (2), Stats., to prescribe forms used in connection with DATCP programs.
Under s. 93.09 (1), Stats., to adopt grading, packaging and labeling standards for food.
Under ss. 93.12 (3) and (5), Stats., to adopt rules for laboratories testing milk and dairy products.
Under s. 97.09 (1), Stats., to adopt food standards of identity, composition and quality.
Under s. 97.09 (4), Stats., to regulate the production, processing, packaging, labeling, transportation, storage, handling, display, sale, and distribution of food to protect the public from adulterated or misbranded foods.
Under s. 97.20 (4), 97.21 (6) and 97.22 (8), Stats., to regulate dairy plants, bulk milk tankers and dairy farms.
Under s. 97.24 (3), to adopt rules for the production, processing, pasteurization, distribution and testing of milk and dairy products. Rules for milk and fluid milk products must be in substantial accord with “Grade A" standards under the PMO.
Under s. 97.52, Stats., to establish sanitary standards for the production, handling and transportation, inspection and testing of milk and dairy products.
Background
The United States Food and Drug Administration (“FDA") recently completed an audit of Wisconsin's dairy regulatory program. FDA requested a number of changes in current DATCP rules, to make the rules more fully consistent with the current (2005) version of the PMO. This rule makes changes requested by FDA. This rule also makes other changes to update and clarify current rules, and to accommodate changing dairy industry technology, organization and practices. The changes in this rule are, for the most part, technical in nature. However, some rule changes may require significant changes by some dairy businesses (see Business Impact Analysis below).
DATCP and others have proposed major reforms to modernize and streamline the PMO. However, those reforms will require action at the national level and by other states. In the meantime, Wisconsin must comply with existing PMO requirements.
Rule Content
Dairy Farms
This rule updates and modifies current rules related to dairy farms. Among other things, this rule does all of the following:
Incorporates PMO requirements related to gravity flow manure handling systems and liquid manure storage.
Clarifies milk hauler responsibilities relating to mixing, sampling, and testing milk shipments.
Spells out standards and procedures related to Wisconsin's performance-based dairy farm inspection system.
Updates drug residue action levels and safe levels, consistent with the PMO.
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Links to Admin. Code and Statutes in this Register are to current versions, which may not be the version that was referred to in the original published document.