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.
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.
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.
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.
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
May 13, 1999 Marathon County Courthouse
Thursday 500 Forest Street
3:00 p.m. until 5:00 p.m. Wausau, WI 54403
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.
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.
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:
It adds a specific department or entry class for computers and computer programs.
It changes the basis for entry classes in the junior fair division from the age of exhibitors to the academic grade level of exhibitors. Current rules specify that junior fair division exhibitors may be 8 to 19 years of age. This rule establishes entry classes for exhibitors who have completed kindergarten to grade 13 by June 30 in the year in which the fair is held.
It eliminates specific breeds as entry classes in the dairy goats, poultry and rabbits departments for both the open division and junior fair division. The new rules allow the local fair to establish entry classes comprised of a single breed, or a combined breed class consisting of two or more breeds within the same group, none of which are offered by the fair as a separate entry class.
It adds a poultry market entry class in the open class division.
It simplifies the rule by eliminating specific entry classes for departments 18 to 32 in the open fair division. The affected departments include exhibits such as flowers and house plants, clothing, home furnishings, and foods and nutrition. The new rules simply list the premium levels and authorize the local fair board to establish specific classes and groupings under each premium level.
It eliminates all bull calf entry classes from the dairy cattle department in the junior fair division. This change is made for safety reasons because of the potential for injury to youth exhibitors when showing a bull calf.
It amends the showmanship class in each department in which it occurs in the junior fair division by eliminating exhibitor classes for beginners, intermediates, and seniors. The revision also gives the local fair board discretion to establish specific entry classes and subdivisions of entry classes.
It creates an entry class for dairy sheep in the junior fair division's sheep department.
It repeals and recreates rules for departments 14 to 34 in the junior fair division. The affected departments include exhibits such as flowers and house plants, clothing, home furnishings, and foods and nutrition. The new rules simply list the premium levels and authorize the local fair board to establish specific classes and groupings under each premium level.
This rule also makes a substantial number of technical and drafting changes to current rules.
This rule will have not significant fiscal impact on the department or local units of government nor will it have any significant impact on small business.
Initial Regulatory Flexibility Analysis
The proposed rule, ch. ATCP 160, Wis. Adm. Code, County and district Fairs, has been reviewed pursuant to s. 227.114, Wis. Stats., and it has been determined that the rule will not have a significant economic impact on a substantial number of small businesses.
Notice of Hearing
Chiropractic Examining Board
Notice is hereby given that pursuant to authority vested in the Chiropractic Examining Board in ss. 15.08 (5) (b), 227.11 (2) and 446.02 (8), Stats., and interpreting s. 446.02 (8), Stats., the Chiropractic Examining Board will hold a public hearing at the time and place indicated below to consider an order to create s. Chir 3.08, relating to use of limited liability entities in chiropractic practice.
May 20, 1999 Room 179A
Thursday 1400 East Washington Ave.
10:00 a.m. MADISON, WI
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 Regulation and Licensing, Office of Administrative Rules, P.O. Box 8935, Madison, Wisconsin 53708. Written comments must be received by May 30, 1999 to be included in the record of rule-making proceedings.
Analysis Prepared by the Dept. of Regulation and Licensing
Statutes authorizing promulgation: ss. 15.08 (5) (b), 227.11 (2) and 446.02 (8), Stats.