Month: April 2017

Legislators Introduce Legislation to Reform Administrative Rules

Representative Joan Ballweg (R-Markesan) and Senators Nass (R-Whitewater) and Darling (R-River Hills) introduced legislation to provide additional legislative oversight on the administrative rulemaking process and reform the procedures for repealing outdated and burdensome rules.

This proposal is an evolution of the Assembly’s Red Tape Review project and initiatives by the Governor to clean up outdated and burdensome rules. The proposed bill allows better legislative checks on state agencies and the administrative rulemaking process, and creates a process to continually review agency rules.

“Speaker Vos tasked me with the Red Tape Review project to see that the nearly 1800 chapters of administrative code are reviewed by the Assembly Standing Committees. This proposal will make the review of administrative code an ongoing process and in some cases, vastly simplify the rules process,” said Ballweg.

Five procedures are created under this bill: (1) an expedited procedure for agencies to repeal unauthorized rules; (2) a process for agencies to regularly review rules; (3) a process for agencies to regularly review new enactments to determine how they affect current rules; (4) a process for the Legislative Reference Bureau to biennially report to the legislature on rules in need of revision; (5) a process for the Joint Committee for Review of Administrative Rules to request a retrospective economic impact analysis on existing rules.

Under current law, to repeal an administrative rule the agency must go through the promulgation process which can take a year or more and is resource and time intensive. There is also nothing that requires agencies to continually review their rules or new enactments, so the process will vary from agency to agency or not happen at all.

“Right now, it’s difficult for small business owners to know which rules apply to them and which are outdated,” Darling said, “This bill eliminates outdated rules from the books and gives our rules a thorough check-up to make sure they are accurate, fair, and clear.”

Farms Caught in Canadian Trade Dispute Find Buyers for Their Milk

Just days before they might have had to close, most of the Wisconsin dairy farms caught up in a trade dispute with Canada have found buyers for their milk, enabling them to stay in business. At risk had been some 58 farms ranging in size from 80 to 3,000 cows, including many in Dodge and Jefferson counties and others near Fond du Lac and Sheboygan.

Grassland Dairy Products of Greenwood said it would stop buying from the farms effective this Monday because it lost millions of dollars when Canada changed its milk-buying practices to favor Canadian farmers at the expense of U.S. milk producers.

On Thursday, though, dairy farmers close to the situation said nearly all of the farms that lost their contracts with Grassland now appear likely to have new milk buyers by Monday, even if the agreements are short term.

Some of the new contracts have come from Mullins Cheese of Mosinee, Rolling Hills and the cooperative Dairy Farmers of America. State officials would not confirm the positive turn of events Thursday, although they said earlier that the situation was changing “hour by hour” and they were hopeful it would be resolved by the end of the week.

The displaced milk is estimated at 1 million pounds, or about 116,000 gallons, a day. That’s milk that farmers otherwise would have had to dump, because cows have to be milked two or three times a day whether or not there’s a buyer for the product.

Still, a few of the displaced farms probably won’t find buyers before Monday. The Farm Center at the state Agriculture Department has a “situation room” where staff members are talking with dairy plant owners, trying to connect them with the remaining farms.

Canada has said it’s not to blame for the crisis; it faults American farmers for producing too much milk in a global marketplace flooded with it. But U.S. authorities, including Trump, have said the Canadian dairy system is choking off sales of Wisconsin and New York milk in Canada. “We need to get at the root of the problem,” said Chris Galen, spokesman for the National Milk Producers Federation in Washington, D.C. “There are long-term ramifications that aren’t as visible as a few dozen farms all of a sudden losing their markets. The longer-term impact will affect a much larger number of America’s dairy farmers from coast to coast.”

GOP Bill Extends Deadlines for Fixing Self-Reported Environmental Violations

Participants in the state’s voluntary environmental compliance audit program would have more time to correct violations under a new Republican-backed bill.

Assembly Bill 264 also instructs the state Department of Natural Resources and the Department of Justice to consider whether a violator is a small business that has committed a minor violation before pursuing enforcement in court.

The bill, introduced Monday by Rep. Andre Jacque, of DePere, would extend the current 90-day deadline for correcting violations found through the DNR environmental compliance audit program. Violators would be allowed 180 days for most violations, and would be allowed 360 days if modification of pollution prevention equipment is required.

The bill also would eliminate the current legal requirements that businesses notify the DNR at least 30 days before beginning a compliance audit, and that the public be notified and be allowed to comment on timetables for bringing a business into compliance.

Jacque said the bill brings the state self-compliance program in line with a similar U.S. Environmental Protection Agency program with the goal of encouraging more companies to participate. The EPA program has a 180-day correction time period and no requirement to notify the agency before an audit begins. “Currently the state program is, as I understand it, woefully underutilized compared with the federal process,” Jacque said. “This is going to make the state program more usable.”

Jacque noted the DNR’s Small Business Environmental Council, composed of both Republican and Democratic appointees, unanimously supported the bill draft.

Under existing state law, a business can reduce its liability for violations of environmental standards by enrolling in the environmental compliance audit program, voluntarily auditing its own performances, reporting results and correcting violations.

The law contains provisions that prevent use of the program to deflect penalties for known or serious violations. The program was created in 2004. The DNR received two compliance reports identifying five potential violations in the past two years and three reports identifying 37 potential violations in the prior two years.

Wisconsin’s First-Quarter Home Sales Highest in at Least 12 Years

Sales of existing homes in Wisconsin posted their best first quarter in at least a dozen years, the Wisconsin Realtors Association said Monday. At the same time, prices continued to increase in what real estate professionals say is a thin inventory of homes on the market, especially in the state’s more-urban metro areas.

A strong March helped boost the first-quarter sales total to 13,376, up 3.2% from 12,958 in the first three months of 2016. In March, sales increased 7.2%, to 5,906 from 5,509 in March last year. The median sale price of homes sold in Wisconsin through March this year was $159,575, or 6.4% higher than $150,000 in last year’s first quarter.

The Wisconsin Realtors Association said first-quarter existing home sales were the strongest for that three-month period in the state since the association recalibrated its system of tracking home sales in 2005.

“What is amazing about these record sales is that they are occurring against a backdrop of very tight statewide inventories,” Erik Sjowall, chairman of the Wisconsin Realtors Association, said in a statement.

Economist David Clark, a Marquette University professor who analyzes the monthly sales and price data for the state Realtors, said buyers seemed to have grasped the reality they must have their financial qualifications in order and should act quickly on a property they want. “That behavioral change may be allowing us to see growth even though our inventory levels are getting really tight,” said Clark, who is executive associate dean at Marquette’s business school.

All regions of the state had monthly growth in sales in March.

Economic conditions point toward more consumers likely getting into the homebuying market. The statewide labor market continues to improve, with the March seasonally adjusted unemployment rate at 3.4%, the Realtors said. The unemployment rate has gone down even though the state labor force has grown over the last 12 months, which means job growth is more than keeping pace with the number of new job seekers.


In New Trade Front, Trump Slaps Tariff on Canadian Lumber

The Trump administration announced on Monday that it would impose new tariffs on Canadian softwood lumber imports, escalating a longstanding conflict with America’s second-largest trading partner.

The Commerce Department determined that Canada had been improperly subsidizing the sale of softwood lumber products to the United States, and after failed negotiations, Washington decided to retaliate with tariffs of 3 percent to 24 percent. The penalties will be collected retroactively on imports dating back 90 days.

The decision came days after President Trump complained bitterly about Canada’s dairy trade practices, and the tariffs signaled a harsher turn in his relationship with Canada, even as he seeks to renegotiate the North American Free Trade Agreement. While he has often assailed China, Mexico and others for their trade practices, he seemed to have forged a strong relationship with Canada’s prime minister, Justin Trudeau.

The United States and Canada have been at odds over softwood lumber in one form or another since the 19th century, with the current dispute tracing back to 1982. The United States imported $5.7 billion in softwood lumber last year alone, mainly for residential home building.

At the conflict’s heart is a fundamental difference in forestry ownership. In the United States, forest lands are largely held by lumber companies. In Canada, they tend to be owned by the government, and American mills contend that Canadian provinces subsidize their industries by charging low royalty rates for cutting trees. A temporary truce under President George W. Bush, which effectively limited Canadian exports to the United States, expired in 2015.

Responding on Monday to a complaint filed by American mills, the Commerce Department found that five Canadian companies received subsidies worth 3 percent to 24 percent and ordered equivalent tariffs on each of them. For other Canadian lumber companies, it set a tariff rate of 20 percent. The department will issue a final determination in September.

“The government of Canada disagrees strongly with the U.S. Department of Commerce’s decision to impose an unfair and punitive duty,” Chrystia Freeland, the minister of foreign affairs, and Jim Carr, the minister of natural resources, said in a joint statement. “The accusations are baseless and unfounded.”

Commerce Secretary Wilbur Ross told The Wall Street Journal that the Trump administration had tried to negotiate a settlement but failed. In a separate statement on Monday, he called it “a bad week for U.S.-Canada trade relations,” repeating Mr. Trump’s complaints about dairy exports. “This is not our idea of a properly functioning free trade agreement,” he said.

Company won’t Replace only Fuel Pipeline to Green Bay

An Illinois company will not replace its deteriorated 110-mile fuel pipeline between Milwaukee and Green Bay, state Administration Secretary Scott Neitzel said Friday.

West Shore Pipe Line Company in June 2016 permanently shut down the only gasoline and diesel fuel pipeline serving northeastern Wisconsin after testing of the 56-year-old line found extensive repairs were needed. At that time, West Shore representatives said the company was evaluating options for rebuilding the line within two years.

The old repair-plagued line was removed from service in March 2016 for the testing, and it never reopened.

Since that time, state officials have worked with gasoline retail businesses to maintain an adequate fuel supply in the region at a reasonable price for consumers, Neitzel said. No fuel shortages have been reported in that time.

Gasoline retailers hired more tanker trucks and drivers to transport fuel from terminals at Milwaukee, Waupun and Junction City. The terminal at Milwaukee is owned by West Shore. The terminals at Waupun and Junction City added capacity to serve more trucks, Neitzel said.

In addition, the state lifted weight limits for fuel trucks on certain routes into northeastern Wisconsin and the Port of Green Bay began importing diesel and gasoline shipments.

“Now that West Shore has decided to discontinue its service to Green Bay, we’ll meet with all entities in the industry that can help us meet the demand for that region,” Neitzel said. Asked if another pipeline company might consider extending a line into Green Bay, Neitzel replied: “I wouldn’t rule anything out.”
West Shore owns a 650-mile fuel distribution system within Illinois, Wisconsin and Indiana. One fuel pipeline extends from Hammond, Ind., around Chicago to Milwaukee. A separate line runs from East Chicago, Ind., to Janesville and Madison

Study: Manufacturing Tax Credit Added 21,000 Jobs

Wisconsin’s manufacturing and agriculture tax credit accounted for almost 21,000 new manufacturing jobs since implementation started in 2013, according to a new study from University of Wisconsin-Madison Professor Noah Williams.

The study also concluded the tax credit accounted for 42,000 total jobs throughout the state.

The analysis, released through the Center for Research on the Wisconsin Economy, looked at job data in Wisconsin counties bordering other states to help isolate the impact of the tax credit before working toward a statewide estimate. Agricultural jobs were not included because of a lack of data at the county level.

Since 2013, manufacturing employment in Wisconsin’s border counties grew 1.9 percentage points faster than in those counties just across the state line, according to Williams.

He also acknowledged the tax credit “was only one part of an overall attempt to change the business climate in Wisconsin, which included changes in unionization, personal taxes, regulation, and becoming a right-to-work state in 2015.”

The tax credit, passed as part of the 2011 state budget, phased in a series of increasing tax credits each year starting in 2013. It was fully phased in starting in 2016 and leaves manufacturers with minimal state taxes.

Opponents of the tax credit have pointed to Legislative Fiscal Bureau estimates showing the policy has reduced state revenues substantially. The most recent estimate suggests a reduction of $1.4 billion from 2013 to 2019, compared to an original estimate of $617 million.

An analysis by the Wisconsin Budget Project showed the state’s manufacturing sector increased employment by 2.1 percent in the two years before and after implementation of the tax credit, even as job growth in other industries increased faster.

Wisconsin Manufacturers and Commerce, meanwhile, used U.S. Bureau of Labor Statistics data to show the state lost 81,800 manufacturing jobs between 2006 and 2010 and gained 34,200 starting in 2011, when the tax credit was first passed.

Williams says state-level data is colored by a variety of factors, and comparisons to surrounding states don’t account for things like population concentration, industry differences and labor force dynamics. The idea behind using border counties is that the economies are generally similar on either side of the line, allowing for a better comparison.


UI Trust Fund Projected to Exceed $1.2 Billion on Key Date

The Department of Workforce Development (DWD) recently released the 2017 Unemployment Insurance (U) Financial Outlook Report, which projects continued growth for the Wisconsin UI Trust Fund throughout the projection period. In addition to continued growth, the UI Trust Fund is predicted to have a balance of $1.2 billion or greater on June 30th, which would result in the third straight year that Wisconsin employers who participate in the UI program would experience a tax reduction. Due to the vastly improved Wisconsin economy and common-sense reforms made to the UI program, when combined with the reductions for the 2016 and 2017 tax years, tax schedule changes are estimated to reduce total UI taxes by over $150 million.

“Wisconsin’s UI Trust Fund has come a long way over the past six years, from a deficit of over $1 billion which brought over $360 million in additional costs to employers due to borrowing money from the federal government to a healthy UI Trust Fund balance of over $1 billion,” DWD Secretary Ray Allen said. “Wisconsin’s Trust Fund is continuing to grow, but we must ensure that we avoid the additional burden that borrowing money to pay benefits puts on the employers who fund UI benefit payments.”

The projections are included in the state’s 2017 UI Financial Outlook report, which DWD submitted on April 14 to the Governor and legislative leadership as required by statute.

Highlights of the report include:

  • Wisconsin’s UI Trust Fund ended 2016 with a positive balance of roughly $1.2 billion
  • UI benefits are expected to stay at historically low levels throughout the projection period, and the UI Trust Fund is expected to grow to over $1.5 billion by the end of 2019
  • Wisconsin’s UI Trust Fund balance is projected to be greater than $1.2 billion on June 30, which will move UI taxes to the lowest tax schedule, schedule D. This would result in a tax reduction for the third straight tax year for most Wisconsin employers covered under the UI program.

Other indicators of the health of Wisconsin’s UI program and overall economy include:

  • Initial UI claims ended 2016 at their lowest level since 1988. Year 2017 initial UI claims are running at their lowest levels in at least 30 years
  • Continuing UI claims ended 2016 at their lowest levels since 1973. Year 2017 Continuing UI claims in Wisconsin are running at their lowest level in at least 30 years.

14-State Coalition Defend Executive Order to Ease Over-Regulation

Attorney General Brad Schimel and West Virginia Attorney General Patrick Morrisey are leading a 14-state coalition urging a federal court to uphold an executive order aimed at reducing the regulatory burden on state governments and citizens.

“In recent years, bureaucrats in Washington, D.C. have been expanding their power and reach through regulatory actions, and little has been done to remove unnecessary federal regulations,” said Attorney General Schimel. “This executive order will protect Wisconsin from more years of the same, allow Wisconsinites to operate in a simplified regulatory environment, and protect our state’s sovereignty.”

The friend-of-the-court brief, filed late Monday, defends the “1-in-2-out” rule, which strives to eliminate unnecessary and costly regulation by requiring the federal bureaucracy to do away with two regulations for every new rule it creates. The coalition argues that the executive order effectively reins in a bureaucracy that has implemented a far greater regulatory burden than Congress ever envisioned.

The brief further contends past presidents, of both political parties, have enacted similar mechanisms to ensure review of regulations within the executive branch. Such measures have instructed agencies to consider the cumulative costs, the impact on the national economy and the effect of rules on state and local government.

Wisconsin and West Virginia filed the coalition’s brief before the U.S. District Court for the District of Columbia. Other states participating are Alabama, Arizona, Arkansas, Georgia, Kansas, Louisiana, Michigan, Nevada, Oklahoma, South Carolina, Texas and Wyoming.

President Trump to Sign 'Buy American, Hire American' Executive Order

President Trump will sign a double-barreled executive order Tuesday that will clamp down on guest worker visas and require agencies to buy more goods and services from U.S. companies and workers.

Trump will sign the so-called “Buy American, Hire American” executive order during a visit to Snap-On Tools in Kenosha, Wis., Tuesday, said two senior administration officials who briefed reporters on the order Monday.

By combining aspects of immigration policy with federal procurement regulations, Trump is using executive action to advance his philosophy of economic nationalism without waiting for action from Congress.  But like many of his previous executive orders, the order will largely call on cabinet secretaries to fill in the details with reports and recommendations about what the administration can legally do.

Specifically targeted: The H-1B visa program, which allows 85,000 foreign workers into the United States each year to take specific high-skilled jobs with U.S. companies. The program is popular with the information technology industry, which Trump has accused of “importing low-wage workers on H-1B visas to take jobs from young college-trained Americans.”

The “Buy American” portion of the order will tighten the waivers and exemptions that agencies use to get around procurement laws that favor American-made goods, and require agency heads to sign off on those waivers. It will require agencies to consider whether foreign governments are using unfair trade practices when considering the lowest responsible bidder. And it includes language requiring transportation projects to use steel “melted and poured” in the United States.