Analysis Prepared by the Department of Health Services
Statutes interpreted
Statutory authority
Explanation of agency authority
1.
Wis. Stat. s.
227.11 (2) (a) provides state agencies with general rulemaking authority to promulgate rules interpreting the provisions of any statute enforced or administered by the agency if the agency considers it necessary to effectuate the purpose of the statute.
2.
Wis. Stat. s.
250.04 (7) authorizes fines of $10 to $100 for violations of rules promulgated by department related to any matter under its supervision that are necessary to provide efficient administration and to protect health. This includes lead hazard reduction.
3.
Wis. Stat. s.
250.041 authorizes the department to issue, deny or suspend certifications under Wis. Stat. §
254.176 for a person who performs lead hazard reduction or a lead management activity, or who supervises these activities.
4.
Wis. Stat. s.
254.172 authorizes the department to promulgate rules governing lead hazard reduction that it determines are consistent with federal law.
5.
Wis. Stat. s.
254.176 (1) and
(2) authorizes the department to establish to certification requirements by rule, with the exception of individuals who are licensed, certified or registered by the Department of Commerce (Comm) under Wis. Stat. ch.
145, for certain plumbing and fire protection system activities, within the scope of their Comm credential; and companies that are registered with the Comm under Wis. Stat. §
101.178, to perform heating, ventilating or air conditioning installation or servicing activities, within the scope of their Comm registration. In my opinion these limited certification exceptions do not affect application and enforcement of the lead renovation training and safe practice requirements for these individuals and companies. The DHS certification process requires applications and fees that are separate and distinct from any training required.
6.
Wis. Stat. s.
254.15 directs the department to develop and implement a comprehensive statewide lead poisoning or lead exposure and treatment program that includes rules for lead hazard reduction requirements, and related certification, accreditation and approval requirements. Wis. Stat. §
254.115 authorizes the denial, nonrenewal and revocation of a certification in specified circumstances.
7.
Wis. Stat. s.
254.167 authorizes the department to promulgate rules to specify procedures for investigating, testing or sampling painted, varnished or other finished surfaces that may contain lead.
8.
Wis. Stat. s.
254.178 directs the department to promulgate rules establishing requirements for accreditation of lead training courses and approval of lead instructors.
9.
Wis. Stat. s.
254.179 directs the department to promulgate rules to establish the standards for a premises, dwelling or dwelling unit to be issued a certificate of lead-free status.
Related statute or rule
Plain language analysis
The rules under this order require individuals, companies, and government agencies who perform or offer to perform renovation activities to be certified by the department, be trained and have appropriately trained staff, to distribute renovation information, keep records, and to follow the appropriate work practices when conducting renovation activities in dwellings constructed prior to 1978 (target housing) and child-occupied facilities, including common areas, constructed before 1978 that provide child care services, preschools, or public or private schools. The rules also require that training providers implement training course curriculum for renovation training and receive renovation training course accreditation from the department before offering renovation training courses and that course instructors meet the qualifications and receive approval before teaching renovation training courses.
The rules promulgated under this order are similar to the requirements under 40 §§ CFR 745.80 to 745.91 and
745.225, the EPA requirements for training, certification, work practices and recordkeeping to perform renovation activities, except that unlike current EPA regulation,
40 CFR § 745.82 (c), the rules under this order do not permit a property owner to exempt a contractor from following work practice requirements by signing an acknowledgement that no pregnant woman or child under age 6 resides in the dwelling. The department determined not to include a similar provision in this order in anticipation of EPA's agreement under an August 2009 negotiated settlement to issue a notice of proposed removal of this provision by October 20, 2009, and promulgate final rules by April 22, 2010.
The rules apply to an estimated 756,000 pre-1978 Wisconsin facilities, 754,000 of which are dwelling units, either rental housing, owner-occupied housing, or housing that meets the definition of child-occupied facility. Approximately 2,000 facilities are child-occupied facilities in pre-1978 public or commercial buildings. Based on EPA and census data, the department estimates that annually there will be approximately 35,000 children under age 6 affected by the rule. These children are projected to receive considerable benefits due to this regulation. Since 1996, more than 44,000 Wisconsin children have been identified as lead poisoned. Nearly one in every 20 children who entered the Wisconsin school system in the fall of 2006 was known to have been lead poisoned. The rules promulgated under this order are intended to minimize exposure to lead-based paint hazards created during renovation, repair, and painting activities in target housing and child-occupied facilities.
Comparison with federal regulations
40 CFR §§ 745.80 to
745.91, Subpart E, relating to residential property renovation establishes requirements for performing renovation activities in residential dwellings and child-occupied facilities, including training of renovators and dust sampling technicians, certification of renovators, dust sampling technicians and renovation firms, provision of pre-renovation information to owners and occupants, renovation work practices, and recordkeeping.
40 CFR § 745.225, Subpart L, relating to accreditation of training programs establishes accreditation requirements for training courses that renovators and dust sampling technicians must complete for certification, including curriculum contents and the application and approval process for courses.
The department's rules under ch.
DHS 163 are consistent with the EPA requirements under
40 CFR §§ 745.80 to
745.91 and
745.225, and meet the requirements for EPA authorization under
40 CFR §§ 745.320 to
329 to implement and enforce the renovation, repair and painting requirements in Wisconsin in lieu of the EPA enforcing federal regulations in Wisconsin.
Comparison with rules in adjacent states
Illinois
Illinois does not have a lead renovator rule but is in the early study phase for regulatory development, including reviewing statutory authority and rulemaking options. A final renovation rule is expected sometime in late 2011.
Iowa
Iowa has a rule that requires pre-renovation education (lead renovation information distribution to owners/occupants), which is one subsection of the EPA renovation rule under
40 CFR 745 Subpart E. Iowa is in the final stages of full renovation rule development and plans to have an emergency renovation rule published by November 18, 2009.
Michigan
Michigan does not have a lead renovator rule but is in the early stages of developing a renovator rule.
Minnesota
Minnesota recently received legislative approval through a statutory change to develop a renovator rule that is consistent with the federal renovator rule and is just starting the rule-making process as of August 2009 with the goal to publish a final rule before the end of 2010.
Summary of factual data and analytical methodologies
The department referred to all of the following to draft the rules in this order and the small business fiscal impact analysis:
•
EPA regulations,
40 CFR §§ 745.80 to
745.91 and
745.225 relating to renovations and relating to training providers, and 745.320 to 339, relating to requirements that qualify states and tribes to implement these requirements in lieu of the EPA.
40 CFR §745 is commonly known as the renovation, repair and painting rule.
•
The EPA's Final Regulatory Flexibility Analysis for the Lead: Renovation Repair, and Painting Program, March 1, 2008 (Document ID EPA-HQ-OPPT-2005).
•
The EPA's “Economic Analysis for the TSCA Lead Renovation, Repair and Painting Program Final Rule for Target Housing and Child-Occupied Facilities", March 2008.
•
Letter dated May 5, 2008, from the U.S. Government Accountability Office, Associate General Counsel Robert J. Cramer, to the U.S. Senate Committee on Environment and Public Works and the U.S. House of Representatives Committee on Energy and Commerce reporting on “a major rule promulgated by the [EPA]".
•
Criteria adopted by the department and approved by the Wisconsin Small Business Regulatory Review Board to determine whether the department's proposed rules would have a significant economic impact on a substantial number of small businesses. Pursuant to the department's criteria, a proposed rule would have a significant economic impact on a substantial number of small businesses if at least 10% of the businesses affected by the proposed rules are small businesses and if operating expenditures, including annualized capital expenditures, increase by more than the prior year's consumer price index or revenues are reduced by more than the prior year's consumer price index. For the purposes of this rulemaking, 2008 is the index year. The consumer price index is compiled by the U.S. Department of Labor, Bureau of Labor Statistics and for 2008 is 3.8 percent.
•
The 2002 Economic Census –Geographic Series (Wisconsin), which is compiled by the U.S. Census Bureau every 5 years for each year ending in “2" and “7" and contains the latest available economic data compiled on businesses located in Wisconsin. (The U.S. Census Bureau's data release schedule for the 2007 Economic Census –Geographic Series is November 2009-July 2010.)
•
Section
227.114 (1) (a), Stats., which defines “small business" as a business entity, including its affiliates, which is independently owned and operated and not dominant in its field, and which employees 25 or fewer full-time employees or which has gross annual sales of less than $5,000,000.
•
Under ss.
227.13 and
254.174, Stats., the department established and met with a lead technical advisory committee (LTAC) to review and advise the department on the rule revisions. The LTAC includes representatives of the renovation industry, rental housing industry, school districts, local health departments, local housing and community development agencies, non-profits that assist homeowners, tribal programs, daycares and other state agencies.
Represented groups included:
1. Renovators: WI Builders Association (WBA) and National Assn. of the Remodeling Industry (NARI)
2. Weatherization: Project Home
3. Property owners: WI Apartment Association, SE Wisconsin Apartment Association, WI Realtors Assn.
4. WI Building Inspectors Association
5. Lead training providers
6. Environmental consultants
7. HeadStart
8. Non-profit: Dominican Center for Women (neighborhood development & housing rehab in Milwaukee)
9. Department of Administration, Division of Energy Services (weatherization funding)
10. School Districts: Milwaukee and Racine
11. Local Health Departments: Milwaukee and Madison/Dane County
12. Local Housing Agencies: Chippewa County Housing Authority, Waukesha Community Development and City of Sheboygan Building Inspection
13. Department of Commerce, Division of Housing and Division of Safety & Buildings
14. Department of Children and Families, Division of Early Care and Education
15. Department of Health Services, Childhood Lead Poisoning Prevention Program and Medical Officer
LTAC members reviewed the EPA regulations and the department's conceptual language for revisions to ch.
DHS 163, including definitions, certification requirements, work practice and recordkeeping responsibilities, and training course requirements. The department fully considered comments and advice from the LTAC when developing the rule revisions.
Analysis and supporting documents used to determine effect on small business
Small businesses affected by the rule
A business is considered a small business if it is a business entity, including its affiliates, which is independently owned and operated and not dominant in its field, and which employees 25 or fewer full-time employees or which has gross annual sales of less than $5,000,000. As indicated by the revenue and employee information provided by the 2002 U.S. Economic Census for Wisconsin, stated below, it is likely that a majority of the businesses affected by the rule are small businesses as defined under Wis. Stat. §
227.114 (1) (a).
The department conservatively estimates that at least 15,000 businesses will be affected by this rule, including contractors and trades (such as painters, electricians, plumbers, HVAC, siders and roofers); private schools, child care and preschool providers; and rental property owners and property management companies. This information is based on approximately 10,000 dwelling contractors certified by the department of commerce in Wisconsin, approximately 2,000 other trades, an estimated 3,000 rental property owners and managers of pre-1978 housing units and estimated 1,200 daycares and preschools in pre-1978 facilities.
CONSTRUCTION INDUSTRY
NAICS
|
Subsector
|
Business Description:
Primary Responsibility
|
Number of Establish-ments
|
Dollar Value of Work Done
|
Number of Employees
|
Includes
Businesses that Meet the WI Definition of Small Business
|
236118
|
Residential Remodelers: remodeling general contractors, operative remodelers, remodeling design-build firms, and remodeling project construction management firms
|
Remodeling construction (including additions, alterations, reconstruction, maintenance, and repair work) of houses and other residential buildings (single-family and multifamily).
|
1,508
|
$704,991,000
|
6,151
|
Yes
|
23611
|
Residential
Building
Construction
|
Construction or remodeling and renovation of single-family and multifamily residential buildings. Included in this industry are residential housing general contractors (i.e., new construction, remodeling or renovating existing residential structures), operative builders and remodelers of residential structures, residential project construction management firms, and residential design-build firms.
|
4,003
|
$4,146,381,000
|
19,073
|
Yes
|
23813
|
Framing
Contractors
|
Structural framing and sheathing using materials other than structural steel or concrete new work, additions, alterations, maintenance, and repairs.
|
430
|
$196,482,000
|
2,464
|
Yes
|
23816
|
Roofing
Contractors
|
Roofing. This industry also includes establishments treating roofs (i.e., spraying, painting, or coating) and installing skylights. The work performed may include new work, additions, alterations, maintenance, and repairs.
|
709
|
$501,773,000
|
4,958
|
Yes
|
23817
|
Siding Contractors
|
Installing siding of wood, aluminum, vinyl or other exterior finish material (except brick, stone, stucco, or curtain wall). This industry also includes establishments installing gutters and downspouts. The work performed may include new work, additions, alterations, maintenance, and repairs.
|
395
|
$148,778,000
|
1,877
|
Yes
|
238150
|
Glass and Glazing Contractors
|
Installing glass panes in prepared openings (i.e., glazing work) and other glass work for buildings. The work performed may include new work, additions, alterations, maintenance, and repairs.
|
47
|
$114,996,000
|
808
|
Yes
|
23821
|
Electrical
Contractors
|
Installing and servicing electrical wiring and equipment. Electrical contractors included in this industry may include both the parts and labor when performing work. Electrical contractors may perform new work, additions, alterations, maintenance, and repairs.
|
1,174
|
$1,599,245,000
|
14,335
|
Yes
|
23822
|
Plumbing, Heating, and Air-Conditioning Contractors
|
Installing and servicing plumbing, heating, and air-conditioning equipment. Contractors in this industry may provide both parts and labor when performing work. The work performed may include new work, additions, alterations, maintenance, and repairs.
|
1,839
|
$2,643,604,000
|
20,425
|
Yes
|
23831
|
Drywall and Insulation
Contractors
|
Drywall, plaster work, and building insulation work. Plaster work includes applying plain or ornamental plaster, and installation of lath to receive plaster. The work performed may include new work, additions, alterations, maintenance, and repairs.
|
533
|
$471,329,000
|
5,461
|
Yes
|
23832
|
Painting and
Wall Covering Contractors
|
Interior or exterior painting or interior wall covering. The work performed may include new work, additions, alterations, maintenance, and repairs.
|
841
|
$276,551,000
|
4,023
|
Yes
|
23833
|
Flooring
Contractors
|
Installation of resilient floor tile, carpeting, linoleum, and hard wood flooring. The work performed may include new work, additions, alterations, maintenance, and repairs.
|
323
|
$183,469,000
|
1,618
|
Yes
|
23839
|
Other Building
Finishing
Contractors
|
Building finishing trade work (except drywall, plaster and insulation work; painting and wall covering work; flooring work; tile and terrazzo work; and finish carpentry work). The work performed may include new work, additions, alterations, or maintenance and repairs.
|
144
|
$65,831,000
|
835
|
Yes
|
23835
|
Finish Carpentry Contractors
|
Finish carpentry work. The work performed may include new work, additions, alterations, maintenance, and repairs.
|
1,088
|
$468,750,000
|
4,689
|
Yes
|
REAL ESTATE INDUSTRY
NAICS
|
Subsection
|
Business Description:
Primary Responsibility
|
Number of Establish-ments
|
Revenue
|
Number of Employees
|
Includes
Businesses that Meet the WI Definition of Small Business
|
53111
|
Lessors of
Residential
Buildings and Dwellings
|
Lessors of buildings used as
residences or dwellings, such as single-family homes, apartment buildings, and town homes. Included in this industry are
owner-lessors and establishments renting real estate and then acting as lessors in subleasing it to
others. The establishments in this industry may manage the property themselves or have another establishment manage it for them.
|
1,019
|
$737,415,000
|
5,270
|
Yes
|
53131
|
Real Estate
Property Managers
|
Managing real property for others. Management includes ensuring that various activities associated with the overall operation of the property are performed, such as collecting rents, and overseeing other services (e.g., maintenance, security, trash removal).
|
510
|
$323,257,000
|
4,871
|
Yes
|
531311
|
Residential
Property Managers
|
Managing residential real estate for others.
|
398
|
$235,558,000
|
4,034
|
Yes
|
SOCIAL ASSISTANCE (CHILD CARE) INDUSTRY
NAICS
|
Subsection
|
Business Description:
Primary Responsibility
|
Number of Establish-ments
|
Receipts
|
Number of Employees
|
Includes
Businesses that Meet the WI Definition of Small Business
|
6244
|
Child Day Care Services
|
Providing day care of infants or children. These establishments generally care for preschool children, but may care for older children when they are not in school and may also offer
prekindergarten educational programs
|
1,666
|
$478,195,000
|
17,357
|
Yes
|
WASTE MANAGEMENT AND REMEDIATION INDUSTRY
NAICS
|
Subsection
|
Business Description:
Primary Responsibility
|
Number of Establish-ments
|
Sales
|
Number of Employees
|
Includes
Businesses that Meet the WI Definition of Small Business
|
5629102
|
Asbestos Abatement and Lead Paint Removal
|
Asbestos abatement or
lead paint removal
|
25
|
$24,152,000
|
296
|
Yes
|
Other persons or entities affected by the rule
Other persons and entities that will be affected by the rule are children and families, public school districts, and state and local governments.
Costs to small businesses
Under the provisions of ch.
DHS 163 relating to pre-renovation education and lead-based paint renovation, small businesses will have increased expenses, including certification fees, recordkeeping and other administrative costs, information distribution expenses and work practice (equipment and supplies) costs.
The department reviewed the regulatory requirements for EPA authorization under
40 CFR 745 and identified the costs to businesses under the EPA regulations and the department rules under this order. The department also used the 2002 U.S. Economic Census to help determine the effect on small businesses. In addition, the department reviewed and used relevant portions of EPA's economic analysis to determine the costs and benefits to Wisconsin.
In its analysis, the EPA analyzed the economic impact of compliance on small entities by evaluating the number of companies that would experience the impact and the size of the impact. Average annual compliance costs as a percentage of average annual revenues were used to assess the potential average cost of the rule on small businesses and small governments. EPA estimated that the average compliance costs for small businesses would be 0.7% of annual revenues. For small non-profits such as private schools and pre-schools, the costs would be 0.1% of annual expenditures. EPA based these estimates on an average compliance cost of approximately $35 per renovation. Even if the actual average cost per renovation is double EPA's estimate, or $70 per job, this would translate to only 1.4% of annual revenue for contractors and 0.2% for nonprofits, and would be below the 2008 CPI of 3.8%.
Upon review of the information, the department has determined, however, that the actual costs to renovators are indeterminate because of the number of variables involved, including:
•
The size of the project/amount charged to customer to conduct the renovation – the larger the project/more charged to conduct the project, the lower the cost of compliance as a percent of the overall cost of the job.
•
Number of jobs conducted by the renovator – the more jobs a renovator conducts in a month or year the lower the overall cost of compliance per job.
•
Cost of equipment and supplies – whether more expensive equipment such as a HEPA vacuum is already owned or must be purchased and whether supplies are purchased in bulk or in smaller amounts.
•
Generally larger, more active renovators will be affected less by the costs of compliance than smaller, less active renovators.
The costs to businesses under this rule would be similar to the costs to businesses under the EPA regulations if the EPA implemented its regulations in Wisconsin. The cost elements in the EPA regulations and this order are the same. A discussion of the cost elements follows:
Certification fees
Under the current rule, companies conducting lead-hazard reduction and lead-investigation activities are required to be certified by the department and to pay a certification fee of $75 every 2 years ($37.50 per year). Certification of companies performing only renovation activities is currently optional unless the work will be conducted in a state-registered lead-safe home. Under the revised rule, company certification will be required for companies that conduct renovations for compensation in pre-1978 housing or child-occupied facilities. Renovation companies will pay the current fee of $75 for a 2-year certification.
Licensed plumbers and HVAC workers are not required to pay the fee and become certified under the rule, but are required to comply with all other provisions relating to regulated work under the chapter, including training, recordkeeping and work practices.
Accreditation of training courses
Under the rule, the current 1-day lead-safe work course is being converted to the 1-day lead-safe renovator course. Training providers that are already accredited to provide the lead-safe work course will be allowed to convert their course to the lead-safe renovator course with no additional fee. The department will require only a minimal paper submittal to accomplish the transition from the lead-safe work to lead-safe renovator course. The lead-safe renovator refresher course is new and training providers wishing to offer it submit an application to the department with a $125 application and a $100 accreditation fee. The application fee is a one-time fee and the accreditation fee is payable every 2 years.
Other costs to training providers are not expected to change, including existing fees for renewing accreditation ($200 for 2 years for the lead-safe renovator course), and administrative costs to notify the department of scheduled classes, verify student identities, take student pictures, submit student information and pictures to the department, and keep required course and student records. These requirements are not revised under the rule except to reduce the requirement to view 2 forms of student ID to view only 1 form of photo ID per student.
The EPA provides complete curriculum materials for both the initial and refresher renovator courses, including instructor and student manuals, free for download from its website, thus minimizing course preparation costs for training providers. This curriculum is acceptable for use in Wisconsin. The EPA fees for training course accreditation are $560 for accreditation of the initial renovator course and $400 for the refresher course. Re-accreditation is required every 4 years at a cost of $340 for the initial and $310 for the refresher. Compared over 8 years, Wisconsin fees are $85 less than EPA's fees for a company offering both the initial and the refresher renovator courses.
Recordkeeping
