December 6, 2018
Assembly Bill 1069/ Senate Bill 883
Assembly Vote: 57-27
Senate Vote: 18-15
- Requires any southeast Wisconsin freeway megaproject, major highway development, and certain state highway rehab projects using federal money be paid for with at least 70 percent of aggregate federal funding. The bill is the latest provision aimed at ensuring the kinds of bloated cost overruns that plagued the state Department of Transportation in previous years don’t happen again. In effect, more federal dollars will be used on fewer projects, with the goal of ensuring that spending on costly federal regulations is minimized.
- Prohibits the state Department of Transportation from making transfers of state and federal funding between highway programs.
- Cements law requiring the state Department of Revenue to determine the amount of sales tax collected on out-of-state retailers, which is to be used to offset individual income tax rates. Rates will be reduced in proportion to taxes paid. DOR then must certify its findings to the secretary of administration, the governor and the Legislature. The bill follows the recent U.S. Supreme Court’s ruling upholding South Dakota law requiring collection of state sales and use taxes. The new collections will be applied to any out-of-state seller conducting 200 or more transactions in Wisconsin annually, or making more than $100,000 in sales in Wisconsin in one year.
- Allows pass-through businesses to be taxed at the 7.9 percent corporate tax rate on net income reportable to the state rather than the top income tax rate, if they so elect. While the state corporate rate is higher than the 7.65 percent top level income tax rate, S corporations, LLCs, and partnerships could realize tax savings thanks to the federal tax cuts of 2017. The pass-throughs would be eligible for other federal tax credits, off-setting their overall tax burden, since the individual write-off is now capped at $10,000. By definition, nearly all of the affected entities are small businesses with fewer than 50 employees. This is likely to increase tax collections at the state level.
AB 1070/ Senate Bill 884
Assembly Vote: 56-26
Senate Vote: 17-16
- Effectively eliminates the Office of the Solicitor General in the state Department of Justice, which has represented the state in certain appeals cases in state and federal courts.
- Requires parties suing the state on allegations that a law is unconstitutional or a violation of federal law to serve legislative leadership, not just the attorney general, as is currently required. The bill allows the Legislature to offer the legislative branch the opportunity to defend the statutes it passes and to communicate legislative intent. The Legislature’s Joint Committee on Legislative Organization may intervene, as well as obtain legal representation, on behalf of the state. A special counsel, not the attorney general, would represent legislators and staff members named in legal actions.
- Requires the Legislature’s Joint Committee on Finance to sign off on any settlement of a legal action the DOJ is prosecuting. Current law requires approval of the governor. Such settlements are prohibited from conceding that a statute is invalid without the JCLO’s approval. The finance committee will have two weeks to review actions for injunctive relief or proposed consent decrees. The legislation is aimed at ending so-called “Sue and Settle” practices of government agencies. That’s when unelected bureaucrats agree to settle a lawsuit from special interest groups, like environmental organizations, to go around the normal rule-making process, and can cost businesses and taxpayers a fortune, as well as lost liberties.
- Eliminates the ability of the governor and other state officers or agencies to nominate individuals for positions who have already been rejected by the Senate.
- Requires the Department of Administration to seek approval from the Legislature on changes to Capitol security, including the posting of firearm restrictions.
- Mandates that on even-numbered years each state agency file with the DOA the agency’s budget request for the upcoming biennium. Agencies must also list the fees they are authorized to charge and the amount of each fee.
- Increases the size of the state’s Group Health Insurance Board by four members, to be appointed by the leaders in both houses.
- Extends Department of Natural Resources grant requirements on municipal flood control programs.
- Gives the Wisconsin Economic Development Corporation (WEDC) board the authority to appoint the quasi-public agency’s CEO, not the governor, as is the case currently. The bill would return the power to the governor in September 2019. Gov.-elect Tony Evers, a Democrat, campaigned on getting rid of WEDC. The measure could prevent or at least delay him from doing so.
- Requires the JCLO to handle leases for legislative offices and legislative service agencies, removing the responsibility from the Department of Administration.
- Mandates all executive branch agencies, with the exception of the University of Wisconsin System Board of Regents, to submit a quarterly report to the Joint Finance Committee detailing expenditures for its state operations. The report specifically must note costs for supplies and services made at the discretion of the department head.
- WEDC must seek Joint Finance Committee approval of any proposed new enterprise zone or related tax credits. The bill also eliminates any restriction on the number of enterprise zones WEDC may designate, ending the 30-zone cap.
- Requires the state Department of Corrections to submit a report to the Legislature on who DOC pardoned or released from prison before completing their sentences. If an early release or pardoned inmate is convicted of a crime, Corrections would have to identify the individual and the offense.
- Requires agencies to cite statute or administrative rule for any statement or interpretation of law provided in agency informational material.
- Allows the Legislature to request an independent economic impact analysis of a rule, detailing how much its implementation would cost those subjected to it.
- Ends the statutory assumption that a state agency complied with the required rule-making procedures when promulgating a new regulation.
- Spells out that agency plans that are submitted to the federal government in compliance with federal law (compliance plans) cannot be used by bureaucrats to promulgate new rules without explicit statutory authority to do so.
- Gives the Legislature’s Joint Committee for Review of Administrative Rules the authority to suspend a rule multiple times. Currently, a rule is automatically enacted without legislative action killing it. Permanent suspensions still require legislation.
- Prohibits an agency from giving a hearing examiner final authority in a contested case. Final decisions must be approved, signed, and dated by the secretary of the agency.
- Codifies verification procedures of Wisconsin’s voter ID law.
- Requires agencies to provide lists of committee members selected to provide advice in rule-making. The bill aims to identify individuals employed or engaged in special interest campaigns that may run counter to the state’s interests.
- Prohibits courts from according deference, or simply taking the word, of agency interpretations of law in legal disputes. The bill establishes a number of requirements on agency use of so-called “guidance documents,” specifically defining the documents used by bureaucrats to explain rules and regulations. The bill requires agencies to submit proposed guidance documents to the Legislative Reference Bureau for publication and to allow a period for written public comment. Moreover, it spells out that guidance documents do not have the force of law, contrary to what bureaucrats have previously attempted to claim.
Assembly Bill 1072/ Senate Bill 886
Assembly Vote: 59-32
Senate Vote: 18-15
The bill generally provides the Legislature with oversight of the implementation of welfare reform programs Gov. Scott Walker and the Republican-controlled Legislature have forged over the past eight years.
- Requires the state Department of Health Services to implement the BadgerCare Reform waiver approved in October by the Trump administration. The program requires childless adults receiving taxpayer-funded health care to be working, training for work, or otherwise in community engagement activities. The reform law also includes a nominal $8 monthly premium for households receiving the benefits. DHS also must implement illegal substance screening, testing, and treatment for able-bodied adults seeking to participate in the state FoodShare employment and training program known as FSET.
- Requires the state’s Commissioner of Insurance to submit reports and provide oversight activities required by the federal government in the implementation and maintenance of Wisconsin’s reinsurance program.
- Prohibits the state Department of Health Services from changing the state’s Medical Assistance plan or altering reimbursement rates to providers without submitting the proposed changes to the finance committee. Rate changes or payments of about $1 million require approval of the Legislature.
- Gives the Legislature the sole authority to review reallocations of funding, including federal Temporary Assistance for Needy Families (TANF) block grants, removing that authority from the secretary of the state Department of Children and Families.
- Eliminates the state Department of Workforce Development’s authority to create waivers from work search requirements for certain filers of unemployment insurance benefits. The agency may change or get rid of a waiver, or create additional waivers, to comply with federal law. The bill codifies the requirement that claimants verify work search and registration requirements.
Bills Not Passed:
- Kimberly-Clark bailout: originally the stated purpose for calling the Legislature into Extraordinary Session, this bill never made it to the calendar this week after the votes to pass it were short in the Senate. MacIver has written about the proposal extensively: here, here, and here, just to name a few. The bill would have created an incentive package with tax credits, styled after the Foxconn deal, for paper product manufacturer Kimberly-Clark.
- Moving the date of the presidential primary: this bill was heard in the Joint Finance Committee on Monday, but it did not move forward to an executive session, where it would have received a vote. It would have de-coupled partisan and nonpartisan election dates, moving the presidential primary to March rather than April of 2019. (http://docs.legis.wisconsin.gov/2017/proposals/reg/asm/bill/ab1071)
- Pre-existing conditions: one bill to protect the insurance coverage of pre-existing conditions made it to the Senate floor, but was turned down on a 17-16 vote after two Republican Senators (Sen. Craig, Sen. Kapenga) joined all Democrats in voting against the bill. In the Assembly, it was a party-line vote, with all Democrats voting against prohibiting annual or lifetime limits on insurance benefits plans, and all Republicans voting for it. (http://docs.legis.wisconsin.gov/2017/related/proposals/sb883)