Rule-Making Notices
Notice of Hearings
Agriculture, Trade and Consumer Protection
[
CR 07-073]
(Reprinted from 7/31/07 Wis. Adm. Register)
The State of Wisconsin Department of Agriculture, Trade and Consumer Protection (DATCP) announces that it will hold public hearings on a proposed amendment to chapters ATCP 99, 100, and 101, Wis. Adm. Code, relating to the Agricultural Producer Security.
DATCP will hold three public hearings at the times and places shown below. DATCP invites the public to attend the hearings and comment on the proposed rule. Following the public hearings, the hearing record will remain open until Wednesday, October 31, 2008 for additional written comments.
Hearing impaired persons may request an interpreter for these hearings. Please make reservations for a hearing interpreter by August 6, 2007, by writing to Kevin LeRoy, Division of Trade and Consumer Protection, P.O. Box 8911, Madison, WI 53708-8911, telephone (608) 224-4928. Alternatively, you may contact the DATCP TDD at (608) 224-5058. Handicap access is available at the hearings.
Submission of Comments and Copy of Rule
You may obtain a free copy of this rule by contacting the Wisconsin Department of Agriculture, Trade and Consumer Protection, Division of Trade and Consumer Protection, 2811 Agriculture Drive, P.O. Box 8911, Madison, WI 53708. You can also obtain a copy by calling (608) 224-4928 or emailing
kevin.leroy@wisconsin.gov. Copies will also be available at the hearings. To view the proposed rule online, go to:
To provide comments or concerns relating to small business, please contact DATCP's small business regulatory coordinator Keeley Moll at the address above, by emailing to
Keeley.Moll@datcp.state.wi.us or by telephone at (608) 224-5039.
Hearing Dates and Locations
Thursday, August 16, 2007, 2:00 p.m.
DATCP Northwest Regional Office
3610 Oakwood Hills Pkwy
Eau Claire, WI 54701-7754
Tuesday, August 21, 2007, 2:00 p.m.
DATCP Northeast Regional Office
Room 152A
200 N Jefferson St.
Green Bay, WI 54301
Wednesday, August 22, 2007, 10:00 a.m.
Department of Agriculture, Trade and Consumer Protection
2811 Agriculture Dr.
Board Room (CR-106)
Madison, WI 53718-6777
Analysis Prepared by the Department of Agriculture, Trade and Consumer Protection
Wisconsin's agricultural producer security program helps protect agricultural producers against catastrophic financial defaults by grain dealers, grain warehouse keepers, milk contractors and vegetable contractors (collectively referred to as “contractors").
Contractors must be licensed by the Department of Agriculture, Trade and Consumer Protection (“DATCP") and pay license fees. Most contractors must also pay assessments to an agricultural producer security fund (“fund"). In the event of a contractor default, DATCP may compensate producers from the fund.
This rule changes current grain dealer, grain warehouse keeper and vegetable contractor license fees. This rule changes current fund assessments for grain dealers (deferred payment assessment) and grain warehouse keepers, and changes required minimum fund assessments for grain dealers, grain warehouse keepers, milk contractors and vegetable contractors. This rule does not make any other significant changes in current contractor regulations.
Statutory authority
Statutes interpreted
Agency authority
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 ss.
126.81 and
126.88, Stats., to establish license fees and fund assessments under the agricultural producer security program. Chapter
126, Stats., establishes license fees and fund assessments, but authorizes DATCP to change those license fees and fund assessments by rule.
Under current law, DATCP must modify fund assessments whenever fund balances fall outside a specified range. The fund balance attributed to the grain warehouse keeper sector currently falls below the required minimum of $200,000. Therefore, DATCP must modify fund assessments for grain warehouse keepers. DATCP is authorized, but not required, to modify fund assessments for other contractors.
Background
DATCP administers the agricultural producer security program under ch.
126, Stats. DATCP has adopted rules to implement the program. The rules are contained in chs.
ATCP 99-
101, Wis. Adm. Code. Under current law:
• Licensed contractors must pay license fees to fund DATCP administration of the agricultural producer security program. Administration includes grain warehouse inspections, review of contractor financial statements, license administration and response to contractor financial defaults and law violations.
• Most contractors (“contributing contractors") must pay fund assessments to finance the agricultural producer security fund. The fund is held in trust, for the benefit of producers. If a contractor defaults on payments to agricultural producers, DATCP may reimburse producers from the fund. Fund assessments are like insurance premiums, and are based on contractor size, financial condition and risk practices.
Prior to 2003, DATCP administrative costs were paid by a combination of general tax revenue (“GPR") and contractor license fees. However, the 2003-2004 Biennial Budget Act eliminated virtually all GPR funding for program administration. That made it necessary to transfer staff from GPR funding to license fee funding. Partly as a result of that change, current license fee funding is no longer adequate to cover administrative costs. There has been a gradual growth in administrative costs, due to factors (such as statewide union contracts for accountants and auditors) that are outside DATCP control.
Funding shortfalls are especially severe in the grain dealer and grain warehouse keeper programs. Administrative costs now annually exceed license fee revenues by over $200,000 in each of those programs, and each program has a negative cash balance of more than $350,000. In the vegetable contractor program, administrative costs now annually exceed license fee revenues by over $20,000, and the program has a negative cash balance (January 1, 2007) of more than $50,000.
Deficits in the grain and vegetable administration accounts are currently being covered by milk contractor license fee revenues and by fund assessment revenues that would normally go to the producer security fund. That unfairly affects milk contractors and reduces fund coverage for all producers (grain, milk and vegetable).
This rule increases annual license fees for grain dealers, grain warehouse keepers and vegetable contractors, to remedy current inequities and provide minimally adequate funding for program administration. This rule also adjusts fund assessments, especially for grain warehouse keepers (for whom an adjustment is required by law).
Notwithstanding this rule, the total of all contractor payments under the producer security (license fees plus fund assessments) will actually decline over the next few years, because of fee credits and declining formula rates that are built into the producer security law itself. This rule will slow, but not reverse, that overall decline. This rule will not have any significant impact on contractors' overall business costs.
Rule contents
Grain Dealer License Fees
Current Fees. Under current law, a grain dealer must pay the following annual license fees and surcharges:
• A license processing fee of $25.
• One of the following fees:
• $500 if the grain dealer purchased at least $500,000 worth of producer grain in this state during the grain dealer's last completed fiscal year.
• $200 if the grain dealer purchased at least $50,000 but less than $500,000 worth of producer grain in this state in the grain dealer's last completed fiscal year.
• $50 if the grain dealer purchased less than $50,000 worth of producer grain in this state in the grain dealer's last completed fiscal year.
• A $225 fee per business location in excess of one location (but only if the grain dealer purchased $500,000 worth of producer grain in this state during the grain dealer's last completed fiscal year).
• A $45 fee per truck, in excess of one truck, that the grain dealer uses to haul grain in this state.
