Not applicable.
5. Plain language analysis:
These proposed rules make three categories of changes to the administrative rules administered by the Department’s Division of Corporate and Consumer Services (the Division).
First, the proposed changes implement 2021 Wisconsin Act 258, which affects limited liability companies and other entities required to file business records with the division, by eliminating rules that were superseded by the Act. For example, the Act’s language includes most of the substantive content of existing section DFI-CCS 10.04 of the Wisconsin Administrative Code; because that content is now set forth in statute, the redundant language of the administrative rule is unnecessary and can be repealed. In addition, while the Act specified filing fees for almost all documents to be filed with the Department under the applicable statutory chapters, it did not specify fees for (1) applications for reinstatement under chapters 179, 181, or 183, (2) amendments, cancellations, or renewals of partnership authority under chapter 179, (3) statements of change of registered agent or registered agent’s name, email, address, or street address under chapter 180, (4) statements of revocation or rescission of dissolution under chapters 178, 179, 181, or 183, (5) statements of withdrawal of a filed record before effectiveness under chapters 179, 180, 181, or 183, (6) statements of disassociation under chapter 179, or (7) statements of authority or denial under chapter 183. The proposed rule would fill those gaps by establishing fees for those documents that are identical to the fees charged for the same document types under analogous statutory chapters. Second, the proposed rule updates various provisions relating to UCC filings to reflect minor changes in technology and practices — as well as minor changes to the language of the model administrative rules promulgated by the Secured Transactions Section of the International Association of Commercial Administrators (“IACA”) — that have occurred in the 20 years since the administrative rules governing the UCC were originally promulgated in this state. The Department consulted the most recent version of the IACA model rules and the rules, practices, technology, and experiences of filing offices in other states when considering administrative rules to govern UCC filings, as it did in proposing these changes. While virtually all the changes in this proposed rule are non-substantive clarifications and repeals of provisions addressing practices that have become obsolete (such as accepting cash payments) or system limitations that no longer apply (such as character limits on certain online forms), the Department believes these proposed updates will better harmonize Wisconsin’s rules with modern practices and rule language in other states.
Third, to incentivize online filings and reduce administrative costs to the public, the proposed rules would impose larger fees for filing documents on paper where an online option is available and update certain UCC search and document fees to more closely reflect the capabilities of the department’s UCC system and, with regard to bulk image requests, to ensure that any third-party costs to retrieve the images are paid by the requesting party rather than the public.
6. Summary of, and comparison with, existing or proposed federal regulation:
Not applicable. Filing fees for business registration documents and the implementation of the UCC are matters of state law.
7. Comparison with rules in adjacent states:
Every state has adopted the UCC, and versions adopted in Wisconsin, Illinois, Iowa, Michigan, and Minnesota are substantially similar. Each requires the filing office rules to conform closely to Article 9 of the UCC and the rules, practices, and technology used in other states, and in Michigan—like Wisconsin—the filing office is expressly required to consider IACA’s most recent model rules. See Ill. Admin. Code tit. 14, §§180.10 to 180.19; Iowa Admin. Code r. 721-30.1(554) to 721-30.6(554); Mich. Admin. Code R. 440.1101 to 440.9994; Minn. Stat. § 5.12; Minn. R. 8280.0010 to 8280.0480. Though calculated differently in some cases, Wisconsin and its neighbors charge comparable fees for UCC searches and bulk copies of data or images. See Ill. Admin. Code tit. 14, §§180.13 and 180.14; Iowa Admin. Code r. 721-30.1(10), (13), and (14); Mich. Admin. Code R. 440.9523 (6) and 440.9525; Minn. Stat. § 5.24, Minn. R. 8280.0060; Office of the Minnesota Secretary of State, UCC Search Fees, available at https://mblsportal.sos.state.mn.us/Secured/SearchUCC (last accessed Oct. 11, 2022); Office of the Minnesota Secretary of State, UCC Data Available for Purchase, available at https://www.sos.state.mn.us/business-liens/business-liens-data/ucc-data-available-for-purchase (last accessed Oct. 11, 2022). Iowa imposes a $10 to $30 across-the-board surcharge for filing UCC documents in paper format, Iowa Admin. Code r. 721-30.1(10), while Michigan, Minnesota, and Illinois charge the same fees for paper or electronic filing of UCC documents. See Ill. Admin. Code tit. 14, §§180.13 and 180.14; Iowa Admin. Code r. 721-30.1(10), (13), and (14); Mich. Admin. Code R. 440.9523 (6) and 440.9525; Minn. Stat. § 5.24, Minn. R. 8280.0060; Office of the Minnesota Secretary of State, UCC Fee Schedule, available at https://www.sos.state.mn.us/business-liens/ucc-tax-cns-forms-fees/uniform-commercial-code-ucc-fee-schedule (last accessed Oct. 11, 2022). 2021 Wisconsin Act 258 authorized the Department to charge higher fees for business registration documents delivered in paper format. Wisconsin’s neighbors do not yet have that statutory authority for those types of filings, and therefore they generally do not impose surcharges for filing business registration documents in paper format. 8. Summary of factual data and analytical methodologies:
The proposed rules are based on (1) the Department’s experience in administering Wis. Stat. ch. 409 and Wis. Admin. Code chs. DFI-CCS 1 through 7 and 10; (2) the Department’s knowledge of the rules, practices, technology, and experiences of other states’ regulators in administering their versions of the UCC; (3) the Department’s review of the most recent version of IACA’s model rules; and (4) the Department’s experience in processing documents filed under chapters 178, 179, 180, 181, and 183 of the Wisconsin Statutes, including its observation that documents filed in paper format require more staff time and resources to process than those filed online. 9. Analysis and supporting documents used to determine effect on small business:
These changes are primarily technical in nature, and any new fees imposed on required business filings may be avoided by filing online rather than in paper format. Therefore, small businesses are not materially affected by these revisions.
10. Anticipated costs incurred by private sector:
While the changes would increase fees for certain documents filed on paper, those increases may be avoided by filing those documents online. Therefore, the private sector need not incur any additional costs as a result of these revisions.
11. Effect on small business:
Small businesses are not affected by these revisions.
12. Agency contact person:
Jennifer Dohm
Deputy Administrator
Division of Corporate and Consumer Services
Department of Financial Institutions
13. Place where comments are to be submitted and deadline for submission:
Comments may be submitted to the contact person shown below no later than the date on which the public hearing on this proposed rule order is conducted. Information as to the place, date and time of the public hearing will be published in the Wisconsin Administrative Register.
By mail: Marc Shovers, Assistant Chief Legal Counsel, Department of Financial Institutions, PO Box 8861, Madison, WI 53708-8861.
By delivery: Marc Shovers, Assistant Chief Legal Counsel, Department of Financial Institutions, 4822 Madison Yards Way, North Tower, Madison, WI 53703.
The Comment Period ended on the date of the public hearing, July 18, 2023.
TEXT OF RULE
DFI-CCS 1.01 (20) (a) The standard initial financing statement (“UCC1”) which includes more than two or more UCC financing statement addendums (“UCC1ad”), or the standard amendment (“UCC3”) which includes more than 2 two or more UCC amendment addendums (“UCC3ad”) as set forth in Wis. Stat. s. 409.521. DFI-CCS 1.05 Office hours. Office hours shall be from 7:45 a.m. until 4:30 p.m. There shall be no office hours on state legal holidays. The office shall receive transmissions electronically 24 hours every day of the year, except for scheduled maintenance and unscheduled interruptions of service. Electronic communications may be retrieved and processed periodically, but not less often than once each day the filing office is open for business, on a batch basis.
DFI-CCS 1.06 (1) When filed by personal or courier delivery at the filing office’s street address, the file time shall be the time that the UCC document is accepted for review by the filing office of delivery even though the UCC document may not yet have been accepted for filing and may subsequently be rejected. A UCC document delivered after regular business hours or on a day the filing office is not open for business shall have a filing time of the start of business on the next day the filing office is open for business.
SECTION 4. Section DFI-CCS 1.06 (2) is repealed.
DFI-CCS 1.06 (4) (b) The file time for a UCC document delivered by these methods shall be the time that the filing office’s system analyzes the relevant transmission and determines that the required elements of the transmission have been received in the required format and are machine readable the required payment has been accepted.
DFI-CCS 1.07 Search request delivery. UCC search requests shall be delivered to the filing office by any of the means set forth in s. DFI-CCS 1.06. UCC search requests upon a debtor named on an initial financing statement shall be made by an appropriate indication on the face of the initial financing statement form if the form is entitled to be filed with the standard form fee and the relevant search fee is also tendered with the initial financing statement. DFI-CCS 1.10 (1) (f) For filing and indexing federal tax liens under s. 779.97, Stats., $10.00 the fee specified in s. 779.97 (5), Stats. DFI-CCS 1.10 (1) (g) This section shall not apply to fees charged by a filing office described in s. 409.501 (1) (a), Stats. A filing office described in s. 409.501 (1) (a), Stats., shall charge fees in accordance with s. 59.43 (2) (e), Stats., unless the filing office is described in s. 190.11, Stats., or s. 409.501 (1) (b), Stats., in which case the fees charged shall be in accordance with pars. (a) through (f). DFI-CCS 1.10 (3) (a) For a UCC search request communicated on paper or in a paper-based format, $15.00 $50.00.
SECTION 10. Section DFI-CCS 1.10 (3) (c) is repealed and recreated to read:
DFI-CCS 1.10 (3) (c) For a copy of an individual financing statement and the filings associated therewith, $4.00.
SECTION 11. Section DFI-CCS 1.10 (3) (d) is repealed.
SECTION 12. Section DFI-CCS 1.10 (3) (e) is repealed and recreated to read:
(e) Fees for other services are as follows:
1.
A copy of weekly data base updates of indexed filings, $250.00.2.
A copy of the full data base of indexed filings, which shall at a minimum include both active filings and filings that have lapsed within the last year, $500.00.
