Original Notice.

     Preproposal statement of inquiry was filed as WSR 04-06-074.

     Title of Rule: WAC 16-250-155 Tonnage fee requirements and 16-252-155 Tonnage fee required.

     Purpose: The purpose of the proposed amendments is to increase tonnage feeds [fees] for commercial feed and pet food/specialty pet food from nine cents per ton to twelve cents per ton.

     Statutory Authority for Adoption: RCW 15.53.9018, section 309(2), chapter 25, Laws of 2003 1st sp.s. (ESSB 5404) and chapter 34.05 RCW.

     Statute Being Implemented: RCW 15.53.9018 and section 309(2), chapter 25, Laws of 2003 1st sp.s. (ESSB 5404).

     Summary: The department is proposing to increase the inspection fees in WAC 16-250-155 and 16-252-155 in order to reduce a feed program funding deficit. The feed program is funded entirely from fees (registration fees, license fees and inspection fees). From January 1980 to the present, inspection fees have increased from eight cents/ton to nine cents/ton. The one-cent/ton increase occurred in 1996 and was used to support the feed program's share of the department's administrative costs. The 1996 one-cent/ton fee increase was not used to fund program activities. The three-cent/ton increase that the department is proposing will not completely address the feed program funding deficit, but it will give the department and its feed advisory committee sufficient time to address long-term program funding needs and solutions. Section 309(2), chapter 25, Laws of 2003 1st sp.s. (ESSB 5404) authorizes the department to propose a fee increase in excess of the Office of Financial Management (OFM) fiscal growth rate factor.

     Reasons Supporting Proposal: Without the proposed increase, the department will be forced to curtail the services that it offers to the commercial feed and pet food/specialty pet food industries.

     Name of Agency Personnel Responsible for Drafting, Implementation and Enforcement: Ted Maxwell, 1111 Washington Street S.E., 2nd Floor, (360) 902-2026.

     Name of Proponent: Washington State Department of Agriculture, governmental.

     Rule is not necessitated by federal law, federal or state court decision.

     Explanation of Rule, its Purpose, and Anticipated Effects: The purpose of the proposed amendments is to increase tonnage feeds [fees] for commercial feed and pet food/specialty pet food from nine cents per ton to twelve cents per ton in WAC 16-250-155 and 16-252-155. The department is proposing to increase these inspection fees in order to reduce the feed program's funding deficit. The feed program is funded entirely from fees (registration fees, license fees and inspection fees). From January 1980 to the present, inspection fees have increased from eight cents/ton to nine cents/ton. The one-cent/ton increase occurred in 1996 and was used to support the feed program's share of the department's administrative costs. The 1996 one-cent/ton fee increase was not used to fund program activities. The three-cent/ton increase that the department is proposing will not completely address the feed program funding deficit, but it will give the department and its feed advisory committee sufficient time to address long-term program funding needs and solutions. Section 309(2), chapter 25, Laws of 2003 1st sp.s. (ESSB 5404) authorizes the department to propose a fee increase in excess of the Office of Financial Management (OFM) fiscal growth rate factor. Without the proposed increase, the department will be forced to curtail the services that it offers to the commercial feed and pet food/specialty pet food industries.

     Proposal Changes the Following Existing Rules: The proposal increases the tonnage fees in WAC 16-250-155 and 16-252-155 from nine cents per ton to twelve cents per ton.

     No small business economic impact statement has been prepared under chapter 19.85 RCW. In order to mitigate any potential adverse economic impact of its proposed increase in commercial feed and pet food/specialty pet food tonnage fees, the department is delaying the effective date of the increases until January 1, 2005. In addition, since the department could not determine the potential cost impact of its proposed tonnage fee increase, it conducted an economic impact survey. A survey, cover letter and a stamped envelope addressed to the department's rules coordinator was mailed (March 29, 2004) to all commercial feed licensees licensed by the department and pet food/specialty pet food registrants registered with the department (514 surveys). All licensees and registrants were given until April 26, 2004, to complete and return the survey. One survey was returned as "undeliverable." Respondents representing a response rate of 27.1%, returned one hundred and thirty-nine surveys. Of those returned, one hundred and fourteen respondents (82.0%) indicated that the proposed tonnage fee increases would have no effect upon their business.

     The twenty-five respondents, who reported that the proposed tonnage fees would increase their cost of doing business, reported a total of annual cost of compliance of $7,986. Using information gathered on the survey, the department has calculated an estimated average cost of compliance per:

•	Full-time employee of $10.26;
•	One hundred dollars of sales of $00.00; and
•	Tons of feed distributed of $00.01.

     The department does not consider these costs to be "more than minor" and, therefore, has not prepared a formal small business economic impact statement as described in chapter 19.85 RCW.

     RCW 34.05.328 does not apply to this rule adoption. The Washington State Department of Agriculture is not a listed agency in RCW 34.05.328 (5)(a)(i).

     Hearing Location: Natural Resources Building, Room 259, 1111 Washington Street, Olympia, WA, on June 30, 2004, at 1:00 p.m.

     Assistance for Persons with Disabilities: Contact Virginia Walsh by June 14, 2004, TDD (360) 902-1996.

     Submit Written Comments to: Laurie Mauerman, Washington State Department of Agriculture, P.O. Box 42560, Olympia, WA 98504-2560, e-mail lmauerman@agr.wa.gov, fax (360) 902-2093, by 5:00 p.m., June 30, 2004.

     Date of Intended Adoption: July 6, 2004.

May 19, 2004

Bob Arrington

Assistant Director

OTS-7231.1

AMENDATORY SECTION(Amending WSR 03-23-128, filed 11/19/03, effective 7/1/04)

WAC 16-250-155   Tonnage fee requirements.   Each initial distributor of commercial feed in or into Washington state must pay the department an inspection fee of ((nine)) twelve cents per ton on all commercial feed they sold during the year. The minimum inspection fee, the late penalty fee, and exceptions to payment of the fee are as authorized in RCW 15.53.9018.

[Statutory Authority: Chapters 15.53 and 34.05 RCW. 03-23-128, § 16-250-155, filed 11/19/03, effective 7/1/04.]

OTS-7232.1

AMENDATORY SECTION(Amending WSR 03-23-129, filed 11/19/03, effective 7/1/04)

WAC 16-252-155   Tonnage fee required.   Each initial distributor of a pet food or specialty pet food in or into Washington state must pay the department an inspection fee of ((nine)) twelve cents per ton on all pet food or specialty pet food they sold, for distribution within Washington state, during the year. The minimum inspection fee, the late penalty fee, and exceptions to payment of the fee are as authorized in RCW 15.53.9018.

[Statutory Authority: Chapters 15.53 and 34.05 RCW. 03-23-129, § 16-252-155, filed 11/19/03, effective 7/1/04.]

© Washington State Code Reviser's Office