N o t i c e S e c t i o n
Notice of Hearing
Agriculture, Trade and Consumer Protection
The state of Wisconsin Department of Agriculture, Trade and Consumer Protection announces that it will hold a public hearing on its emergency rule related to dairy plant security. The emergency rule, which is effective on May 1, 1999, amends ch. ATCP 100, Wis. Adm. Code.
Written Comments
The public is invited to attend the hearing and comment on the emergency rule. Following the public hearing, the hearing record will remain open until June 10, 1999.
Copies of Emergency Rule and Contact Information
A copy of the emergency rule may be obtained, free of charge, from the Wisconsin Department of Agriculture, Trade and Consumer Protection, Division of Trade and Protection, 2811 Agriculture Drive, P. O. Box 8911, Madison, WI 53708, or by calling (608) 224-4934.
An interpreter for the hearing impaired will be available on request for this hearing. Please make reservations for a hearing interpreter by contacting Judy Jung (608) 224-4972 or by contacting the TDD at the Department at (608) 224-5058.
Hearing Information
The hearing is scheduled as follows:
Date and Time Location
May 18, 1999 Board Room, #SR-106
Tuesday State Agriculture Bldg.
Commencing 2811 Agriculture Dr.
at 10:00 a.m. MADISON, WI
Handicapped accessible
Analysis Prepared by the Dept. of Agriculture, Trade & Consumer Protection
Statutory authority: ss. 93.07 (1), 97.20 (4), and 100.06
Statutes interpreted: ss. 97.20 and 100.06
This emergency rule reduces the amount of security which dairy plant operators file with the Department to secure payment of milk producer payrolls. This adjustment reflects a large decline in producer payrolls resulting from the recent drop in milk prices. This emergency rule will restore security requirements to normal levels, and will relieve dairy plant operators of excessive security requirements based on last year's high milk prices.
This adjustment will save dairy processors millions of dollars which they can put to other productive uses. It will maintain normal protection for milk producers based on this year's milk prices, and will help Wisconsin's dairy processing industry to remain financially viable.
Dairy Plant Security Program
The Department of Agriculture, Trade and Consumer Protection (“department") currently administers a dairy plant licensing and security program under ss. 97.20 and 100.06, Stats. The Department adopts rules under ch. ATCP 100, Wis. Adm. Code (Dairy Plant Payments to Milk Producers; Security).
Dairy plant operators are currently licensed under s. 97.20, Stats., with an annual license year beginning May 1. As a condition to licensing, dairy plant operators must comply with financial requirements under s. 100.06, Stats. These financial requirements are designed to provide “reasonable assurance" that dairy farmers will be paid for the milk which they produce and ship to dairy plants.
Currently, under ss. 97.20 (2) (d) 2. and 100.06, Stats., no dairy plant operator may purchase milk from producers in this state unless the dairy plant operator does one of the following:
• Files audited financial statements with the department showing that the operator meets minimum financial standards.
• Files security with the Department.
• Enters into a dairy plant trusteeship. (A trusteeship is not a viable option for many plants.)
Current Security Requirements
Under s. ATCP 100.45 (5), Wis. Adm. Code, if a dairy plant operator is required to file security, the security must be equal to at least 75% of the operator's “maximum liability to producers." An operator's “maximum liability to producers" is based on the operator's highest monthly producer payroll during the preceding license year.
Because of record high prices during the last quarter of 1998, dairy plants had unusually high producer payroll during that period. The Basic Formula Price (“BFP") reached an all time record high of $17.34 per hundredweight in December 1998. Since then, the average market price for raw milk has fallen by approximately 41 percent. (Dairy economists expect an average BFP for 1999 to be 12 to 16.2% below last year's average of $14.20.)
As a result of this dramatic price drop, dairy plant producer payrolls have decreased sharply. Current dairy plant security requirements, calculated according to last year's “maximum liability to producers," are therefore excessive in relation to current payrolls. (Security amounts are 31 to 48% higher than they would be if calculated at current prices.)
Prices received by Wisconsin dairy plants for processed dairy products have also fallen dramatically since the end of last year. This has created serious financial hardships for many dairy plant operators, and has impaired the ability of some operators to meet the financial standards under s. 100.06, Stats., or file security in the (excessive) amount currently required. If a dairy plant operator is unable to meet minimum financial standards, and is unable to file security, the dairy plant may be forced to close. The forced closing of a plant may, in turn, result in serious financial losses to producer patrons.
Security Adjustment
Excessive security requirements, based on last year's milk prices, impose an added burden on financially stressed plant operators. This emergency rule reduces security requirements by 15% for the license year beginning May 1, 1999, to reflect the reduction in milk prices and producer payrolls. This will make it easier for dairy plant operators to meet the minimum security requirements and stay in business.
Producer Protection
The emergency rule will continue to provide reasonable protection for milk producers. The emergency rule merely adjusts security levels to be commensurate with current milk prices and producer payrolls. This emergency rule will relieve financially stressed dairy plants from unnecessary financial burdens, and will make it easier for those plants to file security with the Department. That will reduce the risk of dairy plant financial failures, or forced closings of unsecured plants, which may adversely affect milk producers.
Under current rules, if the amount of security filed by a dairy plant operator falls below 75% of the operator's current monthly producer payroll, the dairy plant must immediately notify the Department. The Department may require the operator to file additional security. This emergency rule does not change these current rule provisions.
Fiscal Estimate
Under current rules, dairy plant operators who are required to file security with the Department must maintain minimum security amounts equal to 75% of their maximum liability to producers. Because of recent extraordinary decreases in the price of raw milk, this rule is placing unnecessary financial hardships on dairy plants that are not providing any increased benefit to producers.
This rule would temporarily reduce the amount of security to 85% of current levels, thereby reducing financial strain on dairy plant operators.
Expenses incurred by the Department's dairy plant security program are funded by program revenue fees collected from dairy plants. This proposed emergency rule in no way affects revenues or expenses.
Initial Regulatory Flexibility Analysis
This emergency rule reduces the amount of security which dairy plant operators file with the Department to secure payment of milk producer payrolls. This adjustment reflects a large decline in producer payrolls resulting from the recent drop in milk prices. This emergency rule will restore security requirements to normal levels, and will relieve dairy plant operators of excessive security requirements based on last year's high milk prices.
This adjustment will save dairy processors, many of whom are “small businesses" as defined by s. 227.114 (1) (a), Stats., millions of dollars which they can put to other productive uses. It will maintain normal protection for milk producers, many of whom are “small businesses" as defined by s. 227.114 (1) (a), Stats., based on this year's milk prices.
It will also help Wisconsin's dairy processing industry to remain financially viable, which benefits processors and milk producers, many of whom are “small businesses" as defined by s. 227.114 (1) (a), Stats.
Notice of Hearings
Agriculture, Trade & Consumer Protection
The State of Wisconsin Department of Agriculture, Trade and Consumer Protection announces that it will hold public hearings on proposed revisions to ch. ATCP 160, Wis. Adm. Code, relating to County and District Fairs. The hearings will be held at the times and places shown below. The public is invited to attend the hearings and make comments on the proposed rule. Following the public hearings, the hearing record will remain open until May 28, 1999, for additional written comments.
A copy of this rule may be obtained free of charge, from the Wisconsin Department of Agriculture, Trade and Consumer Protection, Division of Marketing, 2811 Agriculture Drive, P.O. Box 8911, Madison, WI 53708, or by calling (608) 224-5100 or (608) 224-5131. Copies will also be available at the public hearings.
An interpreter for the hearing impaired will be available on request for these hearings. Please make reservations for a hearing interpreter by May 3, 1999, either by writing to Cindy Rein, 2800 Agriculture Drive, P.O. Box 8911, Madison, WI 53708, (608) 224-5100) or by contacting the message relay system (TTY) at (608) 224-5058. Handicap access is available at both locations for the hearings.
Hearing Information
Two hearings are scheduled:
May 13, 1999 State of Wisconsin
Thursday WI Dept. of Agriculture, Trade
9:30 a.m. until 11:30 a.m. & Consumer Protection Bldg.
2811 Agriculture Drive
Madison, WI 53718
Room 172
May 13, 1999 Marathon County Courthouse
Thursday 500 Forest Street
3:00 p.m. until 5:00 p.m. Wausau, WI 54403
Room 149
Analysis Prepared by the Department of Agriculture, Trade and Consumer Protection
Statutory Authority: ss. 93.07(1) and 93.23(1)(a)2.
Statute Interpreted: s. 93.23
This rule updates the department's current rules related to county and district fairs. Among other things, this rule establishes new and revised entry classes for county and district fair exhibits, and specifies uniform premium awards for various entry classes.
Background
Under s. 93.23, Stats., the department of agriculture, trade and consumer protection (“department") is authorized to distribute state aid moneys to county and district fairs. Currently, about 76 county and district fairs receive state aids from the department. State aid moneys, appropriated under s. 20.115(4)(b) and (g), Stats., are used to reimburse county and district fairs for premiums awarded to fair exhibitors. In each year of the 1997-99 biennium, the Legislature earmarked $585,000 of the state's gaming revenues for that purpose.
Under s. 93.23, Stats., the department may reimburse a county or district fair for 95% of the first $8,000 in net premiums awarded by the fair, and 75% of all net premiums over $8,000. The maximum amount of reimbursement is $15,000. In order to qualify for state aids under s. 93.23, Stats., a county or district fair must award premiums according to a uniform premium list which the department adopts by rule.
The department's current rules under ch. ATCP 160, Wis. Adm. Code specify detailed entry classes for county and district fair exhibits. For each entry class, current rules specify uniform premiums for first place to fourth place premium awards. The department will pay state aids only on that portion of a premium award that is within the maximum amount specified by department rule. Under this rule, premiums for most exhibits range from $1.00 to $3.00, although higher amounts may be awarded for some classes of exhibits.
The department updates its county and district fair rules every 5 years, based on recommendations from the Wisconsin association of fairs. The Wisconsin association of fairs is a state association of organizations that sponsor county and district fairs in this state. This rule is adopted as part of the department's regular 5-year update cycle, and incorporates the most recent recommendations of the Wisconsin association of fairs.
Rule Contents
This rule specifies a number of new and revised entry classes for county and district fair exhibits. It also specifies a number of new and revised premium awards in various entry classes. This rule makes the following changes to current rules, among others:
