Agency Procedure for Promulgation
A public hearing is required and will be held on April 19, 2001, at 9:15 a.m. in Room 179A, Washington Square Building, 1400 E. Washington Avenue, Madison WI 53708.
Rule-making notices
Notice of Hearing
Agriculture, Trade and Consumer Protection
(reprinted from 2/28/01 Wis. Admin. Register)
The state of Wisconsin Department of Agriculture, Trade and Consumer Protection announces that it will hold a public hearing on a proposed rule (proposed ch. ATCP 161, subchapter III, Wis. Adm. Code) relating to annual grants to ethanol producers. The hearing will be held:
Monday, March 12, 2001 at 1:00 p.m.
Wisconsin Dept. of Agriculture, Trade and Consumer Protection
Board Room (SR-106)
2811 Agriculture Drive
Madison, WI 53718-6777.
The public is invited to attend the hearing and make comments on the proposed rule. Additional written comments will be accepted until March 12, 2001.
A copy of this rule may be obtained free of charge, from the Wisconsin Department of Agriculture, Trade and Consumer Protection, Division of Trade and Consumer Protection, PO Box 8911, Madison, WI 53708 or by calling (608)224-4928. Copies will also be available at the public hearing.
An interpreter for the hearing impaired will be available on request for this public hearing. Please make reservations for the hearing interpreter by March 7, 2001 either by writing to Kevin LeRoy, Division of Trade and Consumer Protection, PO Box 8911, Madison, WI 53708, (608/224-4928), or TDD at (608/224-5058). Handicap access is available at the hearing.
Analysis Prepared by the Department of Agriculture, Trade and Consumer Protection
Statutory authority: ss. 93.07(1) and 93.75(3)
Statutes interpreted: s. 93.75
The legislature, in 1999 Wisconsin Act 55, created an ethanol grant program under s. 93.75, Stats. The legislature authorized the department of agriculture, trade and consumer protection (DATCP) to make grants to ethanol producers in this state. The legislature has not yet provided any funding for the grant program. This rule implements the grant program, subject to legislative funding. The ethanol grant program is scheduled to sunset on July 1, 2006.
Statutory Requirements
To be eligible for a grant under s. 93.75, Stats., an ethanol producer must produce at least 10 million gallons of ethanol in a 12-month period unless DATCP specifies a different amount by rule. The ethanol producer must also purchase commodity inputs from “local sources" as defined by DATCP rule.
Under s. 93.75, Stats., an ethanol producer is eligible for grant payments during the first 60 months of ethanol production. Subject to available funding, the legislature directed DATCP to pay 20 cents per gallon for up to 15 million gallons of eligible ethanol production per 12-month period. DATCP must adopt rules to prorate grant payments if there are not enough funds to pay all ethanol producers at the authorized statutory rate.
Rule Contents
Annual grants to ethanol producers
Under this rule, an ethanol producer may apply by April 1 of each year to receive an ethanol production grant for any consecutive 12-month period ending within a year prior to that April 1. (The applicant chooses the consecutive 12-month period.) Subject to available funding, DATCP will award to each eligible applicant a grant of 20 cents per gallon for up to 15 million gallons of “eligible ethanol" produced during the consecutive 12-month period identified in the grant application.
Eligible producer
An ethanol producer is eligible for an annual grant if all the following apply:
• The producer produced at least 10 million gallons of “eligible ethanol" during the consecutive 12-month period identified in the grant application.
• DATCP has not previously awarded a grant to the ethanol producer for ethanol produced during the consecutive 12-month period identified in the grant application.
• The ethanol producer first began producing ethanol in this state not more than 60 months prior to the end of consecutive 12-month period identified in the grant application.
Eligible ethanol
Under this rule, DATCP will make grant payments only for “eligible ethanol" production. “Eligible ethanol" means ethanol that the ethanol producer produces in this state from commodities purchased from local sources. A “commodity" includes grain and other starch or sugar crops. A “commodity purchased from a local source" means any of the following:
• A commodity that the ethanol producer purchases from a person who grew that commodity in this state.
• Grain that the ethanol producer purchases from a grain dealer and receives directly from a grain facility located in this state.
Grant application
An ethanol producer must submit a grant application in writing, on a form provided by DATCP. The application must specify all the following:
• The consecutive 12-month period for which the applicant seeks a grant.
• The total gallons of “eligible ethanol" that the applicant produced during that consecutive 12-month period.
• The name and address of each supplier from whom the applicant purchased a commodity used to produce the “eligible ethanol." The applicant must identify the type and amount of each commodity purchased from each supplier. If the applicant purchased grain from a grain dealer, the applicant must give the address of the grain facility from which the grain dealer shipped that grain to the applicant.
• The applicant's federal tax identification number.
• The date on which the applicant first produced ethanol in this state.
• Any other information required by DATCP.
DATCP action on grant applications
DATCP must award grants by June 1 of each year, and must make grant payments by June 30 (the end of the state fiscal year). If DATCP denies a grant application, or awards a smaller prorated amount (see below), DATCP must explain its action in writing.
DATCP may require an applicant to provide additional information, and may deny a grant application if the applicant fails to honor DATCP's reasonable request for relevant information. DATCP may exercise its authority under ch. 93, Stats., to verify a grant application, or to verify the applicant's eligibility for a grant.
DATCP may deny a grant application, or recover grant payments made to an applicant, if DATCP finds that the applicant has materially misrepresented any information related to a grant application.
Prorating payments
Under this rule, if grant awards in any state fiscal year exceed the grant funds appropriated for that fiscal year, DATCP must prorate grant awards based on each applicant's eligible ethanol production during the consecutive 12-month period identified in the applicant's grant application. An ethanol producer who receives a pro-rated grant may not apply for the balance of that grant in the next fiscal year.
Fiscal Estimate
This proposed rule was initiated when the legislature passed 1999 Wis. Act 55. This act created an ethanol grant program under s. 93.75, Wis. Stats. Under this program, the department is authorized to make grants to certain ethanol producers. The legislation requires the department to adopt rules for the program. Administrative costs associated with this program should be minimal and easily absorbed into the agency's general duties.
Initial Regulatory Flexibility Analysis
1999 Wis. Act 55 created an ethanol grant program under s. 93.75, Wis. Stats. Under this program, the department is authorized to make grants to certain ethanol producers. The legislation requires the department to adopt rules for the grant program.
To be eligible for a payment, the ethanol producer must produce at least ten million gallons of ethanol per year. The legislation requires the department to pay ethanol producers who meet the statutory and proposed rule criteria 20¢ per gallon for not more than 15 million gallons.
Ethanol producers may only apply for a grant payment if they have been in business for sixty months or less. The entire program is scheduled to sunset on July 1, 2006.
There is little chance that any ethanol producer who can produce the minimum ten million gallons per year would also meet the state's definition of a “small business" contained in s. 227.114(1)(a). Stats. In that statutory section, “small business" means a business entity, including its affiliates, which is independently owned and operated and is not dominant in its field, and which employs fewer than twenty-five full time employees or which has gross annual sales of less than $2,500,000. Consequently, the department expects this program to have minimal impact on small business in the ethanol production industry.
The grant program should have a major impact on the prices for agricultural crops used in the production of ethanol. By providing another market for these agricultural crops, the prices for those crops should increase. The increase in prices will benefit Wisconsin farmers. Since the grant program is designed to promote the purchase of crops grown in Wisconsin, there will be a benefit to Wisconsin small businesses derived from this program and rule.
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 proposed rule changes to ATCP 29, Wis. Adm. Code. The hearing will be held at the time and place shown below. The public is invited to attend the hearing and make comments on the proposed rule. Following the public hearing, the hearing record will remain open until April 11, 2001, 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 Agricultural Resource Management, 2811 Agriculture Drive, P.O. Box 8911, Madison WI 53708 or by calling (608) 224-4523. Copies will also be available at the public hearing.
An interpreter for the hearing impaired will be available on request for the hearing. Please make reservations for a hearing interpreter by March 21, 2001 either by writing Karen Ayers, 2811 Agriculture Drive, P.O. Box 8911, Madison, WI 53708, (608/224-4523), or by contacting the message relay system (TTY) at 608/224-5058. Handicap access is available at the hearing.
Wednesday, March 28, 2001 from 1:00 p.m.-5:00 p.m.
Wisconsin Dept. of Agriculture, Trade and Consumer Protection
Board Room
2811 Agriculture Drive
Madison, WI 53718-6777.
Analysis Prepared by the Department of
Agriculture, Trade and Consumer Protection
Statutory authority: ss. 93.07 (1) and 94.73(15)
Statutes interpreted: ss. 94.681 (3), 94.685(3)(a) 2., 94.703 (3) (a) 2. and 94.704 (3) (a) 2.
This rule increases pesticide license fee surcharges in order to continue funding for the agricultural chemical cleanup program under s. 94.73, Stats.
Background
The department of agriculture, trade and consumer protection (DATCP) administers an agricultural chemical cleanup program under s. 94.73, Stats. This program is designed to clean up environmental contamination caused by spills of fertilizers and nonhousehold pesticides. Under the cleanup program, DATCP may reimburse a portion of the eligible cleanup costs. Over 360 contaminated sites are being cleaned up under this program.
When the cleanup program was first established, it was funded by a combination of general tax dollars (GPR) and agricultural chemical license fee surcharges. But the Legislature later withdrew GPR funding. The Legislature also transferred $500,000 in license fee surcharge funds from this program to the state general fund. The program is now funded entirely by license fee surcharges.
Under s. 94.73 (15), Stats., DATCP must adjust these surcharges by rule, as necessary, to maintain a cleanup fund balance of not more than $5 million and not less than $2 million. In response to a fund surplus, DATCP adopted rules suspending license fee surcharges until December, 2002. But an increase in cleanup reimbursement claims has depleted the fund more rapidly than expected. DATCP currently projects that the fund balance will fall below the required $2 million minimum amount later this calendar year. If no new funding is provided, the fund balance will likely fall to zero in the next biennium.
In order to provide continued funding for cleanup projects, this rule reinstates pesticide license fee surcharges beginning in December, 2001. This rule change will likely prevent the fund balance from falling to zero, but will not necessarily maintain the required minimum balance of $2 million. This rule does not affect fertilizer license fees, which will automatically resume in August, 2002.
Pesticide Manufacturers and Labelers; License Fee Surcharges
Under this rule, pesticide manufacturers and labelers must pay license fee surcharges based on their annual gross sales of pesticide products in Wisconsin:
• For each product with annual gross sales less than $25,000, the surcharge is $5. This surcharge is added to the current basic license fee of $275 per product.
• For each product with annual gross sales between $25,000 and $75,000, the surcharge is $100. This surcharge is added to the current basic license fee of $790.
•For each product with annual gross sales greater than $75,000, the surcharge is 0.75% of gross sales. This surcharge is added to the current basic license fee of $2760 plus 0.2% of gross sales.
A manufacturer or labeler must pay the required surcharge for each license year ending December 31, based on sales for the 12 months ending September 30 of the preceding license year. This rule first applies to license applications for the year 2002. To obtain a license for the year 2002, an applicant must pay surcharges based on sales for the 12 months ending September 30, 2001.
Dealers and Distributors of Restricted-Use Pesticides; License Fee Surcharges
Under this rule, a dealer or distributor of restricted-use pesticides must pay an annual license fee surcharge for each business location. This surcharge adds $40 to the current annual license fee of $60 per business location. A dealer or distributor must pay the surcharge to obtain a license for each year ending December 31, beginning with the 2002 license year.
Pesticide Application Businesses
Under this rule, a pesticide commercial application business must pay an annual license fee surcharge for each business location. The surcharge adds $55 to a current annual license fee of $70 per business location. A pesticide application business must pay the surcharge in order to obtain a license for each license year ending December 31, beginning with the 2002 license year.
Individual Commercial Applicators
Under this rule, an individual commercial applicator of pesticides must pay an annual license fee surcharge of $20, which is added to the current annual license fee of $30. An individual commercial applicator must pay the surcharge in order to obtain a license for each license year ending December 31, beginning with the 2002 license year.
Fiscal estimate
Based on currently pending ACCP claims and claim volumes normally submitted and reviewed in the last half of a fiscal year, the department estimates the balance in the ACCP fund will be approximately $2.7 million at the end of FY 2000/2001. This estimate anticipates that by June 2001, the department will be able to complete its review of the large backlog of existing cases generated by an October, 2000 deadline.
Based on written cost estimates or written cost approvals, and department knowledge of which projects have been completed, the department estimates ongoing annual expenditures by the industry of between $4.2 million and $4.7 million per year. Department records indicate that at least 90% of these costs will be submitted for reimbursements, and that 75% of submitted costs are paid out. The department anticipates an ongoing annual reimbursement demand of $3.1 million to $3.4 million.
This rule assumes the final version of this rule would be published either November 1, 2001 or December 1, 2001. Based on numbers of licenses issued and dollar values of nonhousehold pesticides sold, the department anticipates that this rule could generate $1,560,000 in annual surcharge fee revenues, beginning in FY 2001/2002. Publication after December 1, 2001 would not provide revenues during FY 2001/2002, since all affected licenses are issued during December.
