Rule-Making Notices (Hearing Notices)

rulemaking_notices Wisconsin Administrative Register No. 617, 5/14/2007

Rule-making notices

Notice of Hearings

Agriculture, Trade and Consumer Protection

[CR 07-037]
[Reprinted from 4/30/07 Register]

The state of Wisconsin Department of Agriculture, Trade and Consumer Protection (DATCP) announces that it will hold public hearings on proposed amendments to chapters ATCP 60, 69, 70, 71, 75, 77, 80, 81, 82 and 85, Wis. Adm. Code, relating to food and dairy license and reinspection fees.

DATCP will hold three public hearings at the times and places shown below. DATCP invites the public to attend the hearings and comment on the proposed rule. Following the public hearings, the hearing record will remain open until Monday, June 11, 2007, for additional written comments. Comments may be sent to the Division of Food Safety at the address below, by email to [e-mail], or online by using the State of Wisconsin's Administrative Rules website at: https://apps4.dhfs.state.wi.us/admrules/public/Home.

You may obtain a free copy of this rule by contacting the Wisconsin Department of Agriculture, Trade and Consumer Protection, Division of Food Safety, 2811 Agriculture Drive, P.O. Box 8911, Madison, WI 53708. You can also obtain a copy by calling [phone] or emailing [e-mail]. Copies will also be available at the hearings. To view the proposed rule online, go to the State of Wisconsin's Administrative Rules website at:

https://apps4.dhfs.state.wi.us/admrules/public/Home.

To provide comments or concerns relating to small business, please contact DATCP's small business regulatory coordinator Keeley Moll at the address above, by emailing to [e-mail] or by telephone at [phone].

Hearing impaired persons may request an interpreter for these hearings. Please make reservations for a hearing interpreter by May 9, 2007, by writing to Deb Mazanec, Division of Food Safety, P.O. Box 8911, Madison, WI 53708-8911, telephone [phone]. Alternatively, you may contact the DATCP TDD at [phone]. Handicap access is available at the hearings.

Hearing Dates and Locations:

Tuesday, May 15, 2007

10:00 a.m. to 1:00 p.m.

State of Wisconsin Office Building, Room 105

718 W. Clairemont Avenue

Eau Claire, WI 54701

Wednesday, May 16, 2007

10:00 a.m. to 1:00 p.m.

Appleton Public Library, Room C

225 N. Oneida Street

Appleton, WI 54911

Tuesday, May 22, 2007

10:00 a.m. to 1:00 p.m.

Dept. of Agriculture, Trade and Consumer Protection

2811 Agriculture Drive, Board Room (CR-106)

Madison, Wisconsin, 53718-6777

Analysis Prepared by the Department of Agriculture, Trade and Consumer Protection

The Department of Agriculture, Trade and Consumer Protection (“DATCP") administers Wisconsin's dairy and food safety program. The program is funded, in major part, by dairy and food license fees. This rule increases current license fees in order to address an imminent deficit in the food safety program revenue account.

Statutory Authority

Statutory authority: 93.07 (1), 93.09 (10), 93.12 (7), 97.17 (4), 97.175 (2), 97.20 (2c) (b), (2g) (b), (2n) (b), (2w) and (4), 97.21 (4m) and (6), 97.22 (2) (b), (4) (am) and (8), 97.27 (3m) and (5), 97.29 (3) (am), (cm) and (5), 97.30 (3m) and (5), and 98.146 (4), Stats.

Statutes interpreted: 93.09, 93.12, 97.17, 97.175, 97.20, 97.21, 97.22, 97.27, 97.29, 97.30 and 98.146 (4), Stats.

DATCP has broad authority, under s. 93.07(1), Stats., to adopt rules needed to implement laws under its jurisdiction. DATCP also has specific authority, under the provisions cited above, to establish dairy and food license and reinspection fees.

Rule Content

This rule increases current license and reinspection fees for dairy and food businesses, as shown below. DATCP plans to adopt and publish this rule before May 1, 2008, but fee increases will first apply to fees that are due on July 1, 2008.

Entity	Current Fee(s)	Proposed Fee(s)
Dairy Farm	$24 annual license fee (paid by dairy plant operator)	$32
	$24 or $48 reinspection fee (paid by dairy plant operator if reinspection is required)	$32 or $64
Dairy Plant	Annual license fee (calculations include an increase in the basic license fee from $96 to $129) $699 or $879 for grade A processing plant (based on size)	$937 or $1,178
	$397 for grade A receiving station	$532
	$96 for grade A transfer station	$129
Entity	Current Fee(s)	Proposed Fee(s)
	$96 to $421 for grade B processing plant (based on size)	$129 or $565
	$96 for grade B receiving station or transfer station	$129
	Grade A milk procurement fee: 0.96 cent per 100 lbs.	1.081 cent per 100 lbs. (for payments due beginning July 1, 2008)
	Grade B milk procurement fee: 0.2 cent per 100 lbs.	No change
	Reinspection fee: $203 or $246 for grade A processing plant	$336 or $394
	$221 for grade B processing plant	$360
	$122 for grade A receiving station	$229
	$48 for grade B receiving station or transfer station	$64
	Butter and cheese grading fee: 1.09 cents per 100 lbs. of product	1.5 cents per 100 lbs. of product
Food Processing Plant	$78-$685 annual license fee (based on size and type)	$105 - $918
	$261 canning surcharge for canning plants with annual production of 25,000 or more	$350
	$49-$431 reinspection fee (based on size and type)	$66 - $578
Food Warehouse	$65-$261 annual license fee (based on size and type)	$87-$350
	$92-$246 reinspection fee (based on size and type)	$123 - $330
Milk Distributor	$60 annual license fee per facility	$80
	$25 reinspection fee per facility	$34
Entity	Current Fee(s)	Proposed Fee(s)
Retail Food Store	$37-$562 annual license fee (based on size and type)	$50-$753
	$74-$369 reinspection fee (based on size and type)	$99 - $494
Dairy, Food or Water Testing Lab	$336 annual lab certification fee for each dairy or food test (other than milk drug residue screening)	$450
	$276 annual lab certification fee for each water test	$370
	$25 annual certification fee for each dairy or food analyst (other than milk drug residue screening analyst)	$34
	$50-$500 initial fee and $25-$50 annual renewal fee for lab performing milk drug residue screening	$67-$670 initial fee $34-$67 annual renewal fee
	$25 initial evaluation fee for milk drug residue screening analysts (if more than 3 per lab)	$34
Bulk Milk Tanker	$36 annual bulk milk tanker license fee	$48
	$36 bulk milk tanker reinspection fee	$48
	$48 bulk milk weigher & sampler license fee (2-year license)	$64
	$48 bulk milk weigher and sampler reinspection fee	$64
Buttermaker or Cheesemaker	$60 license fee (2-year license)	$80
Butter or Cheese Grader	$60 license fee (2-year license)	$80

This rule does not affect any of the following:

• Fees that DATCP charges for certain services, such as review of food processing equipment plans, or the testing, timing and sealing of pasteurizers. DATCP is authorized to charge fees for such services in order to cover its cost of providing the services. DATCP may adjust these service fees by written notice, in order to keep fees consistent with service costs.

• License fees for milk and cream testers. DATCP is not authorized to adjust these fees by rule. Milk and cream testers currently pay a license fee of $50 (for a 2-year license) and a reinspection fee of $25.

• License fees for meat establishments. Meat inspection programs are funded by a combination of federal dollars and matching state GPR dollars. Under federal law, states must match federal dollars with state GPR dollars, not license fees.

Fiscal Estimate

State Fiscal Effect

This rule will increase food safety program revenues by approximately $994,000 per year, beginning in FY 2008. The increase is needed to offset a projected deficit in DATCP's food safety program revenue account beginning in FY 2007. A complete fiscal estimate is attached.

Wisconsin's food safety program is funded by a combination of general tax dollars (GPR) and program revenue from license fees (PR). In 1991, license fees funded about 40% of program costs. The 1995-97 biennial budget act reduced the GPR funding share, so that PR funded about 50% of program costs. Subsequent state budgets further reduced the GPR funding share, so that PR now funds about 60% of the food safety budget.

Recent state budgets have lapsed a substantial amount of food safety license fee revenue to the state general fund (to help remedy state budget deficits). At the same time, DATCP has experienced a modest increase in operating costs. DATCP proposed a license fee increase in 2005, but was forced to withdraw a large share of that fee increase proposal. As a result, DATCP projects a substantial food safety budget deficit beginning in FY 2007.

DATCP is working to deliver effective food safety protection as efficiently as possible. For example:

DATCP has reduced its food and dairy staff by approximately 17% since 1990 (from 118 to 98 staff). Staffing trends fairly reflect changes in the food and dairy industry, including a reduction in dairy farm numbers and increased delegation of retail food regulation to cooperating local governments. While food safety staffing needs have declined in some traditional areas, they are growing in other areas.

DATCP works with local governments to license and inspect retail food establishments. Thirty-four local entities license and inspect on behalf of DATCP, compared to 15 in 1997 (local participation is voluntary). Local entities now license and inspect 4,600 retail food establishments. DATCP licenses and inspects the remaining 4,200 establishments.

DATCP is working to reform national dairy regulations, which impose rigid Grade A inspection frequency requirements. DATCP is pursuing a more flexible, risk-based inspection system that could reduce inspection costs. In the meantime, Wisconsin must comply with current inspection mandates in order to ship milk and fluid milk products in interstate commerce.

DATCP and the Wisconsin Department of Health and Family Services (DHFS) have eliminated duplicate licensing and inspection of grocery stores, restaurants, and combination grocery-restaurants. DATCP and DHFS have adopted uniform rules for grocery stores and restaurants, based on the federal Model Food Code.

Local Fiscal Effect

DATCP currently provides administrative support to local governments that license and inspect retail food establishments as agents of DATCP. Local governments establish their own license fees, and reimburse DATCP for administrative services costs. The reimbursement amount equals 10% of the license fees that DATCP would charge local license holders, if DATCP licensed them directly. An increase in DATCP license fees therefore increases local reimbursement payments (current payments do not fully compensate DATCP for its costs).

In FY 2006, local governments made a total of $58,000 in reimbursement payments. If DATCP adopts the fee increases proposed in this rule, the reimbursement rate will remain at 10%, but the total reimbursement amount will increase to approximately $76,500. This rule thus increases local costs by approximately $18,500 (statewide total). Local governments can (and likely will) pass this increased cost on to retail food businesses. Local governments can set license fees to recover up to 100% of their reasonable operating costs.

Business Impact

This rule affects all milk producers, dairy plants, food processing plants, food warehouses, milk distributors, retail food stores, dairy and food testing laboratories, milk haulers, buttermakers, cheesemakers, and butter and cheese graders licensed by the department. Many of these businesses are “small businesses" as defined in s. 227.114 (1) (a), Stats.

This rule increases annual license fees, reinspection fees and milk procurement fees, beginning with fees that are due in July, 2008. This will increase overall dairy and food industry costs by a combined total of approximately $994,000 per year. Costs for individual businesses will depend on business size and type. Because of competitive market conditions, it may be difficult for affected businesses to increase prices to recover these costs.

The proposed fee increases will have a significant but not dramatic impact on affected businesses. In the multi-billion dollar dairy and food industries, license fees comprise a relatively small overall share of industry costs. DATCP has worked to maintain a fair and equitable license fee schedule.

Fees are based on actual food safety costs related to each license sector. Fees are also based on business size, food product type, and type of food handling operations. Smaller businesses generally pay lower fees than large businesses, and lower-risk businesses generally pay lower fees than higher-risk businesses.

This rule increases food safety license fees, but does not change other license requirements. This rule requires no additional recordkeeping, and no added professional services to comply. A Business Impact Analysis is attached.

DATCP has not incorporated a small business enforcement policy in this rule, but has adopted a separate rule on that subject (see subch. VII of ch. ATCP 1). DATCP will seek voluntary compliance. However, food and dairy businesses must pay required license fees in order to obtain a license from DATCP.

Federal Regulation

There are no existing or proposed federal regulations related to license fees for food and dairy businesses operating in Wisconsin. However, national regulations such as the Interstate Pasteurized Milk Ordinance (“PMO") have a significant impact on state program costs. The PMO includes rigid inspection frequency requirements for grade A dairy farms and other grade A dairy operations. Wisconsin must comply with the PMO in order to ship milk and fluid milk products in interstate commerce.

Surrounding State Programs