Original Notice.

     Preproposal statement of inquiry was filed as WSR 12-11-052.

     Title of Rule and Other Identifying Information: The department is proposing to revise WAC 16-228-1540 to establish a $25 fee to take pesticide and structural pest inspector license exams.

     Hearing Location(s): Washington State Department of Agriculture (WSDA), 2nd Floor, Conference Room 238-B, 21 North 1st Avenue, Yakima, WA 98902, on Tuesday, October 9, 2012, at 1:00 p.m.; and at the Natural Resources Building, 2nd Floor, Conference Room 259, 1111 Washington Street S.E., Olympia, WA 98504, on Thursday, October 11, 2012, at 1:00 p.m.

     Date of Intended Adoption: October 25, 2012.

     Submit Written Comments to: Margaret Tucker, Program Manager, WSDA, P.O. Box 42560, Olympia, WA 98504-2560, e-mail mtucker@agr.wa.gov, fax (360) 902-2093, by October 11, 2012, 5:00 p.m.

     Assistance for Persons with Disabilities: Contact Margaret Tucker by October 1, 2012, TTY (800) 833-6388.

     Purpose of the Proposal and Its Anticipated Effects, Including Any Changes in Existing Rules: This proposal would revise WAC 16-228-1540 to establish a $25 testing fee when taking WSDA pesticide and structural pest inspector exams. The fee would be charged each time exams are administered and is the same for each test taker regardless of the number of exams taken. The fee will assist the program in recovering costs to administer exams to approximately four thousand prospective licensees each year. Exams are offered in all pesticide management division (PMD) offices, following large WSU prelicense shortcourses and upon request whenever fifteen or more testers can be guaranteed.

     Reasons Supporting Proposal: WSDA estimates that it costs from $19 - $31/tester to administer exams yet does not currently collect a fee for this activity. The fee will raise approximately $100,000 and will partially offset the $616,000 in general fund dollars lost by the PMD during the last biennium.

     Statutory Authority for Adoption: RCW 17.21.030, 15.58.040, and chapter 34.05 RCW; also 3ESHB 2127.

     Statute Being Implemented: Chapters 15.58, 17.21, and 34.05 RCW.

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

     Name of Proponent: WSDA, governmental.

     Name of Agency Personnel Responsible for Drafting, Implementation and Enforcement: Margaret Tucker, NRB, 2nd Floor, 1111 Washington Street S.E., Olympia, WA 98504, (360) 902-2015.

     A small business economic impact statement has been prepared under chapter 19.85 RCW.

     SMALL BUSINESS ECONOMIC IMPACT STATEMENT (SBEIS): Chapter 19.85 RCW, the Regulatory Fairness Act, requires an analysis of the economic impact proposed rules will have on regulated businesses. Preparation of an SBEIS is required when proposed rules will impose more than minor costs on businesses.

     "Minor cost" means a cost that is less than one percent of annual payroll or the greater of either .3 percent of annual revenue or $100.

     "Small business" means any business entity that is owned and operated independently from all other businesses and has fifty or fewer employees.

     INDUSTRY ANALYSIS: The proposed rule impacts businesses that commercially apply pesticides (commercial applicators), perform wood destroying organism inspections (structural pest inspectors) and/or distribute pesticides (pesticide dealers). The department has analyzed the proposed rule amendment and has determined that costs are not more than minor on regulated businesses.

     INVOLVEMENT OF SMALL BUSINESSES: Small businesses have been involved in writing the proposed rules and in providing the department with the expected costs associated with the changes. The fee proposal was presented to the pesticide advisory board and other groups on multiple occasions. The 2012 legislature gave approval for the fee proposal to move forward. An electronic survey on the economic impact of the proposed fee was issued to all commercial applicators and structural pest inspectors for which WSDA had an e-mail address. In addition, pesticide dealers were sent a letter requesting that they complete the on-line survey.

     COST OF COMPLIANCE: Under this proposed rule, individuals who take pesticide or SPI license exams will pay $25/testing session regardless of the number of exams taken. While it is possible to pass all exams in just one testing session, many individuals must retake failed exams. Some businesses responded that they will pay this fee for their employees while others will require the employee to pay the fee. A majority of survey respondents (sixty-five percent) said they will only pay the fee one time.

     There were one hundred forty-six responses to the on-line survey with ninety percent identifying as a small business (less than fifty employees) and ten percent as a large business (fifty or greater employees). There was a distinct difference in the responses by small vs. large businesses. Those identifying as a large business responded that they would be more affected by the change than those identifying as a small business. The low number of large business responders (fourteen) may be somewhat of a factor.

     A majority of survey respondents (seventy-six percent) said they would not lose sales, revenue or have a decrease in profit as a result of this new fee (seventy-nine percent of small businesses and thirty-six percent of large businesses).

     Almost fifty-five percent responded that they would not incur additional costs to comply with this fee (fifty-nine percent of small businesses and fifteen percent of large businesses).

     JOBS CREATED OR LOST: Under RCW 19.85.040, agencies must provide an estimate of the number of jobs that will be created or lost as the result of compliance with the proposed rules. In collecting information from representative small businesses through an on-line survey, seventy-six percent estimated no gain and eighty-eight percent estimated no loss of employees. Of those that estimate a loss of employees (eight), the average loss was 2.75 employees. Of the few large business[es] that responded, eighty-eight percent estimated no gain and fifty percent estimated no loss.

     DISPROPORTIONATE IMPACT TO SMALL BUSINESSES: A majority of survey respondents (seventy-six percent) said they would not lose sales, revenue or have a decrease in profit as a result of this new fee (seventy-nine percent of small businesses and thirty-six percent of large businesses). Of the twenty-one small businesses that responded to the question of their cost per one hundred dollars of sales, the results were as follows:

Unknown or did not calculate	12
Less than $1	5
$1	1
$5	1
$10	2

     The costs small businesses will incur to comply with the proposed rule are not disproportionate to those incurred by large businesses.

     CONCLUSION: To comply with chapter 19.85 RCW, the Regulatory Fairness Act, the certification and training program has analyzed the economic impact of the proposed rules on small businesses and determined that there is no more than a minor impact. In addition, the program determined that there is not a disproportionate [impact] on small vs. large businesses.

     Please contact Margaret Tucker if you have any questions at (360) 902-2015 or mtucker@agr.wa.gov.

     A copy of the statement may be obtained by contacting Margaret Tucker, P.O. Box 42560, Olympia, WA 98504-2560, phone (360) 902-2015, fax (360) 902-2093, e-mail mtucker@agr.wa.gov.

     A cost-benefit analysis is not required under RCW 34.05.328. WSDA is not a listed agency under RCW 34.05.328 (5)(a)(i).

September 5, 2012

Ted Maxwell

Acting Assistant Director

Pesticide Management Division

OTS-4997.1

AMENDATORY SECTION(Amending WSR 03-22-029, filed 10/28/03, effective 11/28/03)

WAC 16-228-1540   What are the requirements for pesticide examinations?   (1) An examination fee of ((ten)) twenty-five dollars shall be paid prior to administration of any pesticide or structural pest inspector license examinations ((at other than a regularly scheduled examination session. Scheduled exam sessions occur every Tuesday at the Olympia and Yakima pesticide management division offices and at other offices as scheduled)). The department reserves the right to restrict the number of applicants examining at any given time.

     (2) Any individual who fails any pesticide licensing examination twice shall be required to wait at least fourteen days before retaking that examination a third time. Subsequent testing shall be at the director's discretion.

     (3) An applicant shall complete the application form for a pesticide or structural pest inspector license and pay the required license application fee ((prior to being given)) and testing fee at the time pesticide or structural pest inspector examinations are given, unless prior arrangements have been made.

     (4) Pesticide and structural pest inspector examination scores shall not be released by the department until the license application fee ((has)) and testing fee have been paid.

[Statutory Authority: Chapters 17.21, 15.58, 34.05 RCW. 03-22-029, § 16-228-1540, filed 10/28/03, effective 11/28/03. Statutory Authority: Chapters 15.58, 17.21 RCW. 00-22-073, § 16-228-1540, filed 10/30/00, effective 11/30/00. Statutory Authority: Chapters 15.54, 15.58 and 17.21 RCW. 99-22-002, § 16-228-1540, filed 10/20/99, effective 11/20/99.]