Under the current rule, home improvement contractors are required to obtain all required state or local building permits before work can begin under the contract. Under this proposed rule, if a home improvement contract consists of multiple subprojects, contractors may start work on the overall project before obtaining all building permits. However, they may not begin work on a subproject that requires a building permit until after they obtain the permit.
Under the current rule, sellers must provide manufacturers product warranties either at the time the buyer and seller enter into the contract or when the product is installed. Under this proposed rule, the seller has the option of providing written manufacturers' warranties at the completion of the project – as long as it is specified in the contract.
Under the current rule, if a home improvement contract contains liquidated damages that penalize a buyer for breaching the contract, the liquidated damages may not exceed 10% of the contract price or $100, whichever is less. This proposed rule maintains the 10 percent limit, but it repeals the $100 maximum.
Under the current rule, the seller may not substitute products or materials from those specified in the home improvement contract, or for those which the seller represented would be used, without prior consent from the buyer. If the home improvement contract is in writing, the prior consent must also be in writing. Under this proposed rule, the seller may deviate from the written home improvement contract, but only under the following limited conditions:
• The buyer verbally agrees to the deviation
•
The seller maintains documentation of the deviation, and the buyer agreed to the deviation.
•
The deviation does not represent any additional cost to the buyer
•
The deviation does not represent a decrease in the value of the finished product.
Under the current rule, the seller is required to provide the buyer with lien waivers before accepting final payment. Further, if the contract requires partial payments at various stages in the performance of the contract, the seller is required to provide lien waivers for the proportionate value of all labor, services and products or materials furnished or delivered as of the time payment is made. This rule does not alter the current rule's treatment of lien waivers before final payment. However, it does allow the seller to forego proportionate lien waivers before partial payments as long as the seller takes steps to educate the buyer about lien waivers and the buyer provides written consent to foregoing the partial waivers.
Under the current rule, sellers are required to give buyers timely notice of any impending delay in contract performance. If the home improvement contract is in writing (or required to be in writing), the buyer must agree in writing to the change in the schedule. This rule qualifies this requirement by specifying that, if the seller can show that the delay was caused by the buyer, the seller is not responsible for the delay.
The current rule contains protections for buyers in the event that the seller fails to complete the project, but also assigns the rights to collect payment to a third party. This rule does not alter this provision. But it does insert an explanatory note that includes an example of how it might be applied.
Under current rules, sellers who provide basement waterproofing services are regulated both as home improvement contractors under ch.
ATCP 110 and also under ch.
ATCP 111 — Basement Waterproofing Practices. This rule consolidates the content of ch.
ATCP 111 into a section of
ATCP 110, without making any substantial changes.
Summary of, and comparison with, existing or proposed federal statutes and regulations.
The federal government does not, in general, regulate home improvement practices.
Comparison with rules in adjacent states
Most states, including all of Wisconsin's neighbors, have home improvement practices laws. Many of the provisions in ATCP 110 are common in these other states as well.
Illinois regulates home improvement practices through its Home Repair and Remodeling Act and its Home Repair Fraud Act. These provisions are generally similar to Wisconsin's Home Improvement Practices rule.
Iowa grants consumers a private right of action which enables consumers to sue businesses that engage in deceptive or unfair practices or misrepresentation, or that fail to disclose material facts. This law covers home improvement practices, among other areas.
Contractors who do home improvement work in Minnesota and Michigan are required to obtain a license from the state (there are some exceptions). In Minnesota, licensed contractors are required to pay into the Minnesota Contractor's Recovery Fund. This fund compensates people who have suffered losses due to a licensed contractor's fraudulent, deceptive or dishonest practices, misuse of funds, or failure to do the work the contractor was hired to do.
Summary of factual data and analytical methodologies
We do not have statistics specific to Wisconsin, but fixr.com (a web-based contractor referral service) has reported the extent of the home improvement industry on a national basis.
United States Annual Averages 1995 - 2009
|
Number of Projects
|
Total Expenditure
|
Average Cost Per Project
|
Room additions and alterations
|
1,156,018
|
$ 23,141,745,151
|
$ 20,019
|
Systems and equipment
|
9,462,782
|
$ 15,061,419,820
|
$ 1,592
|
Outside attachments
|
549,917
|
$ 3,560,131,931
|
$ 6,474
|
Kitchen remodels
|
1,052,211
|
$ 10,638,971,786
|
$ 10,111
|
Other property additions and replacements
|
3,758,351
|
$ 19,767,613,249
|
$ 5,260
|
Exterior additions and replacements
|
5,636,949
|
$ 23,734,265,908
|
$ 4,210
|
Interior additions and replacements
|
5,186,460
|
$ 13,211,085,021
|
$ 2,547
|
Bath remodels
|
1,030,736
|
$ 6,475,917,156
|
$ 6,283
|
Disaster repairs
|
528,062
|
$ 6,448,663,562
|
$ 12,212
|
Complaints against home improvement contractors are consistently ranked in the top ten complaint categories received by the department's bureau of consumer protection. In 2012, DATCP received 391 written complaints against home improvement contractors.
Analysis and supporting documents used to determine effect on small business or in preparation of an economic impact analysis
DATCP has consulted with the Wisconsin Builders Association and the National Association of Remodelers – Milwaukee Chapter on the economic impact and the small business impact of this rule.
Effect on Small Business
The existing ch.
ATCP 110 regulates businesses that provide home improvement services. Many of these businesses are “small businesses." They include general contractors, landscapers, plumbers, roofers, window installers, cabinet makers, electricians, and many more. Some of the changes to ch.
ATCP 110 proposed in this rule will have an effect on some of these businesses. DATCP anticipates that the majority of these effects will be beneficial. The rule streamlines existing regulations to make them easier for home improvement providers to comply. But the rule does not eliminate these regulations, thereby preserving important protections for consumers.
This rule may benefit home improvement contractors in the following ways:
•
General contractors working on significant reconstruction projects would no longer be regulated under this proposed rule. Currently, ch.
ATCP 110 does not regulate new home construction but it does regulate home improvement projects. Under this proposal, major reconstructions — those projects where the price of the contract is greater than the assessed property value — would be treated like new home construction.
• For all home improvement contractors, this rule provides some additional flexibility (as long as certain conditions are met). Including:
• Building permits need only be obtained before work on that portion of the project concerning the building permit. Otherwise, all required building permits must be obtained before any work is completed.
• Sellers can provide written manufacturers' warranties at the conclusion of the work. Otherwise, written manufacturers' warranties must be provided at the time the product is installed.
• Under very limited circumstances, sellers can deviate from the written contract based on verbal agreements between the buyer and the seller.
• The seller cannot be held responsible for delays in contract performance if the seller can demonstrate that delay was caused by actions or inactions of the buyer.
Initial Regulatory Flexibility Analysis
Reporting, bookkeeping and other procedures
Generally, reporting, bookkeeping and other procedures are the same as the current rule. However, this proposed rule does allow home improvement contractors some choices. For example under the current rule, any changes to the home improvement contract must be in writing before any work can proceed under the contract. Under the proposed rule, work can proceed, but only if the seller agrees to maintain certain documentation.
Professional skills required
This rule does not represent any requirements for professional skills.
Accommodation for small business
Many of the businesses affected by this rule are “small businesses." This rule does not make special exceptions for small businesses because the subject matter does not lend itself to treating different sized home improvement contractors differently.
Conclusion
This rule will generally benefit affected businesses, including “small businesses." Negative effects, if any, will be few and limited. This rule will not have a significant adverse effect on “small business," and is not subject to the delayed “small business" effective date provided in s.
227.22 (2) (e), Stats.
Environmental Impact
This rule does not have an environmental impact.
Contact Information
Kevin LeRoy
Department of Agriculture, Trade and Consumer Protection
P.O. Box 8911
Madison, WI 53708-8911
Telephone (608) 224-4928
E-Mail:
kevin.leroy@wisconsin.gov.
ADMINISTRATIVE RULES
FISCAL ESTIMATE
AND ECONOMIC IMPACT ANALYSIS
|
Type of Estimate and Analysis
|
X Original ⍽ Updated ⍽ Corrected
|
Administrative Rule Chapter, Title and Number
|
Ch. ATCP 110 and 111, Home Improvement Practices and Basement Waterproofing
|
Subject
|
Home improvement practices and basement waterproofing
|
Fund Sources Affected
|
Chapter 20 , Stats. Appropriations Affected
|
X GPR
⍽ FED X PRO ⍽ PRS
⍽ SEG ⍽ SEG-S
|
20.115 (1) (a) and (jb)
|
Fiscal Effect of Implementing the Rule
|
X No Fiscal Effect
⍽ Indeterminate
|
⍽ Increase Existing Revenues
⍽ Decrease Existing Revenues
|
⍽ Increase Costs
⍽ Could Absorb Within Agency's Budget
⍽ Decrease Costs
|
The Rule Will Impact the Following (Check All That Apply)
|
⍽ State's Economy
⍽ Local Government Units
|
X Specific Businesses/Sectors
⍽ Public Utility Rate Payers
|
Would Implementation and Compliance Costs Be Greater Than $20 million?
⍽ Yes X No
|
Policy Problem Addressed by the Rule
|
ATCP 110, Home Improvement Practices, helps ensure fair transactions between home improvement contractors and their customers. This rule regulates many different types of home improvement, remodeling, and repair projects. This rule has been in existence since 1940 and has been modified a number of times, most recently in 2001.
The changes proposed in this rule, generally, represent updates and revisions to keep the rule consistent with current industry practices. It does not represent a major shift in policy from the existing rules.
|
Summary of Rule's Economic and Fiscal Impact on Specific Businesses, Business Sectors, Public Utility Rate Payers, Local Governmental Units and the State's Economy as a Whole (Include Implementation and Compliance Costs Expected to be Incurred)
|
Local Governments
This rule will not impact local governments.
Home Improvement Contractors – General
This proposed rule is updated to reflect current practices in the home improvement industry. The rule will reduce the cost of compliance on home improvement contractors by reducing required paperwork, streamlining processes, and eliminating unnecessary, burdensome requirements. In general, the rule benefits both contractors and consumers by providing additional flexibility, while retaining prohibitions against unfair business practices. Contractors that take advantage of the proposed rule's added flexibility may incur minimal cost as they revise their standard contracts to conform to the new rule.
Home Improvement Contractors that Specialize in Major Reconstruction or Rebuilding of Existing Structures
The current rule (generally) regulates any home improvement work that is done on an existing residential building (see ATCP 110.01 (2), the definition of “home improvement," for a more precise description). The current rule does not, however, regulate new home construction. Under this proposed rule, very large projects, those where the value of the project is greater than the assessed value of the property, would be outside the scope of the rule. This allows contractors who do this type of work to interact with their customers as they would when building a new home.
|
Basement Waterproofers
Ch. ATCP 111 regulates business practices by basement waterproofers. This proposed rule streamlines the code by moving these provisions into a section of ATCP 110. However, it does not make any substantive changes to the requirements.
Utility Rate Payers
This rule does not impact utility rate payers.
General Public
Chs. ATCP 110 and 111 impact buyers of home improvement services by placing certain requirements and restrictions on home improvement contractors. This proposed rule does not represent a measurable change from this impact.
|
Benefits of Implementing the Rule and Alternative(s) to Implementing the Rule
|
Benefits
Home improvement contractors
The proposed rule is intended to reduce the cost of compliance to contractors, which will in turn lead to increased efficiency and profitability. The rule also retains important prohibitions against unfair trade practices that harm honest businesses and consumers. This rule should benefit home improvement contractors.
General Public
The rule provides additional flexibility in transactions between contractors and consumers. Consumers may benefit when contractors' gains in efficiency and flexibility translate into lower costs and increased competition.
Alternatives
DATCP could continue regulating the home improvement industry under existing rules. However, this proposed rule updates and refines existing ATCP 110, Home Improvement Practices. The intent of this rulemaking is to modernize and streamline the requirements, but without sacrificing important consumer protections.
|
Long Range Implications of Implementing the Rule
|
Implementing the rule will benefit business, consumers, and the general public. The rule modifications will provide flexibility for businesses while retaining protection for consumers.
|
Compare With Approaches Being Used by Federal Government
|
The federal government does not, in general, regulate home improvement practices.
|
Compare With Approaches Being Used by Neighboring States (Illinois, Iowa, Michigan and Minnesota)
|
Most states, including all of Wisconsin's neighbors have home improvement practices laws. Many of the provisions in ATCP 110 are common in these other states as well.
Illinois regulates home improvement practices through its Home Repair and Remodeling Act and its Home Repair Fraud Act. These provisions are generally similar to Wisconsin's Home Improvement Practices rule.
Iowa grants consumers a private right of action, which enables consumers to sue businesses that engage in deceptive or unfair practices, misrepresentation, or failure to disclose material facts. This law covers home improvement practices, among other areas.
Contractors who do home improvement work in Minnesota and Michigan are required to obtain a license from the state (there are some exceptions). In Minnesota, licensed contractors are required to pay into the Minnesota Contractor's Recovery Fund. This fund compensates people who have suffered losses due to a licensed contractor's fraudulent, deceptive or dishonest practices, misuse of funds, or failure to do the work the contractor was hired to do.
|
Notice of Hearing
Safety and Professional Services — Pharmacy Examining Board
NOTICE IS HEREBY GIVEN that pursuant to authority vested in the Pharmacy Examining Board in ss.
450.19 (2) and
961.31, Wis. Stats., and interpreting ss.
15.08 (5) (b) and
227.11 (2) (a) Wis. Stats., the Pharmacy Examining Board will hold a public hearing at the time and place indicated below to consider an order to repeal ss.
Phar 18.02 (22),
18.06 (4) to
(6) and
(9); renumber s.
Phar 18.06 (8) to
(5); renumber and amend s.
Phar 18.06 (7) to
(4); amend ss.
Phar 18.02 (7),
(16), and
(17),
18.03 (intro.),
18.04 (1) (b) and
(e), and
(3) (b),
(d),
(i), and
(k),
18.06 (1) to
(3) (intro.); create s.
Phar 18.02 (13e); and repeal and recreate s.
Phar 18.02 (3), relating to the prescription drug monitoring program (PDMP) and the exclusion of veterinarians from reporting.
Hearing Information
Date: Wednesday, September 11, 2013
Time: 9:00 a.m.
Location: 1400 East Washington Avenue (Enter at 55 No.
Dickenson Street)
Room 121
Madison, Wisconsin
Appearances at the Hearing
Interested persons are invited to present information at the hearing. Persons appearing may make an oral presentation but are urged to submit facts, opinions and argument in writing as well. Facts, opinions and argument may also be submitted in writing without a personal appearance by mail addressed to the Department of Safety and Professional Services, Division of Policy Development, P.O. Box 8935, Madison, Wisconsin 53708-8935. Written comments must be received at or before the public hearing to be included in the record of rule-making proceedings.
Place Where Comments Are to be Submitted and Deadline for Submission
Comments may be submitted to Jean MacCubbin, Program Manager, Department of Safety and Professional Services, Division of Policy Development, 1400 East Washington Avenue, Room 151, P.O. Box 8935, Madison, WI 53708-8935, or by email to
jean.maccubbin@wisconsin.gov; or via telecommunications relay services at 711. Comments must be received at or before the public hearing to be held on
September 11, 2013 to be included in the record of rule-making proceedings.
Copies of Rule
Copies of this proposed rule are available upon request to Jean MacCubbin, Program Manager, Department of Safety and Professional Services, Division of Policy Development, 1400 East Washington Avenue, P.O. Box 8935, Madison, WI 53708-8935, by email at
jean.maccubbin@wisconsin.gov or on our website at
http://dsps.wi.gov/ Default.aspx?Page=44e541e8-abdd-49da-8fde-046713617e9e.
Analysis prepared by the Department of Safety and Professional Services
Statutes interpreted
Statutory authority
Explanation of agency authority
Section
450.19 (2), Stats., directs the Board to establish rules to govern the PDMP. Section
961.31, Stats., authorizes the Board to promulgate rules relating to the dispensing of controlled substances. Finally, ss.
15.08 (5) (b) and
227.11 (2) (a), Stats., confers to the Board the powers to promulgate rules for the guidance of the profession and to interpret the provisions of statutes it enforces.
Related statute or rule
Chapter
450, Stats., and chs.
Phar 1 to
17, Wis. Admin. Code.
Plain language analysis
Chapter
Phar 18, Prescription Drug Monitoring Program (PDMP), created a prescription drug monitoring program to collect and maintain information relating to the prescribing and dispensing of prescription drugs, particularly controlled substances. Chapter
Phar 18 became effective January 1, 2013, in response to s.
961.31, Stats., which provided the board authority to promulgate rules. As promulgated ch.
Phar 18 contradicts the statutory directive to create the PDMP in s.
450.19, Stats., as modified by
2013 Act 3.
Sections 1 to 4 either create, amend, or repeal definitions relating to changes consistent with
2013 Act 3 and the PDMP. Section 5 corrects statutory citations changed from the enactment of
2013 Act 3. Section 6 updates data requirements now that veterinarians are no longer required to report to the PDMP. Section 7 and 8 remove code text specific to veterinarian dispensers. Section 9 renumbers subsections after deleting text in Sections 7 and 8.
Summary of, and comparison with, existing or proposed federal regulation
There is no existing or proposed federal regulation.
Comparison with rules in adjacent states
An Internet-based search for similar prescription drug monitoring programs revealed that the states of Illinois, Michigan, and Minnesota allow veterinarians to access their on-line reporting website or specifically require veterinarians to report dispensing through their statues or codes. The search did not reveal that Iowa codes or statutes require or exempt veterinarians from their prescription drug monitoring program.
No factual data or analytical methodologies were used to draft the rules; the main purpose of the rule revisions is to conform to the Statutes after the enactment of
2013 Act 3.
Analysis and supporting documents used to determine effect on small business or in preparation of economic impact analysis
None undertaken to draft the rules; the main purpose of the rule revisions is to conform to the Statutes after the enactment of
2013 Act 3.
Fiscal Estimate and Economic Impact Analysis
The Fiscal Estimate and Economic Impact Analysis is attached.
Initial Regulatory Flexibility Analysis or Summary
This rule change will not have an effect on small business.
Environmental Assessment/Statement
