NOTICE IS HEREBY GIVEN that pursuant to ss. 16.004 (1), 16.705 (1) and (2), Stats., the Department of Administration will hold a public hearing on the Department's emergency rulemaking order and proposed permanent rulemaking order amending ch. Adm 10, Wisconsin Administrative Code, relating to cost-benefit analyses of contractual services.

Friday, August 11, 2006 at 1:00 p.m.

Wisconsin Administration Building

101 E. Wilson Street, 1st Floor

St. Croix Room

Madison, Wisconsin

Interested persons are invited to present information at the hearing. Persons appearing may make an oral presentation but are also urged to submit facts, opinions and arguments in writing as well. Written comments from persons unable to attend the public hearing, or who wish to supplement testimony offered at the hearing, should be directed to: Terri Lenz, Wisconsin Department of Administration, Division of Enterprise Operations, P.O. Box 7867, Madison, WI 53707-7867, or by calling (608) 261-2298, fax at (608) 267-0600 or by email at terri.lenz@wisconsin.gov. Written comments must be received by August 11, 2006, to be included in the record of rule-making proceedings.

1. Statutes Interpreted: ss. 16.004 (1), 16.705 (2) and 227.11, Stats.

2. Statutory Authority: ss. 16.004 (1), 16.705 (2) and 227.11, Stats.

3. Explanation of agency authority: 2005 Wisconsin Act 89 (“Act 89") renumbered and amended s. 16.705 (8), Stats., amended s. 16.705 (1) and (2), Stats., and created ss. 16.70 (3g) and 16.705 (8) (a) and (b), Stats., in order to prescribe uniform procedures for determining whether services are appropriate for contracting under the State procurement system.

4. Related statute or rule: Administrative rule chapter 10.

5. Plain language analysis: The department intends to promulgate a rule as required by Act 89 to require a cost-benefit analysis to be completed for each bid or request for proposal to compare the cost of contracting for services versus providing the services with state employees.

Currently, all state agencies and UW System campuses may contract for services between $25,000 and $200,000 if they can show that the services can be performed more economically or efficiently by such a contract than by state employees. Currently, if the contractual services would be greater than $200,000, the contracting agency must complete a more rigorous and detailed cost/benefit analysis to demonstrate that the services can be performed more economically or efficiently by such a contract than by state employees. This more rigorous and detailed analysis includes total cost, quality and nature of services required, specialized skills, time factors, risk factors and legal barriers. Act 89 requires agencies to conduct uniform cost-benefit analysis of each proposed contractual service procurement involving an estimated expenditure of more than $25,000 in accordance with standards prescribed in the rules. Cost benefit-analysis is defined to include total cost, quality, technical expertise and timeliness of a service.

Act 89 also requires agencies to review periodically, and before any renewal, the continued appropriateness of contracting under each services agreement involving an estimated expenditure of more than $25,000. Act 89 requires the department to complete an annual summary report of the cost benefit-analysis prepared by state agencies in the preceding fiscal year and recommendations for elimination of unneeded contractual service procurements and for the consolidation or resolicitation of existing contractual service procurements.

6. Summary of, and comparison with, existing or proposed federal regulations: This proposed rule is specific to State of Wisconsin procurement laws and is completely separate from, and unaffected by, federal regulations.

7. Comparison with rules in adjacent states.

Michigan: The department is unaware of and was unable to locate any rules in this state pertaining to this subject.

Minnesota: The department is unaware of and was unable to locate any rules in this state pertaining to this subject.

Illinois: The department is unaware of and was unable to locate any rules in this state pertaining to this subject.

Iowa: The department is unaware of and was unable to locate any rules in this state pertaining to this subject.

8. Summary of factual data and analytical methodologies used and how the related findings support the regulatory approach chosen: 2005 Wisconsin Act 89 requires the department to promulgate this rule.

9. Analysis and supporting documents used to determine effect on small business or in preparation of economic impact statement: The proposed rule prescribes uniform procedures for determining whether services are appropriate for contracting, however the rule does not require agencies and UW System campuses to make a procurement decision based upon the cost benefit analysis and therefore is expected to have no effect on small business.

10. Effect on small business: The proposed rule prescribes uniform procedures for determining whether services are appropriate for contracting, however the rule does not require agencies and UW System campuses to make a procurement decision based upon the cost benefit analysis and therefore is expected to have no effect on small business.

11. Agency contact person: Requests for copies of the proposed rule should be submitted to Terri Lenz, Department of Administration, Division of Enterprise Operations, P.O. Box 7867, Madison, WI 53707-7867. You may also contact Ms. Lenz at (608) 261-2298, by fax at (608) 267-0600 or by email at terri.lenz@wisconsin.gov.

12. Place where comments are to be submitted and deadline for submission: Comments on the proposed rule should be submitted to Terri Lenz, Department of Administration, Division of Enterprise Operations, P.O. Box 7867, Madison, WI 53707-7867. You may also contact Ms. Lenz at (608) 261-2298, by fax at (608) 267-0600 or by email at terri.lenz@wisconsin.gov.

13. Fiscal effect: The fiscal estimate for the act is attached.

The proposed rule prescribes uniform procedures for determining whether services are appropriate for contracting, however the rule does not require agencies and UW System campuses to make a procurement decision based upon the cost benefit analysis and therefore is expected to have no effect on small business.

A copy of the proposed rules and the full fiscal estimate may be obtained from the Department of Administration upon request.

A copy of the emergency rule may be obtained upon request from Terri Lenz, Wisconsin Department of Administration, Division of Enterprise Operations, P.O. Box 7867, Madison, WI 53707-7867, or by calling (608) 261-2298, fax at (608) 267-0600 or by email at terri.lenz@wisconsin.gov.

The state of Wisconsin Department of Agriculture, Trade and Consumer Protection (DATCP) announces that it will hold public hearings on a proposed repeal and recreation of chapter ATCP 156, Wis. Adm. Code, relating to Seed Potato Certification and Grading.

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 Thursday, August 31, 2006 for additional written comments. Comments may be sent to the Division of Trade and Consumer Protection at the address below, by email to kevin.leroy@datcp.state.wi.us or online at https://apps4. dhfs.state.wi.us/admrules/public/Home

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 may also obtain a copy by calling (608) 224-4928 or emailing kevin.leroy@datcp.state.wi.us. 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 impaired persons may request an interpreter for these hearings. Please make reservations for a hearing interpreter by July 31, 2006, by writing to Kevin LeRoy, Division of Trade and Consumer Protection, P.O. Box 8911, Madison, WI 53708-8911, telephone (608) 224-4584. Alternatively, you may contact the DATCP TDD at (608) 224-5058. Handicap access is available at the hearings.

Monday, August 7, 2006

1:00 p.m. until 3:00 p.m.

Department of Agriculture, Trade and Consumer Protection

Board Room (CR-106)

2811 Agriculture Drive

Madison, Wisconsin, 53718-6777

Wednesday, August 9, 2006

10:00 a.m. until 11:30 a.m.

The Portage County Public Library

Charles M. White Library Building

The Pinery Room

1001 Main Street

Stevens Point, Wisconsin 54481

Wednesday, August 9, 2006

2:30 p.m. until 5:00 p.m.

Langlade County Fair Grounds

Clover Room, Multipurpose Building

1581 Neva Road

Antigo, Wisconsin, 54409-2340

This rule repeals and recreates current rules related to Wisconsin's certified seed potato program, a voluntary program for the certification and grading of seed potatoes in this state. The program is jointly administered by the Wisconsin department of agriculture, trade and consumer protection (“DATCP") and the university of Wisconsin college of agricultural and life sciences (the “college"). This rule updates and clarifies current certification standards and procedures.

Statutory authority: ss. 93.07 (1), 93.09, 100.14 (1) and 100.20 (2), Stats.

Statutes interpreted: ss. 93.06 (1), (1m), (1p), (1q) and (11), 93.09, 100.14 (1) and 100.20, Stats.

DATCP has broad authority, under s. 93.07(1), Stats., to adopt rules to implement laws under its jurisdiction. DATCP also has authority, under the above statutes, to adopt grading and certification standards for commodities, to provide grading and certification services upon request, and to recover the cost of the requested services. DATCP has authority, under s. 100.20, Stats., to prohibit unfair and deceptive business practices.

Under s. 93.06 (11), Stats., DATCP may cooperate with other entities and appoint agents for the administration of programs under its jurisdiction. DATCP administers the certified seed potato program pursuant to this rule and a memorandum of understanding with the college.

DATCP has delegated authority to the college to inspect and certify seed potatoes for disease risk. The college may charge fees to cover the college's costs of inspection and certification. Certification decisions by the college may be subject to administrative review by DATCP, as provided in this rule.

DATCP grades seed potatoes, once they are certified by the college. A person may not sell potatoes as Wisconsin certified seed potatoes unless the potatoes are certified by the college and graded by DATCP.

Wisconsin is one of the nation's largest potato producing states. Wisconsin's certified seed potato program helps Wisconsin's potato industry, by maintaining the quality and disease-free reliability of seed potatoes. Commercial potato growers can rely on the seed potatoes they purchase. Seed potato growers can market their seed potatoes more effectively, because buyers can purchase with confidence. Certification helps prevent the spread of serious and potentially devastating potato diseases, and facilitates the movement of seed potatoes in interstate and international commerce.

Seed potato certification and grading is voluntary, and is done at the request of the seed potato grower. Yet most Wisconsin potatoes are grown from certified seed, because certification helps buyers and sellers alike.

At the request of a seed potato grower, the college inspects seed potatoes for diseases and other conditions. The college then certifies the seed potatoes in appropriate categories based on predicted disease-free reliability. DATCP inspects and grades college-certified seed potatoes for other measures of quality. A grower may not sell potatoes as certified seed potatoes unless the potatoes have been certified by the college and graded by DATCP.

Seed potatoes are labeled with their certification and grade classifications, so that buyers know what they are getting. Certification and grade classifications affect purchase decisions and sale prices. DATCP and the college charge fees to cover the cost of requested grading and certification services.

The Certification Process

DATCP rules specify standards and procedures for seed potato certification and grading. Current rules are contained in ch. ATCP 156, Wis. Adm. Code. Historically, the college has provided disease-free propagative material used to grow multi-generational lines of certified seed potatoes in this state.

Seed potato growers plant propagative material provided by the college, and harvest the seed potatoes. Harvested seed potatoes may be sold to commercial growers, or replanted to produce subsequent generations of seed potatoes. If the seed potatoes are certified by the college (and graded by DATCP), they may be sold as certified seed potatoes (normally at a higher price). If they are certified as “foundation" seed potatoes, they may be replanted to produce subsequent generations of certified seed potatoes.

With each generation of planting in the field, the disease-free reliability of the seed potatoes (and hence their certification classification) is reduced. After a certain number of generations, seed potatoes may no longer be used as “foundation" seed potatoes to produce other certified seed potatoes. However, a seed potato grower may start a new line of certified seed potatoes, using new disease-free propagative material provided by the college or a comparable source.

As part of the certification process, the college samples and inspects growing and harvested seed potatoes. The college also conducts follow-up evaluations of potatoes grown from the certified “lot." The college looks for diseases of concern. The college may not certify a seed potato “lot" if samples from that “lot" fail to meet minimum disease standards.

If a “lot" meets minimum disease standards, the college assigns a classification code based on generation (with each year of field planting the classification drops one level, reflecting increased disease risk). Each “lot" is labeled with its assigned classification code.

Once the college has certified seed potatoes, and assigned a disease-risk classification, DATCP may grade the potatoes based on various quality factors. DATCP visually inspects samples of potatoes drawn from the graded “lot," and grades the “lot" according to DATCP rules. Each graded “lot" is labeled with its assigned grade.

Rule Changes Needed

In recent years, there has been increased demand for rapid introduction of new potato varieties, often from out-of-state sources. Biotechnology has expanded disease-testing options, and has facilitated the creation of new potato varieties and new forms of propagative material. There has been increased cooperation between states, aimed at standardizing seed potato certification.

These developments have not replaced the traditional certification program based on college propagative material, field inspection and “limited-generation" plantings. However, they do require some program changes and adaptations.

This rule provides a clearer, more up-to-date framework for the seed potato certification program administered by the college. Among other things, this rule:

• Clarifies and, in some cases, changes current certification standards and procedures.

• Eliminates some outdated requirements, and strengthens some disease-control standards.

• Recognizes new laboratory testing capabilities.

• Expands the number of sources from which growers may obtain propagative material for certified seed potatoes, while minimizing disease risk.

• Allows for variances in certification standards to accommodate unusual situations.

• Clarifies how propagative material is regulated.

This rule does not substantially alter current standards or procedures for DATCP quality inspection of seed potatoes. However, it clarifies the respective roles of DATCP and the college, and spells out grading standards and procedures with greater clarity.

This rule applies to seed potato growers who wish to produce and sell certified seed potatoes (participation is voluntary, and there is nothing to prohibit sales of uncertified seed potatoes). It also applies to laboratories and greenhouses that provide propagative material used to grow certified seed potatoes. This rule does not apply to any of the following:

• Producers who grow potatoes only for consumption, and not for seed.

• Producers who grow potatoes for seed, but do not wish to have their seed potatoes certified and graded (participation is voluntary).

• Home gardens.

This rule reorganizes current rules into subchapters. This clarifies the distinction between certification by the college and grading by DATCP. This rule also redrafts the current rules, so they will be easier to read and understand.

This rule clarifies the procedure by which a seed potato grower may apply for and obtain certification of seed potatoes. Among other things, it clarifies the information that the grower must include on the application form, and the information that the college must include in the certification. This will make it easier for the college to process certification requests, and document certifications. It will also provide a better certification history and record, which is important for certification credibility, disease control and future certification.

Under this rule, if an applicant seeks certification of a protected (patented) variety of seed potatoes, the application must document that the applicant has permission to grow the protected variety. This is consistent with requirements under federal law.

Under this rule, as under current rules, the college may certify a “lot" of seed potatoes at the request of the seed potato grower. This rule clarifies that a “lot" includes all potatoes of the same variety and line that are grown from the same source seed on the same farm in the same year. Certification does not constitute a warranty by the college, and does not extend to any disease or condition that cannot be observed by visual inspection.

This rule clarifies minimum standards for the certification of seed potatoes, including standards for all of the following:

• Propagative material used to grow the certified seed potatoes.

• Field planting.

• Field and harvest inspections.

• Post-harvest testing.

This rule expands the number of sources from which growers may obtain propagative material for certified seed potatoes, while minimizing disease risk. Under this rule, certified seed potatoes must be grown from one of the following (no other propagative materials may be planted on a farm producing certified seed potatoes):

• Certified “foundation" seed potatoes produced, on the same farm, by the producer requesting certification.

• Certified “foundation" seed potatoes produced on another farm, if pre-approved by the college.

• Propagative material produced by the college.

• “Foundation" seed potatoes certified by another state, under standards equivalent to the standards in this rule, if pre-approved by the college.

• Propagative material produced in an approved laboratory or greenhouse (see below), if pre-approved by the college.

• Propagative material produced by a recognized breeding program and pre-approved by the college.

Under this rule, as under the current rules, the college must conduct field and harvest inspections of certified seed potatoes. The college must visually inspect a representative sample of growing potato plants, and a representative sample of harvested potatoes. The college must inspect for specified diseases and conditions, including leafroll, mosaics, spindle tuber, bacterial ring rot and variety mixture.

Under this rule, as under the current rules, the college must reject an entire “lot" of potatoes for certification if inspection samples exceed specified tolerances for the relevant diseases or conditions. This rule makes the following key changes to current tolerances, to make them more consistent with tolerances in other states:

• It specifies a zero tolerance for spindle tuber (which currently has a positive tolerance, but has not been detected for several decades).

• It increases (slightly) the current tolerance for variety mixture.

Field and harvest inspection tolerances, as revised by this rule, are shown in Table 1:

Table 1
Field and Harvest Inspection Standards

Condition	1st Field Inspection	Subsequent Field or Harvest Inspections
		Foundation Seed Potatoes	Other Seed Potatoes
Leafroll	1.5%	0.25%	1.0%
Mosaics	2.0%	0.25%	1.0%
Spindle tuber	0.0%	0.0%	0.0%
Total leafroll and mosaics	3.0%	0.25%	2.0%
Bacterial ring rot	0.0%	0.0%	0.0%
Variety mixture	1.0%	0.1%	0.1%

This rule, like the current rules, specifies higher standards for the certification of “foundation" seed potatoes (which may be used to grow other certified seed potatoes, not just commercial potatoes or uncertified seed potatoes). “Foundation" seed potatoes are subject to more rigorous disease tolerances (see Table 1 above and Table 2 below), and more rigorous inspection and control for bacterial ring rot (see below). The college may not certify “foundation" seed potatoes until it has completed its post-harvest testing of the potatoes (see below).

The current rules and this rule specify a zero tolerance for bacterial ring rot. Under the current rules and this rule, the college must reject for certification any “lot" of seed potatoes in which bacterial ring rot is found. The college may certify other lots on the same farm, but not as “foundation" class seed. The farm must produce 2 annual crops free of bacterial ring rot before the college can again certify “foundation" class seed from that farm. There is no exception to this requirement.

Under current rules, if bacterial ring rot is found in 2 “lots" from the same farm within 3 years, the college may not certify any other “lots" from that farm (regardless of whether bacterial ring rot is actually found in those “lots"). This rule allows the college to certify the other “lots," but not as “foundation" seed (until the farm produces 2 annual crops free of bacterial ring rot).

Under current rules and this rule, the college must conduct a post-harvest test on every “lot" of certified seed potatoes. The college may not certify a “lot" that fails a post-harvest test, except that in some cases this rule allows certification based on lab testing (see below).

To conduct a post-harvest test, the college collects a sample of potatoes from the “lot" to be certified, and plants those potatoes in a winter growing location. The college then inspects the potatoes grown in the winter location for disease and variety mixture. The inspection must show compliance with specified tolerances (this rule revises some of the current tolerances). The tolerances (as revised by this rule) are shown in Table 2:

Table 2
Post-Harvest Test Standards

Condition	Foundation seed potatoes	Other certified seed potatoes
Leafroll	0.5%	5.0%
Mosaics	0.5%	5.0%
Spindle tuber	0.0%	0.0%
Total leafroll and mosaics	0.5%	5.0%
Bacterial ring rot	0.0%	0.0%
Variety mixture	0.25%	2.0%

This rule allows for greater use of laboratory testing in lieu of traditional post-harvest testing. Under this rule, the college may certify a “lot" of seed potatoes that passes field and harvest inspection, regardless of any post-harvest testing, if laboratory testing by the college shows that the “lot" meets the post-harvest test standards in Table 2.

Under this rule, the college may certify a “lot" of seed potatoes that fails to comply with applicable tolerances in Table 1 or Table 2, if the college documents all of the following:

• Special conditions justify the certification, and there is a reasonable likelihood that the next generation of seed potatoes grown from the non-complying lot will meet applicable tolerances.

• No bacterial ring rot has been found in the lot.

• The certification will not jeopardize seed potato quality, or pose a significant risk of harm to the potato industry or consumers.

• The certified seed potatoes will not be planted on any farm other than the farm where they are produced.

Under current rules and this rule, the college gives each “lot" of certified seed potatoes a classification number based on generation (with each year of field planting the classification drops one level, reflecting increased disease risk). Under current rules, seed potatoes may be certified for 5 generations (4 generations as “foundation" seed), except that “Elite" seed potatoes produced by the college may be certified for up to 7 generations (6 generations as “foundation" seed).

This rule allows certification for up to 7 generations (6 generations as “foundation" seed), and eliminates the separate classification of “Elite" seed. This will make Wisconsin's classification system more consistent with the system in other states. The new classification system is shown below (FY1 is the highest classification):

Under this rule, the college may authorize a seed potato grower to use experimental propagative material from a breeding farm. This makes it possible for growers to experiment with new varieties. However, seed potatoes grown from the experimental material may be certified for only 3 generations (“Ex5 Foundation," “Ex6 Foundation" and “Certified"), not 7 generations.

Table 3
Classification

Year of Field Propagation on Seed Potato Farm (Generation)	Standard Classification	Experimental* Classification
1	FY1 Foundation	Ex5 Foundation
2	FY2 Foundation	Ex6 Foundation
3	FY3 Foundation	Certified**
4	FY4 Foundation
5	FY5 Foundation
6	FY6 Foundation
7	Certified**

* Applies to lines of seed potatoes grown from experimental field-grown propagative material from recognized breeding programs.

** “Certified" (non-foundation) class seed may not be replanted to produce other certified seed potatoes, but may be used to produce commercial potatoes or uncertified seed potatoes.

Under this rule, “foundation" seed potatoes certified by another state have the same classification assigned by that state, provided that the other state certifies seed potatoes under standards equivalent to the standards in this rule. If the other state does not provide field year information, the seed will be classified as FY5.

Once for each line of certified seed potatoes, the college may renew a classification by doing one of the following (contrary to the normal classification progression):

• The college may classify, as “FY5" rather than “certified," certified seed potatoes produced from seed potatoes classified as “FY6."

• The college may classify, as “Ex5" rather than “certified," certified seed potatoes produced from seed potatoes classified as “Ex6."

A seed potato grower seeking such a renewal must show that the seed potatoes meet the standards for the renewed classification. The college may require verification in the form of laboratory testing. “Tuber unit planting" is no longer required, in order to qualify for a renewal classification, because most seed potato growers no longer have the necessary equipment.

Historically, the college has provided disease-free propagative material used to grow lines of certified seed potatoes in this state. But in recent years, there has been increased demand for new potato varieties, often from out-of-state sources.

This rule expands the sources from which a seed potato grower may obtain propagative material used to start a line of certified seed potatoes. However, this rule includes safeguards to prevent the introduction of disease, and to maintain the credibility of the certification process.

This rule allows a seed potato grower to obtain propagative material from, among other places, a laboratory or greenhouse approved by the college. “Propagative material" may include tissue culture plantlets, microtubers, minitubers or tubers that are produced under rigorous laboratory or greenhouse conditions to ensure that they are free of disease.

The college may approve a laboratory or greenhouse in this state if all of the following apply:

• The college inspects the laboratory or greenhouse before granting approval, and at least annually after granting approval. The college must also inspect minitubers, if any, produced by a greenhouse.

• The laboratory or greenhouse uses testing, propagation, isolation and sanitation procedures equivalent to those used by the college.

• The laboratory or greenhouse operator does all of the following:

• Applies to the college for approval, and provides information reasonably required by the college for purposes of evaluation and approval.

• Agrees to pay the college's reasonable costs to inspect, evaluate and approve the laboratory or greenhouse.

• Keeps complete records of laboratory or greenhouse operations, and of propagative material produced by the laboratory or greenhouse. The operator must make the records available to the college upon request.

• Labels propagative material as directed by the college, consistent with this rule.

The college may approve a laboratory or greenhouse in another state if the seed potato certification agency in the other state approves that laboratory or greenhouse for the same purpose, using standards and procedures that are equivalent to the standards and procedures that the college uses to approve in-state laboratories and greenhouses under this rule.

This rule spells out basic standards for storing, shipping and handling certified seed potatoes, to prevent disease contamination. This rule modernizes current standards. For example, this rule eliminates the current requirement that “foundation" seed potatoes be shipped in bags (it allows bulk shipments) and addresses shipment in totes. This rule also eliminates the current requirement that bags or trucks be sealed with a metal seal.

Under this rule, no person may do any of the following:

• Sell or represent potatoes as certified seed potatoes unless they are certified, graded and labeled under this rule, or by another state under standards equivalent to those in this rule.

• Sell or represent potatoes as Wisconsin certified seed potatoes unless they are certified by the college and graded by DATCP under this rule.

• Misrepresent the terms, conditions or basis for any seed potato certification.

The college may withdraw certification if a seed potato seller misrepresents the terms of the certification. DATCP may also prosecute fraudulent misrepresentations in court. Buyers who suffer monetary loss because of fraudulent misrepresentations have a private remedy for double damages, court costs and attorney fees.

Current rules provide no mechanism by which a seed potato grower may seek review of an adverse certification decision by the college. Under this rule, a seed potato grower may request an informal meeting with the college to review an adverse decision. The college must hold the informal meeting within 30 days, unless the requester agrees to a later date. The meeting may be held by telephone.

If the matter is not resolved after the informal meeting with the college, the seed potato grower may request a contested case hearing before DATCP. DATCP may reverse, modify or remand a decision of the college if DATCP finds that the decision is contrary to this rule. However, DATCP may not reverse, modify or remand a matter that this rule leaves to the discretion of the college.

This rule clarifies, but does not substantially alter, the standards for DATCP grading of seed potatoes certified by the college. This rule prohibits misrepresentations of grade. This rule describes the current mechanism by which a person adversely affected by a DATCP grading decision may request a contested case hearing.

This rule will not have a significant fiscal impact on DATCP or the college. This rule will not affect local units of government. A complete fiscal estimate is attached.

This rule applies to seed potato growers who wish to produce and sell certified seed potatoes (participation is voluntary, and there is nothing to prohibit sales of uncertified seed potatoes). It also applies to laboratories and greenhouses that provide propagative material used to grow certified seed potatoes. Many of these businesses may qualify as “small businesses."

This rule does not apply to any of the following:

• Producers who grow potatoes only for consumption, and not for seed.

• Producers who grow potatoes for seed, but do not wish to have their seed potatoes certified and graded (participation is voluntary).

• Home gardens.

This rule will assist the Wisconsin potato industry, including seed potato growers. This rule is not expected to have any significant adverse impact on seed potato growers or other sectors of the Wisconsin potato industry. Participation is voluntary.

This rule modernizes Wisconsin's certified seed potato rule to address changing industry practices and standards. Among other things, this rule:

• Clarifies current certification standards and procedures.

• Allows seed potato growers to obtain propagative material from a wider array of sources. This will help satisfy emerging demands for rapid introduction of new potato varieties, often from out-of-state sources. This rule includes safeguards to ensure that seed potatoes from these sources are not diseased. Laboratories and greenhouses producing propagative material must be approved by the college, and the college must pre-approve propagative material before growers in this state plant the propagative material to produce certified seed potatoes.

• Provides for more targeted response to findings of bacterial ring rot. This rule provides continued strong protection against bacterial ring rot, but reduces the threat of devastating business losses to seed potato growers.

• Updates current disease tolerances, to reflect current interstate and international standards. The college may also grant written variances for individual lots if special conditions justify the variance, and if the college finds that the variance does not create a risk of harm to other potato producers, to the potato industry, or to consumers.

• Provides for certification reciprocity between states. Seed potatoes certified in another state may be sold as certified seed potatoes in Wisconsin, provided that the other state reciprocates, and provided that the other state applies certification standards and procedures that are equivalent to those applied in Wisconsin. Seed potatoes certified in another state may not be represented as Wisconsin certified seed potatoes, and must be labeled to show certification in another state.

• Modernizes requirements for certified seed potato labeling, shipping and handling.

• Provides a mechanism by which a seed potato grower may obtain informal and formal review of an adverse certification decision by the college.

• Prohibits fraudulent sales of uncertified seed as certified seed.

This rule makes minor changes related to certification application, certification procedure, recordkeeping, and certified seed potato handling and labeling. However, none of these changes will have a significant adverse impact on potato growers.

Because this rule has no significant adverse impact on small business, it is not subject to the delayed small business effective date provided in s. ATCP 227.22(2)(e), Stats. DATCP has not incorporated a small business enforcement policy in this rule, pursuant to 2003 Wis. Act 145, because participation in the seed potato certification program is voluntary. DATCP has proposed a separate rule related to the exercise of enforcement discretion under all of its rules.

This rule will have no significant environmental impact, compared to current rules. This rule, like the current rules, will help to prevent the introduction and spread of serious potato diseases in this state. No environmental impact statement is required.

There are no comparable federal programs related to the certification of seed potatoes. The United States department of agriculture, animal and plant health inspection service, is currently developing a proposed memorandum of understanding with states to standardize seed potato certification between states, and to ensure that certification meets minimum standards. This rule is consistent with the proposed memorandum of understanding.

Michigan. Michigan recently changed its seed potato certification rules. The changes make the Michigan rules more consistent with Wisconsin rules. Conversely, this rule will also make Wisconsin rules more consistent with Michigan rules. For example:

• Michigan's rule allows variances from certification standards for good cause (such as a statewide shortage of certified seed potatoes). This rule will allow the college to grant similar variances.

• Michigan's rule has a zero tolerance for potato spindle tuber. This rule also specifies a zero tolerance for spindle tuber.

• Michigan's rule does not require certified “foundation" seed to be shipped in bags (it allows bulk shipments). This rule also allows bulk shipments, and eliminates the current bagging requirement in Wisconsin.

Minnesota. Minnesota's seed potato certification rule is similar to Wisconsin's. But unlike Wisconsin, Minnesota also restricts the planting of uncertified seed potatoes. The Minnesota rules prohibit a person from planting more than 10 acres of uncertified seed potatoes unless those seed potatoes have passed a field inspection. The field inspection must show compliance with disease standards similar to those that apply to certified seed potatoes (among other things, the potatoes must be free of ring rot).

This rule will make Wisconsin rules more consistent, in certain areas, with Minnesota rules. For example:

• Minnesota's rule allows variances from certification standards for good cause (such as a statewide shortage of certified seed potatoes). This rule will allow the college to grant similar variances.

• Minnesota's rule has a zero tolerance for potato spindle tuber. This rule also specifies a zero tolerance for spindle tuber.

• Minnesota's rule does not require certified “foundation" seed to be shipped in bags (it allows bulk shipments). This rule also allows bulk shipments, and eliminates the current bagging requirement in Wisconsin.

• Minnesota's rule provides for a more targeted response to bacterial ring rot findings. This rule adopts a similar approach in Wisconsin.

• Minnesota's rule allows growers to apply for certification of protected varieties, if they have permission to grow those varieties (the rule does not otherwise regulate the planting of protected varieties). This rule takes a similar approach.

Indiana, Illinois & Iowa. Indiana, Illinois and Iowa do not produce seed potatoes and do not have seed potato certification rules.

Questions and comments related to this rule may be directed to the following persons:

Comments for the Hearing Record:

Department of Agriculture, Trade and Consumer
Protection
P. O. Box 8911, Madison, WI 53708-8911
Attn: Kevin LeRoy
Telephone: (608) 224-4928
E-mail: Kevin.Leroy@datcp.state.wi.us

Other Questions or Comments:

Department of Plant Pathology
University of Wisconsin-Madison
1630 Linden Dr.
Madison, WI 53706
Attn: Dr. Amy Charkowski, Assistant Professor
(Administrative Director)
Telephone: (608) 262-7911
E-mail: Amy Charkowski [amyc@plantpath.wisc.edu]

The Department of Agriculture, Trade and Consumer Protection announces that it will hold a public hearing on an emergency rule relating to mobile air conditioner refrigerant and repairs. This emergency rule authorizes the sale of mobile air conditioner refrigerant R 134A in containers holding less than 15 lbs. of the refrigerant. Mobile air conditioners include car and other motor vehicle air conditioners.

DATCP will hold one hearing at the time and place shown below. DATCP invites the public to attend the hearing and comment on the emergency rule. Following the public hearing, the hearing record will remain open until Friday, August 25, 2006, for additional written comments. Comments may be sent to the Division of Trade and Consumer Protection at the address below or by e-mail to Michelle.Reinen@datcp.state.wi.us.

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) 224-5160 or emailing Michelle.Reinen@datcp.state.wi.us. 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 impaired persons may request an interpreter for the hearing. Please make reservations for a hearing interpreter by August 5, 2006, by writing to Michelle Reinen, Division of Trade and Consumer Protection, P.O. Box 8911, Madison, WI 53708-8911, telephone (608) 224-5160. Alternatively, you may contact the Department TDD at (608) 224-5058. Handicap access is available at the hearing.

Tuesday, August 15, 10 a.m. to 12 p.m.

Department of Agriculture, Trade and Consumer Protection

2811 Agriculture Drive, Board Room

Madison, WI 53708

Handicapped accessible

This emergency rule amends ss. ATCP 136.10 (1) and (2), and creates s. 136.10 (2m), to permit the sale of mobile air conditioner refrigerant R 134A in containers holding less than 15 lbs. of the refrigerant.

Statutory Authority: ss. 93.07 (1) and 100.45 (5), Stats.

Statute Interpreted: s. 100.45 (5), Stats.

The Department of Agriculture, Trade and Consumer Protection (“DATCP") has broad general authority to adopt rules interpreting statutes under its jurisdiction (see s. 93.07(1), Stats.). DATCP is specifically authorized to adopt rules to administer s. 100.45, Stats., related to mobile air conditioner refrigerant and repairs.

Current Rules

DATCP is responsible for the administration and enforcement s. 100.45, Stats., related to mobile air conditioner refrigerant and repairs. Mobile air conditioners include car and other motor vehicle air conditioners. DATCP has adopted rules, under ch. ATCP 136, to implement s. 100.45, Stats.

The current law and rules are designed to prevent the release, into the environment, of mobile air conditioner refrigerant that may deplete atmospheric ozone and cause other environmental damage. The current law and rules are based, in part, on federal regulations administered by the United States environmental protection agency.

Under current rules, businesses that repair mobile air conditioners must be registered by DATCP, and repair technicians must complete required training. Repair shops may not add refrigerant to a leaking mobile air conditioner without repairing the air conditioner, and must use proper equipment and methods to avoid releasing refrigerant.

Current rules prohibit the sale of mobile air conditioner refrigerant to persons other than registered installers. Current rules prohibit the sale of refrigerant in small “do-it-yourself" containers holding less than 15 lbs. of refrigerant.

Current DATCP rules apply to federally-designated class I and class II ozone depleting refrigerants, as well as “substitute" refrigerants. Federal rules regulate the installation of mobile air conditioner refrigerants, including “substitute refrigerants," but do not regulate the sale of substitute refrigerants.

JCRAR Action

On June 28, 2006, the Legislature's Joint Committee for Review of Administrative Rules (JCRAR) voted to suspend all current state rules related to the installation and sale of “substitute refrigerants" of any kind. This broad exemption will become effective unless DATCP adopts a narrower alternative exemption by emergency rule.

The narrower exemption specified by JCRAR would apply to the sale of one type of “substitute refrigerant" known as R 134A. The exemption would allow the sale of R 134A to the general public in “do-it-yourself" containers holding less than 15 lbs. R 134A is currently the most widely used mobile air conditioner refrigerant. It is not considered an ozone-depleting substance, but is considered an environmental contaminant that contributes to global warming.

Consumers who purchase R 134A in “do-it-yourself" containers will presumably use it to refill their leaking mobile air conditioners which, in most cases, will continue to leak refrigerant to the environment. Consumers are not generally trained or equipped to repair air conditioner leaks, or to prevent the release of refrigerant into the environment.

DATCP is adopting this emergency rule for the sole purpose of preventing a broader suspension of rules that currently prevent the release of mobile air conditioner refrigerant into the environment.

This rule will have no fiscal impact on local government and will have no new impact on DATCP.

Business Impact

This rule will benefit manufacturers and sellers of R 134A, who will be able to sell the refrigerant in “do-it-yourself" containers holding less than 15 lbs. of the refrigerant. Sellers will likely include major consumer retail chains.

This rule will adversely affect motor vehicle repair shops and mobile air conditioner repair shops, who have invested in equipment and training to repair leaking mobile air conditioners and prevent refrigerant leaks to the environment.

It is likely that many consumers will use the “do-it-yourself" containers to refill their leaking mobile air conditioners, without repairing the leaks or taking precautionary measures to prevent release of refrigerant into the environment. This will likely reduce business for registered commercial repair shops and installers.

Federal Programs

Federal law currently regulates the commercial repair of mobile air conditioners, and the commercial installation of mobile air conditioner refrigerant. There is no federal regulation of refrigerant sales. This rule will have no impact on federal programs.

Surrounding State Programs

No other state prohibits the sale of R 134A mobile air conditioner refrigerant in “do-it-yourself" containers of less than 15 lbs. This rule will make Wisconsin consistent with other states.

Questions and comments related to this rule may be directed to:

Michelle Reinen

Department of Agriculture, trade and Consumer Protection

P.O. Box 8911

Madison, WI 53708-8911

Telephone (608) 224-5160

E-Mail: michelle.reinen@datcp.state.wi.us

NOTICE IS HEREBY GIVEN that pursuant to the authority in ss. 166.02 (6u), 166.03 (2) (b) 9., 227.11 (2) (a), Stats. and interpreting ss. 20.465 (3) (b), 20.465 (3) (b) (s), 166.02 (6u), 166.03 (2) (b) 9., Stats., the Division of Emergency Management will hold public hearings at the times and places indicated below to consider the creation of ch. WEM 7, as an emergency rule and a permanent rule, relating to the application process and criteria for determining eligibility for payments to local units of government for damages and costs incurred for major catastrophes. The public hearings will be held as follows:

Date	Location	Begin Time
Mon. Aug. 14	Milwaukee Area Lecture Hall A &B, Milwaukee County Sheriff's Training Academy 9225 S. 68th St, Franklin, WI 53132	10:00 a.m.
Mon. Aug. 14	Appleton Area Grand Chute Town Hall Board Room 1900 Grand Chute Blvd. Appleton WI 54913	6:30 p.m.
Tues. Aug. 15	Madison Emergency Operations Center (EOC) Department of Military Affairs 2400 Wright Street Madison WI 53707	10:00 a.m.
Tues. Aug. 15	LaCrosse Health and Human Services Building Auditorium 300 4th Street North LaCrosse WI 54601	6:30 p.m.
Wed. Aug. 16	Wausau area Rib Mountain Town Hall, 3700 North Mountain Road Rib Mountain, WI 54401	6:30 p.m.
Thur. Aug. 17	Rice Lake area Barron County Justice Center Emergency Operations Center 1420 State Hwy 25 N Barron WI 54812	6:30 p.m.

Interested persons are invited to present information at the hearing. Persons appearing may make an oral presentation but are urged to submit facts, opinions and arguments in writing as well. Facts, opinions and arguments may also be submitted in writing without a personal appearance by mail address to Diane J. Kleiboer, Disaster Resources Supervisor, Wisconsin Emergency Management; 2400 Wright Street, Room 213, P.O. Box 7865, Madison, WI 53708-7865. Telephone: (608) 242-3200. Email: diane.kleiboer@dma.state.wi.us. Written comments must be received by August 17, 2006 to be included in the record of rule making proceedings.

The hearing sites are fully accessible to persons with disabilities.

The Wisconsin Department of Military Affairs, through its Division of Emergency Management, proposed an order to create WEM 7 relating to the application process and criteria for determining eligibility for payments to local units of government for damages and costs incurred for major catastrophes.

Statutory Authority: ss. 166.03 (2) (b) 9., and 227.11 (2) (a), Stats.

Statutes Interpreted: s. 166.03 (2) (b) 9.

Explanation of Agency Authority: The Department of Military Affairs, through its Division of Emergency Management, is required under s. 166.03 (2) (b) 9 (created by 2005 Wisconsin Act 269) to promulgate and adopt rules to administer the payment program to local units of government for specific costs related to emergency response and recovery.

Related Rule of Statute: There are no other related statutes or rules other than those listed above.

Plain Language Analysis: Chapter WEM 7 establishes an application process and eligibility criteria for payments to local units of government for specific costs related to emergency response and recovery efforts. These would be costs that cannot be insured or that are impossible to predict based on the unique nature of the disaster response. These costs include debris removal, emergency protective measures taken to eliminate of reduce immediate threats to life, public health or safety or damages to roads or bridges.

Summary of and Comparison With, Existing or Proposed Federal Regulations: The federal Public Assistance Program (44 CFR part 206, Subparts G and H), made available in a Presidential Disaster Declaration, and the major disaster assistance program as provided for in WEM 7 are similar. Both programs provide grants to local governments that have sustained damages or incurred costs as a result of a major disaster. Each also has a cost share provision; the federal public assistance program is 75% federal with the remaining 25% split between the state and local applicant while the state program cost share is 70/30, state/local. The eligibility criteria for the state program resemble those of the federal program, specifically as they pertain to debris clearance, emergency protective measures and damage to road systems. The administrative and management processes for the state program will be patterned after those of the federal public assistance program and will be documented in a State Administrative Plan. For both programs the actual amount paid to an applicant is determined by the applicant's ability to submit appropriate documentation justifying the claimed costs.

Comparison with Rules in Adjacent States: The Division is unaware of any proposed or existing federal regulation that is covered by the proposed rule.

Summary of Factual Data and Analytical Methodologies: The Division reviewed records of disaster occurrences from 2000 through 2005 and determined that, on average, there were three to five disaster occurrences each year that did not qualify for federal disaster assistance, but placed a substantial financial burden on the impacted jurisdictions. In these disasters, the majority of public assistance costs were for debris removal, emergency protective measures and damage to road systems. The Division also took into account the established federal threshold for the state to qualify for the federal public assistance program made available in a Presidential Disaster Declaration.

Effect on Small Business: The proposed rule will have no significant effect on small business, as defined in s. 227.114 (1), Stats. There were no supporting documents used to determine the effect on small business and an economic impact report was not prepared. This rule will affect only local units of government.

In the current biennium the program is funded with PECFA SEG funds. In the next biennium budget an alternate source of funding will be needed. It is assumed that approximately $3 million in damages and costs may be eligible for payment under the major disaster assistance fund. The increased workload will be significant but the agency will have to make do with current staff. Additional costs for supplies and services will likewise have to be absorbed within the agency's existing budget.

Diane Kleiboer, Supervisor, Disaster Recovery Section, Wisconsin Emergency Management, 2400 Wright Street, P. O. Box 7865, Madison, WI 53707-7865. Telephone: 608-242-3200. Email: diane.kleiboer@dma.state.wi.us.

Place Where Comments Are to Be Submitted and Deadline for Submission: Comments may be submitted to Diane Kleiboer, Supervisor, Disaster Recovery Section, 2400 Wright Street, P. O. Box 7865, Madison, WI 53707-7865. Telephone: 608-242-3200. Email: diane.kleiboer @dma.state.wi.us. Comments must be received on or before August 17, 2006 to be included in the record of rule-making proceedings.

SECTION 1. Chapter WEM 7 is created to read:

WEM 7.01   Purpose

WEM 7.02   Definitions

WEM 7.03   Eligibility Criteria

WEM 7.04   Application Process

WEM 7.05   Eligible and Ineligible Costs

WEM 7.06   Payments of Major Disaster Assistance Fund Applications

WEM 7.07   Expedited Claims and Payment Process

WEM 7.08   Record Retention

WEM 7.09   Fund Expenditure Limitation

WEM 7.10   Dual Payment

WEM 7.11   Appeal Process

7.01 PURPOSE. The purpose of this chapter sectionis to establish the application process and the criteria for determining eligibility for payment under the major disaster assistance fund as required in ss. 166.03 (2) (b) 9., Stats.

7.02 DEFINITIONS. In this chapter:

(1) “Administrator" means the administrator of the Wisconsin division of emergency management.

(2) "Applicant" means any local governmental unit that applies for major disaster assistance funding under this chapter.

(3) "Applicant's authorized representative" means any person authorized by the governing body of a local governmental unit to apply for major disaster assistance funding under this chapter.

(4) "County" means the county or counties where a major catastrophe has occurred.

(5) "Department" means the Wisconsin department of military affairs.

(6) "Disaster declaration" means a document by which an authorized official or the governing body of a local governmental unit or the State declares a disaster.

(7) “Division" means the Wisconsin division of emergency management.

(8) "Incident period" means the definite time interval of a major catastrophe with a specific start and end date .

(9) “Local governmental unit" has the meaning given in 19.42 (7u), Stats.

(10) "Major catastrophe" has the meaning given in s. 166.02 (6u), Stats.

(11) “State" means the state of Wisconsin.

7.03 ELIGIBILITY CRITERIA.

(1) The division may make payments to eligible local governmental units under this chapter upon receipt and consideration of an application if the administrator determines all of the following:

(a) The local governmental unit has suffered a major catastrophe.

(b) A disaster declaration was issued by the local governmental unit or the state during the incident period of the major catastrophe.

(c) The damages suffered and eligible costs incurred are the direct result of a major catastrophe.

(d) Federal disaster assistance is not available for that major catastrophe because the governor's request that the president declare the catastrophe a major disaster under 42 USC 5170 has been denied or where no federal assistance is requested because the major catastrophe does not meet the statewide or countywide per capita impact indicator under the public assistance program guidelines issued by the federal emergency management agency.

(e) The local governmental unit will contribute at least 30% of the total amount of the damages and eligible costs incurred from the major catastrophe from other funding sources.

(2) In making a determination under sub (1), the administrator shall consider all of the following:

(a) The availability of funding from other federal and state government sources.

(b) The availability of insurance.

(c) Any other factors the administrator considers relevant.

7.04 APPLICATION PROCESS. (1) The division shall prepare application materials which may be updated as needed. The application materials shall set forth the application instructions and requirements for funding under this chapter.

Note: Application materials are available on request without charge from the Disaster Resources Section Supervisor, Wisconsin Emergency Management, 2400 Wright Street, Room 213, P.O. Box 7865, Madison, WI 53707-7865, telephone (608) 242-3200. The completed forms and supporting documentation shall be mailed to the Disaster Resources Section Supervisor, Wisconsin Emergency Management, 2400 Wright Street, Room 213, P.O. Box 7865, Madison, WI 53707-7865. Application materials may also be accessed from the Wisconsin Emergency Management webpage at: http://emergencymanagement.wi.gov/

Note: Within six months of enactment of the administrative rules, Wisconsin Emergency Management will develop an administrative manual that details the implementation process and provides specific information on program eligibility. Until such time as the manual is developed, Wisconsin Emergency Management will adhere to the eligibility criteria outlined for Categories A, B, and C of FEMA's Public Assistance Program contained in the FEMA Public Assistance Guidance Document.

(2) A county, on behalf of eligible local units of government units within the county, shall provide the administrator with written notice of intent, DMA form XXX (x/2006), to apply within 30 days of the major catastrophe. A late notice of intent shall be cause for the denial of the application.

(3) Within 60 days after the end of the incident period of the major disaster, an application shall be submitted by the county to the administrator. A complete application under this chapter shall include the following:

A completed DMA Form XXX (x/2006), signed by the county emergency management director containing the following information:

(a) The cause, the location of damage, a list of the affected local units of government within the county, and the incident period of the major catastrophe.

(b) Documentation of a local, county or state disaster declaration in response to the major catastrophe.

(c) A description of damages and the amount of eligible costs incurred by the eligible local governmental units.

(d) A statement or evidence that the local governmental unit has matching funds to cover at least 30% of the total of eligible costs incurred from the major catastrophe.

(e) Any other information that the administrator considers relevant.

(4) The administrator shall review the application and supporting documentation for completeness and may return the application with a request for more detailed information. The administrator may ,consult with local public officials to ensure the application reflects the extent and magnitude of the damages and to reconcile any differences. The application is not complete until the administrator receives all requested information.

(5) An application returned to the applicant with a request for more detailed information or for correction of deficiencies must be resubmitted within 30 days from receipt by applicant. The failure of the applicant to provide in a timely manner the requested information without a reasonable explanation shall be cause for denial of the application.

(6) For purposes of this section, an application and supporting documentation is deemed complete when the administrator determines the application fully complies with the requirements under this chapter. When the application is complete, a notice will be provided to the applicant of the administrator's receipt and acceptance of the application.

(7) If the administrator determines that a review of the application and supporting documentation cannot be completed because the records, documents and other evidence were not maintained in accordance with generally accepted accounting principles and practices consistently applied, or were for any reason inadequate to demonstrate the reasonableness of the eligible costs claimed, the administrator may reject the application or make adjustments, if possible. Further consideration of such amounts will depend on the adequacy of subsequent documentation submitted by the applicant. Any additional information requested by the administrator must be resubmitted by the applicant within 30 days from receipt unless specifically extended by the administrator. The failure of the applicant to provide in a timely manner the requested information without a reasonable explanation shall be cause for denial of the application.

(8) The administrator shall take no longer than 30 days from the time the application is deemed complete in which to approve or deny the application. Applications that are approved shall be paid in accordance with section 7.06 of this chapter. A letter of denial shall be sent upon decision by the administrator that the application is denied.

(9) If the application is approved, the administrator will notify eligible local governmental units of the steps necessary to obtain payment or reimbursement for eligible costs as specified in 7.05 (1), including submission of invoices or other documentation substantiating the costs to be reimbursed.

7.05 ELIGIBLE AND INELIGIBLE COSTS. (1) ELIGIBLE COSTS. Costs eligible for payment under this chapter are those arising from a major catastrophe that are a direct result of response or recovery operations tofor the declared major catastrophe during the incident period and the applicant is responsible for providing response and recovery operations in the major catastrophe.

(a) Eligible costs shall include, but are not limited to:

as follows:

1. Debris removal to include woody debris, building wreckage, dirt, gravel, vehicles and other disaster related materials.

2. Emergency protective measures to eliminate or reduce immediate threats to life, public health or safety or a hazard that threatens significant damage to improved public or private property.

3. Damages to roads and bridges to include surfaces, bases, shoulders, ditches, drainage structures, piers, girders, abutments, slope protection and approaches.

(2) INELIGIBLE COSTS. Those costs which the administrator determines are not of such severity and magnitude that effective response and payment are beyond the capabilities of the affected local governmental units.

(a) Ineligible costs include, but are not limited to:

1. Damages to water control facilities including dams, reservoirs, levees, drainage channels, shore protective devices, irrigation facilities and pumping facilities.

2. Damages to buildings and equipment.

3. Damages to utilities including power generation facilities, sewage   collection systems and water treatment plants.

4. Ordinary operating expenses of local governmental units, such as salaries and expenses of public officials that are not directly related to the application.

5. Costs for which payment has been, or will be, received from any other funding source.

6. Disaster-related costs which should be covered and compensated by insurance.

7.06 PAYMENTS OF MAJOR DISASTER ASSISTANCE APPLICATIONS. (1) GENERAL PROVISIONS. (a) The state share of the damages and eligible costs incurred by local governmental units shall not be greater than 70% of the eligible disaster costs.

(b) In any quarter of the state fiscal year, the department may not make payments to applicants in excess of 25% of the total amounts allocated in s. 20.465. (3) (b) and (s), Stats.

(c) If major disaster assistance application payments requested during a quarter exceed 25% of the total amounts allocated in s. 20.465. (3) (b) and (s), Stats., all accepted applications will be paid proportionately.

(d) During the last quarter of the state fiscal year, the department shall proportionately allocate and pay the balance, if any, remaining in the appropriations created in s. 20.465. (3) (b) and (s), Stats. among all the applications submitted during the fiscal year with unpaid eligible costs.

(2) MATCH REQUIREMENTS. (a) The local share of damages and eligible costs incurred by local governmental units may not be less than 30%.

(b) The substantiated value of donated materials, equipment, services and labor may be used as all or part of the local share of the eligible costs subject to all of the following:

1. All sources of local share donation shall be indicated when the application and supporting documentation is submitted.

2. The maximum value of donated, non-professional labor shall be equal to the prevailing federal minimum wage requirements.

3. The value of donated equipment may not exceed the Wisconsin department of transportation highway rates equipment.

4. The value of donated materials and professional services shall conform to market rates and be established by invoice.

(3) AUDIT. (a) The applicant shall account for all funds received and paid under this chapter in conformance with generally accepted accounting principles and practices. The applicant shall maintain detailed records of expenditures to show that fund payments were used for the purpose for which the payment was made. The applicant shall keep all financial records, including all invoices and canceled checks or bank statements that support all eligible costs claimed by the applicant, and the records shall be available for inspection by the department for 5 years after the final payment.

(b) The department may audit all of the applicant's records pertaining to this application. The department's audit may result in an adjustment in the payment amount.

(4) PAYMENT. The applicant shall submit to the administrator claims for payment of actual and eligible costs on forms provided by the department. All eligible costs claimed for payment shall be documented and shall be consistent with the eligibility provisions of this chapter.

(5) FINAL INSPECTION. Upon completion of all work by an applicant, the division shall inspect all the work that the applicant claims. The applicant shall provide the division employees with access to all claimed work and shall permit review of all records relating to the work.

(6) CLOSEOUT OF APPLICATION. (a) The administrator shall close out the applicant's major disaster assistance application when all of the following occurs:

1. The recovery work is complete.

2. The division completes a final inspection of all work claimed for reimbursement by the applicant.

3. The division pays eligible costs.

4. The required audits are complete.

5. The applicant receives the final amount due or pays any amount owed.

7.07 EXPEDITED CLAIM AND PAYMENT PROCESS. (1) If the major catastrophe places an undue burden or hardship on the local governmental unit and public officials wish to expedite the application and payment process, the local governmental unit shall submit an expedited request for payment on DMA Form XXX (x/2006) with required documentation that shall include a statement explaining why expedited payment of the application is necessary and the specific hardship posed.

(2) All requests for an advance of funds shall be signed by the applicant's authorized representative and forwarded to the administrator. The administrator shall assess a request for an advance to determine whether the request is reasonable and for eligible costs that have been completed. The administrator shall grant a request for an advance for work not completed only if an applicant has demonstrated that the work cannot be completed without an advance. The amount of an advance will be based upon eligible costs to date and the estimated eligible costs for the next 60-day period.

7.08 RECORD RETENTION.

The applicant shall maintain for five years all records relating to the application submitted in accordance with the State's standard audit practices and shall make the records available for inspection and audit. If a contract or subcontract for the furnishing of goods, equipment, labor, materials, or services to the applicant may result in a claim, the applicant shall include in the contract or subcontract a provision that all books, accounts, reports, and other records relating to the contract or subcontract shall be subject to inspection and audit by the state for five years after completion of the contract or subcontract.

7.09 FUND EXPENDITURE LIMITATION.

Expenditures from the major disaster assistance fund, as a result of a catastrophic disaster, shall not exceed the amount authorized in the major disaster assistance appropriations created in s. 20.465. (3) (b) and (s), Stats. An expenditure payment cap of 25% of the total amounts allocated in s. 20.465. (3) (b) and (s), Stats., shall be set quarterly by the department and balances shall be reconciled at the end of the state fiscal year.

7.10 DUAL PAYMENT.

If eligible costs are subsequently recovered from other sources after payment from the major disaster assistance fund, the applicant shall return the recovered eligible costs to the department for deposit back into the fund. If the administrator or an applicant determines that the applicant received duplicate funds for a claim from the state and from another source, the applicant shall refund the amount received from the state.

7.11 APPEAL PROCESS.

(1) Applicant shall have 30 days after receipt of the final determination by the administrator in which to file a written appeal.

(2) The applicant shall first appeal directly to the administrator.

(3) Following an appeal to the administrator, an applicant may then request a problem resolution process in which the adjutant general of the department of military affairs reviews the materials submitted by the applicant and issues a decision based on those materials or meets with the parties to negotiate an acceptable resolution of the problem.

(4) An applicant may request an administrative hearing under Ch. 227 Stats.

NOTICE IS HEREBY GIVEN that pursuant to the authority in ss. 166.03 (2) (a) 3., 227.11 (2) (a), Stats. and interpreting s. 166.03 (2) (a) 3., Stats., the Division of Emergency Management will hold public hearings at the times and places indicated below to consider the creation of ch. WEM 8, relating to the establishment of standards for the adoption of the Mutual Aid Box Alarm System, also known as MABAS, that may be used for the systematic deployment of fire, rescue and emergency medical services personnel and equipment in a multi-jurisdictional or multi-agency emergency response. The public hearings will be held as follows:

Date	Location	Begin Time
Mon. Aug. 14	Milwaukee Area Milwaukee County Sheriff's Training Academy Lecture Hall A &B, 9225 S. 68th St, Franklin, WI 53132	11:00 a.m.
Mon. Aug. 14	Appleton Area Grand Chute Town Hall Board Room 1900 Grand Chute Blvd. Appleton WI 54913	7:30 p.m.
Tues. Aug. 15	Madison Emergency Operations Center (EOC) Department of Military Affairs 2400 Wright Street Madison WI 53707	11:00 a.m.
Tues. Aug. 15	LaCrosse Health and Human Services Building Auditorium 300 4th Street North LaCrosse WI 54601	7:30 p.m.
Wed. Aug. 16	Wausau Area Rib Mountain Town Hall, 3700 North Mountain Road Rib Mountain, WI 54401	7:30 p.m.
Thur. Aug. 17	Rice Lake Area Barron County Justice Center Emergency Operations Center 1420 State Hwy 25 N Barron WI 54812	7:30 p.m.

Interested persons are invited to present information at the hearing. Persons appearing may make an oral presentation but are urges to submit facts, opinions and arguments in writing as well. Facts, opinions and arguments may also be submitted in writing without a personal appearance by mail address to Keith Tveit, Fire Services Coordinator, Wisconsin Emergency Management; 2400 Wright Street, Room 213, P.O. Box 7865, Madison, WI 53708-7865. Telephone: (608) 242-3200. Email: keith.tveit@dma.state.wi.us. Written comments must be received by August 17, 2006 to be included in the record of rule making proceedings.

The hearing sites are fully accessible to persons with disabilities.

Proposed WEM 8

The Wisconsin Department of Military Affairs, through its Division of Emergency Management, proposes an order to create WEM 8 relating to the establishment of standards for the adoption of the Mutual Aid Box Alarm System, also known as MABAS, that may be used for deploying fire, rescue and emergency medical services personnel and equipment in a multi-jurisdictional or multi-agency emergency response.

Statutory Authority: ss. 166.03 (2) (a) 3., 227.11 (2) (a), Stats.

Statutes Interpreted:s. 166.03 (2) (a) 3, Stats.

Explanation of Agency Authority: The Department of Military Affairs, through its Division of Emergency Management, is required under s. 166.03 (2) (a) 3., Stats. (created by 2005 Wisconsin Act 257) to promulgate and adopt rules establishing the Mutual Aid Box Alarm System as a standard for deploying fire, rescue and emergency medical services personnel and equipment in the event of a multi-jurisdictional or multi-agency emergency response.

Related Rule of Statute: There are no other related statutes or rules other than those listed above.

Plain language analysis: Chapter WEM 8 establishes standards adopting the Mutual Aid Box Alarm System as a mechanism for the systematic deployment of fire, rescue and emergency medical services personnel and equipment during multi-jurisdictional or multi-agency emergency response to crises, natural disasters and manmade catastrophes. This administrative rule delineates the various levels of response and provides a procedure and systematic plan for the provision of mutual aid as resources are exhausted at the various levels of response. The rule establishes uniform compliance requirements for the types and classes of emergency response equipment and apparatus as well as minimum training requirements for emergency response personnel. Participation in the Mutual Aid Box Alarm System by local units of government is strictly voluntary. Equipment, personnel and services provided are at no cost to the stricken unit of government but may be recoverable from third parties and responsible parties. Fire, rescue and emergency medical services personnel providing mutual aid remain the employees of the aiding unit of government.

Summary of, and comparison with, existing or proposed federal regulations: The Department is unaware of any proposed or existing federal regulation that is covered by the proposed rule.

Comparison with rules in adjacent states: The State of Illinois has utilized the Mutual Aid Box Alarm System since the late 1960's as an effective mechanism for providing mutual aid among municipalities and fire departments. This system was formally adopted by the State of Illinois and enacted under the “Intergovernmental Cooperation Act" at 5 ILCS 220/1 et. seq.

Summary of factual data and analytical methodologies: There were no factual data or analytical methodologies used to develop the proposed rules.

Effect of small business: The proposed rules will have no significant effect on small business, as defined in s. 227.114 (1), Stats. There were no supporting documents used to determine the effect on small business and an economic impact report was not prepared.

Fiscal Estimate: These rules implement the standards adopting the Mutual Aid Box Alarm System as enacted by 2005 Wisconsin Act 257. These rules do not appear to have any impact on local government costs.

Agency contact person: Keith Tveit, Fire Services Coordinator, Wisconsin Emergency Management; 2400 Wright Street, Room 213, P.O. Box 7865, Madison, WI 53708-7865. Telephone: (608) 220-6049. Email: keith.tveit@dma.state.wi.us.

Place where comments are to be submitted and deadline for submission: Comments may be submitted to Keith Tveit, Fire Services Coordinator, Wisconsin Emergency Management; 2400 Wright Street, Room 213, P.O. Box 7865, Madison, WI 53708-7865. Telephone: (608) 220-6049. Email: keith.tveit@dma.state.wi.us. Comments must be received on or before August 17, 2006 to be included in the record of rule-making proceedings.

SECTION 1. Chapter WEM 8 is created to read:

Chapter WEM 8

MUTUAL AID BOX ALARM SYSTEM

STANDARDS AND PROCEDURES

WEM 8.01 Purpose

WEM 8.02 Definitions

WEM 8.03 Levels of Response

WEM 8.04 Procedure for Providing Mutual Aid

WEM 8.05 Types and Classing of Resources

WEM 8.06 Coordinators

WEM 8.07 Credentialing

WEM 8.08 Limitations on Coverage

WEM 8.09 Compensation

WEM 8.10 Participation

WEM 8.01 PURPOSE. The purpose of this chapter is to establish standards for the adoption of the Mutual Aid Box Alarm System, also known as MABAS, as a mechanism to be used for mutual aid for fire, rescue, and emergency medical services and associated special operational services as required in ss. 166.03 (2) (a) 3, Stats.

WEM 8.02 DEFINITIONS. In this chapter:

(1) “Aiding unit" means a member unit furnishing equipment, personnel or services to a stricken unit.

(2) “Apparatus guidelines" means apparatus defined and incorporated into the Mutual Aid Box Alarm System General Operating Procedures.

(3) “Chief officer" means the highest ranking officer within a fire, rescue or emergency medical services unit.

(4) “Emergency" means an occurrence or condition in a member unit's territorial jurisdiction which results in a situation of such magnitude or consequence that it cannot be adequately handled by the resources of the stricken unit and such that a member unit determines the necessity and advisability of requesting mutual aid.

(5) “Emergency medical services system" means the method for establishing a system for the appropriate management for the medical treatment and transport of the public in pre-hospital, interfacility or from facilities or institutions providing health services under s. TRANS Chapter 309 and ss. HFS Chapters 110 through 113.

(6) “Incident command system" has the same meaning as in s. COMM 30.01(16) and follows the guidelines of the National Incident Management System, also known as NIMS.

(7) “MABAS, or `Mutual Aid Box Alarm System' box card" means a printed form containing details of departments, specialized personnel and equipment to respond to a given geographical area, target hazard and/or specialized response within a community.

(8) “MABAS, or `Mutual Aid Box Alarm System' division" means the geographically associated MABAS member units which have been grouped for operational efficiency and representation of those MABAS member units.

Each MABAS division shall designate one representative to serve on the statewide MABAS executive board.

(9) “MABAS or `Mutual Aid Box Alarm System' interdivisional card" means a MABAS box card designated for interdivisional mutual aid, listing a MABAS division's equipment available to respond based on the type of equipment and location.

(10) “MABAS or `Mutual Aid Box Alarm System' member unit" means a unit of local government including but not limited to a city, village, town, emergency medical services district or fire protection district having a fire department recognized by the State of Wisconsin or an intergovernmental agency and the units of which the intergovernmental agency is comprised which is a party to the MABAS agreement and has been appropriately authorized by the governing body to enter into such an agreement.

(11) “MABAS or `Mutual Aid Box Alarm System' region" means the Wisconsin emergency management areas as identified by the Adjutant General under ss. 166.03 (2) 6. (b) 1., Stats.

(12) “Mutual Aid Box Alarm System", also known as MABAS, means a definite and prearranged plan whereby response and assistance is provided to a stricken unit by the aiding unit in accordance with the system established and maintained by MABAS member units and amended from time to time. Management oversight of the system is handled by the MABAS executive board.

(13) “National Incident Management System" or `NIMS'," means a system mandated by Homeland Security Presidential Directive 5 that provides a consistent nationwide approach for federal, state, local and tribal governments; the private sector, and nongovernmental organizations to work effectively and efficiently together to prepare for, respond to, and recover from domestic incidents, regardless of cause, size, or complexity.

(14) “Stricken unit" means a member unit which requests aid in the event of an emergency.

(15) “WEM or `Wisconsin emergency management' duty officer" means an individual on-call 24 hours and seven days a week and as identified by Wisconsin emergency management's duty officer roster.

WEM 8.03 LEVELS OF RESPONSE. MABAS coordinates the effective and efficient provision of mutual aid during emergencies, natural disasters, or manmade catastrophes. In recognition of home rule, MABAS is not intended to relieve a community from their responsibilities of providing adequate emergency services for all local emergencies, since all communities should have their own first line of defense. When a community exhausts its resources, MABAS can be activated by the stricken community through a systematic plan at various levels of response:

(1) A “local response" is an emergency that is a routine day-to-day event utilizing resources listed on a MABAS box card with a minimum of three MABAS alarm levels which is triggered locally by the incident commander on scene.

(2) A “regional response" is an emergency that has exhausted “local response" capabilities and may utilize up to three MABAS interdivisional cards. A regional response is triggered locally by the incident commander on the scene of an emergency.

(3) A “state response" is an emergency that has exhausted “regional response" capabilities and may utilize multiple MABAS interdivisional cards. A state response is triggered by a request to the WEM duty officer by the incident commander on the scene of the emergency. Responding resources will be coordinated by the WEM duty officer in coordination with the regional MABAS division coordinator.

(4) A “national response" is an emergency that has exhausted state resources and is an event of national significant which is triggered by or to the Wisconsin emergency management duty officer through the Emergency Management Assistance Compact under ss. 166.30, Stats.

WEM 8.04 PROCEDURE FOR PROVIDING MUTUAL AID. (1) The MABAS member units authorize their respective chief officer or designee to take necessary and proper action to render or request mutual aid from the member units in accordance with the policies and procedures established and maintained by the MABAS member units. The aid rendered shall be to the extent of available personnel and equipment not required for adequate protection of the territorial limits of the aiding unit.

(2) Whenever an emergency occurs and conditions are such that the incident commander, or designee, of the stricken unit determines it is advisable to request aid under MABAS, shall activate the number of aiding units deemed necessary in accordance with the policy and procedures established and maintained by the MABAS member units.

(3) The chief officer, or designee, of the aiding unit shall take the following action immediately upon being requested for mutual aid:

a. Determine what equipment, personnel and/or services are requested according to the system maintained by MABAS.

b. Determine if requested equipment, personnel and/or services can be committed in response to the request from the stricken unit.

c. Dispatch the predetermined requested equipment, personnel and/or services, to the extent available, to the staging location of the emergency reported by the stricken unit in accordance with the procedure of MABAS.

d. Notify the stricken unit if any or all of the requested equipment, personnel and/or services cannot be provided.

WEM 8.05 TYPES AND CLASSES OF RESOURCES. All equipment and apparatus provided to the stricken unit shall be compliant with requirements based on National Fire Protection Association standards and s. TRANS 309 at the time of its original construction and shall fall within one of the NIMS vehicle classifications. At the local response level, staffing guidelines shall be based upon the current local policy and practices. At the regional response level, state response level and national response level, personnel provided by aiding units shall comply with all MABAS staffing guideline minimums.

WEM 8.06 COORDINATORS. Each MABAS division shall have one division coordinator available at all times. Each MABAS region shall designate one division in their region to act as the regional coordinator. Each WEM region will have one designated MABAS division as a Wisconsin emergency management regional coordinator.

WEM 8.07 CREDENTIALING. All firefighters responding under MABAS shall meet the training standards and requirements of entry level firefighter trained under s. COMM 30.07. Emergency medical services responders shall have a valid emergency medical services license as defined in s. HFS 110 through 113.

WEM 8.08 LIMITATIONS ON COVERAGE. (1) Personnel dispatched to aid a stricken unit under MABAS shall remain employees of the aiding unit. Personnel rendering aid shall report for direction and assignment at the scene of the emergency to the incident commander or designee of the stricken unit. The aiding unit shall at all times have the right to withdraw any and all aid upon the order of its chief officer or designee, provided that the aiding unit withdrawing such aid shall notify the incident commander of the stricken unit of the withdrawal of such aid and the extend of such withdrawal.

(2) The rendering of assistance under MABAS shall not be mandatory. Aiding units may refuse if local conditions of the aiding unit prohibit response. It is the responsibility of the aiding unit to immediately notify the stricken unit of its inability to respond.

WEM 8.09 COMPENSATION. Equipment, personnel or services provided under MABAS shall be at no charge to the stricken unit. However, any expenses recoverable from third parties and responsible parties shall be equitably distributed among aiding units. Nothing shall operate to bar any recovery of funds from any state of federal agency under existing state and federal laws.

WEM 8.10 PARTICIPATION. Participating agencies in the statewide mutual aid plan must be either a MABAS member unit or have signed a memorandum of understanding directly with MABAS. Failure to do either does not jeopardize WEM duty officer directed responses to a non-participating community.

SECTION 2. EFFECTIVE DATE. This rule shall take effect on the first day of the month following publication in the Wisconsin administrative register as provided in s. 227.22 (2) (intro), Stats.

NOTICE IS HEREBY GIVEN that pursuant to authority vested in the Department of Regulation and Licensing in s. 227.11 (2), Stats., and subchapter XII of ch. 440, Stats., as created by 2005 Wisconsin Act 292, and interpreting subchapter XII of ch. 440, Stats., the Department of Regulation and Licensing will hold a public hearing at the time and place indicated below to consider an order to create chs. RL 180 to 183 and Appendix I, relating to the issuance and renewal of licenses, the issuance of temporary permits, standards of practice and grounds for discipline of licensed midwives.

Date:   August 14, 2006

Time:   9:00 a.m.

Location:   1400 East Washington Avenue

  Room 121A (Enter at 55 N. Dickinson St.)

  Madison, Wisconsin

Appearances at the Hearing:

Interested persons are invited to present information at the hearing. Persons appearing may make an oral presentation but are urged to submit facts, opinions and argument in writing as well. Facts, opinions and argument may also be submitted in writing without a personal appearance by mail addressed to Pamela Haack, Paralegal, Department of Regulation and Licensing, 1400 East Washington Avenue, Room 152, P.O. Box 8935, Madison, Wisconsin 53708-8935, or by email at pamela.haack@drl.state.wi.us. Comments must be received on or before August 14, 2006 to be included in the record of rule-making proceedings.

Statutes interpreted: Subchapter XII of ch. 440, Stats.

Statutory authority: Section 227.11 (2), Stats., and Subchapter XII of ch. 440, Stats., as created by 2005 Wisconsin Act 292.

Explanation of agency authority: Subchapter XII of ch. 440, Stats., was enacted on April 10, 2006. Under subch. XII of ch. 440, Stats., the Department of Regulation and Licensing is authorized to promulgate rules relating to the issuance and renewal of licenses; the issuance of temporary permits; standards of practice, and grounds for discipline of a licensed midwife.

Related statute or rule: Section 441.15, Stats., which relates to the licensure of nurse-midwives.

Plain language analysis: Chapter RL 180 is being created to include definitions of several terms that are used in subch. XII of ch. 440, Stats., and in chs. RL 180 to 183. The proposed rules include definitions for administer, consultation, department, direct supervision, health care provider, licensed midwife, practice of midwifery and temporary permit.

Chapter RL 181 is being created to identify the requirements and procedures for submitting applications for licenses and renewal of licenses and applications for temporary permits.

Chapter RL 182 is being created to identify the standards of practice of midwifery. The standards of practice established by the National Association of Certified Professional Midwives are set forth in Appendix I. The proposed rules also include standards relating to informed consent, treatment measures and prohibited practices.

Chapter RL 183 is being created to identify the grounds for discipline of a licensed midwife.

Summary of, and comparison with, existing or federal regulation:

There are no federal laws that govern the licensing of midwives.

Comparison with rules in adjacent states:

Minnesota:

Minnesota licenses traditional midwives. A review of the applicable Minnesota statutes reflects that Minnesota has many requirements that are similar to the requirements for licensure and practice in Wisconsin. Several differences found in the Minnesota statutes include a requirement that licensees complete 30 hours of continuing education every 3 years; a requirement that licensees develop a medical consultation plan, and recordkeeping and reporting requirements.

Michigan:

Michigan does not currently have licensing requirements for certified professional midwives.

Illinois:

Illinois does not currently have licensing requirements for certified professional midwives.

Iowa:

Iowa does not currently have licensing requirements for certified professional midwives.

Summary of factual data and analytical methodologies:

The Department of Regulation and Licensing proposes to promulgate administrative rules relating to the regulation of licensed midwives pursuant to the provisions of 2005 Wisconsin Act 292. The provisions under the Act establish the requirements for obtaining licensure and state that practice rules promulgated shall be consistent with the standards of practice of midwifery established by the National Association of Certified Professional Midwives (NACPM). Drug administration and procedures defined under the rules were written in accordance with NACPM's recommendations. For guidance on the development of the administrative rules, the department has appointed an advisory committee in accordance with the provisions under s. 440.987, Stats.

Analysis and supporting documents used to determine effect on small business or in preparation of economic impact report:

The department proposes that the proposed rules will have minor or non-significant effect on small business as it does only initiate regulation on those currently practicing midwifery in the state of Wisconsin, though does so in consistence with the provisions of 2005 Wisconsin Act 292 and the department's charter in maintaining the protection of the public. The rules as written should not have a major or significant economic impact as they do not increase the standards for those already certified by the National Association of Certified Professional Midwives (NACPM).

2005 Wisconsin Act 292, which initiated promulgation of rules regulating licensed midwives, does not substantially increase existing standards for obtaining the midwife license, those standards being (primarily) a preexisting valid certification as a certified professional midwife or a valid nurse-midwife credential granted by the American College of Nurse Midwives. Furthermore, the rules promulgated only restrict practice of midwifery to the standards established by NACPM. Any additional restrictions established must be in accordance with those standards, and may not go against certain provisions under the statutes that may constitute a threat to their practice, which includes a prohibition on establishing the following requirements: a nursing degree; a midwife to practice under supervision or collaboration with a health care provider; a midwife to enter into an agreement with another health care provider; limit the location of where a midwife may practice; permit a midwife to use forceps or vacuum extraction.

Finally, the rules promulgated will regulate approximately 35 people, at least initially, who are currently practicing in Wisconsin under the aforementioned certifications. Additional costs on their practice will be the cost of licensure, or renewal, which is $56/biennium.

Section 227.137, Stats., requires an “agency" to prepare an economic impact report before submitting the proposed rule-making order to the Wisconsin Legislative Council. The Department of Regulation and Licensing is not included as an “agency" in this section.

The Department estimates that this rule will require staff time in the Divisions of Management Services, Professional Credentialing, and Enforcement. The one-time salary and fringe costs in the Division of Management Services and Professional Credentialing are estimated at $2,300. The on-going salary and fringe cost in the Division of Enforcement is estimated at $19,800.

Anticipated costs incurred by private sector:

The department finds that this rule has no significant fiscal effect on the private sector.

Effect on small business:

These proposed rules will have no significant economic impact on small businesses, as defined in s. 227.114 (1), Stats. The Department's Regulatory Review Coordinator may be contacted by email at larry.martin@drl.state.wi.us, or by calling (608) 266-8608.

Pamela Haack, Paralegal, Department of Regulation and Licensing, Office of Legal Counsel, 1400 East Washington Avenue, Room 152, P.O. Box 8935, Madison, Wisconsin 53708-8935. Telephone (608) 266-0495. Email: pamela.haack@drl.state.wi.us.

Place where comments are to be submitted and deadline for submission:

Comments may be submitted to Pamela Haack, Paralegal, Department of Regulation and Licensing, Office of Legal Counsel, 1400 East Washington Avenue, Room 152, P.O. Box 8935, Madison, Wisconsin 53708-8935; email pamela.haack@drl.state.wi.us. Comments must be received on or before August 14, 2006, to be included in the record of rule-making proceedings.

Notice is hereby given that, pursuant to s. 71.80 (1) (c), Stats., and interpreting ss. 71.04 (4), (4m), (5) (intro.), (6) (intro.), (7) (d), (df), and (dh), (8) (b), (8) (c) and (10) and 71.25 (6), (6m), (7) (intro.), (8) (intro.), (9) (d), (df) and (dh), (10) (c), (11) and (14, Stats., the Department of Revenue will hold a public hearing at the time and place indicated below, to consider the repeal, renumbering and amending, amending, and repeal and recreation of rules relating to apportionment of apportionable income.

The hearing will be held at 9:00 a.m. on Monday, August 14, 2006, in the Events Room (1st floor) of the State Revenue Building, located at 2135 Rimrock Road, Madison, Wisconsin.

Handicap access is available at the hearing location.

Interested persons are invited to appear at the hearing and may make an oral presentation. It is requested that written comments reflecting the oral presentation be given to the department at the hearing. Written comments may also be submitted to the contact person shown below no later than August 21, 2006, and will be given the same consideration as testimony presented at the hearing.

The Wisconsin Department of Revenue proposes an order to: repeal s. Tax 2.39 (6) (b) 4. b. and (7); renumber and amend s. Tax 2.39 (6) (b) 4. c.; amend s. Tax 2.39 (1), (2) (a), (b), and (e), and (6) (a) and (b) 4. a.; and repeal and recreate s. Tax 2.39 (3) and (6) (c); relating to the computation of the apportionment fraction of multistate businesses.

Statutes interpreted: ss. 71.04 (4), (4m), (5) (intro.), (6) (intro.), (7) (d), (df), and (dh), (8) (b), (8) (c), and (10) and 71.25 (6), (6m), (7) (intro.), (8) (intro.), (9) (d), (df), and (dh), (10) (c), (11), and (14), Stats.

Statutory authority: s. 71.80 (1) (c), Stats.

Explanation of agency authority: Under s. 71.80 (1) (c), Stats., the department may make such regulations as it shall deem necessary in order to carry out chapter 71 of the Wisconsin Statutes, relating to income and franchise taxes.

Related statute or rule: ss. 71.04 (4), (4m), (5) (intro.), (6) (intro.), (7) (d), (df), and (dh), (8) (b), (8) (c), and (10) and 71.25 (6), (6m), (7) (intro.), (8) (intro.), (9) (d), (df), and (dh), (10) (c), (11), and (14), Stats.

Plain language analysis: This proposed rule order prescribes the method to be used for apportioning the apportionable income of multistate businesses.

Section 1. Tax 2.39 (1) is amended to clarify that the apportionment formula applies only to apportionable income and to conform language, style, and format to Legislative Council Rules Clearinghouse standards.

Tax 2.39 (2) (a), (b), and (e) are amended to conform language, style, and format to Legislative Council Rules Clearinghouse standards.

Section 2. Tax 2.39 (3) is repealed and recreated to do all of the following:

a. Reflect the phase-in of an apportionment formula consisting solely of a sales factor, as provided by 2003 Wisconsin Act 37.

b. Prescribe the weight to be given to the other apportionment factors for taxable years beginning before January 1, 2008, if a factor is omitted.

c. Reflect the computation of the sales factor if the numerator or denominator of the factor is a positive number, zero, or a negative number, as provided by 2003 Wisconsin Act 37.

d. List specialized industries that are not subject to the standard apportionment formula, as provided by 2003 Wisconsin Act 37.

Section 3. Tax 2.39 (6) (a) is amended to conform language, style, and format to Legislative Council Rules Clearinghouse standards.

Sections 4, 5, and 6. Tax 2.39 (6) (b) 4. a. is amended to remove obsolete language. Tax 2.39 (6) (b) 4. b. is repealed because it is no longer needed. Tax 2.39 (6) (b) 4. c. is renumbered Tax 2.39 (6) (b) 4. b. and amended to remove obsolete language.

Section 7. Tax 2.39 (6) (c) is repealed and recreated to do all of the following:

a. Change the way that receipts from the use of computer software and from services are attributed to Wisconsin, as prescribed in 2005 Wisconsin Act 25, effective for taxable years beginning on or after January 1, 2005.

b. Clarify when receipts from the lease, rental, licensing, or other use of tangible personal property are attributed to Wisconsin.

c. Add a note about the Wisconsin Tax Appeals Commission's decision in The Hearst Corporation vs. Wisconsin Department of Revenue, Docket No. I-8511, May 15, 1990. The commission decided that the income-producing activity with respect to certain income from broadcasting network programming and national advertising occurred in Wisconsin.

Section 8. Tax 2.39 (7) is repealed because it is obsolete. The treatment of partnerships was revised by 2001 Wisconsin Act 16, which amended s. 71.22 (1r) and created s. 71.25 (15), Stats., effective for taxable years of partnership partners or limited liability company members beginning on or after January 1, 2001.

Summary of, and comparison with, existing or proposed federal regulation: There is no existing or proposed federal regulation that is intended to address the activities to be regulated by the rule.

- Illinois' apportionment formula consists solely of a sales factor. Sales of tangible personal property are sourced on a destination basis. If the taxpayer is not subject to tax in the destination state, a throwback rule applies. Generally, sales of services are attributed to the state where the income-producing activity occurred. If the income-producing activity occurred in more than one state, the sale is attributed to the state with the greater costs of performance. Gross receipts from the sale, lease, rental, or licensing of real property are attributable to Illinois if the property is located in Illinois. Gross receipts from the rental, lease, or licensing of tangible personal property are attributable to Illinois if the property is located in Illinois, or based on the ratio of the time the property was used in Illinois to the total time the property was used everywhere. Gross receipts from services are attributable to Illinois based on the ratio of the time spent performing the services in Illinois to the total time spent performing services everywhere.

- Iowa's apportionment formula consists solely of a sales factor. Sales of tangible personal property are sourced on a destination basis. It the taxpayer is not subject to tax in the destination state, a throwout rule applies. Sales of services are sourced where the benefit of the service is received. Gross receipts from rents, royalties, or other fees received for the use of real property are attributable to Iowa if the property is located in Iowa. Gross receipts from rents, royalties, license fees, or other fees received for the use of tangible personal property are attributable to Iowa if the property is located in Iowa, or based on the ratio of the time the property was used in Iowa to the total time the property was used everywhere. Royalty income from intangible property is attributable to Iowa if the taxpayer's commercial domicile is in Iowa.

- Michigan's apportionment formula for 2006 consists of a three-factor formula with sales weighted 92.5%, and property and payroll each weighted 3.75%. Sales of tangible personal property are sourced on a destination basis. Michigan does not have a throwback rule. Sales of services are sourced where the income-producing activity occurred. If the income-producing activity occurred in more than one state, the sale is attributed to the state with the greater costs of performance.

- Minnesota's apportionment formula consists of a three-factor formula with sales weighted 75%, and property and payroll each weighted 12.5%. Sales of tangible personal property are sourced on a destination basis. Minnesota does not have a throwback rule. Sales, rents, royalties, or other income received in connection with real property are attributable to Minnesota if the property is located in Minnesota. Receipts from the lease or rental of tangible personal property are attributable to Minnesota if the property is located in Minnesota, or based on the extent to which the property was used in Minnesota. Royalties or other income from intangible property is attributable to Minnesota based on the portion of use in the state. If the portion of use in and outside Minnesota cannot be determined, the sales are excluded from the numerator and denominator of the sales factor. Sales of services are sourced where the benefit of the service is received, where the service was ordered, or where the service was billed, depending on the circumstances.

- Summary of factual data and analytical methodologies: 2003 Wisconsin Act 37 changed the apportionment formula used by multistate businesses for determining the income taxable by Wisconsin. As a result of this legislation, single sales factor apportionment will be phased in for most businesses. The phase-in of single sales factor apportionment begins for taxable years beginning on January 1, 2006. 2005 Wisconsin Act 25 changed how gross receipts from the use of computer software and from services are sourced for purposes of the apportionment formula. Receipts from the use of computer software are sourced to the location where the software is used. Receipts from services are sourced where the benefit of the service is received. The change in the sourcing rules first applies to taxable years beginning on January 1, 2005. 2001 Wisconsin Act 16 created ss. 71.22 (1r) and 71.25 (15), Stats., effective for taxable years beginning on or after January 1, 2001. These provisions specify that a general or limited partner's share of a partnership's apportionment factors are included in the numerator and denominator of the partner's apportionment factors. Similar treatment applies to members of limited liability companies that are treated as partnerships. The department has determined that it is necessary to revise s. Tax 2.39 to reflect these law changes.

Analysis and supporting documents used to determine effect on small business: The department has determined that there is not a significant fiscal effect on small business. This proposed rule order will only apply to large, multistate companies that are required to determine their Wisconsin income using the apportionment method. Therefore, this proposed rule order does not have a significant effect on small business.

Anticipated costs incurred by private sector: This rule order does not have a significant fiscal effect on the private sector.

Effect on small business: This rule order does not have a significant fiscal effect on small business.

Please contact Dale Kleven at (608) 266-8253 or dkleven@dor.state.wi.us, if you have any questions regarding this rule order.

Place where comments are to be submitted and deadline for submission: Comments may be submitted to the contact person shown below no later than one week after 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.

Dale Kleven

Department of Revenue

Mail Stop 6-40

2135 Rimrock Road

P.O. Box 8933

Madison, WI 53708-8933

SECTION 1. Tax 2.39 (1) and (2) (a), (b), and (e) are amended to read:

Tax 2.39 (1) GENERAL. Except as provided in sub. (3) (a), any person, except resident individuals, resident estates, and resident trusts, engaged in business both within and without Wisconsin in and outside this state shall report by apportion its apportionable income using the statutory apportionment method as provided in s. 71.04 (4) or 71.25 (6), Stats., when the person's business in Wisconsin this state is an integral part of a unitary business unless the department, in writing, allows reporting on a different basis. Nonapportionable income shall be allocated as provided in s. 71.25 (5) (b), Stats.

(2) (a) “Apportionable income" has the meaning given in s. 71.25 (5) (a), Stats.

(2) (b) “Engaged in business within and without Wisconsin in and outside this state" means having business activity which is sufficient to create nexus in Wisconsin this state and at least one other state or foreign country.

(2) (e) “Nonapportionable income" has the meaning given in s. 71.25 (5) (b), Stats.

SECTION 2. Tax 2.39 (3) is repealed and recreated to read:

(3) APPORTIONMENT FRACTION. (a) 1. For taxable years beginning before January 1, 2006, persons engaged in business in and outside this state, except direct air carriers, financial organizations, telecommunications companies, pipeline companies, public utilities, railroads, and sleeping car companies, as defined in ss. 71.04 (8) (a) and (b) 1. and 71.25 (10) (a) and (b) 1., Stats., and corporations that are authorized to use an alternative method of apportionment under s. 71.25 (14), Stats., shall use an apportionment fraction as described in s. 71.04 (4) (a) or 71.25 (6) (a), Stats. Property, payroll, or sales related to the production of nonapportionable income may not be included in either the numerator or the denominator of any of the apportionment factors.

2. If one of the factors described in subd. 1. is omitted pursuant to s. 71.04 (10) or 71.25 (11), Stats., the percentages of the fraction represented by the remaining factors shall be adjusted as follows:

a. If either the property factor or payroll factor is omitted, the other factor shall represent 33.3333 percent of the fraction and the sales factor shall represent 66.6667 percent of the fraction.

b. If the sales factor is omitted, the property factor and the payroll factor shall each represent 50 percent of the fraction.

3. If either the numerator or the denominator of the sales factor is zero or a negative number, the sales factor shall be determined as described in s. 71.04 (4m) (a) 1., (b) 1., or (c) 1. or 71.25 (6m) (a) 1., (b) 1., or (c) 1., Stats.

(b) 1. For taxable years beginning after December 31, 2005, and before January 1, 2007, persons engaged in business in and outside this state, except direct air carriers, financial organizations, telecommunications companies, pipeline companies, public utilities, railroads, and sleeping car companies, as defined in ss. 71.04 (8) (a) and (b) 2. and 71.25 (10) (a) and (b) 2., Stats., and corporations that are authorized to use an alternative method of apportionment under s. 71.25 (14), Stats., shall use an apportionment fraction as described in s. 71.04 (4) (b) or 71.25 (6) (b), Stats. Property, payroll, or sales related to the production of nonapportionable income may not be included in either the numerator or the denominator of any of the apportionment factors.

2. If one of the factors described in subd. 1. is omitted pursuant to s. 71.04 (10) or 71.25 (11), Stats., the percentages of the fraction represented by the remaining factors shall be adjusted as follows:

a. If either the property factor or payroll factor is omitted, the other factor shall represent 25 percent of the fraction and the sales factor shall represent 75 percent of the fraction.

b. If the sales factor is omitted, the property factor and the payroll factor shall each represent 50 percent of the fraction.

3. If either the numerator or the denominator of the sales factor is zero or a negative number, the sales factor shall be determined as described in s. 71.04 (4m) (a) 1., (b) 1., or (c) 1. or 71.25 (6m) (a) 1., (b) 1., or (c) 1., Stats.

(c) 1. For taxable years beginning after December 31, 2006, and before January 1, 2008, persons engaged in business in and outside this state, except direct air carriers, financial organizations, telecommunications companies, pipeline companies, public utilities, railroads, and sleeping car companies, as defined in ss. 71.04 (8) (a) and (b) 2. and 71.25 (10) (a) and (b) 2., Stats., and corporations that are authorized to use an alternative method of apportionment under s. 71.25 (14), Stats., shall use an apportionment fraction as described in s. 71.04 (4) (c) or 71.25 (6) (c), Stats. Property, payroll, or sales related to the production of nonapportionable income may not be included in either the numerator or the denominator of any of the apportionment factors.

2. If one of the factors described in subd. 1. is omitted pursuant to s. 71.04 (10) or 71.25 (11), Stats., the percentages of the fraction represented by the remaining factors shall be adjusted as follows:

a. If either the property factor or payroll factor is omitted, the other factor shall represent 11.1111 percent of the fraction and the sales factor shall represent 88.8889 percent of the fraction.

b. If the sales factor is omitted, the property factor and the payroll factor shall each represent 50 percent of the fraction.
3. If either the numerator or the denominator of the sales factor is zero or a negative number, the sales factor shall be determined as described in s. 71.04 (4m) (a) 1., (b) 1., or (c) 1. or 71.25 (6m) (a) 1., (b) 1., or (c) 1., Stats.

(d) For taxable years beginning after December 31, 2007, persons engaged in business in and outside this state, except direct air carriers, financial organizations, telecommunications companies, pipeline companies, public utilities, railroads, and sleeping car companies, as defined in ss. 71.04 (8) (a) and (b) 2. and 71.25 (10) (a) and (b) 2., Stats., and corporations that are authorized to use an alternative method of apportionment under s. 71.25 (14), Stats., shall use an apportionment fraction as described in s. 71.04 (4) (d) or 71.25 (6) (d), Stats. Sales related to the production of nonapportionable income may not be included in either the numerator or the denominator of the sales factor. If either the numerator or the denominator of the sales factor is zero or a negative number, the sales factor shall be determined as described in ss. 71.04 (4m) (a) 2., (b) 2., or (c) 2. or 71.25 (6m) (a) 2., (b) 2., or (c) 2., Stats.

Note: See ss. Tax 2.46, 2.47, 2.475, 2.48, 2.49, 2.495, 2.50, 2.502, and 2.505 for special apportionment fractions of interstate direct air carriers, motor carriers, railroads, sleeping car companies, pipelines, financial institutions, broker-dealers, investment advisers, investment companies, underwriters, public utilities, telecommunications companies, and professional sports clubs.

(e) The apportionment method may be used only if the taxpayer is engaged in business both in Wisconsin and at least one other state or foreign country and its business in Wisconsin is an integral part of a unitary business.

Note: Refer to ss. 71.04 (4) and 71.25 (6), Stats., as amended by 2003 Wis. Act 37.

Note: See s. Tax 2.395 for an alternative method of apportioning the income of certain corporations.

SECTION 3. Tax 2.39 (6) (a) is amended to read:

(6) SALES FACTOR. (a) Numerator; denominator. The numerator of the sales factor shall include the taxpayer's gross receipts from sales which that are in Wisconsin in the production of apportionable income; this state and the denominator shall include all the taxpayer's gross receipts from sales in the production of apportionable income everywhere during the taxable year. Gross receipts that are not derived in the production of apportionable income and items described in ss. 71.04 (7) (f) and 71.25 (9) (f), Stats., may not be included in the sales factor.

SECTION 4. Tax 2.39 (6) (b) 4. a. is amended to read:

Tax 2.39 (6) (b) 4. a. For the taxable years beginning on or after January 1, 1989, gross Gross receipts from the sales of tangible personal property are in Wisconsin if the property is shipped from an office, store, warehouse, factory or other place of storage in Wisconsin and delivered to the federal government, including its agencies and instrumentalities, in Wisconsin regardless of the f.o.b. point or other conditions of sale. For purposes of this section, only sales for which the federal government makes direct payment to the seller pursuant to the terms of its contract constitute sales to the federal government. Thus, sales by a subcontractor to the prime contractor, the party to the contract with the federal government, do not constitute sales to the federal government.

SECTION 5. Tax 2.39 (6) (b) 4. b. is repealed.

SECTION 6. Tax 2.39 (6) (b) 4. c. is renumbered Tax 2.39 (6) (b) 4. b. and amended to read:

Tax 2.39 (6) (b) 4. b. For taxable years beginning on or after January 1, 1990, gross Gross receipts from the sales of tangible personal property are in Wisconsin if the property is shipped from an office, store, warehouse, factory or other place of storage in Wisconsin and delivered to the federal government, including its agencies and instrumentalities, outside Wisconsin and the taxpayer does not have nexus in the destination state. The amount included in the numerator of the sales factor shall be 50 percent of the sale.

Note to Revisor: Remove the note at the end of Tax 2.39 (6) (b) 4. b. as renumbered.

SECTION 7. Tax 2.39 (6) (c) is repealed and recreated to read:

(c) Sales other than sales of tangible personal property attributable to Wisconsin. 1. Except as provided in ss. 71.04 (7) (df) and (dh) and 71.25 (9) (df) and (dh), Stats., gross receipts from transactions other than sales of tangible personal property shall be included in the numerator of the sales factor if the income producing activity which gave rise to the receipts is performed wholly within this state during the taxable year. If the income producing activity is performed partly in and partly outside this state during the taxable year, receipts shall be assigned to this state based upon the ratio of direct costs of performance in this state to the direct costs of performance in all states having jurisdiction to tax the business during the taxable year.

2. For purposes of this paragraph, “income producing activity" means the act or acts engaged in by the taxpayer for the ultimate purpose of obtaining gains or profit.

3. For purposes of this paragraph, “costs of performance" means direct costs determined in a manner consistent with generally accepted accounting principles and in accordance with accepted conditions or practices in the trade or business of the taxpayer.

4. The numerator of the sales factor includes gross receipts from the sale, lease, rental, licensing, or other use of real property owned by the taxpayer if the real property is located in this state and gross receipts from the sublease of real property if the real property is located in this state.

5. Except as described in subd. 6., the numerator of the sales factor includes gross receipts from the lease, rental, licensing, or other use of tangible personal property owned by the taxpayer and the sublease of tangible personal property if the property is located in this state during the entire period of lease, rental, licensing, sublease, or other use. If the property is used in and outside this state during the period of lease, rental, licensing, or sublease, gross receipts are included in the numerator of the sales factor to the extent that the property is used in this state. The proportion of use in this state is determined by multiplying the gross receipts from the lease, rental, licensing, sublease, or other use of the property by a fraction having as a numerator the number of days the property is in this state while leased, rented, licensed, or subleased in the taxable year and having as a denominator the total number of days that the property is leased, rented, licensed, or subleased in all states having jurisdiction to tax the taxpayer during the taxable year.

6. Gross receipts from the lease, rental, or licensing of moving property, including motor vehicles, rolling stock, aircraft, vessels, or mobile equipment, owned by the taxpayer and the sublease of moving property are included in the numerator of the sales factor to the extent that the property is used in this state. The proportion of use of moving property in this state is determined as follows:

a. The proportion of use of a motor vehicle or rolling stock in this state is determined by multiplying the gross receipts from the lease, rental, licensing, or sublease of the motor vehicle or rolling stock by a fraction having as a numerator the number of miles traveled within this state by the motor vehicle or rolling stock while leased, rented, licensed, or subleased in the taxable year and having as a denominator the total number of miles traveled by the motor vehicle or rolling stock while leased, rented, licensed, or subleased in the taxable year.

b. The proportion of use of an aircraft in this state is determined by multiplying the gross receipts from the lease, rental, licensing, or sublease of the aircraft by a fraction having as a numerator the number of takeoffs and landings of the aircraft in this state while leased, rented, licensed, or subleased in the taxable year and having as a denominator the total number of takeoffs and landings of the aircraft while leased, rented, licensed, or subleased in the taxable year.

c. The proportion of a vessel or mobile equipment in this state is determined by multiplying the gross receipts from the lease, rental, licensing, or sublease of the vessel or mobile equipment by a fraction having as a numerator the number of days that the vessel or mobile equipment is in this state while leased, rented, licensed, or subleased in the taxable year and having as a denominator the total number of days that the vessel or mobile equipment is leased, rented, licensed, or subleased in the taxable year.

d. If the taxpayer is unable to determine the use of moving property under subdivision paragraphs a., b., or c. while the property is leased, rented, licensed, or subleased in the taxable year, the moving property is conclusively deemed to be used in the state in which the property is located at the time that the lessee, licensee, or sublessee takes possession of the property.

7. The numerator of the sales factor includes gross receipts from the sale, licensing the use of, or other use of intangible property, including, but not limited to, patents, copyrights, trademarks, trade names, service names, franchises, licenses, plans, specifications, blueprints, processes, techniques, formulas, designs, layouts, patterns, drawings, manuals, technical know-how, contracts, and customer lists, if the income producing activity occurs in this state during the taxable year. If the income producing activity occurs in and outside this state, the gross receipts shall be allocated between those states having jurisdiction to tax the taxpayer based on the direct costs of performance. For purposes of this subdivision, intangible property excludes securities.

Note to Revisor: Insert the following notes at the end of Tax 2.39 (6) (c) 7. as repealed and recreated:

Note: Refer to ss. 71.04 (7) (d), (df), and (dh) and 71.25 (9) (d), (df), and (dh), Stats., as affected by 2005 Wis. Act 25.

Note: In The Hearst Corporation vs. Wisconsin Department of Revenue, Wisconsin Tax Appeals Commission, Docket No. I-8511 (May 15, 1990), the taxpayer received income from the television network for broadcasting network programming in Wisconsin and income from the sale of national advertising time. The Commission held that the network income is a result of the income producing activity of broadcasting the network programming in Wisconsin and is includable in full in the numerator of the sales factor. The national advertising income is a result of the income producing activity of broadcasting in Wisconsin and the income is includable in full in the sales factor numerator.

8. The provisions of this paragraph shall also apply to sales, other than sales of tangible personal property, to the federal government.

SECTION 8. Tax 2.39 (7) is repealed.

Note to Revisor: Replace the note at the end of Tax 2.39 with the following:

Note: Section Tax 2.39 interprets ss. 71.04 (4), (4m), (5), (6), (7), (10), and (11) and 71.25 (5), (6), (6m), (7), (8), (9), (11), and (15), Stats.

Note: The provisions of s. Tax 2.39 first apply for taxable years beginning on January 1, 2005.

The rules contained in this order shall take effect on the first day of the month following publication in the Wisconsin administrative register as provided in s. 227.22(2)(intro.), Stats.

This proposed rule order does not have a significant economic impact on a substantial number of small businesses.

Notice is hereby given that, pursuant to s. 895.59 (2), Stats., and interpreting s. 895.59, Stats., the Department of Revenue will hold a public hearing at the time and place indicated below, to consider the creation of rules relating to the discretion that the department will follow in the enforcement of rules and guidelines as they apply to a small business.

The hearing will be held at 12:00 P.M. on Monday, August 14, 2006, in the Events Room (1st floor) of the State Revenue Building, located at 2135 Rimrock Road, Madison, Wisconsin.

Handicap access is available at the hearing location.

Statute interpreted: s. 895.59, Stats.

Statutory authority: s. 895.59 (2), Stats.

Explanation of agency authority: Each agency shall promulgate a rule that requires the agency to disclose in advance the discretion that the agency will follow in the enforcement of rules and guidelines against a small business.

Related statute or rule: s. 895.59, Stats.

Plain language analysis: This proposed rule order discloses that the enforcement of rules or guidelines as they apply to a small business shall be done on a case-by-case basis. Each case shall be determined on its merits as evaluated by the department, taking into consideration all relevant factors. Factors may include, but are not limited to:

History of compliance with the rule or guideline.

The extent to which the rule or guideline allows for discretion in its enforcement.

Voluntary disclosure.

Summary of, and comparison with, existing or proposed federal regulation: The department is not aware of any existing or proposed federal regulation that is intended to address the activities to be regulated by the rule.

Comparison with rules in adjacent states: The department is not aware of a similar rule in an adjacent state.

Summary of factual data and analytical methodologies: 2003 Wisconsin Act 145 created s. 895.59 (2), Stats., which sets forth a requirement that each agency shall promulgate a rule that requires the agency to disclose in advance the discretion that the agency will follow in the enforcement of rules and guidelines against a small business. In response to this statutory requirement, the department has created this proposed rule order.

Analysis and supporting documents used to determine effect on small business: This proposed rule order describes existing department policy. It makes no policy or other changes having a significant effect on small business.

Anticipated costs incurred by private sector: This proposed rule order does not have a significant fiscal effect on the private sector.

Effect on small business: This proposed rule order does not have a significant effect on small business.

Agency contact person: Please contact Dale Kleven at (608) 266-8253 or dkleven@dor.state.wi.us, if you have any questions regarding this proposed rule order.

Place where comments are to be submitted and deadline for submission: Comments may be submitted to the contact person shown below no later than one week after 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.

Dale Kleven

Department of Revenue

Mail Stop 6-40

2135 Rimrock Road

P.O. Box 8933

Madison, WI 53708-8933

SECTION 1. Tax 1.15 is created to read:

Tax 1.15 Enforcement of rules and guidelines as they apply to a small business. (1) PURPOSE. This section discloses the discretion that the department will follow in the enforcement of rules and guidelines as they apply to a small business.

(2) DEFINITION OF SMALL BUSINESS. In this section, “small business" has the meaning given in s. 227.114 (1), Stats., but does not include an entity defined in s. 48.685 (1) (b) or 50.065 (1) (c), Stats.

(3) DISCRETION THE DEPARTMENT WILL FOLLOW. The enforcement of rules or guidelines as they apply to a small business, including the reduction or waiver of penalties for a voluntary disclosure of actual or potential violations of rules or guidelines, shall be done on a case-by-case basis. Each case shall be determined on its merits as evaluated by the department, taking into consideration all relevant factors. Factors may include, but are not limited to:

(a) History of compliance with the rule or guideline.

(b) The extent to which the rule or guideline allows for discretion in its enforcement.

(c) Voluntary disclosure.

(4) VOLUNTARY DISCLOSURE. The department encourages a small business that is not in compliance with Wisconsin tax law to voluntarily come forward. On a case-by-case basis, considering all relevant factors, the department may exercise discretion to:

(a) Enter into a written agreement with the small business that restricts the statute of limitations.

(b) Waive penalties.

(c) Reduce the number of periods for which returns shall be filed.

Note: Section Tax 1.15 interprets s. 895.59, Stats.

The rules contained in this order shall take effect on the first day of the month following publication in the Wisconsin administrative register as provided in s. 227.22 (2) (intro.), Stats.

This proposed rule order does not have a significant economic impact on a substantial number of small businesses.

Interested persons are invited to appear at the hearing and may make an oral presentation. It is requested that written comments reflecting the oral presentation be given to the department at the hearing. Written comments may also be submitted to the contact person shown below no later than August 21, 2006, and will be given the same consideration as testimony presented at the hearing.

NOTICE IS HEREBY GIVEN that pursuant to Subchapter VI, ch. 343, Stats., and interpreting Subchapter VI, ch. 343, Stats., the Department of Transportation will hold a public hearing in Room 254 of the Hill Farms State Transportation Building, 4802 Sheboygan Avenue, Madison, Wisconsin on the 14th day of August, 2006, at 1:00 PM, to consider the amendment of ch. Trans 105, Wisconsin Administrative Code, relating to licensing of driver schools and instructors.

An interpreter for the hearing impaired will be available on request for this hearing. Please make reservations for a hearing interpreter at least 10 days prior to the hearing.

Statutes interpreted: Subchapter VI, ch. 343, Stats.

Statutory authority: Subchapter VI, ch. 343, Stats.

Explanation of agency authority: The Department licenses driver training schools and instructors that teach driver's education for a fee. High schools or technical colleges that teach driver's education as part of their regular school program and businesses that provide instruction in the operation of motorcycles are excluded.

Related statute or rule: ss. 343.60 to 343.72, Stats., and ch. Trans 105.

Plain language analysis: The purpose of this rule making is to amend ch. Trans 105 to comply with 2005 Wisconsin Act 397. This new law made many substantial changes to the driver schools statutes. Some of the changes include:

Eliminating the requirement that schools maintain permanently bound books for recordkeeping.

Implementing a system of progressive enforcement to take action against driver schools or instructors that have violated the law or have compiled multiple substantiated consumer complaints.

Allowing driver schools to participate in the Cooperative Driver Testing Program, which allows schools to administer the knowledge and signs tests to their own students under the age of 18.

Requiring driver schools to file a bond with the Department, and maintain a liability insurance policy in the amount established by rule.

Summary of, and preliminary comparison with, existing or proposed federal regulation: None.

Comparison with Rules in the Following States:

Michigan, Iowa, Minnesota, and Illinois have rules relating driver schools, driver school instructors and course content for young drivers to complete driver's education prior to licensure. The rules are similar to this proposed rule.

Summary of factual data and analytical methodologies used and how the related findings support the regulatory approach chosen: A telephone survey was conducted of a sample of driver schools currently conducting business. Responses were compiled, and are shown below. There are approximately 180 driver training schools statewide. Analysis and supporting documentation used to determine effect on small businesses:

1. New bonding requirement will cost approximately $200 per year. Vehicle inspections will increase costs slightly.

2. The new bonding requirement will increase costs, but not substantially. The bond will likely be added to the school's current insurance policy.

3. The new bonding requirement will increase costs. The total amount of the increase is unknown, although the bond will likely be added to an existing insurance policy.

1. Some of the changes in ch. Trans 105 will decrease workload, such as removing the requirement that records be kept in a permanently bound book, and lengthening the renewal cycle to two years. The workload reduction will be offset by other changes, such as additional workload required to participate in the Cooperative Driver Testing Program.

2. No workload impact.

3. No change in workload expected. May have a slight decrease.

Other comments:

1. This will make driver schools operated in the State of Wisconsin more professional, and the changes are welcome.

2. Allowing driver schools to participate in the Cooperative Driver Testing Program is a positive for both students and schools. The changes made in the proposed rule are good. Schools that are in compliance that run a quality business will not have a problem.

3. Driver schools must be allowed to operate home-based offices to remain in business. (Note: the proposed rulemaking still allows driver schools to have home-based offices).

Effect on small business: Most driver schools are small businesses, and are already regulated by the Department. This rule making changes how the Department regulates driver schools. The Department's Regulatory Review Coordinator may be contacted by e-mail at andrew.ruiz@dot.state.wi.us, or by calling (414) 438-4585.

Fiscal effect and anticipated costs incurred by private sector: The Department estimates that there will be no fiscal impact on the liabilities or revenues of any county, city, village, town, school district, vocational, technical and adult education district, sewerage district, or federally-recognized tribes or bands. The Department estimates that there will be no fiscal impact on state revenues or liabilities. The private sector should not see an increase in costs. Allowing students to take the knowledge and signs test at the driving school, instead of DMV, should decrease travel costs and time away from work for parents.

Agency contact person and place where comments are to be submitted and deadline for submission: The public record on this proposed rule making will be held open until close of business August 15, 2006 to permit the submission of comments in lieu of public hearing testimony or comments supplementing testimony offered at the hearing. Any such comments should be submitted to Erin Egan, Department of Transportation, Division of Motor Vehicles, Room 255, P. O. Box 7911, Madison, WI 53707-7911. You may also contact Ms. Egan by phone at (608) 266-1449.

To view the proposed amendments to the rule, view the current rule, and submit written comments via e-mail/internet, you may visit the following website: http://www.dot.wisconsin.gov/library/research/law/rulenotices.htm.

NOTICE IS HEREBY GIVEN that pursuant to Sections 49.137 (4m) and 227.11 (2), Stats., the Department of Workforce Development proposes to hold a public hearing to consider rules relating to grants supporting community child care initiatives.

Interested persons are invited to appear at the hearings and will be afforded the opportunity to make an oral presentation of their positions. Persons making oral presentations are requested to submit their facts, views, and suggested rewording in writing.

Visitors to the GEF 1 building are requested to enter through the left East Washington Avenue door and register with the customer service desk. The entrance is accessible via a ramp from the corner of Webster Street and East Washington Avenue. If you have special needs or circumstances regarding communication or accessibility at the hearing, please call (608) 267-9403 at least 10 days prior to the hearing date. Accommodations such as ASL interpreters, English translators, or materials in audiotape format will be made available on request to the fullest extent possible.

Statutory authority: Note: Complaint forms are available from the Department of Regulation and Licensing, Division of Enforcement, 1400 East Washington Avenue, P.O. Box 8935, Madison, Wisconsin 53708, or from the department's website at: http://drl.wi.gov.

Statutes interpreted: Section 49.137 (4m), Stats.

Related statutes and rules: 42 USC 9858 to 9858q and 45 CFR Part 98

Explanation of agency authority. Section 49.137 (4m), Stats., provides that the department shall award grants to local governments and tribal governing bodies for programs to improve the quality of child care. The department shall promulgate rules to administer the grant program, including rules that specify the eligibility criteria and procedures for awarding grants. Section 49.137 (4m) refers to the program as the local pass-through grant program.

The local pass-through grant program is funded by the federal Child Care and Development Fund (CCDF), a federal block grant that makes federal child care funding available to states that contribute the required match at the state's federal medical assistance percentage rate. The local pass-through program began in 1999 to bring CCDF funds into the state that had been left unmatched in the state budget. Through the local pass-through program, the department awards grants supporting community child care initiatives to all local governments and tribes that supply the match required to bring the CCDF funds into the state.

Summary of the proposed rules. In recent years, funding for grants supporting community child care initiatives has been cut by 86%. This reduced funding necessitates a change in the procedure for awarding the grants. Under the current rule, former initial grantees may receive continuing grants in the 2 following funding cycles of up to 75% of the amount of their initial grants and then may also compete, along with any eligible jurisdiction in the state, for the remaining 25% of funding as initial grantees. The proposed rule will allow all grants in some years to be awarded as initial grants and all grants in other years to be awarded as continuing grants.

Offering only initial grants in some funding cycles and only continuing grants in other cycles will provide for equitable grant making over time while not requiring an overly complicated procedure for awarding the program's limited funding. Availability of initial grants gives new applicants the opportunity to apply for funding. Availability of continuing grants is important to local governments and tribes because they need to know that they will be able to receive funding for more than one year before they go through the effort and expense of starting a new program. Continuing grants support local governments and tribes that have shown an interest in receiving the grants, have the match on hand, and have the demand of grant-funded activities. There are currently 48 grantees representing approximately 86 local jurisdictions.

Offering both continuing grants and initial grants each year creates workload issues for both local governments and tribes and for the department. Local governments and tribes may receive funding through both the continuing and initial grant process and this causes duplicated work at the state and local level. Offering both initial and continuing grants each year creates workload issues for the department due to the effort in publicizing and promoting a statewide open RFP for initial grants, recalculating the fair share funding available for each county, and recalculating the proportions for each grantee within the fair share funding.

The current rule provides that a continuing grant may be offered for 2 funding cycles following the award of the initial grant. The proposed rule will allow a continuing grant for up to 3 funding cycles. This will allow more flexibility in managing the program. In addition, the current rule provides that continuing grants may be offered in an amount up to 75% of the amount of the initial grant. The proposed rule will allow a continuing grant in an amount up to 200% of the initial grant. The increase to 200% is proposed to avoid a mandatory RFP for initial grants if there is only a small amount of funding left to award. If the pass-through program received funding at a significantly higher level, the department could offer an RFP for initial grants to allow local governments and tribes to apply when they may not have considered the lower funding levels to be worthwhile.

The proposed rule will also:

Amend the authority of the department to round the level of required match from the nearest higher full percentage point to the nearest higher percentage that can be expressed in whole dollars relative to the amount of the grant.

Repeal descriptions of single, cooperative, and collaborative applications. This level of detail is more appropriate for the RFP.

Repeal the subsection that provides for different percentages of the grant that may be spent on administrative costs based on the different types of applications and creates a provision that allows the department to limit the amount of funding that may be spent on administrative costs to a level no higher than 15%.

Make minor language changes to clarify and simplify the rule.

Summary of factual data and analytical methodologies. The proposed rule is intended to simplify the procedures for applying for grants and awarding of grants due to the significantly reduced funding for the program.

Comparison with federal law. The statewide limit on administrative costs for a CCDF grant is 5%. The other issues in the proposed rules are not addressed in federal law.

Comparison with rules in adjacent states. None of the adjacent states have a comparable program.

Effect on small businesses. The proposed rules do not affect small businesses. The Department's Small Business Regulatory Coordinator is Jennifer Jirschele, (608) 266-1023, jennifer.jirschele@dwd.state.wi.us.

Agency contact person and place where comments are to be submitted. The proposed rules and the fiscal estimate are available at the web site http://adminrules.wisconsin.gov. This site allows you to view documents associated with this rule's promulgation, register to receive email notification whenever the Department posts new information about this rulemaking order, and submit comments and view comments by others during the public comment period. The proposed rules are also available at:
http://www.dwd.state.wi.us/dwd/hearings.htm.

You may receive a paper copy of the proposed rules or fiscal estimate by contacting:

Elaine Pridgen

Office of Legal Counsel

Dept. of Workforce Development

P.O. Box 7946

Madison, WI 53707-7946

(608) 267-9403

Written comments on the proposed rules received at the above address, email, or through the http://adminrules.wisconsin.gov web site no later than August 17, 2006, will be given the same consideration as testimony presented at the hearing.