The department issues 82 types of licenses, certifications and registrations for a variety of trade occupations. Approximately 40 percent of those credentials require the fulfillment of continuing educational obligations to renew the specific credential. Many of the continuing education courses are developed, conducted and/or sponsored by third-party entities. Continuing educational courses must first be reviewed and approved by the department. Currently, the department does not charge a fee for the review of a course. The department's cost to provide this review is currently offset by the credential fees of the various occupations. The department over the last three years has reviewed approximately 900 courses annually. On average, the review of a continuing educational course takes about an hour to process.
The department offers license applicants the ability to review their qualifying licensing exams. Currently, the department does not charge a fee for this service. The department's cost to provide this service is currently offset by the exam fees and the credential fees. Approximately 200 individuals annually take advantage of this opportunity. The department costs involve retrieving records and monitoring the applicants who review their exams.
Of the 82 types of credentials issued by the department, an application fee is part of the overall credential fee charge by the department for approximately 75 percent of the credentials. The application fee is charged for the initial application and for late credential renewals. Current application fees range from $10 to $35. The implementation of an application fee for the remaining 25 percent of the credentials creates equity across the board.
Analysis and supporting documents used to determine effect on small business
Continuing educational courses needed to renew various credentials issued by the department can be developed and submitted by anyone. Currently, many of the continuing education courses are developed or sponsored by various building trade or inspection associations. The fee for attending and/or completing a continuing educational course is determined by the course provider or sponsor. The department does not believe that the proposed fee of $40 per application plus $5 for each half hour of credit sought will create a significant impact on course submitters. Continuing education courses are approved for 5 years.
The proposed fee to review a previous licensing exam affects individuals and not businesses directly.
Manufactured home dealer businesses would be the only business type credential affected by the implementation of the proposed $15 credential application fee.
An economic impact report has not been required to be prepared.
Small Business Impact
Initial regulatory flexibility analysis
Types of small businesses that will be affected by the rules.
The most significant proposal establishes a fee for the department's review of continuing educational course submittals relating to credentials administered by the Safety and Buildings Division. The continuing educational courses can be developed and submitted by anyone. The courses are utilized by various trades people credentialed by the department to fulfill educational obligations as a prerequisite to renew their license, certification or registration. Currently, many of the continuing education courses are developed or sponsored by various building trade or inspection associations.
Reporting, bookkeeping and other procedures required for compliance with the rules.
The proposed changes to chapters Comm 2 and 5 do not imposed any additional reporting, bookkeeping or other procedures for compliance.
Types of professional skills necessary for compliance with the rules.
The proposed changes to chapters Comm 2 and 5 do not require any type of professional skills for compliance.
Rules have a significant economic impact on small businesses?
No.
Small business regulatory coordinator
The small business regulatory coordinator for the Department of Commerce is Carol Dunn, who may be contacted at telephone (608) 267-0297, or Email at
carol.dunn@wisconsin.gov.
Environmental Impact
The Department has considered the environmental impact of the proposed rules. In accordance with chapter Comm 1, the proposed rules are a Type III action. A Type III action normally does not have the potential to cause significant environmental effects and normally does not involve unresolved conflicts in the use of available resources. The Department has reviewed these rules and finds no reason to believe that any unusual conditions exist. At this time, the Department has issued this notice to serve as a finding of no significant impact.
Fiscal Estimate
Assumptions used in arriving at fiscal estimate
The department issues 82 types of licenses, certifications and registrations for a variety of trade occupations. Approximately 40 percent of those credentials require the fulfillment of continuing educational obligations to renew the specific credential. Continuing educational courses must first be reviewed and approved by the department. Currently, the department does not charge a fee for the review of a course. The department's cost to provide this review is currently offset by the credential fees of the various occupations. The department over the last three years has reviewed approximately 900 courses annually. The department estimates that the average amount of approved credit sought is 2 hours per course. The department proposes assessing a fee of $40 for each course approval plus $5 for each half hour of credit recognized. The department expects the requests for continuing educational course approval to remain steady. Based upon these assumptions, the proposal would generate $54,000 annually in revenue.
The department offers license applicants the ability to review their qualifying licensing exams. Currently, the department does not charge a fee for this service. The department's cost to provide this service is currently offset by the exam fees and the credential fees. Approximately 200 individuals annually take advantage of this opportunity. The department is proposing $15 fee for this service, and the proposal would generate $3,000 annually in revenue.
Of the 82 types of credentials issued by the department, an application fee is part of the overall credential fee charge by the department for approximately 75 percent of the credentials. The application fee is charged for the initial application and for late credential renewals. Current application fees range from $10 to $35. The implementation of a $15 application fee for the remaining 25 percent of the credentials creates equity across the board. The department estimates that there would 1,000 situations annually, initial applications and late renewals, where the proposed application fee would be applicable. This would this result in an additional $15,000 in annual revenue.
State fiscal effect
Increase existing revenues.
Local government fiscal effect
None.
Fund sources affected
PRO.
Agency Contact
James Quast, Program Manager
(608) 266-9292
Notice of Hearing
Commerce
Statements and Penalties for Grant and Loan Programs and Penalties for Tax Credit Programs, Ch.
Comm 205
NOTICE IS HEREBY GIVEN that pursuant to section
560.01 (2) (ae) 6. and
7., Stats., the Department of Commerce will hold a public hearing on proposed rules to create Chapter
Comm 205 relating to statements and penalties for grant and loan programs, and penalties for tax credit programs, and affecting small businesses.
Hearing Information
The public hearing will be held as follows:
Date and Time
|
Location
|
July 27, 2009
|
Thompson Commerce Center
|
Monday
|
Third Floor, Room 3B
|
10:00 a.m.
|
201 West Washington Avenue
Madison
|
This hearing will be held in an accessible facility. If you have special needs or circumstances that may make communication or accessibility difficult at the hearing, please call Sam Rockweiler at (608) 266-0797 or at Contact Through Relay 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.
Copies of Proposed Rule
The proposed rules and an analysis of the rules are available on the Internet by entering “Comm 205" in the search engine at the following Web site:
http://adminrules.wisconsin.gov. Paper copies may be obtained without cost from Sam Rockweiler at the Department of Commerce, Division of Environmental and Regulatory Services, P.O. Box 14427, Madison, WI 53707, or at
sam.rockweiler@wisconsin.gov, or at telephone (608) 266-0797, or at Contact Through Relay. Copies will also be available at the public hearing.
Appearance at Hearing and Submission of Written Comments
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, via e-mail. Persons submitting comments will not receive individual responses. The hearing record on this rulemaking will remain open until July 30, 2009, 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. E-mail comments should be sent to
sam.rockweiler@wisconsin.gov. If e-mail submittal is not possible, written comments may be submitted to Sam Rockweiler, Department of Commerce, Division of Environmental and Regulatory Services, P.O. Box 14427, Madison, WI 53708-0427.
Analysis Prepared by Department of Commerce
Statutes interpreted
Statutory authority
Explanation of agency authority
Section
227.11 (2) (a) of the Statutes authorizes the Department to promulgate rules interpreting the provisions of any Statute administered by the Department. Sections
560.01 (2) (ae) 6. and
7. direct the Department to require, by rule, penalties and statements in the economic-development grant or loan programs administered by the Department, and penalties in the tax credit programs administered by the Department.
Related statute or rule
Several statute sections and other Departmental rules address financial incentives for economic development in Wisconsin. For example, (1) sections
560.70 to
560.7995 of the Statutes and chapters Comm 100, 107, 112 and 118 address statewide tax-credit programs for job creation, capital investment, employee training and corporate headquarters; (2) sections
560.60 to
560.658 of the Statutes and chapter Comm 106 direct economic development grants and loans towards capital financing, worker training, entrepreneurial development, providing assistance to technology-based business or to businesses at a foreign trade show or event, promoting urban or regional economic development, establishing revolving loan funds, providing working capital, and promoting employee ownership; and (3) several other sections of chapter 560 and other Comm chapters address more-narrowly targeted economic development incentives, such as for film productions, dairy manufacturing facilities, technology commercialization, rural economic development, and brownfield redevelopment.
Plain language analysis
The rules in this order would (1) require each recipient of a grant, loan or tax credit administered by the Department to enter into a contract with the Department, prior to receiving allocation of the grant, loan or tax credit; (2) require each recipient of a grant or loan to submit to the department a statement which contains a detailed accounting of the funding and deliverables for the grant or loan; (3) require verification by a certified public accountant for the statements for grants or loans that total $100,000 or more; and (4) establish penalties for recipients who submit false or misleading information or who fail to comply with the terms of a contract.
Comparison with federal regulations
The federal Government Performance and Results Act (GPRA) of 1993, as primarily enacted in sections 1115 and 1116 of Title 31 of the United States Code, contains several main elements that are substantially similar to the main elements of
2007 Wisconsin Act 125 – such as requiring governmental executive agencies to (1) establish measurable goals and performance indicators for each applicable program administered by the agency, and (2) annually submit a corresponding detailed report to legislative reviewers that assesses the overall effectiveness of each of those programs. However, GPRA does not include the Act 125 requirements that (1) the recipients of the program benefits must submit performance and financial reports and corresponding verified statements to the administering agency; and (2) administering agencies must establish penalties for a recipient who submits false or misleading information, or who fails to comply with the terms of a contract and then fails to adequately explain the noncompliance.
Section 6304 of Title 31 of the United States Code requires a federal executive agency to use a grant agreement as the legal instrument reflecting the relationship between the United States Government and a State, a local government, or other recipient when (1) the principal purpose of the relationship is to transfer something of value to the recipient to carry out a public purpose, and (2) substantial involvement is not expected between the executive agency and the recipient when carrying out the activity contemplated in the agreement. Several of the economic development programs administered by the Department of Commerce include federal grant funding and therefore are addressed in such grant agreements. The Department likewise uses similar grant and loan agreements with the local recipients of the benefits of these and other economic development programs. Federal administrative requirements for grant agreements between federal agencies and nonprofit organizations, for example, are established in section 215 of Title 2 of the Code of Federal Regulations. Those requirements include having the recipient submit performance reports and financial status reports to the awarding agency at least annually – and the financial status report must include a certification statement from an authorized official for the recipient, that attests to the accuracy and completeness of the report and to the validity of all included outlays. This required recipient performance reporting closely matches the recipient performance reporting that is required in
2007 Wisconsin Act 125; and the required certification statement on the financial report closely matches the verification statement which is likewise required in Act 125, and which is to be addressed in the proposed rules.
Sections
215.61 and
215.62 of Title 2 of the Code of Federal Regulations specify that grant awards may be withheld, suspended, or terminated in whole or in part if a recipient fails to comply with the terms and conditions of an award. These penalties for this failure closely match the withholding-payment penalty which is authorized in Act 125 for recipients who fail to comply with the terms of a grant or loan agreement, and which is to be addressed in the proposed rules.
Under the federal civil money penalty law, as enacted in 1981 and as currently applied, for example, to the Social Security program through section 1320a-8 of Title 42 of the United States Code, any person who submits false or misleading statements for an agency's use in determining eligibility for program benefits is subject to a penalty of not more than $5000 for each such statement, and to an assessment of not more than twice the amount of benefits or payments paid as a result of the statements. Since 1981, the provisions of the civil money penalty law have been expanded by reference to numerous types of fraudulent and abusive activities, including those addressed by the federal Economic Development Administration. These penalties for these statements closely match the Act 125 penalties which impose a forfeiture or recoup a payment in response to submittal of false or misleading statements, and which are to be addressed in the proposed rules.
An Internet-based search of recent editions of the Federal Register did not reveal any currently proposed federal regulations regarding penalties in the economic development grant and loan programs administered by the Department; or regarding penalties for submitting false or misleading information in the economic development tax credit programs administered by the Department. In the November 21, 2007, edition of the Federal Register, notice was found of a proposal by the federal Department Housing and Urban Development to extend its information-collection requirements to include requirements for grant recipients to report against their baseline performance standards, in a manner that standardizes grants progress reporting requirements and promotes greater emphasis on performance and results in grant programs.
Comparison with rules in adjacent states
Minnesota
An Internet-based search did not reveal any similar Minnesota rules. However, sections 116J.993 to 116J.995 of the Minnesota Statutes require recipients of state-level economic development funding to (1) enter into a formal subsidy agreement with the State, (2) perform annual reporting, and (3) pay back subsidies for failures to meet terms of the agreements. These requirements are similar to the requirements for the contracts, reporting and penalties that are addressed in the proposed rules. As in the proposed rules, the Minnesota reporting requirements are more detailed for larger funding levels.
Michigan
An Internet-based search did not reveal any similar Michigan rules. However, sections 208.1431 to 208.1434 of the Michigan Statutes address tax credits for job development and economic development – and require recipients of the credits to enter into a formal agreement with the State, and to submit a verified statement from a Certified Public Accountant addressing the actual jobs created, if required by the Michigan Economic Growth Authority. The tax credits can be reduced or terminated for failure to meet the terms of the contract, and must be paid back in full to the State if 51% or more of the new qualified jobs are moved out of state within three years after claiming the credit.
Illinois
Section 20 ILCS 715 of the Illinois Statutes requires recipients of state-level economic development funding to (1) enter into a formal subsidy agreement with the State, (2) perform annual reporting, and (3) pay back subsidies for failures to meet terms of the agreements. The Illinois Administrative Code contains further requirements relating to these topics in Title 32 section 130.110 for renewable fuels and in Title 14 sections 527.80, 527.90, 527.100, 540.190, and 545.560 for economic development and technology development. These requirements are similar to the requirements for the contracts, reporting and penalties that are addressed in the proposed rules. As in the proposed rules, the Illinois reporting requirements are more detailed for larger funding levels.
Iowa
Chapters
15,
15A and
15E of the Iowa Code (statutes), and the Iowa Administrative Code chapters administered by the Department of Economic Development address state-level financial incentives for economic development and job development and require recipients of these incentives to (1) enter into a formal agreement with the State, (2) perform annual reporting, and (3) pay back subsidies for failures to meet terms of the agreements. These requirements are similar to the requirements for the contracts, reporting and penalties that are addressed in the proposed rules.
Summary of factual data and analytical methodologies
The data and methodology for developing these rules were derived from and consisted of (1) incorporating the criteria in
2007 Wisconsin Act 125; (2) incorporating applicable best practices the Department has developed in administering similar programs for economic development, business development, and tax-credit verification; and (3) reviewing Internet-based sources of related federal, state, and private-sector information.
Analysis and supporting documents used to determine effect on small business
The primary document that was used to determine the effect of the rules on small business was
2007 Wisconsin Act 125. This Act applies its private-sector requirements only to businesses for which a corresponding grant, loan or tax credit is desired.
Small Business Impact
The rules are not expected to impose significant costs or other adverse impacts on small businesses because the rules address submittal of documentation, and other activities, only by applicants that choose to pursue grants, loans or tax credits for economic development.
Initial regulatory flexibility analysis
Types of small businesses that will be affected by the rules.
Businesses that receive economic development grants, loans or tax credits administered by the Department.
Reporting, bookkeeping and other procedures required for compliance with the rules.
Businesses that receive economic development grants or loans administered by the Department would need to submit a statement to the Department in accordance with a format and timeline specified in a corresponding contract with the Department.
Types of professional skills necessary for compliance with the rules.
No new professional skills are necessary for compliance with the rules.
Rules have a significant economic impact on small businesses?
