Explanation of agency authority
Under chapter 101 Stats., the Department of Commerce protects public health, safety, and welfare by promulgating comprehensive requirements for design, construction, use and maintenance of public buildings and places of employment and adopts rules that establish uniform, statewide standards for the construction of one- and 2-family dwellings. Various construction trades are involved in building or modifying these types of structures. Together with building owners and designers, construction trades share a responsibility to ensure that the buildings, relative to the respective trade's work, do not pose risk to public health and safety.
The registration would enhance the department's communication, education and oversight efforts for those businesses that contribute in various ways and aspects to the creation or alteration of buildings that limit the safety and health risks for the citizens of Wisconsin. Utilizing the registry of building contractors the department will more efficiently and effectively inform contractors about safety regulations and consumer protection regulations, such as the consumer notice required under s.
101.148 (2), Stats., pertaining to procedures for addressing construction defects.
The department recognizes that by registering Wisconsin building contractors and subcontractors, information pertaining to such registrants can be posted on the internet and made available to the Wisconsin Departments of Workforce Development and Revenue for use in their administration of unemployment insurance, workers compensation insurance and income tax programs, respectively. The registry of building contractors can be used by the aforementioned agencies to reinforce their efforts to minimize the misclassification of employees and to maximize proper participation in unemployment insurance and workers compensation insurance programs and proper payment of income taxes.
Summary of proposed rules
The proposed rules require a registration credential for various building contactors who are involved in the construction or modification of public buildings and places of employment and one- and 2-family dwellings, unless the contractor already holds another type of contractor credential issued by the department. The registration credential is for a contracting business and is not required for each partner or employee who is involved with physically constructing or modifying the structures.
The proposed rules also eliminate several references to old implementation dates that no longer have relevancy.
Comparison with federal regulations
An internet-based search of the code of federal regulations and the federal register did not identify any federal requirements relating to contractor registrations.
Comparison with rules in adjacent states
An Internet-based search for the states of Illinois, Iowa, Michigan and Minnesota found the following:
Illinois:
The state of Illinois does not have any regulations regarding the licensure of building contractors, except roofers.
Iowa:
The state of Iowa requires all individual contractors and businesses performing construction work in Iowa to be registered. The fee is $25 for a two year registration. The prerequisites for registration include the demonstration of compliance with worker's compensation insurance requirements and compliance with unemployment tax requirements.
Michigan:
The state of Michigan requires licenses for persons and businesses that contract with property owners to build new homes or remodel homes. The license types are: Residential Builder, and Maintenance and Alteration Contractor. The Maintenance and Alteration Contractor is restricted to perform only specific trades and services for which they are licensed. The fee is $225 for a three year license. Applicants for the license must complete 60 hours of approved education and pass an examination. Michigan does not have a licensing law regulating builders of commercial buildings.
Minnesota:
The state of Minnesota requires certifications for persons and businesses that contract with property owners to construct or improve dwellings for habitation by one to four families and where the person or business is involved with two or more special building skills. The Residential Contractor license and Remodeler license are annual licenses. The fees, which are based upon gross receipts, are $260 to $360. The application for the license must include a qualifying person who must take the required examination and fulfill the continuing education requirements for the licensee.
Also under the Minnesota Independent Contractor Certification Law, as of January 1, 2009, a certification is required for building contractors where contractors must establish that they are independent contractors versus employees utilizing the “9 Items" test related to Worker's Compensation. The fee for a two year certification is $250.
Summary of factual data and analytical methodologies
The registration provisions of the proposed rules were developed by analyzing and comparing the current administrative rules under chapter Comm 5 for other types of building contractors currently licensed, certified or registered by the department. The concept of the contractor registration was developed in light of proposed Wisconsin legislation under 2007 SB 228 and AB466, and with consideration of legislation in the states adjacent to Wisconsin.
Analysis and supporting documents used to determine effect on small business
The proposed rules require the registration of individuals and entities that act as building contractors or subcontractors who are involved in the construction or modification of public buildings, places of employment and one- and 2- family dwellings and who are not already credentialed by the department. The department currently credentials several contracting trades, including dwelling contractors, HVAC contractors, electrical contractors and elevator contractors. The rules would apply to those persons and entities engaged in the business of commercial general construction, drywall, plastering, electrical wiring, finish carpentry, flooring, framing carpentry, glass and glazing, insulation, masonry and stone work, plumbing, concrete work, roofing, siding, building site preparation and/or stabilization, structural steel, tile and terrazzo, wall coverings, and other building or equipment specialties.
The department estimates that the number of contractors to be registered under the rules would be 30,000. A contractor registration would cost $100 for a 4-year term if applied for electronically and $115 if applied for via paper. The department does not believe that this registration and fee would pose a significant impact on businesses.
An economic impact report has not been required to be prepared.
Small Business Impact
Initial regulatory flexibility analysis
Types of small businesses that will be affected by the rules
The proposed rules require the registration of individuals and entities that act as building contractors or subcontractors who are involved in the construction or modification of public buildings, places of employment and one- and 2- family dwellings and who are not already credentialed by the department. The department currently credentials several contracting trades, including dwelling contractors, HVAC contractors, electrical contractors and elevator contractors. The rules would apply to those persons and entities engaged in the business of commercial general construction, drywall, plastering, electrical wiring, finish carpentry, flooring, framing carpentry, glass and glazing, insulation, masonry and stone work, plumbing, concrete work, roofing, siding, building site preparation and/or stabilization, structural steel, tile and terrazzo, wall coverings, and other building or equipment specialties.
Reporting, bookkeeping and other procedures required for compliance with the rules
No additional reporting, bookkeeping or other procedures are required above the registration of the building construction business.
Types of professional skills necessary for compliance with the rules
There are no new types of professional skills necessary for compliance with the rules.
Rules have a significant economic impact on small businesses
No.
Fiscal Estimate
Assumptions used in arriving at fiscal estimate
The rules require a registration credential for various building contactors who are involved in the construction or modification of public buildings and places of employment and one- and 2-family dwellings, unless the contractor already holds another type of contractor credential issued by the department. The type of contracting businesses required to be registered under the rules include commercial general construction, drywall, plastering, electrical wiring, finish carpentry, flooring, framing carpentry, glass and glazing, insulation, masonry and stone work, plumbing, concrete work, roofing, siding, building site preparation and/or stabilization, structural steel, tile and terrazzo, wall coverings, and other building or equipment specialties.
The department estimates that there would be 30,000 contracting businesses that would be required to obtain registrations. The department proposes to charge $100 for a 4-year, building contractor registration. There is also a $15 initial application fee that would be waived if the applicant applies and pays for the registration via the internet. The department estimates that it would realize approximately $806,250 in revenue annually.
The department anticipates that the workload associated with this registration can be managed with information technology usage and within current staff levels associated with the administration of the commercial building code program and the one- and 2- family dwelling code program.
State fiscal effect
Increase existing revenues.
Increase costs — costs may be possible to absorb within agency's budget.
Local government fiscal effect
No local government costs.
Fund sources affected
PRO
Long-range fiscal implications
None are anticipated.
Environmental Analysis
The Department has considered the environmental impact of the proposed rules. In accordance with chapter Comm 1, the proposed rules are a Type III action. A Type III action normally does not have the potential to cause significant environmental effects and normally does not involve unresolved conflicts in the use of available resources. The Department has reviewed these rules and finds no reason to believe that any unusual conditions exist. At this time, the Department has issued this notice to serve as a finding of no significant impact.
Contact Information
The small business regulatory coordinator for the Department of Commerce is Carol Dunn, who may be contacted at telephone (608) 267-0297, or Email at
carol.dunn@wisconsin.gov.
Notice of Hearing
Insurance
NOTICE IS HEREBY GIVEN that pursuant to the authority granted under s.
601.41 (3), Stats., and the procedures set forth in under s.
227.18, Stats., the Office of the Commissioner of Insurance will hold a public hearing to consider the adoption of the proposed rulemaking order affecting section
Ins 3.39, Wis. Adm. Code, relating to Medicare supplement insurance.
Hearing Information
Date: January 27, 2009
Time: 1:00 p.m., or as soon thereafter as the matter may
be reached
Place: OCI, Room 227, 2nd Floor
125 South Webster Street
Madison, WI
Submission of Written Comments
Written comments can be mailed to:
Julie E. Walsh
Legal Unit — OCI Rule Comment for Rule Ins 339
Office of the Commissioner of Insurance
PO Box 7873
Madison WI 53707-7873
Written comments can be hand delivered to:
Julie E. Walsh
Legal Unit - OCI Rule Comment for Rule Ins 339
Office of the Commissioner of Insurance
125 South Webster St – 2nd Floor
Madison WI 53703-3474
Comments can be emailed to:
Julie E. Walsh
The deadline for submitting comments is 4:00 p.m. on the 14th day after the date for the hearing stated in this Notice of Hearing.
Analysis Prepared by the Office of the Commissioner of Insurance (OCI)
Statutes interpreted
Sections
185.983 (1m),
600.03,
601.01 (2),
609.01 (1g) (b),
625.16,
628.34 (12),
628.38,
631.20 (2),
632.73 (2m),
632.76 (2) (b) and
632.81,
632.895 (6) and
(9), Wis. Stats.
Statutory authority
Explanation of agency authority
The statutes all relate to the commissioner's authority to promulgate rules regulating the business of insurance as it relates to Medicare supplement and Medicare replacement insurance products. Specifically, ss.
601.41,
625.16,
628.38,
632.73,
632.76, and
632.81, Wis. Stats., permit the commissioner to promulgate rules regulating various aspects of Medicare supplement and Medicare replacement products while ss.
628.34, and
628.38, Wis. Stats., authorize the commissioner to promulgate rules governing disclosure requirements and unfair marketing practices for disability policies, which includes Medicare supplement and Medicare replacement products.
