Madison, Wisconsin 53718
Tuesday, July 17, 2007
7:00 p.m. to 9:00 p.m.
Dept. of Natural Resources West Central Region Hdqrs.
1300 W. Clairemont Avenue – Room 158
Eau Claire, WI 54701
Analysis Prepared by the Department of Agriculture, Trade and Consumer Protection
The Department of Agriculture, Trade and Consumer Protection (“DATCP") administers Wisconsin's animal health and disease control program. The program is funded, in significant part, by animal health fees. This rule increases animal health fees in order to remedy a serious deficit in the animal health fee revenue account.
Statutory authority: 93.07 (1), 95.55 (3), 95.57 (2), 95.60 (5), 95.68 (4) and (8), 95.69 (4) and (8), 95.71 (5) and (8), and 95.715 (2) (d).
Statutes interpreted: 93.06 (1d), (1g), (1m), (1p), (1q), 95.55, 95.57 (2), 95.60 (5), 95.68 (4) and (8), 95.69 (4) and (8), 95.71 (5) and (8), and 95.715 (2) (d).
DATCP has broad authority, under s.
93.07 (1), Stats., to adopt rules needed to implement laws under its jurisdiction. DATCP also has authority, under the provisions cited above, to charge certain animal health fees and determine the amount of those fees.
Rule Content.
Fee changes. This rule increases some current animal health fees, and creates some new fees. Among other things, this rule affects license fees, voluntary herd certification fees, fees for veterinary certification forms, and fees for voluntary certification of animal health professionals. Some of the fee increases (veterinary certification forms, livestock market licenses, etc.) may affect several sectors of the livestock industry, while others are limited to specific livestock sectors.
Fee For:
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Current Fee:
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Proposed Fee:
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Certificate of Veterinary Inspection (blank form used by private veterinarians)
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$3 per form
(interstate or intrastate)
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$5.60 per form (interstate)
$0.60 per form (intrastate)
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Cattle; Brucellosis-Free Herd Certification (Voluntary certification facilitates animal sale and movement)
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No fee.
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$50 annual certification
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Cattle and Other Bovines; TB-Free Herd Certification (Voluntary certification facilitates sale and movement)
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No fee
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$50 annual certification
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Johne's Disease Veterinarian; Certification (Voluntary 3-year certification)
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No fee.
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$50 per 3-year certification
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Cattle and Other Bovines:
Approved Import Feedlot Permit (Voluntary permit facilitates certain imports)
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$75 annual permit
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$140 annual permit
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Swine; Qualified Pseudorabies Negative Herd, Qualified Pseudo-Rabies Negative Grow-out Herd, or Feeder Swine Pseudorabies Monitored Herd (Voluntary certification facilitates sale and movement)
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No fee
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$50 annual certification
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Swine; Validated Brucellosis-Free Herd Certification (Voluntary certification facilitates swine sale and movement)
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No fee
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$50 annual certification
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Equine Imports; Quarantine Station Permit (station may receive certain horse imports)
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No fee
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$100 annual permit and $100 permit per quarantined animal
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Poultry Tester; Training
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No fee
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$25 training fee.
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National Poultry Improvement Plan; Annual Flock Enrollment
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Annual fee ranges from $40 to $200 based on flock type and size.
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Annual fee ranges from $80 to $400 based on flock type and size.
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Farm-raised Deer; Annual Herd
Registration
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Annual fee based on herd size:
$50 if < 15 deer
$100 if > 15 deer
$150 minimum one-time inspection fee for 2nd herd at same site (not required for renewal).
$100 surcharge if found operating without registration
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Annual fee based on herd size:
$162.50 if < 15 deer
$325 if > 15 deer
$200 minimum one-time inspection fee for 2nd herd at same site (not required for renewal).
$250 surcharge if found operating without registration
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Farm-raised Deer;
Hunting Preserve Certificate
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$150 for 10-year certificate
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$500 for 10-year certificate
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Farm-raised Deer; TB-Free Herd Certification (Voluntary certification facilitates deer sales and movement)
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No fee.
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$50 per year of certification
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Farm-raised Deer; Brucellosis-Free Herd
Certification (Voluntary certification facilitates deer sales and movement)
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No fee.
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$50 per year of certification
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Fish Farm (Type 1); Annual Registration
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$25 annual fee covers any number of Type 1 fish farms
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$37.50 annual fee covers one Type 1 fish farm; $50 annual fee covers any number of Type 1 fish farms
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Fish Farm (Type 2); Annual Registration
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$50 annual fee covers any number of Type 2 fish farms
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$125 annual fee covers 1-5 Type 2 fish farms;
$150 annual fee covers 6-10 Type 2 fish farms;
$200 annual fee covers 11-20 Type 2 fish farms;
$300 annual fee covers 20 or more Type 2 fish farms.
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Fish Import Permit (may cover multiple import shipments for up to one year)
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$50
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$90
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Sheep; Brucella-Ovis Free Flock Certification (Voluntary certification facilitates animal sale and movement)
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No fee
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$50 per year of certification
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Goats; Brucellosis-Free Flock Certification (Voluntary certification facilitates animal sale and movement)
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No fee
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$50 per year of certification
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Goats; Tuberculosis Free Flock Certification (Voluntary certification facilitates animal sale and movement)
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No fee
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$50 annual certification
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Animal Market; Annual License
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$225 annual fee for Class A license
$115 annual fee for Class B license
$150 annual fee for Class C license
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$420 annual fee for Class A license
$220 annual fee for Class B license
$280 annual fee for Class C license
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Animal Dealer; Annual License
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$115 annual fee
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$220 annual fee
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Animal Trucker; Annual License
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$30 annual fee
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$60 annual fee
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Animal Transport Vehicle;
Annual Registration Sticker
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$10 annual fee per vehicle
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$20 annual fee per vehicle
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Other Rule Changes. This rule eliminates current fish farm registration fee exemptions for research institutions and government agencies. Those entities will now have to pay the same registration fees as other fish farm operators.
Rule Effective Date. This rule will not take effect until calendar year 2008. There are different annual license cycles for different types of licensed entities, and license fee increases will not be implemented until the first annual license cycle beginning after the rule effective date.
Fiscal Estimate
State Fiscal Effect. Animal Health program operations are funded by a combination of general state tax dollars (79%), animal health fee revenues (19%) and federal funds (2%). This does not include federal funds that are passed through to program beneficiaries in the form of grants or other assistance.
Recent state budgets have done the following:
• Reduced annual GPR funding (general tax dollars) for animal health by nearly $300,000.
• Lapsed approximately $130,000 in animal health fee revenue (one-time lapse) to the state general fund.
• Assigned more staff to be paid from animal health fee revenues.
Program costs have gone up this year, as DATCP has filled critical animal health positions that had been held vacant. DATCP has only about 37 authorized permanent positions (field and office positions) for its entire animal health and disease control program, so it is important that key positions be filled.
As a result of these combined factors, the positive cash balance in the animal health fee revenue account is declining rapidly. DATCP collects about $300,000 in animal health fees each year, and projects fee revenue expenditures approaching $600,000 each year. DATCP projects a negative cash balance of $131,500 in the animal health fee revenue account beginning in FY 2008. If nothing is done, the negative cash balance will go to $371,400 in FY 2009, $633,300 in FY 2010 and $924,500 in FY 2011. DATCP is proposing a fee increase to remedy this funding deficit and maintain critical disease control programs.
This rule will increase animal health fee revenues by approximately $375,150 per year when it is fully implemented beginning in FY 2008-09. DATCP projects that this fee increase will stabilize animal health program staffing and funding for the foreseeable future, without further fee increases.
Without this fee increase or other funding support, DATCP will need to reduce animal health staffing at a time when bio-security and disease threats have grown. DATCP has only about 37 permanent staff for all of its animal health and disease control programs (does not count temporary, federally-funded positions). Staff reductions will increase risks to Wisconsin's major livestock industries, which rely on effective animal health and disease control programs. Staff reductions will also increase disease risks to humans and wildlife.
Local Fiscal Effect. This rule will have no fiscal impact on local units of government.
Business Impact. This rule affects animal markets, animal dealers, animal truckers, livestock farmers, deer farmers, fish farmers and veterinarians. Many of these businesses are “small businesses" as defined in s.
227.114 (1) (a), Stats.
This rule increases some current animal health fees, and creates some new fees. Some fee increases may affect several sectors of the livestock industry, while others are limited to specific livestock sectors.
This rule will increase overall industry costs by a combined total of approximately $375,150 per year, once the rule is fully implemented. Fee increases for individual businesses are generally modest, and will depend on business size and type. Smaller businesses generally pay lower fees than large businesses. Fees are based, in part, on animal health costs related to each affected industry.
This rule does not change other animal health regulations. This rule requires no additional recordkeeping, and no added professional services to comply. For small businesses, the effective date of this rule is automatically delayed by 2 months, pursuant to s.
227.22(2)(e), Stats. The delayed effective date is not expected to have a significant impact on the timing or amount of fee collections under this rule.
Federal Regulation
DATCP administers animal disease control programs in cooperation with the United States Department of Agriculture, Animal and Plant Health Inspection Service (“the federal bureau").
Federal grants pay for about 2% of Wisconsin's animal health program operations. This does not include federal funds that are passed through to program beneficiaries in the form of grants or other assistance.
The federal bureau has well-established control programs for historically important diseases such as tuberculosis and brucellosis. The federal bureau has less well-developed programs for new or localized diseases, or emerging animal-based industries. In those areas, states often play a leadership role. For example, Wisconsin is a recognized national leader in the regulation of farm-raised deer (chronic wasting disease) and aquaculture.
States have independent authority to regulate animal health and movement, including imports from other states. However, states strive for reasonable consistency, based on standards spelled out in federal regulations. States typically incorporate federal standards where they exist, and play a key role in implementing federal standards.
The federal bureau does not license animal businesses, or regulate state fees. This fee rule does not duplicate or conflict with any federal fees or standards.
Surrounding State Programs
Surrounding state animal health programs are broadly comparable to those in Wisconsin, but differ in a number of ways. State programs reflect differences in animal populations, animal-based industries, and disease threats. Programs for historically important diseases, such as tuberculosis and brucellosis, tend to be fairly similar between states and are based on well-established federal standards. Programs for newer diseases or newer forms of agriculture, such as farm-raised deer and aquaculture, tend to be more variable.
Animal health fees fund about 19% of Wisconsin's animal health program operations. In the surrounding states, by contrast, animal health program operations are funded almost entirely by state general fund appropriations. Some states charge almost no license fees. Other states charge fees but deposit them to the state general fund (so they do not have a direct impact on program appropriations).
Minnesota
The state-funded portion of Minnesota's animal health program is funded 98% by state general fund appropriations and 2% by industry fees. The farm-raised deer (chronic wasting disease control) program is the only program that charges fees. That fee is $10 per farm-raised deer, up to maximum of $100 per herd.
Iowa
The state-funded portion of Iowa's animal health program is funded 100% by state general fund appropriations. Iowa charges nominal industry fees that are deposited to the state general fund. The cost to collect the fees (which are set by statute) exceeds the amount of revenue produced. Fees include the following:
• $50 for an annual animal market license, plus $10 for each market agent.
• $25 for an annual animal dealer license, plus $10 for each dealer agent.
• $5 for an annual pig dealer license, plus $3 for each dealer agent.
• $3 for an annual poultry buyer license.
• $10 for an annual hatchery license.
• $25 to register a livestock brand for 5 years.
• $10 for an annual sheep dealer license.
• $10 for an annual bull breeder license.
Michigan
The state-funded portion of Michigan's animal health program is funded 95% by state general fund appropriations, 2% by segregated fees from racing, and 3% by animal industry fees. Michigan fees include the following:
• $400 for an annual livestock market (auction) license.
• $250 for an annual livestock collection point (buy station) license.
• $150 for an annual horse market (auction) license.
$50 for an annual livestock dealer license.
• $100 for an annual fish farm license ($75 for a renewal).
Illinois
The state-funded portion of Illinois' animal health program is funded 100% by state general fund appropriations, except that part of its poultry program (eggs) is funded by industry fees. The state also charges some lab testing fees for non-traditional diseases. Illinois charges nominal license fees that are deposited to the state general fund. The cost to collect the fees (which are set by statute) exceeds the amount of revenue produced. Fees include the following:
• $200 for an annual livestock market (auction) license.
• $25 for an annual livestock dealer license ($10 for a renewal license), plus $10 for each additional business location and $5 for each dealer agent.
• $25 for an annual feeder swine dealer license ($10 for a renewal license), plus $5 for each dealer agent.
Notice of Hearing
Commerce
(Financial Assistance for Businesses and Communities)
NOTICE IS HEREBY GIVEN that pursuant to s.
560.206, Stats., the Department of Commerce will hold a public hearing on proposed rules in ch.
Comm 133, Wis. Adm. Code, relating to implementing a film production accreditation program.
The public hearing will be held as follows:
Date and Time:
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Location:
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July 17, 2007
(Tuesday)
Commencing
at 9:00 a.m.
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Thompson Commerce Center
Third Floor, Room 3B
201 West Washington Ave.
Madison, Wisconsin
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Interested persons are invited to appear at the hearing and present comments on the proposed rules. Persons making oral presentations are requested to submit their comments in writing, via e-mail. Persons submitting comments will not receive individual responses. The hearing record on this proposed rulemaking will remain open until July 20, 2007, to permit submittal of written comments from persons who are unable to attend the hearing or who wish to supplement testimony offered at the hearing. All written comments should be submitted by e-mail to
srockweiler@commerce.state.wi.us. If e-mail submittal is not possible, written comments may be mailed to Sam Rockweiler, Department of Commerce, Division of Environmental and Regulatory Services, P.O. Box 14427, Madison, WI 53708-0427.
This hearing will be held in an accessible facility. If you have special needs or circumstances that may make communication or accessibility difficult at the hearing, please call Sam Rockweiler at (608) 266-0797 or (608) 264-8777 (TTY) at least 10 days prior to the hearing date. Accommodations such as interpreters, English translators, or materials in audio tape format will, to the fullest extent possible, be made available upon a request from a person with a disability.
3. Explanation of Agency Authority. Sections
560.206 (1) and
(4) of the Statutes require the Department to promulgate rules for implementing and administering a program to accredit film productions for the purposes of sections
71.07 (5f) and
(5h),
71.28 (5f) and
(5h), and
71.47 (5f) and
(5h) of the Statutes. Section
227.11 (2) (a) of the Statutes authorizes the Department to promulgate rules interpreting the provisions of any Statute administered by the Department.
4. Related Statute or Rule. The Department has rules for several other programs associated with tax credits, but none of those programs relate to accrediting film productions or establishing film production companies.
5. Plain Language Analysis. The proposed rules specify (1) the eligibility requirements for film productions to become accredited; (2) the documentation that must be submitted to receive accreditation and to receive acceptance of incurred expenses that are related to tax credits for producing a film production in Wisconsin; (3) the documentation that must be submitted to receive acceptance of incurred expenses that are related to tax credits for establishing a film production company in Wisconsin; (4) the Department's response to the submitted documentation; and (5) use of the Department's response when filing claims with the Department of Revenue for the corresponding tax credits.
6. Summary of, and Comparison With, Existing or Proposed Federal Regulations. A federal tax incentive program for film and television productions is available under Section
181 of the Internal Revenue Code. Under the program, investors in qualifying film and television productions may elect to immediately deduct the cost of qualifying film expenditures in the year the expenditures occur. The program is in effect for qualifying productions commencing before January 1, 2009. The federal deduction applies to qualifying productions up to $15 million, or up to $20 million if the production occurs in a qualifying distressed area. The incentive can be used in conjunction with any state film incentive. The Web site reference for the section in the Code is
http://www.law.cornell.edu/uscode/html/uscode26/ usc_sec_26_00000181----000-.html.
7. Comparison With Rules in Adjacent States.
Michigan. In Michigan, rebates range from 12 to 20 percent, depending on the amount of the production spending in the state. According to the Director of the Michigan Film Office, there are no administrative rules for the program, but guidelines are available through the Office's Web site at
http://www.michigan.gov/hal/0,1607,7-160-17445_19275_37781---,00.html.
Minnesota. Minnesota offers exemptions from sales and lodging taxes, and a rebate of 15 percent for eligible production costs incurred in the state. An Internet based search did not reveal any administrative rules for the program, but guidelines are available through the following Web site:
http://www.mnfilmtv.org.
Iowa. Iowa enacted legislation on May 17, 2007, that (1) offers producers a transferable income tax credit of 25 percent of qualified in-state expenditures, (2) offers investors the same credit, and (3) offers Iowa-based companies or Iowa residents a 100-percent income exclusion for monies earned from certified projects. No administrative rules have been developed yet for this program. Further information is available through the following Web site:
http://www.traveliowa.com/film/incentives.html.
Section
528.20 of the rules defines “Illinois resident" as “an individual who is domiciled in this State during the accredited production. Except in a case where the applicant has actual knowledge, as shown in its books and records, that an individual is not an Illinois resident, the possession by an individual of an driver's license or other identification issued by this State prior to the commencement of the accredited production shall be sufficient proof that the individual is an Illinois resident and the address on the license or identification shall be deemed correct." The proposed Wisconsin rules do not include a definition of resident, but require residents to meet Department of Revenue residency criteria.
Under section 528.30, an applicant must file a written statement or other documentation showing that receiving the tax credits was essential to the decision to locate the accredited production in Illinois. According to the rules, “The documentation must show that the applicant has multi-state or international location options and could reasonably locate outside the State, or can demonstrate that at least one other state or nation is being considered for the accredited production, or other documentation showing that the receipt of the credit is a major factor in the applicant's decision to locate the accredited production in Illinois." The proposed Wisconsin rules require that in order for a production to become accredited, the production would not occur in Wisconsin without the tax benefits.
Under section 528.40, an application must be submitted at least 24 hours prior to the start of principal filming or taping. The proposed Wisconsin rules do not specify a submittal deadline prior to filming or taping. Section
528.40 also clarifies whether one or more applications can be filed for television shows with two or more episodes. The proposed Wisconsin rules do not differentiate for television shows with multiple episodes.
Section
528.50 gives an applicant 30 days to correct any deficiencies in the application, and provides 30 days to amend and re-submit an application after a denial. There are no similar timing deadlines in the proposed Wisconsin rules. Also in Section
528.50, Illinois will consider, in its evaluation of the application, whether awarding the credit will result in an overall positive impact to Illinois. Under the general eligibility criteria in the proposed Wisconsin rules, an accredited production must enhance economic development in Wisconsin.
Section
528.62 requires an applicant to quarterly submit economic impact data on jobs created and retained, and production costs. There is no such reporting requirement in the proposed Wisconsin rules, other than the information and documentation that must be submitted following completion of the accredited production, for the Department's verification and release of the tax credits.
Section
528.65 describes issuance of an “accredited production certificate" upon approval of an application. Section
528.70 details the procedures for the applicant to request a “tax credit certificate," certifying the actual amount of the credit awarded to the applicant at any time following the completion of the accredited production, but in no event later than two years following the completion of the production. This process is similar to what is described in the proposed Wisconsin rules, other than the two-year restriction. The Illinois rules also require attestation by a certified public accountant supporting the expenditures incurred by the applicant, which is not required in the Wisconsin rules.
Section
528.75 specifies the amount and duration of the tax credits. The amounts consist of (1) for productions commencing before May 1, 2006, a credit of 25 percent of the approved Illinois labor expenditures, plus an additional 10 percent for employees who earn more than $1,000 on the production and who live in geographic areas of high poverty or high unemployment; and (2) for productions commencing on or after May 1, 2006, a credit of 20 percent of the approved Illinois labor expenditures, plus an additional 15 percent for employees who earn more than $1,000 on the production and who live in geographic areas of high poverty or high unemployment. For tax years ending prior to July 11, 2005, the credit cannot be carried forward or back. For tax years ending on or after July 11, 2005, any excess credits may be carried forward for five years. The Wisconsin amounts differ by including (1) a credit of 25 percent of the salary or wages for all employees of the claimant – but capped at $25,000 per employee, and not including the two highest paid employees; (2) a credit of 25 percent of the production expenditures; and (3) a credit of 100 percent of the sales or use taxes paid for tangible personal property and taxable services that are used directly in producing an accredited production. The Wisconsin duration differs by (1) not allowing any credits to be carried forward, but (2) allowing unlimited refund of any unused credits for production expenditures.
