CR_13-027 Hearing to consider rule revising Chapter ATCP 125, relating to manufactured home communities – fair trade practices.

Wisconsin Administrative Register No. 688, 4/14/2013

Rule-Making Notices

Notice of Hearing

Agriculture, Trade and Consumer Protection

CR 13-027

( DATCP Docket # 12-R-06 )

The Wisconsin Department of Agriculture, Trade and Consumer Protection (DATCP) announces that it will hold public hearings on a proposed rule revising Chapter ATCP 125 , relating to manufactured home communities – fair trade practices.

DATCP will hold two public hearings at the times and places shown below.

Hearing Information

Date:   Friday, Tuesday, April 30, 2013
Time:   2:00 p.m.
Location:   First Floor Meeting Room
  Marathon County Public Library
  300 N 1st Street
  Wausau, WI 54403

Date:   Wednesday, May 1, 2013
Time:   9:30 a.m.
Location:   Conference Room 172
  Department of Agriculture, Trade and
  Consumer Protection
  2811 Agriculture Drive
  Madison, WI 53718-6777

Hearing impaired persons may request an interpreter for this hearing. Please make reservations for a hearing interpreter by April 23, 2013, by writing to Kevin LeRoy, Division of Trade and Consumer Protection, P.O. Box 8911, Madison, WI 53708-8911; or by emailing [e-mail] ; or by telephone at [phone]. Alternatively, you may contact the DATCP TDD at [phone]. The hearing facility is handicap accessible.

DATCP invites the public to attend the hearing and comment on the proposed rule. Following the public hearings, the hearing record will remain open until May 15, 2013, for additional written comments. Comments may be sent to the Division of Trade and Consumer Protection at the address below, or to [e-mail] , or to http://adminrules.wisconsin.gov .

You can obtain a free copy of this hearing draft rule and related documents including the economic impact analysis 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 [phone] or by emailing [e-mail] . Copies will also be available at the hearing. To view the hearing draft rule online, go to: http://adminrules.wisconsin.gov .

Comments or concerns relating to small business may also be addressed to DATCP's small business regulatory coordinator Keeley Moll at the address above, or by email to [e-mail] , or by telephone at [phone].

Analysis Prepared by the Department of Agriculture, Trade and Consumer Protection

Statutes interpreted

Section 100.20 (1) , Stats.

Statutory Authority

Sections 93.07 (1) and 100.20 (2) , Stats.

Explanation of statutory authority

DATCP has broad general authority to interpret statutes under its jurisdiction (see s. 93.07 (1) , Stats.)

DATCP has authority under s. 100.20 (2) (a) , Stats., to promulgate rules forbidding methods of competition or trade practices which the department determines to be unfair, and to prescribe fair methods of competition and trade practices. Section 100.20 (2) (b) , Stats., prohibits DATCP from promulgating any rules that regulates the provision of water or sewer service by a manufactured home community operator.

Related statutes and rules

Subchapter V of Ch. 101 , Stats., regulates manufactured homes and mobile homes and establishes licensing programs within the Wisconsin Department of Safety and Professional Services (DSPS) for manufactured home community operators, dealers, installers, salespersons, and manufacturers. This subchapter also establishes the state system for certifying titles of ownership on mobile homes and manufactured homes; and contains a number of requirements and standards related to the homes themselves, water and sewer connections, and standards for manufactured home communities.

Chapter 704 , Stats., regulates transactions between landlords and both residential and non-residential tenants. The department does not administer ch. 704 . Stats.

Section 710.15 , Stats., contains several provisions related to manufactured and mobile home community regulations, including a prohibition against operators considering the age of a mobile home or manufactured home as a determining factor in leasing a lot to that resident.

Chapter ATCP 134 , Wis. Admin. Code, regulates relationships between landlords and tenants in residential rental transactions, including prohibiting a landlord from renting condemned premises and prescribing procedures for handling security deposits.

Chapter SPS 326 , Wis. Admin. Code, regulates standards for manufactured home communities, including the regulation of park operators' delivery and billing of water and sewer services. Chapter SPS 326 specifies the minimum width of streets and the provision of fire hydrants, and all plans for new manufactured home communities or the expansion of existing manufactured home communities, must be approved by DSPS.

Plain language analysis

Background

Chapter ATCP 125 was first promulgated as ch. Ag 125 in 1972. At the time, zoning restrictions led to a shortage of mobile home sites in many areas of the state, which inhibited competition and market choice. The rule was promulgated to address unfair trade practices and methods of competition that emerged in the industry. The rule prohibited mobile home park operators from using unfair or deceptive trade practices. It also required that rental contracts be in writing and contain specific disclosures. The rule was revised in 1976 and again in 1987.

Rule content

This rule does all of the following:

•   Updates the existing rule by incorporating and defining "manufactured home" and "manufactured home community." Current definitions applies only to "mobile homes" and "mobile home parks."

•   Repeals the definition "television service" and creates the definition "electronic communication service" which will specify the mechanisms operators are allowed to use, or are prohibited from using, when billing tenants for these services.

•   Amends the definition "utility service" to exclude water and sewer services. Section 100.20 (2) (b) , Stats., was created after the promulgation of the current rule, which prohibits DATCP from regulating water and sewer services provided by manufactured home community operators.

•   Updates the phrase "mobile home parking fee assessed by local units of government" with the term "municipal permit fee," as specified under ch. 66 , Stats.

•   Repeals outdated and obsolete provisions in the current rule.

Under the current rule, rent and other charges may not be increased during the term of the rental agreement. However, this provision does not apply to "mobile home parking fees" and charges for utility services not included in rent. This rule expands the exceptions to include waste hauling or recycling fees that are assessed by local units of government.

Under the current rule, rental agreements are required to express the amount of rent due in each rent paying period in dollars. Under the proposed rule, if the tenant requests a rental agreement that is three years or greater, the amount of rent due in each rent paying period may be expressed in either a dollar amount or a defined formula based on the consumer price index.

Under the current rule, a rental agreement may not include a security deposit greater than either $350 or three months' rent, whichever is less. This rule updates the maximum security deposit to $750, or two months' rent, whichever is less.

Summary of, and comparison with, existing or proposed federal statutes and regulations

The federal government does not generally regulate manufactured home sales or rental practices. However, Congress did pass the National Manufactured Housing Construction and Safety Standards Act of 1974, which direct the Department of Housing and Urban Development (HUD) to develop regulations; which are now known as the Federal Manufactured Housing Construction and Safety Standards.

Comparison with rules in adjacent states

Illinois statutes contain the Mobile Home Landlord and Tenant Rights Act. Among other things, this act restricts park owners from prohibiting television antennas, requires written leases, allows for temporary occupancy in certain situations, requires park owners to disclose information about rent charged during the last five years and projections for the next three, and restricts park owners' ability to control the sale of mobile homes within the park.

Minnesota administrative code regulates mobile home parks and the methods park owners can use to bill residents for utility costs incurred by the community. For example, rental agreements must be in writing and specify certain terms and conditions related to the location of the lot, amount of rent, services or facilities that the park owner agrees to provide, and the name of any person holding a security interest in the resident's home. Minnesota law prohibits park owners from requiring residents to use the services of a particular dealer or broker when selling their home, or buy goods or services from a particular vendor.

Iowa does not have any laws in place related to mobile or manufactured homes or parks. Iowa legislation was introduced in 2011 to grant mobile home residents rights similar to tenants and proposed to place restrictions on park operators operating as real estate agents. This legislation did not pass.

Michigan has law in place related to mobile home park owners and specifies the rights of a tenant. Park owners are prohibited from charging entrance and exit fees, charging more than 1.5 times the amount of monthly rent as a security deposit and cannot require a person to buy a mobile home from another person as a condition of renting space in that park. Park owners must offer tenants a written lease for one year or more, and provide a copy of rules that govern maintenance, pets, fees, and charges that may be incurred by the tenant. Park owners must keep specific written records for each tenant.

Summary of factual data and analytical methodologies

According to the Department of Safety and Professional Services web page ( www.dsps.wisconsin.gov ), there are approximately 1,074 licensed manufactured home communities in Wisconsin, with a total of 52,316 home sites (these statistics are from an on-line listing of licensed manufactured home parks by DSPS (March, 2011)).

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

DATCP anticipates that the economic impact of this rule will be minimal. This rule makes some changes and updates to existing ch. ATCP 125 ; but the policy changes from existing rule are generally minor and are not expected to have a significant effect on small business or economic impact.

Effect on small business

The rule impacts manufactured home park operators. Many manufactured home park operators are small businesses. This rule does make minor changes to park operators' duties and responsibilities, but will only have a very minor monetary impact. For more detail on the effect of the proposed rule on small business, see the attached Initial Regulatory Flexibility Analysis.

DATCP Contact

Kevin LeRoy, Department of Agriculture, Trade and Consumer Protection, P.O. Box 8911, Madison, WI 53708-8911, Telephone [phone], E-Mail: [e-mail] .

Initial Regulatory Flexibility Analysis

Rule summary

This rule does all of the following:

•   Updates the existing rule by incorporating and defining "manufactured home" and "manufactured home community." Current definitions applies only to "mobile homes" and "mobile home parks."

•   Repeals the definition "television service" and creates the definition "electronic communication service" which will specify the mechanisms operators are allowed to use, or are prohibited from using, when billing tenants for these services.

•   Amends the definition "utility service" to exclude water and sewer services. Section 100.20 (2) (b) , Stats., was created after the promulgation of the current rule, which prohibits DATCP from regulating water and sewer services provided by manufactured home community operators.

•   Updates the phrase "mobile home parking fee assessed by local units of government" with the term "municipal permit fee," as specified under ch. 66 , Stats.

•   Repeals outdated and obsolete provisions in the current rule.

Under the current rule, rent and other charges may not be increased during the term of the rental agreement. However, this provision does not apply to "mobile home parking fees" and charges for utility services not included in rent. This rule expands the exceptions to include waste hauling or recycling fees that are assessed by local units of government.

Under the current rule, rental agreements are required to express the amount of rent due in each rent paying period in dollars. Under the proposed rule, if the tenant requests a rental agreement that is three years or greater, the amount of rent due in each rent paying period may be expressed in either a dollar amount or a defined formula based on the consumer price index.

Under the current rule, a rental agreement may not include a security deposit greater than either $350 or three months' rent, whichever is less. This rule updates the maximum security deposit to $750, or two months' rent, whichever is less.

Small business affected

This rule will have some limited effect on manufactured home community operators. Many operators are small businesses. According to the Department of Safety and Professional Services (DSPS) web page ( www.dsps.wisconsin.gov ), there are approximately 1,074 licensed manufactured home communities in Wisconsin, with a total of 52,316 home sites (these statistics are from an on-line listing of licensed manufactured home parks by DSPS (March, 2011)).

Many of the differences between this rule and the current rule are technical in nature (such as updating terms to conform to other rules and statutes, etc.) and have no impact.

One change that has an impact on small business involves the definition of "utility" in the rule. The current rule includes "television services" in the definition of "utility". The proposed rule repeals "television services" and replaces it with "electronic communication services" which includes such services as cable service, video service, and internet access service as well as television service. These are services that in recent times are commonly bundled under one fee. Under the proposed rule, the manufactured home community operator must follow the current rules for charging for television services for these additional types of electronic communication services. This change may require the operator to incur the cost of sending an invoice to the tenant whenever charging the tenant for any of the services added to the definition of "utility."

Other changes that might have some limited impact are listed below.

•   Municipal waste hauling or recycling fees . Current rule prohibits manufactured home community operators from increasing rent and other charges during the term of the rental agreement. There are exceptions to this prohibition for utility services (that are not included in rent) and municipal permit fees. This rule also allows an exception for waste hauling fees charged by a municipal government.

  This change may benefit manufactured home community operators because it allows them to pass municipal fee increases to tenants at the time they are incurred, rather than waiting until the next rental agreement renewal date.

•   Inflation indexing on rental agreements of three years or longer . Current rule requires rental agreements to include the amount of the rent due in each rent-paying period. Under this proposed rule, rental agreements that are three years or longer may include a formula for adjusting future rental amounts based on the Consumer Price Index.

  Manufactured homes can be financed using home mortgages. However, many lenders are hesitant to offer a mortgage if the term of the mortgage is longer than the term of the rental agreement. But, community operators are generally unwilling to commit to long-term leases under current rules because they are unwilling to specify a dollar amount that will be in place far into the future. This proposed rule should benefit manufactured home owners by making it more likely that they will be able to finance the purchase of their home as a mortgage (rather than personal property).

•   Maximum security deposits . Current rule limits the amount of security deposit that an operator can collect to three months' rent or $350, whichever is less. This rule provision dates back to 1987. $350 in 1987 is roughly equivalent to $715 in 2012. This proposed rule revises the maximum security deposit to either two months' rent or $750, whichever is less.

  Raising the dollar amount to $750 may benefit some manufactured home community operators because it allows them to collect security deposits that are more realistic with current economics. Limiting the security deposit to two months rather than three will benefit tenants whose monthly rents are relatively low.

Reporting, bookkeeping and other procedures

This proposed rule does not make any changes from current rule relating to reporting, bookkeeping and other procedures.

Professional skills required

The proposed rule does not make any changes from current rule relating to professional skills required.

Accommodation for small business

Many of the businesses affected by this rule are "small businesses." For the most part, this rule does not make special exceptions for "small businesses." The nature of the subject matter does not lend itself to differentiating between business sizes.

Conclusion

This rule will generally benefit affected businesses, including "small businesses." Negative effects, if any, will be few and limited. This rule will not have a significant adverse effect on "small business," and is not subject to the delayed "small business" effective date provided in s. 227.22 (2) (e) , Stats.

ADMINISTRATIVE RULES FISCAL ESTIMATE AND ECONOMIC IMPACT ANALYSIS
Type of Estimate and Analysis
X Original ⍽ Updated ⍽ Corrected
Administrative Rule Chapter, Title and Number
Ch. ATCP 125, Mobile Home Parks
Subject
Manufactured Home Communities – Fair Trade Practices
Fund Sources Affected			Chapter 20 , Stats. Appropriations Affected
X GPR ⍽ FED ⍽ PRO ⍽ PRS ⍽ SEG ⍽ SEG-S			Section 20.115 (1) (a)
Fiscal Effect of Implementing the Rule
X No Fiscal Effect ⍽ Indeterminate	⍽ Increase Existing Revenues ⍽ Decrease Existing Revenues		⍽ Increase Costs ⍽ Could Absorb Within Agency's Budget ⍽ Decrease Costs
The Rule Will Impact the Following (Check All That Apply)
⍽ State's Economy ⍽ Local Government Units		X Specific Businesses/Sectors ⍽ Public Utility Rate Payers
Would Implementation and Compliance Costs Be Greater Than $20 million? ⍽ Yes X No
Policy Problem Addressed by the Rule
This rule updates the existing rule by incorporating and defining "manufactured home" and "manufactured home community." The current definition applies only to "mobile homes" and "mobile home parks." The current rule regulates how mobile home park operators can charge tenants for utility services, including "television service." This rule repeals the definition "television service" and creates the definition "electronic communication service" which will specify the mechanisms operators are allowed to use, or are prohibited from using, when billing tenants for these services. In current rules, the definition of "utility service" includes water and sewer services. This rule amends the definition "utility service" to exclude water and sewer services. Section 100.20 (2) (b), Stats., was created after the promulgation of the current rule, which prohibits DATCP from regulating water and sewer services provided by manufactured home community operators. This rule updates the phrase "mobile home parking fee assessed by local units of government" with the term "municipal permit fee," as specified under ch. 66, Stats. Under the current rule, rent and other charges may not be increased during the term of the rental agreement. However, this provision does not apply to "mobile home parking fees" and charges for utility services not included in rent. This rule expands the exceptions to include waste hauling or recycling fees that are assessed by local units of government. Under the current rule, rental agreements are required to express the amount of rent due in each rent paying period in dollars. Under the proposed rule, if the tenant requests a rental agreement that is three years or greater, the amount of rent due in each rent paying period may be expressed in either a dollar amount or a defined formula based on the consumer price index. Under the current rule, a rental agreement may not include a security deposit greater than either $350 or three months' rent, whichever is less. This rule updates the maximum security deposit to $750, or two months' rent, whichever is less.
Summary of Rule's Economic and Fiscal Impact on Specific Businesses, Business Sectors, Public Utility Rate Payers, Local Governmental Units and the State's Economy as a Whole (Include Implementation and Compliance Costs Expected to be Incurred)
This rule makes minor updates and revisions to the existing rule and does not represent any significant shift in policy. Therefore, the economic and fiscal impacts are expected to be minimal. This rule does make some minor changes to park operators' duties and responsibilities, but these changes are not expected to have an economic impact. Under the current rule, the maximum amount of security deposit that a park operator can collect is three month's rent or $350, whichever is less. Under this rule, the maximum security deposit is two month's rent or $750, whichever is less. This means that, in many cases but not all, park operators will be able to ask prospective tenants for higher security deposits. Under current rules, rental agreements are required to express the amount of rent due in each rent paying period in dollars. Under the proposed rule, if the tenant requests a rental agreement that is greater than three years, the amount of rent due in each rent paying period may be expressed in either a dollar amount or a defined formula based on the consumer price index. This provision should benefit some tenants by removing an impediment to obtaining home mortgage loans. Generally, banks are unwilling to finance the purchase of a manufactured home if that home is sitting on a rented lot and the term of the rental agreement will expire before the term of the mortgage. However, because current rules require park operators to state rent payments in dollar amounts; park operators are generally unwilling to agree to long-term rental agreements. This rule removes this disincentive, and therefore, may benefit residents.
Benefits of Implementing the Rule and Alternative(s) to Implementing the Rule
Benefits This rule will benefit mobile home owners and park operators. Generally, it continues policies that have been in place for a number of years. Alternatives The alternative to updating this rule is to do nothing. However, certain portions of the rule are now obsolete (such as the regulation of water and sewer services) and other portions are dated (such as the use of the term "mobile home" as opposed to "manufactured home").
Long Range Implications of Implementing the Rule
There are no long term implications of implementing this rule.
Compare With Approaches Being Used by Federal Government
The federal government does not generally regulate manufactured home sales or rental practices. However, Congress did pass the National Manufactured Housing Construction and Safety Standards Act of 1974, which direct the Department of Housing and Urban Development (HUD) to develop regulations; which are now known as the Federal Manufactured Housing Construction and Safety Standards.
Compare With Approaches Being Used by Neighboring States (Illinois, Iowa, Michigan and Minnesota )
Illinois statutes contain the Mobile Home Landlord and Tenant Rights Act. Among other things, this act restricts park owners from prohibiting television antennas, requires written leases, allows for temporary occupancy in certain situations, requires park owners to disclose information about rent charged during the last five years and projections for the next three, and restricts park owners' ability to control the sale of mobile homes within the park.
Minnesota administrative code regulates mobile home parks and the methods park owners can use to bill residents for utility costs incurred by the community. For example, rental agreements must be in writing and specify certain terms and conditions related to the location of the lot, amount of rent, services or facilities that the park owner agrees to provide, and the name of any person holding a security interest in the resident's home. Minnesota law prohibits park owners from requiring residents to use the services of a particular dealer or broker when selling their home, or buy goods or services from a particular vendor.
Iowa does not have any laws in place related to mobile or manufactured homes or parks. Iowa legislation was introduced in 2011 to grant mobile home residents rights similar to tenants and proposed to place restrictions on park operators operating as real estate agents. This legislation did not pass.
Michigan has law in place related to mobile home park owners and specifies the rights of a tenant. Park owners are prohibited from charging entrance and exit fees, charging more than 1.5 times the amount of monthly rent as a security deposit and cannot require a person to buy a mobile home from another person as a condition of renting space in that park. Park owners must offer tenants a written lease for one year or more, and provide a copy of rules that govern maintenance, pets, fees, and charges that may be incurred by the tenant. Park owners must keep specific written records for each tenant.
Comments Received in Response to Web Posting and DATCP Response
No comments were received in response to either to the posting on the DATCP external website or the statewide administrative rules website.

Notice of Hearing

Public Service Commission

CR 13-025

(PSC # 1-AC-237 )

NOTICE IS GIVEN that pursuant to s. 227.14 (4m) , Stats., the Public Service Commission of Wisconsin proposes an order to repeal s. PSC 8.07 (7) and (11) , chs. PSC 162 to 164 , ss. PSC 165.02 (2) to (5) , (11) , (13) to (16) , and (18) to (20) , 165.031 , 165.034 to 165.065 , and 165.07 to 165.10 , chs. PSC 166 and 167 , ss. PSC 168.10 (1) (b) to (d) and (2) , 168.11 , and 168.12 (1) (f) , ch. PSC 169 , ss. PSC 171.06 (2) and (3) , 171.07 (4) and (5) , 171.08 , and 171.10 (3) , and ch. PSC 174 ; to renumber and amend s. PSC 168.10 (1) (intro.) and (a) ; to amend ss. PSC 100.01 , 102.01 , 104.02 (3) , 165.01 (2) , 165.032 (intro.) , (6) , (7) , and (9) , 165.033 , 168.05 (1) (d) and (3) , 168.09 (4) , 168.12 (1) (intro.) , 168.13 (1) (a) , 171.02 (5) , 171.06 (1) , and 171.10 (1) ; and to repeal and recreate s. PSC 171.09 .

Hearing Information

Date:   Friday, April 26, 2013
Time:   10:00 a.m.
Location:   Amnicon Falls Hearing Room - 1st Floor
  Public Service Commission of Wisconsin
  610 North Whitney Way
  Madison, Wisconsin

The commission does not discriminate on the basis of disability in the provision of programs, services, or employment. Any person with a disability who needs accommodations to participate in this docket or who needs to obtain this document in a different format should contact the docket coordinator, as indicated in the previous paragraph, as soon as possible. Any hearing location is accessible to people in wheelchairs. The Public Service Commission Building is accessible to people in wheelchairs through the Whitney Way first floor (lobby) entrance. Parking for people with disabilities is available on the south side of the building.

Written Comments

Any person may submit written comments on these proposed rules. The record will be open for written comments from the public, effective immediately and until May 6, 2013, at noon. All written comments must include a reference on the filing to docket 1-AC-237. File by one mode only.

Industry: File comments using the commission's Electronic Regulatory Filing (ERF) system. This may be accessed from the commission's web site ( http://psc.wi.gov ).

Members of the Public: Please submit your comments in only one of the following ways:

•   Electronic Comment. Go to the commission's web site at http://psc.wi.gov , and click on the "ERF – Electronic Regulatory Filing" graphic on the side menu bar. On the next page, click on "Need Help?" in the side menu bar for instructions on how to upload a document.

•   Web Comment. Go to the commission's web site at http://psc.wi.gov , click on the "Public Comments" button on the side menu bar. On the next page select the "File a comment" link that appears for docket number 1-AC-237. Web comments shall be received no later than noon, Monday, May 6, 2013.

•   Mail Comment. All comments submitted by U.S. Mail shall be received no later than Monday, May 6, 2013. A mail comment shall include the phrase "Docket 1-AC-237 Comments" in the heading, and shall be addressed to:

  Gary A. Evenson

  Docket 1-AC-237 Comments

  Public Service Commission

  P.O. Box 7854

  Madison, WI 53707-7854

The commission does not accept comments submitted via e-mail or facsimile (fax). Any material submitted to the commission is a public record and may appear on the commission's website. Only one comment may be submitted per person during a comment period. The commission may reject a comment that does not comply with the requirements described in this notice.

Analysis Prepared by the Public Service Commission of Wisconsin

Statutory authority and explanation of authority

This rulemaking is conducted by the commission under ss. 196.02 (1) ("do all things necessary and convenient to its jurisdiction"); 196.02 (3) ("The commission may adopt reasonable rules to . . . regulate the mode and manner of all . . . investigations and hearings."); and 196.44, Stats. ("The commission . . . shall enforce all laws relating to public utilities . . . ."). In addition, the commission has the general power granted to all state agencies under s. 227.11 (2) (a) , Stats. ("Each agency may promulgate rules interpreting the provisions of any statute enforced or administered by it, if the agency considers it necessary to effectuate the purpose of the statute, . . . .").

Statutes interpreted

The primary purpose of this rulemaking is the removal of all those regulations no longer consistent with the regulatory scheme for telecommunications services in Wisconsin enacted and framed by 2011 Wis. Act 22 (Act 22), effective June 9, 2011. Updating changes in the regulations are also included where appropriate to conform to existing law apart from Act 22.

Specifically, telecommunications utility regulatory and reporting requirements removed by Act 22 warrant the amendment and repeal of various provisions, as detailed in Attachment B, in chs. PSC 8 , 100 , 104 , 162 , and 168 . Act 22's repeal of commission regulation of retail services offered by telecommunications utilities to the consuming public warrant the repeal of most of ch. PSC 165 (retaining minor clarifications of the remaining tariff and map rules), the repeal (with other minor conforming changes) of any retail rate regulation of resellers in ch. PSC 168 , and the repeal of all retail ratemaking and service-related regulations in chs. PSC 163 , 164 , 166 , 167 , and 174 . Reflecting existing federal preemption of most state regulation of payphone providers by the Telecommunications Act of 1996, Pub. L. 104-104, 110 Stat. 56 (1996) (1996 TA), payphone regulation in ch. PSC 169 is proposed for repeal. Finally, ch. PSC 171 governing cable television telecommunications providers is amended to reflect the reduction in data reporting to the commission and the removal of limitations on alternative telecommunications providers included in Act 22's changes to s. 196.203 , Stats.

Related statutes or rules

The above-referenced rules are uniquely limited to the commission's jurisdiction. No other related state or federal statutes or rules are affected, whether adversely or positively, by the changes and repeals generally outlined in B. above.

Brief summary of rules

The description in B. above describes the general purpose of this rulemaking which is to remove or clarify the application of existing commission regulations that primarily impose reporting requirements, retail service offering constraints, or other regulatory oversight. Almost all of the changes are non-controversial.

The proposed changes include repeal of certain regulations that arguably reflect state-imposed service quality standards that also intertwine with promoting wholesale competition: (1) Sections PSC 165.064 , 165.085 , 165.086 and 165.087 , involving trunking duties and transmission service quality between at least two telecommunications providers' networks, and (2) Section PSC 165.055 , regarding the distribution and contents of alphabetical local exchange directories ("white pages"). This notice does not retain the foregoing regulations in the draft proposed rules, but this should not be treated as a final commission view of whether the regulations should be retained. An argument may be advanced that retention of one or more of the regulations is compatible with the commission's remaining telecommunications regulatory authority. The commission encourages comments by interested persons as to policy and legal arguments for or against retention of the identified regulations or any part thereof.

Comparison with existing or proposed federal regulations

Most retail regulation of telecommunications services, apart from long distance and payphone services, and reporting by state-certificated providers to the commission, have been the historical regulatory domain of state commissions. Act 22 has essentially removed these state obligations, leaving to the commission, with some exceptions in s. 196.219 , Stats., only those regulatory duties affecting wholesale relations among telecommunications services providers. Section 196.016 , Stats., grants the commission the authority to exercise duties within the 1996 TA that have been granted by that law or the FCC to the state commissions to administer if they so elect. The commission retains authority over areas such as telephone numbering, universal service (including designation of eligible telecommunications carriers), and determinations under 47 USC 251 (f) (1) and (2) to terminate or maintain a rural or small incumbent local exchange carrier's claim to an exemption from interconnection. The proposed changes based on concerns identified in D. above arguably can be addressed and resolved through carrier-to-carrier proceedings under the 1996 TA administered by the commission, specifically the negotiation and arbitration of interconnection agreements under 47 USC 251 and 252 and the provisions preserving state service quality standards cognizable under 47 USC 252 (e) (3), 253 (b), 254 (f), and 261 .

Comparison with similar rules in adjacent states

To conduct this comparison, inquiries were made to the state commissions of Iowa, Illinois, Michigan and Minnesota about the current telecommunications regulatory framework (statutes and rules) prevailing in each state. The inquiry asked questions regarding (1) the extent of reduction of carrier reporting requirements; (2) whether retail rate regulation remained; (3) what provider of last resort (POLR) duty existed, if any; (4) whether the state was seeking parity of regulation among the incumbents and competitors; and (5) whether wholesale jurisdiction as allowed to the states by the 1996 TA was in place. The responses for the four states indicated variations as to (1) through (4), noted in the next paragraphs, but a uniform retention of state wholesale jurisdiction, as allowed by the 1996 TA in response to (5).

Illinois still imposes significant financial and service quality reporting duties on incumbent carriers under rate of return regulation. However, many large carriers have elected market regulation of their rates, a scheme which deregulates most pricing except for certain "safe harbor" basic service type packages for consumers. A POLR duty of the incumbent may not be abandoned as to classes of service except upon approval by the Illinois Commerce Commission (ICC). Small carriers having fewer than 35,000 lines are not rate-of-return regulated, but may be subjected to a rate-of-return rate case before the ICC upon complaint by a substantial number of the customers (10%). On the wholesale side, it is sufficient for one carrier to complain about a small carrier's access rates and thereby trigger an ICC rate case on those rates. Illinois did undertake some legislation to equalize the reporting among incumbent and new carriers, in Pub. Act 96-0927, effective June 15, 2010.

Iowa had previously reduced reporting requirements and in 2005 deregulated all rates except for retention of complaint jurisdiction over intrastate switched access rates. Tariffing was removed in favor of mandatory price catalogues of services. Iowa has never had an explicit POLR duty for incumbents, but frames a duty for both incumbents and new competitors to serve "all eligible customers." Incumbent local exchange providers are required to file maps and competitors are obliged to indicate the extent they concur in those maps as to their service territories.

Michigan currently requires reporting to assist the Michigan Public Service Commission prepare an annual "Status of Competition" report. However, that duty expires with the last report due in 2013 and will effectively end the current reporting obligations. Access charge tariffs are still required. In June, 2011, Michigan totally ended retail rate regulation, paralleling the effect of Act 22. However, there is still a provider of last resort duty, relief from which is permitted, but only under the state commission's supervision and control. Michigan much earlier equalized level of regulation by unifying its certification process under one certification category for local exchange service, but with defined territories.

Minnesota more than two years ago substantially reduced its reporting requirements to a one-page inquiry. Minnesota has an alternative form of regulation statute enacted before 2010 that has been elected by most incumbents and new competitors. Almost all rates are deregulated except for single-line residential and business customer services that are subject to a $1/year price increase cap. The state still retains a POLR duty and has not to this point engaged in legislative attempts to create more parity of regulation among providers.

Effect on small business

The removal of the proposed regulations should have a positive effect on small business by removing obsolete regulations, thereby simplifying and reducing the costs incurred by small businesses.

Comments

Comments on this rulemaking may be submitted as outlined in the Notice of Hearing.

Accommodation

The commission does not discriminate on the basis of disability in the provision of programs, services, or employment. Any person with a disability who needs accommodations to participate in this proceeding or who needs to receive this document in a different format should contact the Docket Coordinator, as indicated in the following paragraph, as soon as possible.

Agency Contacts

Questions regarding this matter, including small business questions, should be directed to Docket Coordinator Gary A. Evenson, Telecommunications Division, at [phone] or [e-mail] . Media questions should be directed to Kristin Ruesch, Communications Director, at [phone]. Hearing- or speech-impaired individuals may also use the commission's TTY number. If calling from within Wisconsin, use [phone]; if calling from outside Wisconsin, use [phone].

Initial Regulatory Flexibility Analysis

The intention of this rulemaking is to clarify those activities removed from state regulation, thereby affording a benefit to providers that might otherwise believe they have to observe both federal and state requirements with respect to those activities. Confusion that could be caused by retention of obsolete provisions in the Wisconsin Administrative Code should be largely, if not completely, avoided. The reduction in compliance costs is a positive financial benefit for both small and large telecommunications providers, effecting an across-the-board reduction of regulatory compliance obligations and associated costs. Those limited duties preserved for the commission largely relate to wholesale interactions among providers. Other duties (chiefly regarding access rates, numbers and service maps) are clarified and updated consistent with Act 22's provisions that involve federal law.

Fiscal Estimate

The proposed rule changes and repeals will likely result in a small, positive fiscal impact in that compliance costs will be reduced through the removal of non-applicable regulations or textual clarification that a retained rule does not apply to a particular type of telecommunications service provider. This rulemaking seeks to update and clarify the scope of the commission's remaining telecommunications jurisdiction in the wholesale, carrier-to-carrier sector of the telecommunications industry.

The Economic Impact Analysis for this rulemaking is attached.

Text of Proposed Rule Changes

SECTION 1. PSC 8.07 (7) and (11) are repealed.

SECTION 2. PSC 100.01 is amended to read:

PSC 100.01 Person defined. Under s. 196.52 (1) , Stats., the term "person" includes trustees, lessees, holders of beneficial equitable interest, voluntary associations, receivers and partnerships. "Person" does not include a telecommunications provider, as defined in s. 196.01 (8p) , Stats. This definition should be observed in filing information in response to this order.

SECTION 3. PSC 102.01 is amended to read:

PSC 102.01 Record of disbursements. Each public utility for which a system of accounts is prescribed by this commission shall so maintain its records as to disclose full particulars concerning any disbursement, including the name of the payee and the purpose of the payment. The records shall likewise disclose the name of the person intended to be paid and the purpose of such disbursement, regardless of whether payment is made by check, cash, cashier's check, bank draft, postal money order, property or other means, whether paid directly to the ultimate recipient, or indirectly through an affiliated company, officer, employee, attorney, or other intermediary. The purpose of any disbursement, regardless of size, shall be shown by the records and the provisions of this order shall apply in their entirety to each disbursement in excess of $10. This chapter does not apply to a telecommunications provider, as defined in s. 196.01 (8p) , Stats.

SECTION 4. PSC 104.02 (3) is amended to read:

PSC 104.02 (3) The term "public utility" or "utility" is defined by s. 196.01 (5) , Stats., but does not include an alternative telecommunication utility certified by the commission under s. 196.203 , Stats .

SECTION 5. Chapter PSC 162 is repealed.

SECTION 6. Chapter PSC 163 is repealed.

SECTION 7. Chapter PSC 164 is repealed.

SECTION 8. PSC 165.01 (2) is amended to read:

PSC 165.01 (2) The rules making up ch. PSC 165 are designed to effectuate and implement, in part, commission responsibilities and jurisdiction in ss. 196.02, 196.016, 196.03, 196.04, 196.191, 196.199, 196.10, 196.12, 196.15, 196.16, 196.17, 196.19, 196.21, 196.22,196.60, 196.625, 196.72, and 196.50 (2) (g), Stats., and parts of other sections of Wisconsin statutes.

SECTION 9. PSC 165.02 (2) to (5), (11), (13) to (16), and (18) to (20) are repealed.

SECTION 10. PSC 165.031 is repealed.

SECTION 11. PSC 165.032 (intro.), (6), (7), and (9) are amended to read:

PSC 165.032 Schedules to be filed with the commission. (intro.) The provisions of the schedules of rates and rules filed with the commission and comprising the filed tariff of the utility shall be definite and so worded as to minimize ambiguity or the possibility of misinterpretation, and shall may include, together with such other information as may be deemed pertinent, any of the following subjects :

(6) Rules governing the establishment or re-establishment of service including credit requirements. (See s. PSC 165.052.)

(7) Rules governing the procedure followed in disconnecting and reconnecting service. (See s. PSC 165.051.)

(9) Rules governing the billing procedures and payment requirements. (A sample bill form should be submitted.)

SECTION 12. PSC 165.033 is amended to read:

PSC 165.033 Exchange area boundaries. (1) Each telecommunications utility shall file accurate exchange area boundary maps in compliance with ch. PSC 166 depicting each specific geographical area in which it furnishes a local exchange service, as defined in s. 196.219 (1) (b) , Stats., under its statewide telecommunications utility certification under s. 196.50 (2) (g) 1. , Stats. Except as provided in sub. (2), the commission shall use the exchange area boundaries designated by the maps on file with it on June 9, 2011, to assist in the following activities:

(a) Administration of numbering resources and federal local number portability requirements by determining rate center boundaries.

(b) Designation of eligible telecommunications carriers by determining wire center boundaries to the extent feasible.

(2) Where multiple rate centers or wire centers existed within an exchange on June 9, 2011, the commission shall use the rate centers or wire centers existing on that date to assist its activities identified in subs. (1) (a) and (b).

Note: Identification of the use of exchange boundary maps is not intended to delimit the entire scope of commission activities in its administration of numbering resources and federal local number portability requirements or in its designation of eligible telecommunications carriers.

SECTION 13. PSC 165.034 to 165.065 and 165.07 to 165.10 are repealed.

SECTION 14. Chapter PSC 166 is repealed.

SECTION 15. Chapter PSC 167 is repealed.

SECTION 16. PSC 168.05 (1) (d) is amended to read:

PSC 168.05 (1) (d) Own, operate, manage or control, in Wisconsin, transmission facilities, including wire, cable, fiber optics or radio, and associated electronics, whose cost basis, including capital leases as defined by generally accepted accounting principles, does not exceed $400,000. The requirements of this paragraph shall be determined for the reseller as of the date of its application for certification and as of December 31 of each calendar year, based upon responses to annual reports commission questionnaires filed pursuant to under s. PSC 168.12 .

SECTION 17. PSC 168.05 (3) is amended to read:

PSC 168.05 (3) Nothing in this section authorizes a telecommunications reseller to provide facilities-based local exchange services, as defined in s. 196.50 (1) (b) 1. , 2009 Stats., in municipalities served by small telecommunications utilities having 150,000 or fewer access lines in service in this state and for which certification in compliance with s. 196.50 (1) (b) , Stats., is required.

SECTION 18. PSC 168.09 (4) is amended to read:

PSC 168.09 (4) Pursuant to Under s. PSC 168.12 , alternative telecommunications utility resellers shall file with the commission responses to annual reports for questionnaires regarding Wisconsin operations.

SECTION 19. PSC 168.10 (1) (intro.) and (a) are renumbered PSC 168.10 and amended to read:

PSC 168.10 General notification requirement. An alternative telecommunications utility reseller certified under this chapter shall do the following; (a) Within , within 20 days of the occurrence, notify the commission in writing of any change to information supplied in response to s. PSC 168.06 (2) (a) , (b) , (c) or (g) .

SECTION 20. PSC 168.10 (1) (b) to (d), and (2) are repealed.

SECTION 21. PSC 168.11 is repealed.

SECTION 22. PSC 168.12 (1) (intro.) is amended to read:

PSC 168.12 (1) (intro.) Each reseller shall file with the commission by April 1 of each year responses to an annual report providing commission questionnaire that provide details concerning the following:

SECTION 23. PSC 168.12 (1) (f) is repealed.

SECTION 24. PSC 168.13 (1) (a) is amended to read:

PSC 168.13 (1) (a) Failure to file a substantially complete responses to the commission's annual report questionnaire required by s. PSC 168.12 .

SECTION 25. Chapter PSC 169 is repealed.

SECTION 26. PSC 171.02 (5) is amended to read:

PSC 171.02 (5) "Telecommunications service" has the meaning prescribed given in s. 196.01 (9m) , Stats. , and includes but is not limited to, point-to-point service for the transport of electronic signals.

SECTION 27. PSC 171.06 (1) is amended to read:

PSC 171.06 (1) All qualified cable television telecommunications service providers shall be subject to the following sections of ch. 196 , Stats.: ss. 196.02 , 196.08, 196.12, 196.025 (6), 196.203, 196.25, 196.39, 196.395, 196.40, 196.41, 196.43, 196.44, 196.65, and 196.66, 196.85, 196.858, and 196.859, Stats.

SECTION 28. PSC 171.06 (2) and (3) are repealed.

SECTION 29. PSC 171.07 (4) and (5) are repealed.

SECTION 30. PSC 171.08 is repealed.

SECTION 31. PSC 171.09 is repealed and recreated to read:

PSC 171.09 New franchise areas. A qualified cable television telecommunications service provider may offer telecommunications services in a franchise area other than the one specified in a qualified petition by notifying the commission in a transmittal updating the information supplied under s. PSC 171.03 . The transmittal shall be filed no later than 20 days after the initial offering of the telecommunications services in the additional franchise area.

SECTION 32. PSC 171.10 (1) is amended to read:

PSC 171.10 (1) File with the commission responses to an annual report questionnaire providing details as to its identity, franchise service areas, and revenues and number of customers .

SECTION 33. PSC 171.10 (3) is repealed.

SECTION 34. Chapter PSC 174 is repealed.

STATE OF WISCONSIN DEPARTMENT OF ADMINISTRATION DOA-2049 (R03/2012)			Division of Executive Budget and Finance 101 East Wilson Street, 10th Floor P.O. Box 7864 Madison, WI 53707-7864 FAX: [phone]
ADMINISTRATIVE RULES Fiscal Estimate & Economic Impact Analysis
1. Type of Estimate and Analysis
X Original   ⍽ Updated   ⍽ Corrected
2. Administrative Rule Chapter, Title and Number
Wis. Admin. Code Chapters PSC 8, 100, 104, 102, 162 to 171, 174.
3. Subject
Repeal and amendment of PSC telecommunications rules to conform with 2011 Wis. Act 22, with miscellaneous updates and clarifications.
4. Fund Sources Affected				5. Chapter 20, Stats. Appropriations Affected
⍽ GPR   ⍽ FED   X PRO   ⍽ PRS   ⍽ SEG   ⍽ SEG-S				None.
6. Fiscal Effect of Implementing the Rule
⍽ No Fiscal Effect ⍽ Indeterminate	⍽ Increase Existing Revenues ⍽ Decrease Existing Revenues			⍽ Increase Costs ⍽ Could Absorb Within Agency's Budget X Decrease Cost
7. The Rule Will Impact the Following (Check All That Apply)
⍽ State's Economy ⍽ Local Government Units		⍽ Specific Businesses/Sectors ⍽ Public Utility Rate Payers ⍽ Small Businesses (if checked, complete Attachment A)
8. Would Implementation and Compliance Costs Be Greater Than $20 million? ⍽ Yes   X No
9. Policy Problem Addressed by the Rule
Clarifies law by removing regulations no longer needed due to statutory change.
10. Summary of the businesses, business sectors, associations representing business, local governmental units, and individuals that may be affected by the proposed rule that were contacted for comments.
This rulemaking removes regulations no longer needed as a result of statutory change. Since these regulations will no longer exist, any costs of complying with them will disappear. As a result, any economic impact will be a positive one. Telecommunications providers, trade associations for wireline providers, wireless providers, and cable providers. Public interest group (CUB) also contacted.
11. Identify the local governmental units that participated in the development of this EIA.
Not Applicable.
12. Summary of Rule's Economic and Fiscal Impact on Specific Businesses, Business Sectors, Public Utility Rate Payers, Local Governmental Units and the State's Economy as a Whole (Include Implementation and Compliance Costs Expected to be Incurred)
Expected reduction in costs as entities previously subject to rules can substantially simplify compliance with state telecommunications requirements. The issues raised by commenting parties were substantive rather than economic.
13. Benefits of Implementing the Rule and Alternative(s) to Implementing the Rule
Expected reduction in costs as entities previously subject to rules can substantially simplify compliance with state telecommunications requirements.
14. Long Range Implications of Implementing the Rule
See No. 12 above. Also reduced regulation will lead to more entrants, more vigorous competition, and a greater variety of price and service options.
15. Compare With Approaches Being Used by Federal Government
There is no strict comparability with federal government regulations in this area because Communications Act of 1934, as amended by the Telecommunications Act of 1996, leaves retail telecommunications regulation to the states.
16. Compare With Approaches Being Used by Neighboring States (Illinois, Iowa, Michigan and Minnesota )
Not applicable as level of deregulation in WI matches or exceeds levels of adjacent states.
17. Contact Name					18. Contact Phone Number
Sarah Klein					[phone]

This document can be made available in alternate formats to individuals with disabilities upon request.

ATTACHMENT A

1. Summary of Rule's Economic and Fiscal Impact on Small Businesses (Separately for each Small Business Sector, Include Implementation and Compliance Costs Expected to be Incurred)

Implements Act 22 by removing or amending rules rendered obsolete or inapplicable, and makes miscellaneous language updates. Since these rules will no longer exist, any costs of complying with them will disappear. As a result, any economic impact will be a positive one.

2. Summary of the data sources used to measure the Rule's impact on Small Businesses

Not deemed necessary.

3. Did the agency consider the following methods to reduce the impact of the Rule on Small Businesses?

⍽ Less Stringent Compliance or Reporting Requirements

⍽ Less Stringent Schedules or Deadlines for Compliance or Reporting

X Consolidation or Simplification of Reporting Requirements

⍽ Establishment of performance standards in lieu of Design or Operational Standards

⍽ Exemption of Small Businesses from some or all requirements

X Other, describe:

Almost all substantive repeals and amendments are required by Act 22. However, in the process minor technical changes will be made to improve rule organization, clarify rule application, modernize rule language, and remove obsolete requirements. Since certain rules will no longer exist, any costs of complying with them will disappear. As a result, any economic impact will be a positive one.

4. Describe the methods incorporated into the Rule that will reduce its impact on Small Businesses

As Act 22 already created the effect on small businesses, this proceeding simply advances the clarity of the rules remaining, simplifying management of compliance obligations that remain. This rulemaking removes regulations no longer needed as a result of statutory change. Since these regulations will no longer exist, any costs of complying with them will disappear. As a result, any economic impact will be a positive one.

5. Describe the Rule's Enforcement Provisions

Not applicable.

6. Did the Agency prepare a Cost Benefit Analysis (if Yes, attach to form)

⍽ Yes X No

Notice of Hearing

Safety and Professional Services

Professional Services, Chs. 1—299

EmR1302 , CR 13-026

NOTICE IS HEREBY GIVEN that pursuant to authority vested in the Department of Safety and Professional Services in ss. 227.11 (2) (a) ; 440.03 (1) ; 440.08 (3) (b) ; 440.62 (5) (b) 2. ; 440.64 (1) (b) ; 454.23 (6) (b) ; 454.25 (1) (a) , (2) and (3) ; 454.26 (3) (b) ; and 454.265 (1) , Wis. Stats., and interpreting ss. 440.03 (1) , 440.08 (3) (b) , 440.62 (5) (b) 2. , 440.64 (1) (b) , and 454.20 to 454.295 ., Wis. Stats., the Department of Safety and Professional Services will hold a public hearing at the time and place indicated below to consider emergency rules and an order for permanent rules to amend ss. SPS 60.01 , 61.02 (1) (a) , (2) (a) , (3) (a) and (4) (a) , 62.10 (title) and 62.10 , 65.01 , 65.02 (1) , 65.07 , and 65.12 (1) (h) and (i) 6. , and to create chapter SPS 205, relating to barbers and to barbering and cosmetology schools and instructors.

As provided in s.227.24 (4), Wis. Stats., this hearing will also be for emergency rules currently in effect that have identically amended these SPS sections and nearly identically created chapter SPS 205.

Hearing Information

Date:   Tuesday, April 30, 2013
Time:   10:00 a.m.
Location:   1400 East Washington Ave.
  Room 121A
  Madison, Wisconsin

Appearances at the Hearing

The public hearing site is accessible to people with disabilities. If you have special needs or circumstances that may make communication or accessibility difficult at the hearing, please contact [e-mail] .

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 the Department of Safety and Professional Services, Division of Policy Development, P.O. Box 8935, Madison, Wisconsin 53708. Written comments must be received at or before the public hearing to be included in the record of rule-making proceedings.

Place where Comments Are to be Submitted and Deadline for Submission

Comments may be submitted to Sam Rockweiler, Rules Coordinator, Department of Safety and Professional Services, Division of Policy Development, P.O. Box 8935, Madison, WI, 53708-0427; telephone [phone] or at Contact Through Relay; e-mail [e-mail] . Comments must be received on or before April 30, 2013, to be included in the record of rule-making proceedings.

Copies of Rule

Copies of this proposed permanent rule and the corresponding emergency rules are available upon request to Sam Rockweiler, Rules Coordinator, Department of Safety and Professional Services, Division of Policy Development, 1400 East Washington Avenue, P.O. Box 8935, Madison, Wisconsin 53708; by email at [e-mail] ; or on our website at http://dsps.wi.gov/ Default.aspx?Page=44e541e8-abdd-49da-8fde-046713617e9e .

Analysis Prepared by the Department of Safety and Professional Services

Statutes interpreted

Sections 440.03 (1) , 440.08 (3) (b) , 440.62 (5) (b) 2. , 440.64 (1) (b) , and 454.20 to 454.295 .

Statutory authority

Sections 227.11 (2) (a) , 440.03 (1) , 440.08 (3) (b) , 440.62 (5) (b) 2. , 440.64 (1) (b) , 454.23 (6) (b) , 454.25 (1) (a) , (2) and (3) ; 454.26 (3) (b) , and 454.265 (1) .

Explanation of agency authority

Section 227.11 (2) (a) of the Statutes authorizes the Department to promulgate rules interpreting any statute that is enforced or administered by the Department, if the rule is considered necessary to effectuate the purpose of the statute.

Section 440.03 (1) of the Statutes authorizes the Department to promulgate rules defining uniform procedures for investigating complaints, commencing disciplinary proceedings, and conducting hearings. Section 440.08 (3) (b) authorizes the Department to promulgate rules requiring holders of licenses that have expired for five years or more to comply with requirements which are beyond the renewal requirements for within those five years. Section 440.62 (5) (b) 2. obligates the Department to establish the minimum curriculum for barbering schools and the minimum standards for instruction, materials, and equipment at barbering schools. Section 440.64 (1) (b) requires the Department to promulgate marketing, educational and fiscally-related rules for barbering schools.

Section 454.23 (6) (b) of the Statutes obligates the Department to establish, by rule, the limits of minimal barbering work, for inactive licensees. Section 454.25 (1) (a) authorizes the Department to promulgate rules for providing barbering services outside of a licensed barbering establishment. Sections 454.25 (2) and (3) allow the Department to establish, by rule, requirements for licensing barbering establishments; and require the Department to establish, by rule, minimum health and safety standards for such establishments, respectively. Section 454.26 (3) (b) obligates the Department to prescribe, by rule, the practical training and schooling that a barbering apprentice must receive. Section 454.265 (1) obligates the Department to promulgate rules establishing limited continuing-education requirements for licensed barbers.

Related statute or rule

Sections 454.01 to 454.16 of the Statutes address the practice and licensure of cosmetology, as overseen by the Cosmetology Examining Board. Chapters BC 1 to 11 , as promulgated by the Board, interpret and implement those statutory provisions. Under those statutory provisions and the rules in chs. BC 1 to 11 , licensed cosmetologists can perform barbering, in licensed cosmetology establishments.

Plain language analysis

These rules address the elements needed to implement the barbering components of 2011 Wisconsin Act 190 . This Act primarily separated the previously combined barbering and cosmetology professions, through comprehensive changes to chapter 454 of the Statutes, and transferred the authority for regulation of the barbering profession from the Barbering and Cosmetology Examining Board to the Department of Safety and Professional Services. Act 190 also changed the education requirements for initial licensure of barbers, and the continuing-education (CE) requirements for renewal of barber licenses — and these rules are consistent with those changes. The rules also contain the changes that are needed in chapters SPS 60 to 65 for separating the curriculum requirements and licensure for schools of barbering, from the curriculum requirements and licensure for schools of cosmetology.

The rules also contain several new criteria that may be of interest to some stakeholders. These criteria include the following: (1) the barber-license syllabus is revised to require substantially fewer hours of instruction; (2) managers are allowed to delegate their supervision of an apprentice to a licensed barber who has at least 2,000 hours of licensed practice; (3) cosmetology apprentices are allowed to transfer their apprenticeship hours to a barbering apprenticeship, on a one-to-one basis; (4) inactive licensees are prohibited from receiving compensation and from practicing in a licensed establishment; (5) licensed cosmetologists and cosmetology establishments are allowed, until March 31, 2015, to convert to a barbering license; (6) reinstatement of a license that is expired for 5 years or more is clarified as always including reexamination, but not including compliance with CE requirements; (7) an 8-year length of licensed practice allows a licensee to stop acquiring CE credits; (8) a CE test-out exam is allowed in lieu of obtaining CE credits; (8) a cosmetologist who has been licensed for less than 8 years and who elects at the time of renewal in 2013 to be issued a barber license is required to complete 4 CE hours for the 2015 renewal; (9) a cosmetologist who has been licensed for less than 8 years and who elects at the time of renewal in 2015 to be issued a barber license is required to complete 4 CE hours for the 2017 renewal; (10) licensees are no longer limited to obtaining a maximum of 3 credit hours for teaching CE, and the prohibition against full-time faculty claiming CE credits for teaching is deleted; (11) instruction in a CE program must include amplification, evaluation, examples, and explanation of the course subject matter to the licensee; and (12) a request for a hearing on a citation must include reasons why the assessment of a forfeiture should be reviewed.

Summary of, and comparison with, existing or proposed federal regulations

The federal government does not regulate barbering professions in the states. However, it does have regulations applicable to apprenticeships in all trades and professions registered with the United States Department of Labor. Such regulations are generally administered under state laws governing apprenticeship programs in a particular state. In Wisconsin, the Department of Workforce Development is charged with that responsibility.

Comparison with rules in adjacent states

An Internet-based search found the following requirements for barbering in the four adjacent states:

a. The Michigan Board of Barber Examiners regulates and licenses barbers, barber students, barber colleges, barber instructors, student instructors, and barbershops. Licensure of barbers and barber instructors is based on examination. Licenses typically are renewed every 2 years, apparently without any CE credits. Barber services must be provided only in a licensed establishment. To become licensed, a barbershop must submit an application, a fee and a self-inspection report attesting to meeting sanitation and establishment standards prescribed in the corresponding rules. A barbershop must be completely partitioned from any dwelling and must not be occupied for lodging or residential purposes. If the ownership or location of a shop changes, a new application and inspection is required. The licenses of the barbershop and all barbers working in the barbershop must be displayed in a prominent place visible to the public at all times.

b. The Illinois Department of Financial and Professional Regulation licenses barbers, barber teachers and barber schools – and registers barbershops – in cooperation with the Barber, Cosmetology, Esthetics and Nail Technology Board. Licensees are required to follow prescribed sanitation standards. Licensure of barbers and barber teachers is based on examination, and is subject to renewal every two years. Barber schools must comply with curriculum and recordkeeping requirements. No CE requirements were found.

c. The Iowa Department of Public Health, through its Board of Barbering, administers licensure of barbers, barber schools, barber instructors and barbershops – and inspects barbershops. Licensure of barbers is based on examination, and licensed cosmetologists are allowed to supervise licensed barbers. Barbers must complete 8 hours of CE credits every 2 years for license renewal, and on-line or independent study does not count toward those credits.

d. The Minnesota Board of Barber Examiners registers apprentices and barbers – and licenses instructors, barber schools and barbershops. Examinations are required for apprentices, barbers and instructors. Operation and sanitation standards are prescribed for barbershops, and shops are subject to inspection by the Board's inspectors. Barbers and barber instructors and schools must renew their credentials.

Summary of factual data and analytical methodologies

The methodology for developing these rules consisted primarily of (1) reviewing 2011 Wisconsin Act 190 , including the non-statutory provisions; (2) incorporating the elements from chapters BC 1 to 11 that previously pertained to barbering; (3) incorporating best practices that have evolved since chapters BC 1 to 11 were last updated; and (4) incorporating input from the Department's barbering advisory committee. The members of that committee represent various aspects of the barbering industry.

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

The Department used its advisory committee as a primary source for determining the potential impacts of both the technical and administrative elements of these rules. A responsibility of committee members is to bring forth any concerns they may be aware of or have with the current requirements and with these rule changes, and any concerns for any potential economic impacts from the changes.

Fiscal Estimate and Economic Impact Analysis

The Fiscal Estimate and Economic Impact Analysis is attached.

Initial Regulatory Flexibility Analysis or Summary

These proposed rules do not have an economic impact on small businesses, as defined in section 227.114 (1) of the Statutes.

The Department's Regulatory Review Coordinator may be contacted by email at [e-mail] or by calling [phone].

Agency Contact Person

Sam Rockweiler, Rules Coordinator, Department of Safety and Professional Services, Division of Policy Development, P.O. Box 8935, Madison, WI, 53708-0427; telephone [phone] or at Contact Through Relay; e-mail [e-mail] .

STATE OF WISCONSIN DEPARTMENT OF ADMINISTRATION DOA-2049 (R03/2012)	Division of Executive Budget and Finance 101 East Wilson Street, 10th Floor P.O. Box 7864 Madison, WI 53707-7864 FAX: [phone]
ADMINISTRATIVE RULES Fiscal Estimate & Economic Impact Analysis

1. Type of Estimate and Analysis
X Original   ⍽ Updated   ⍽ Corrected
2. Administrative Rule Chapter, Title and Number
Chapters SPS 60/Authority, Scope, Purpose and Definitions; 61/Licensing of Schools and Specialty Schools; 62/Regulation of Schools and Specialty Schools; 65/Persons Providing Practical Instruction In Schools; and 205/Barbers.
3. Subject
Barbers, and Barbering and Cosmetology Schools and Instructors.
4. Fund Sources Affected			5. Chapter 20, Stats. Appropriations Affected
⍽ GPR   ⍽ FED   ⍽ PRO   ⍽ PRS   ⍽ SEG   ⍽ SEG-S			None.
6. Fiscal Effect of Implementing the Rule
⍽ No Fiscal Effect ⍽ Indeterminate	⍽ Increase Existing Revenues ⍽ Decrease Existing Revenues		X Increase Costs X Could Absorb Within Agency's Budget ⍽ Decrease Cost
7. The Rule Will Impact the Following (Check All That Apply)
⍽ State's Economy ⍽ Local Government Units		⍽ Specific Businesses/Sectors ⍽ Public Utility Rate Payers ⍽ Small Businesses (if checked, complete Attachment A)
8. Would Implementation and Compliance Costs Be Greater Than $20 million? ⍽ Yes   X No
9. Policy Problem Addressed by the Rule
The rule implements the barbering components of 2011 Wisconsin Act 190.
10. Summary of the businesses, business sectors, associations representing business, local governmental units, and individuals that may be affected by the proposed rule that were contacted for comments.
The Department used its advisory committee as the primary source for determining the potential impacts of both the technical and administrative elements of these rules. A responsibility of committee members is to bring forth any concerns they may be aware of or have with the current requirements and with these rule changes, and any concerns for any potential economic impacts from the changes. The Committee includes two barber members, one barber/cosmetology member, one barber/cosmetology instructor, one educator member, and one apprentice representative from the Department of Workforce Development.
11. Identify the local governmental units that participated in the development of this EIA.
None.
12. Summary of Rule's Economic and Fiscal Impact on Specific Businesses, Business Sectors, Public Utility Rate Payers, Local Governmental Units and the State's Economy as a Whole (Include Implementation and Compliance Costs Expected to be Incurred)
The Department estimates that these rules will have a slight fiscal impact. They will require staff time in the Division of Policy Development and Division of Management Services. The total one-time salary and fringe costs are estimated to be approximately $5,071. There are no additional on-going salary and fringe costs estimated at this time. These rules are not expected to impose significant additional costs or other impacts on other entities because the primary effect of the rules is to no longer require barbering to comply with the more intensive requirements that are applied to cosmetology.
13. Benefits of Implementing the Rule and Alternative(s) to Implementing the Rule
The rules essentially provide the framework for licensing barbers, barbering managers, and barbering establishments. No alternate framework would be available if the rules are not implemented.
14. Long Range Implications of Implementing the Rule
None known or anticipated.
15. Compare With Approaches Being Used by Federal Government
The federal government does not regulate barbering professions in the states.
16. Compare With Approaches Being Used by Neighboring States (Illinois, Iowa, Michigan and Minnesota )
See the detailed comparison in the rule analysis that precedes the rules.
17. Contact Name				18. Contact Phone Number
Sam Rockweiler				6 08-266-0797

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