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Hamilton Political Tidbits - Jan. 4, 2011

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Scott Walker was officially sworn into office this week as Wisconsin's 45th governor and the Legislature has begun the 2011-12 session. Within minutes after taking the oath of office, Gov. Walker declared an economic emergency and called a special session to pass legislation aimed at adding jobs and sending a message that "Wisconsin is open for business."

In the short two months between election night and inauguration, Gov. Walker unveiled numerous policies he plans to pursue soon after being sworn in and calling a special session focusing on job creation.

Those priorities include:

  • Revamping the Wisconsin Department of Commerce to make it more business-friendly;
  • Passing civil liability reforms to attract and retain businesses;
  • Creating major regulatory reforms that will provide more checks and balances on state agencies, particularly those which have been assailed by employers as creating obstacles to legitimate business development; and,
  • Eliminating state taxes on health savings accounts.

For details on the civil liability reforms, see the WCJC Special Session Analysis.

Special Session Links

This edition of Political Tidbits also covers Gov. Walker's cabinet selections, and new rules issued by the Environmental Protection Agency.

Visit Hamilton Consulting Group's Blog for timely news updates.

Legislature Begins 2011-12 Session; Gov. Walker Announces Special Session

The 2011-12 legislative session began on Monday with legislators and Gov. Scott Walker being sworn into office. Within minutes after taking the oath of office, Gov. Walker called the Legislature into a special session to pass legislation that will help Wisconsin's business climate.

The five policies areas Gov. Walker identified that will be included within the Special Session include:

  • Civil liability reform;
  • Regulatory reform;
  • Restructuring the Department of Commerce to make it more business friendly;
  • Eliminating taxes on health savings accounts, and;
  • Cutting taxes on small businesses.

Below is a discussion of Gov. Walker's plans for civil liability reform, regulatory reform and the Dept. of Commerce restructuring. The Hamilton Consulting Group will continue to monitor and provide information as the session progresses.

Gov. Walker Targets Civil Liability Reforms

Governor Scott Walker followed through on his promise to include significant civil justice reforms during the Special Session.

The bill's provisions include:

The legislation shows inclusion of the four above referenced issues plus a proposal addressing "frivolous lawsuits" and a proposal relating to health care issues. For details, see the WCJC Special Session Analysis.

The Special Session was scheduled to convene at 10:00 a.m. on Tuesday and is likely to run for many weeks, some of the time concurrent with the regular session.

Walker Unveils Wisconsin Economic Development Plan

Gov. Scott Walker recently announced his third piece of legislation for the upcoming Wisconsin is Open for Business Special Session. His first two include eliminating taxes on health savings accounts and regulatory reform.

The proposal replaces the Wisconsin Department of Commerce with the Wisconsin Economic Development Corporation.

Specifically, the legislation:

  • Creates a public authority called the Wisconsin Economic Development Corporation (WEDC);
  • Establishes the governance structure of the WEDC;
  • Establishes the powers and duties of the WEDC; and
  • Charges the WEDC with developing a plan for dissolving the Department of Commerce by July 1, 2011, transferring all economic development activities to the WEDC and regulatory functions to other state agencies.

The Wisconsin Economic Development Association (WEDA) and its partners released the Be Bold: The Wisconsin Competitiveness Study earlier this year, which helped shape much of the discussion about Wisconsin's economic development structure. WEDA also issued a release immediately following the Governor's announcement praising him for the initiative.

For more information, see Gov.-elect Walker's announcement.

Walker Outlines Regulatory Reform Plans

Gov. Scott Walker recently unveiled his second piece of legislation for the upcoming "Wisconsin is Open for Business Special Session." The proposal addresses regulatory reform.

Specifically, the legislation:

  • Limits broad rulemaking authority of state agencies.This proposal limits rulemaking authority of bureaucrats by providing that agencies may not draft rules or enforce regulations based on the department's general duties provisions. This will prevent situations where the Wisconsin Legislature has explicitly set certain thresholds or parameters, only to have bureaucrats issue regulations that go beyond their legislatively granted authority.
  • Allows challenges of state regulations outside of Dane County Circuit CourtThis proposal allows an aggrieved party to challenge a state agency rule or determination in a court outside of Dane County. Under current law, all regulations must be challenged solely in Dane County Circuit Court. If passed, the legislation will allow the aggrieved parties to file the lawsuit in the county where they reside.
  • Requires gubernatorial approval before the regulation has force of law.

Gov. Walker's proposal:

  • Requires that a statement of scope must be approved by the Governor as well as the policy-making individual or body before the scope statement is published in the Administrative Register.
  • Eliminates automatic approval of a statement of scope.
  • Requires an agency to prepare and obtain approval of a revised statement of scope if the agency changes the scope in any meaningful or measurable way.
  • Requires an agency to submit the proposed rule in final draft form to the Governor for approval before the rule may be submitted to the Legislature for review or filed with the Legislative Reference Bureau for publication. 

Governor Walker Announces Cabinet Selections

Gov. Scott Walker last week announced his selections to head the state agencies. Below are the names and background of each appointee:

Dept. of Administration
Rep. Mike Huebsch: Current Republican Assemblyman from La Crosse area; former Speaker of the Assembly.

Dept. of Natural Resources
Cathy Stepp: Former state Senator from 2002-06; currently Vice President of Magnum Truck and Equipment, and President of Stepp Consulting, LLC.

Dept. of Transportation
Rep. Mark Gottlieb: Current Republican Assemblyman from Port Washington; civil engineer.

Dept. of Revenue
Rick Chandler: Former Dept. of Revenue secretary under Gov. Tommy G. Thompson; currently a lobbyist for a number of business groups, including Wisconsin Realtors Association; recently has been serving on Gov.-elect Walker's Transition Team.

Dept. of Health Services
Dennis G. Smith: Former administrator of federal Center for Medicaid and State Operations at the Centers for Medicare and Medicaid under President George W. Bush; currently a Senior Fellow at the Heritage Foundation and Managing Director at Leavitt Partners in Washington, D.C.

Dept. of Commerce
Paul Jadin: Former Green Bay mayor and head of Green Bay Area Chamber of Commerce.

Dept. of Children and Families
Eloise Anderson: Former administrator of the Division of Community Services under Gov. Tommy G. Thompson from 1988-92; currently President of Anderson Resources Management Services in California; lecturer at California State University, Sacramento; former Director of the Project for American Family at the Claremont Institute.

Dept. of Agriculture, Trade, and Consumer Protection (DATCP)
Ben Brancel: Former Assembly Speaker from Portage area; former DATCP secretary under Gov. Tommy G. Thompson; farmer.

Dept. of Housing and Economic Development Authority (WHEDA)
Wyman Winston: Former WHEDA official; currently Senior Commercial Manager for Atlanta Development Authority.

Dept. of Workforce Development
Manuel "Manny" Perez: Currently co-owner of JNA Staffing, Inc.,

Dept. of Tourism
Stephanie Klett: Currently host of the "Discover Wisconsin" Television and Radio Series.

Dept. of Regulation and Licensing
Dave Ross: A lifelong Wisconsin resident who owned his own business for 20 years before being elected Mayor of Superior.

Dept. of Financial Institutions
Peter Bildsten: Grew up in Baraboo and is a 30-year veteran of the Wisconsin financial services industry, serving as chairman and CEO of First National Bank and Trust Company of Baraboo for six years before leading a successful merger with Wells Fargo Bank in 2002.

Dept. of Corrections
Gary Hamblin: Professional law enforcement officer for 39 years, serving with the Sawyer County Sheriff's Dept, as the Dane County Sheriff from 1997 to 2006, and as administrator of the Division of Law Enforcement Services with the state Department of Justice under Attorney General J.B. Van Hollen.

EPA: Wisconsin Areas Have Obtained 1997 Ozone 8-hour Standard

On Dec. 15, 2010, EPA published in direct final form its determination that the Milwaukee-Racine and Sheboygan areas have attained the 1997 8-hour ozone National Ambient Air Quality Standard (NAAQS). The Milwaukee-Racine area includes Milwaukee, Ozaukee, Racine, Washington, Waukesha, and Kenosha Counties. The Sheboygan area includes Sheboygan County.

This direct final rule will be effective Feb. 14, 2011, unless EPA receives adverse comments by Jan. 14, 2011. If adverse comments are received, EPA will withdraw the direct final rule and proceed with formal rulemaking on the determination.

The determinations are based on complete, quality-assured and certified ambient air monitoring data that show that the areas have monitored attainment of the 1997 8-hour ozone standard for:

  • The 2006-2008 monitoring period
  • The 2007-2009 monitoring period
  • The 2008-2010 monitoring period (using preliminary data available for 2010)

This determination of attainment is not equivalent to redesignations to attainment because EPA has not approved maintenance plans, nor has it found that the areas have met the other statutory requirements for redesignation. Thus, nonattainment requirements such as New Source Review will continue to apply.

However, certain requirements are being suspended:

  • The requirements for these areas to submit attainment demonstrations and associated reasonably available control measures (RACM);
  • Rreasonable further progress plans (RFP);
  • Contingency measures, and;
  • Other State Implementation Plan (SIP) revisions related to attainment of the standard are suspended.

These determinations also suspend the requirement for EPA to promulgate attainment demonstration, RFP, and any other attainment-related Federal Implementation Plans (FIPs) for these areas.

This determination may be short-lived considering expected revisions to the ozone standard. On Mar. 27, 2008, EPA promulgated a revised 8-hour ozone standard of 0.075 ppm. Below is a history of EPA's recent actions pertaining to the new 8-hour ozone standard:

In March 2009 a court granted EPA's request to stay the litigation on the new standard so EPA could review the standards and determine whether they should be reconsidered.

On Sept. 16, 2009 EPA announced reconsideration of the 2008 decision. The related designation process for that standard was stayed.

On Jan. 6, 2010 EPA proposed to set the level of the primary 8-hour ozone standard within the range of 0.060 to 0.070 ppm, rather than at 0.075 ppm.

On Dec. 8, 2010 EPA said it would delay issuing revised air quality standards for ozone until July 2011 so that it can consider further recommendations from a panel of scientific advisers.

For more information about the 8-hour ozone standard, visit the Hamilton Consulting Regulatory Website. 

EPA Moves Forward With Controversial Greenhouse Gas Regulations

The EPA on Dec. 23, 2010 announced its plans to move forward with regulating greenhouse gases under the Clean Air Act. The controversial rule will set significant new regulations on power plants and oil refineries.
For natural gas, oil, and coal-fired electric generating units (EGUs), the rules will establish new source performance standards for new and modified EGUs and emission guidelines for existing EGUs.

Under the "agreement" with 11 states (New York, California, Connecticut, Delaware, Maine, Massachusetts, New Mexico, Oregon, Rhode Island, Vermont, Washington) Washington, D.C., the City of New York, the Natural Resources Defense Council, the Sierra Club and Environmental Defense Fund, EPA will commit to issuing proposed regulations by July 26, 2011 and final regulations by May 26, 2012.
EPA is coordinating this action on greenhouse gases with a number of other required regulatory actions for traditional pollutants, including the Utility MACT rule, the Transport Rule and New Source Performance Standards for criteria pollutants.

For refineries, EPA has entered into an agreement with the same states and environmental groups to establish a different schedule for the agency to issue regulations addressing greenhouse gases from refineries.

This settlement agreement establishes a "comprehensive approach" of simultaneously addressing different types of air pollution (GHG, toxics, and criteria pollutants) from different points at the refinery at the same time and in accord with EPA's so-called Clean Air Act "obligations" to control emissions from this sector.

In addition to New Source Performance Standards for new and modified refineries, and emission guidelines for existing refineries, EPA will conduct a risk and technology review of current air toxic standards for refineries.
As part of the this settlement, EPA will also "resolve" the issues raised in an August 25, 2008 petition for reconsideration of the refinery New Source Performance Standard.

EPA will propose regulations on all of these issues by Dec. 15, 2011 and finalize regulations by Nov. 15, 2012. In early 2011, EPA will conduct "public and stakeholder data collection" from refineries.

News Clips

Walker's fate tied to economy: Milwaukee Journal Sentinel, Jan. 1, 2011. Incoming governor's success will be judged on fulfilling jobs promise, solving budget woes

Only 12 losing jobs from train cancellation: Milwaukee Journal Sentinel, Jan. 1, 2011. Wisconsin had said 80 jobs were in jeopardy.

Master Lock reassessing China: Milwaukee Journal Sentinel, Jan. 1, 2011. Milwaukee-based company finds it can compete better from U.S. soil.

Jobs and the community health (opinion): Milwaukee Journal Sentinel, Jan. 1, 2011. Five separate topics, but inescapably linked. Where goes the economy, goes the state budget. And we add a variety of life-and-death issues under the umbrella of community health.

Walker names full cabinet: Milwaukee Journal Sentinel, Dec. 30, 2011. Team includes lawmakers, former Thompson aides.

Winter tourism off to good start: Milwaukee Journal Sentinel, Dec. 30, 2011. Operators report uptick in business.

Cathy Stepp, outspoken critic of DNR, picked to head agency: Wisconsin State Journal, Dec. 30, 2010. Stepp is a former member of the state Natural Resources Board. She also served as state senator from 2002 to 2006.

U.S. N uclear Output Rises as NextEra Starts Wisconsin Reactor: Bloomberg, Dec. 22, 2010.