Plain Language Analysis
The Dog Sellers and Facilities Program was created in 2011 to ensure the welfare of dogs and provide consumer protection. The Department licenses and inspects about 500 facilities under this program. The minimum licensing fees were set when the program began and have not changed since 2011.
The program revenue appropriation (appropriated by Wis. Stat. § 20.115 (2) (j)) does not have adequate revenue to recover costs. The Department is not able to reduce expenditures to the level of current revenues without resulting in a failure to fulfill statutory requirements. The Department convened an ATCP 16 Advisory Committee to advise the Department in relation to the Statement of Scope (SS 093-20), pertaining to license fees and reinspection fees for dog sellers and dog facility operators. The Committee was comprised of representatives from each of the groups under Wis. Stat. § 173.41 (14) (b). This rule proposal includes a 100% license fee increase for shelter/control facilities, a 120% license fee increase for all other entities, and a 167% reinspection fee increase. The table below shows the current and proposed license and reinspection fee amounts, the amount of each change, the number of licensees in each category, and the average reinspection count each year.
The proposed fees would ensure recovery of annual program costs and would gradually eliminate the current and projected deficit over five years. Without the proposed fee increase, the appropriation would continue to operate in a negative cash balance until a different change occurs, such as the creation of an alternative funding source or a statutory change. The Department would continue to report the negative cash balance to the Joint Committee on Finance.
Summary of, and Comparison with, Existing or Proposed
Federal Statutes and Regulations
The United States Department of Agriculture (USDA) licenses some businesses that breed or broker dogs. As of March 2020, there are 86 USDA-licensed dog breeders (Class A) and 10 USDA-licensed dog brokers (Class B) in Wisconsin. These numbers include some, but not all, businesses that are also licensed as dog sellers by the Wisconsin Department of Agriculture, Trade and Consumer Protection (DATCP).
USDA and DATCP have different criteria for determining whether an entity needs to be licensed, as well as different minimum facility requirements. USDA does not license retail pet stores and does not license breeders with four or fewer breeding females. DATCP licenses persons who operate an animal shelter, animal control facility, dog breeder, dog breeding facility, dog dealer, or out-of-state dog dealer. Among other criteria defined in Wis. Stat. § 173.41 (1), these are entities that shelter or sell 25 or more dogs in a year. Summary of Comments Received during Hearing and Comment Periods
Preliminary Public Hearing and Comment Period on the Statement of Scope
The Department held a preliminary hearing on the statement of scope (SS 093-20) on August 20, 2020, with comments open until August 27, 2020. The hearing was held remotely. The Department received two comments during the preliminary hearing. Both comments requested that the Department exempt shelter/control facilities from a fee increase. No written comments were received. In response to public comments, the Department discussed options with the ATCP 16 Advisory Committee. All members of the Committee expressed support of an option to increase license fees to recover the annual costs and recover the projected deficit over five years. Individual members either expressed support of increasing all license fees by an equal percentage or expressed support of increasing the license fees for shelter/control facilities by 100% and all other license fees by a higher amount. The preliminary rule draft, as well as this final rule draft, included a 100% license fee increase for shelter/control facilities, a 120% license fee increase for all other entities, and a 167% reinspection fee increase.
Comment Period on the Economic Impact Analysis
The economic impact analysis was posted for 60 days, with comments accepted through June 21, 2021. No comments were received.
Public Hearing and Comment Period on the Preliminary Rule Draft
The Department held public hearings on the preliminary rule draft on August 31 and September 2, 2021, with comments accepted through September 16, 2021. Both hearings offered a combination of in-person access and remote access. The Department sent an email notice to licensees notifying them of the hearing and comment period, in addition to the posting in the Administrative Register. There were no attendees, either in-person or remote, at the public hearings. The Department received six written comments. Three opposed the fee increase generally, two opposed the size of the fee increase, and one did not express a position. Comments regarding the fee increase expressed that:
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Fee increases would be harmful to business-
Fee increases would punish entities operating legally-
A fee increase generally is understandable but the size is too large-
Fee increases should be done gradually over multiple years-
The program should be funded through other means, such as general fund revenueThis final rule draft includes the same fee increases as the preliminary rule draft, as these fee increases are necessary to recovery program costs and ensure the appropriation does not maintain a negative cash balance. The effective date of the rule will be delayed three months for small businesses, pursuant to Wis. Stat. § 227.22 (2) (e). Based on current projections for the timeline of the rule process, the proposed rule would become effective for all entities by the September 30, 2023 renewal cycle, which allows licensees two years from the time of the hearings (August and September 2021) to plan for the fee increases. Without the proposed fee increase, the appropriation would continue to operate in a negative cash balance until a different change occurs, such as the creation of an alternative funding source or a statutory change. The Department would continue to report the negative cash balance to the Joint Committee on Finance.
One of the six comments also expressed that boarding kennels should be included in the program. The Department is unable to evaluate in this rule whether to include boarding kennels in the program, as the categories of entities requiring licensing are established by statute (Wis. Stat. § 173.41). One of the six comments also asked why her not-for-profit non-stock corporation registered with the Wisconsin Department of Financial Institutions with a tax exempt Employer Identification Number (EIN) is licensed as a dog seller and not a shelter/control facility. The Department researched the question and determined that any entity meeting the statutory definition of animal control facility or animal shelter, under Wis. Stat. § 173.41 (1) (a) and (b), may be licensed under the shelter/control facility license category rather than one of the dog seller license categories. The Department is communicating with the commenter regarding the status of her license and whether a change to her license is appropriate. Rules Clearinghouse
The Department modified the rule draft to address all Clearinghouse comments.
Comparison with Rules in Adjacent States
Each of the adjacent states has a program related to dog sellers and facilities, but the programs vary greatly. Below is a comparison of the programs in Wisconsin, Illinois, Iowa, Michigan, and Minnesota. Each have unique program structures, program requirements, and funding sources.
Wisconsin
Wisconsin licenses dog sellers and dog facility operators, including animal shelters and control facilities.
Wisconsin’s program is funded through Program Revenue (PR). The primary source of program revenue is from license fees, but there is also a smaller portion of program revenue from reinspection fees.
Wisconsin’s current license fees are shown below. The first amounts listed are the license fees for in-state entities and the second amounts listed in parentheses are the license fees for out-of-state entities, which are 150% of the license fees for in-state entities.
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$250 ($375) for entities licensed to sell or offer to sell at least 25 but fewer than 50 dogs per year-
$500 ($750) for entities licensed to sell or offer to sell at least 50 but fewer than 100 dogs per year-
$750 ($1,125) for entities licensed to sell or offer to sell at least 100 but fewer than 250 dogs per year-
$1,000 ($1,500) for entities licensed to sell or offer to sell 250 or more dogs per year-
$125 ($188) for entities licensed to operate an animal shelter or animal control facilityWisconsin’s current reinspection fee is $150. On average, there are approximately 23 reinspections per year.
When the Department receives an application for licensure, that application is reviewed and processed. The Department conducts a pre-license inspection that the applicant must pass prior to the issuance of a license. The Department conducts routine inspections of all licensed premises at least once every two years.
The Department also receives and reviews complaints. The Department investigates cases of entities operating without a license and other alleged violations. The Department also conducts follow-up inspections and reinspections when violations are noted as part of an investigation or inspection, to ensure that compliance is gained. The Department takes compliance actions as appropriate, which can include an action on a license (such as to suspend, condition, deny, or revoke), or referral for civil forfeiture or criminal action.
Wisconsin has three dedicated companion animal inspectors, part of a veterinarian specialist, part of a license/permit program associate, and part of an inspector supervisor. Additional staff, including a compliance officer and other field staff, assist as needed when a reinspection or further actions are required.
Wisconsin currently licenses 506 entities:
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120 (114 in-state and 6 out-of-state) entities licensed to sell or offer to sell at least 25 but fewer than 50 dogs per year -
103 (101 in-state and 2 out-of-state) entities licensed to sell or offer to sell at least 50 but fewer than 100 dogs per year-
76 (75 in-state and 1 out-of-state) entities licensed to sell or offer to sell at least 100 but fewer than 250 dogs per year-
28 (27 in-state and 1 out-of-state) entities licensed to sell or offer to sell 250 or more dogs per year-
179 (all in-state) entities licensed to operate an animal shelter or animal control facility
