September 29, 1999 Amnicon Falls Hrg. Room
Wednesday Public Service Commission
9:00 a.m. 610 North Whitney Way
The Public Service Commission does not discriminate on the basis of disability in the provision of programs, services, or employment. This building is accessible to people in wheelchairs through the Whitney Way first floor (lobby) entrance. Parking for people with disabilities is available on the south side of the building. Any person with a disability who needs additional accommodations or who needs to obtain this document in a different format should contact the case coordinator listed below.
Persons who desire to actively participate as full parties must request full party status in writing. Full party status requests should be addressed to Jeffry Patzke, Hearing Examiner, Public Service Commission of Wisconsin, Examining Division, P.O. Box 7854, Madison, Wisconsin 53707-7854.
Questions from the media may be directed to Jeffrey L. Butson, Public Affairs Director, at (608) 267-0912.
Questions regarding this matter may be directed to case coordinator Randel Pilo at (608) 267-1474.
Summary and Analysis of Rules
Statutory authority: ss. 196.02 (3), 196.491 (2) (ag) and (3) (a) 1., and 227.11
Statute interpreted: s. 196.491(2) and (3)
1997 Wis. Act 204 repealed the advance plan process for electric utilities. In its place, state law now requires that the Public Service Commission (Commission) biennially prepare a strategic energy assessment (SEA). The SEA will evaluate the reliability of Wisconsin's current and future electric supply. Public utilities, rural electric cooperatives, municipal utilities, merchant plant operators, and independent power producers are all involved in producing and providing electric power in Wisconsin, so each will be required to submit information for the SEA. New rules with respect to CPCNs are proposed to conform the Commission's rules to the revisions made in the CPCN process by Act 204.
Preparation of an SEA will commence with a forecast of peak electric demand over the biennial period of an SEA, plus one additional year. The forecast will then be compared against electric power supply, to determine if capacity will be available to meet future Wisconsin demand and to provide the additional reserve margin needed for contingencies.
Electricity providers will be required to submit the information necessary to prepare the forecast of peak electric demand. This information will consist of monthly actual non-coincident peak load for a period preceding the SEA, and of predicted peak load for the 3-year period encompassing the SEA. The peak load information will then be offset by programs in place to control peak load, such as direct load control and interruptible load, and by net purchases of firm capacity, i.e., capacity backed up by reserves. Any contracts by an electricity provider to sell firm capacity with reserves will increase peak load, while any contracts to purchase capacity with reserves will offset the peak forecast. Subchapter II covers this assessment of electric demand.
Next, each provider's electric power supply will be evaluated. Each electricity provider will be required to submit information showing how much generating capacity it has installed in Wisconsin or is using to provide electricity to ultimate end-users in Wisconsin. This level of installed generating capacity must then be offset by plans to retire units and sell capacity without reserves during the 3-year period encompassing the SEA. Any plans to upgrade existing units, add new units, and purchase more capacity without reserves will increase the electric power supply. The total amount of electric power supply will then be compared against the forecasted peak electric demand. Subchapter III covers the assessment of electric power supply.
Purchases and sales of power depend on the electric transmission system to complete the transaction. To the extent that Wisconsin relies on such capacity arrangements to provide firm power, an evaluation of the transmission system's adequacy must also be completed. Electricity providers will be required to submit data on any firm reservations for use of the transmission system, while transmission providers will be required to describe plans for constructing new transmission lines during the 3-year period encompassing the SEA, and to file copies of long-term transmission studies that examine plans for transmission lines within and into Wisconsin. Subchapter V covers transmission system operation data.
As part of its SEA, the Commission must assess the extent that competition is contributing to a reliable, low-cost electric system. In addition, the Commission must assess the regional bulk power market's effect on the adequacy and reliability of electric supply in Wisconsin, and the reasonableness of electric prices. To accomplish these ends, the proposed rules require information on system dispatch costs and average energy production costs. The Commission must also evaluate whether competition is contributing to an environmentally sound electric system, consider the public interest in environmental protection, identify and describe activities to discourage inefficient and excessive power use, and perform an environmental assessment of each SEA. Conservation information is also required to comply with the state energy goals and priorities under ss. 1.12 and 196.025, Stats., when the Commission makes determinations within the SEA. As a result, the proposed rules require information on pollutant emissions and conservation. The required cost, emissions, and conservation information is covered in Subchapter IV.
Subchapter VI relates to the filing of applications for CPCNs. Included in the subchapter are the minimum data requirements for any application to build a large electric generating facility or high-voltage transmission line.
Anyone wishing to receive a free copy of the proposed rules and the template for submitting and organizing the required data should contact the case coordinator listed below.
These rules revise ch. PSC 111 and have no fiscal effect, independent of the fiscal effect of s. 196.491 (2) and (3), Stats., as created in 1997 Wis. Act 204. The Public Service Commission relies upon the fiscal analysis prepared for Assembly Bill 940, which ultimately resulted in the enactment of 1997 Wis. Act 204, as the starting point for its fiscal analysis. The fiscal analysis of Assembly Bill 940 indicates that there is no expected effect on local governments and that the costs of the Commission may increase, but the increase may be possible to absorb within the agency's budget.
1997 Wis. Act 204 created statutes replacing the Advance Plan process with the biennial Strategic Energy Assessment (SEA) and modified the process for filing applications for Certificates of Public Conveniences and Necessity. Under s. 196.491 (2) (a), Stats., the Commission is to prepare a biennial SEA that evaluates the adequacy and reliability of Wisconsin's current and future electrical supply.
Initial Regulatory Flexibility Analysis
The proposed rules would apply to any entity that has or expects to have generation in Wisconsin greater than 5 MW, or that provides electric service to ultimate end users in Wisconsin, including self-providers and any entity providing transmission service in Wisconsin. Based on the Commission's investigation, it is unlikely that any such providers would be a small business as defined in s. 227.114, Stats. The proposed rules are therefore not expected to affect small businesses as defined in s. 227.114, Stats.
Notice of Proposed Rule
Notice is hereby given that pursuant to s. 227.11 (2) (a), Stats., and interpreting ss. 77.51 (4), (12), (13), (14) (intro.), (h) and (L), (15), (20) and (22) (a) and (b) and 77.52 (1), (2) (a) and (2m) (a) and (b), Stats., and according to the procedure set forth in s. 227.16 (2) (e), Stats., the Department of Revenue will adopt the following rules as proposed in this notice without public hearing unless, within 30 days after publication of this notice on September 15, 1999, it is petitioned for a public hearing by 25 natural persons who will be affected by the rule, a municipality which will be affected by the rule, or an association which is representative of a farm, labor, business or professional group which will be affected by the rule.
Please contact Mark Wipperfurth at (608) 266-8253, if you have any questions regarding this proposed rule order.
Analysis by the Dept. of Revenue
Statutory authority: s. 227.11 (2) (a)
Statutes interpreted: ss. 77.51 (4), (12), (13), (14) (intro.), (h) and (L), (15), (20) and (22) (a) and (b) and 77.52 (1), (2) (a) and (2m) (a) and (b)
Sections 1 and 2. Tax 11.67 (2) (a) is revised, to update language and to remove examples from the text of the rule and set them forth separately, per Legislative Council Rules Clearinghouse (“Clearinghouse") standards.
Tax 11.67(3) (e) 2. is revised and Tax 11.67 (3) (e) 3. is repealed, to clarify that the taxability of materials used in constructing a prototype depends on the primary objective of the customer, and that determining whether a transaction is a purchase and sale of a prototype, or a research and development service with the prototype being incidental, is done on a case-by-case basis.
Section 3. Tax 11.67 (3) (f), (h) and (j) are revised, to conform language and punctuation to Clearinghouse standards.
Section 4. Tax 11.67 (3) (L) to (n) are renumbered Tax 11.67(3)(k) to (m), to conform numbering to Clearinghouse standards. As renumbered, Tax 11.67 (3) (L) is revised, to conform punctuation to Clearinghouse standards.
Text of Proposed Rule
SECTION 1. Tax 11.67 (2) (a) and (3) (e) 2. are amended to read:
Tax 11.67 (2) (a) Since persons engaged in the business of furnishing services are consumers, not retailers, of the tangible personal property which they use incidentally in rendering their services, tax applies to the sale of such the tangible personal property to them. Examples are physicians, lawyers and accountants.
Note to Revisor: Insert the following example following Tax 11.67 (2) (a):
Example: Persons engaged in the business of furnishing services include physicians, lawyers and accountants.
(3)(e)2. In certain instances under a research and development contract, the information cannot be developed without the production of a prototype. In this situation, the researcher owes tax on the materials used to construct the prototype since it is used to compile the data, designs, drawings and whatever else is provided to the customer. The measure of the tax is the cost of the materials going into the production of the prototype as well as all other materials consumed in performing the contract. The transfer of the prototype is incidental to the transfer of information, and for sales tax purposes, is deemed not a sale of tangible personal property. However, if the prototype is transferred to a customer for use in its business or for the purpose of reselling it, the researcher may purchase the materials used to construct the prototype without tax as property for resale if the primary objective of the customer in the transaction is to obtain tangible personal property, such as a prototype, the researcher may purchase the material used to construct the prototype without tax as property for resale. The subsequent sale of the prototype by the researcher to the customer is subject to tax unless an exemption applies. If the primary objective of the customer is to obtain the information resulting from production of the prototype, the prototype is considered transferred to the customer incidental to the research and development services. The researcher is subject to tax on the material purchased and used to construct the prototype. Determinations shall be made on a case-by-case basis.
Note to Revisor: Remove the examples following Tax 11.67(3)(e)2. and insert the following note:
Note: For a ruling on whether a specific transaction is a sale of a prototype or a research and development service with the prototype transferred incidental to the research and development service, write to Wisconsin Department of Revenue, Administration Technical Services, P.O. Box 8933, Madison, WI 53708-8933. The transaction should be described in detail.
SECTION 2. Tax 11.67 (3) (e) 3. is repealed.
SECTION 3. Tax 11.67 (3) (f), (h) and (j) are amended to read:
Tax 11.67 (3) (f) Recording studios. When a recording studio agrees to furnish or supply records, acetates or other tangible personal property which becomes the property of others, the tax applies to the total gross receipts resulting from the sale of such
the tangible personal property. Gross receipts shall may not be reduced for labor or service costs, including charges for the use or rental of studio facilities, even though such those costs may be itemized in billing the customer.
(h) Drafting. Charges made by a self-employed person for commercial drafting are subject to the tax when the charge is for detailed drawings based entirely on specifications and data supplied by architects, engineers, or other business firms. These charges are taxable if the concepts, ideas, specifications or designs depicted in the drawings produced are the customer's and the person performing the drafting simply transfers the details supplied by the customer to paper thereby producing a drawing, which is tangible personal property, for use by the customer. When the person performing drafting services uses his or her own concepts and ideas in producing detailed drawings for a customer, the sale of the drawings is not a sale of tangible personal property.
(j) Detonating explosives. Detonating explosives is a non-taxable service. A person who performs such that service and furnishes the explosives used in conjunction with the service is the consumer of the explosives.
SECTION 4. Tax 11.67 (3) (L) to (n) are renumbered Tax 11.67 (3) (k) to (m) and, as renumbered, Tax 11.67(3) (L) is amended to read:
Tax 11.67(3) (L) Car washes. The gross receipts of persons providing car wash service, including those providing coin-operated self-service car washes consisting of a pressurized spray of soap and water, are taxable. These persons are the consumers of the tangible personal property, such as soap, brushes, and towels, they purchase, except for the wax, air freshener and protectants physically transferred to a customer's vehicle. Thus, suppliers may accept a resale certificate for wax, air freshener and protectants sold to car wash operators, but suppliers are liable for the tax on all other sales of supplies to these operators.
Initial Regulatory Flexibility Analysis
This proposed rule order does not have a significant economic impact on a substantial number of small businesses.
The proposed order updates the Department of Revenue's administrative code relating to taxable sales by service enterprises, and the taxability of components utilized in the production of research and development prototypes. The changes clarify existing language to reflect the Department's current position, and alter style and format to conform to Legislative Council Clearinghouse standards. These rule changes do not have a fiscal effect.
Notice of Hearing
Notice is hereby given that that pursuant to ss. 85.16 (1), 110.06, 218.01 (5), 227.11 (2), Stats., and interpreting ss. 218.01 (1) (e) and (n), (2) (d) 1., (2a), (3) (a) 6., 9., 14., 18., 19., 22. and 30., (3) (bf), (7a), 218.30, 218.32 (2) and (4) (c), 227.51 (2), 341.51 (3), 342.16 (1m) and (2), Stats., the Department of Transportation will hold a public hearing at the time and place indicated below to consider the amendment of chs. Trans 138 and 139, Wis. Adm. Code, relating to dealer facilities, records and licenses and motor vehicle trade practices.
November 12, 1999 Room 421
Friday Hill Farms State Trans. Bldg.
1:00 p.m. 4802 Sheboygan Ave.
Parking for persons with disabilities and an accessible entrance are available on the north and south sides of the Hill Farms State Transportation Building.
An interpreter for the hearing impaired will be available on request for this hearing. Please make reservations for a hearing interpreter at least 10 days prior to the hearing.
The public record on this proposed rule-making will be held open until close of business November 26, 1999, to permit the submission of written comments from persons unable to attend the public hearing or who wish to supplement testimony offered at the hearing. Any such comments should be submitted to Cathy Skaar, Policy Analyst, Department of Transportation, Dealer Licensing Section, Room 806, P. O. Box 7909, Madison, WI 53707-7909.
Analysis Prepared by the Wis. Dept. of Transportation
Statutory authority: ss. 85.16 (1), 110.06, 218.01 (5), 227.11 (2)
Statutes interpreted: ss. 218.01 (1) (e) and (n), (2) (d) 1., (2a), (3) (a) 6., 9., 14., 18., 19., 22. and 30., (3) (bf), (7a), 218.30, 218.32 (2) and (4) (c), 227.51 (2), 341.51 (3), 342.16 (1m) and (2)
General Summary of Proposed Rule. Chapters Trans 138 and 139 regulate the conduct of motor vehicle dealers, salespeople, and other licensees in Wisconsin and provide protection for consumers from unfair trade practices. The proposed rule amends these regulations to incorporate some new consumer protections and some changes requested by the motor vehicle dealer industry intended to facilitate commerce.
A detailed description of all proposed changes is given in the Statement of Scope for this rule-making, published in the 11-1-98 Wisconsin Administrative Register. The following are the proposed changes:
1. Amend current s. Trans 138.02 (10) definition of “sell" a motor vehicle, to include delivering a vehicle from a seller in another jurisdiction to a retail consumer in Wisconsin. The change would bring under dealer licensing authority those people who currently deliver vehicles to Wisconsin consumers for out-of-state sellers.
2. Exempt from dealer licensing requirements those retail auctions that sell, at one time, heavy (over 16,000 lbs.) construction motor vehicles owned by several businesses, when those sales are incidental to the vehicle owners' primary business activities.
3. Change the definition of a “new" vehicle to allow any number of miles for manufacturer tests, pre-delivery test, dealer exchange or delivery, plus up to 200 miles for any other purpose (including the purchasing consumer's test drive).
4. To modify used motor vehicle disclosure requirements applicable to motorcycles. The Department proposes to exempt motorcycle dealers from the requirement of displaying the Wisconsin Buyer's Guide label on the motorcycle. Customers would have to be provided with an opportunity to review the Wisconsin Buyer's Guide prior to entering into a contract to purchase a motorcycle.
5. To create new protections for people who sell vehicles on consignment through a dealer and to protect the people who buy those consignment vehicles.
6. To clarify that a dealer may accept a subsequent offer on a vehicle when an accepted offer is already pending, and to specify required disclosures to the consumer whose offer is subject to an earlier pending offer.
7. To clarify that there are two allowed methods for dealerships to document changes to the motor vehicle purchase contract after the dealer has accepted the offer.
8. Amend s. Trans 138.05 (5) to give the auctions 14 rather than 12 days to provide clear title before a dealer can rescind a purchase.
9. To restrict fraudulent consumer loan application practices made possible by artificial adjustments to the price of a vehicle.