The Senate convened first and began by taking up a list of appointees from Gov. Scott Walker. The Senate confirmed the appointees en masse, 18-15 along party lines. Of note, Ellen Nowak was confirmed as Public Service Commissioner, and Georgia Maxwell was confirmed as Labor and Industry Review Commissioner.
The legislature also approved three bills. The Senate went first, making a number of changes to the bills (see below). The Assembly then convened early in the morning on Wednesday and finished debating and voting on the bills around 8:15 a.m on Wednesday. The Assembly voted to concur in the amended versions of the bills passed by the Senate earlier in the night.
Senate Bill 883, with two amendments, includes provisions related to the Department of Transportation (DOT) and Department of Revenue (DOR). The bill passed the Senate 18-15, along party lines. In the Assembly, the bill passed largely along party lines, with Rep. Todd Novak (R-Dodgeville) the only Republican voting no.
SB 883 provides that for Southeast Wisconsin freeway megaprojects, major highway development projects, and certain state highway rehabilitation projects for which DOT spends federal money, federal money must make up at least 70 percent of the aggregate funding for those projects, unless an alternative plan is approved by the Joint Finance Committee (JFC). The bill also eliminates the ability to transfer funding between state and federal highway programs and gives DOT oversight over local projects.
SB 883 allows pass-through entities to elect to be taxed at the entity level for purposes of the state’s income and franchise taxes beginning in 2018 for tax-option corporations and 2019 for other entities.
The bill also clarifies that the recent U.S. Supreme Court decision in South Dakota v. Wayfair, Inc. triggers Wisconsin statutory provisions allowing DOR to collect state sales and use taxes from online out-of-state retailers. The bill also mirrors the South Dakota language from the Wayfair decision exempting retailers with annual gross sales into this state less than $100,000 or 200 or fewer transactions. The bill also gives JFC input in how the new individual income tax rates will be reduced according to the amount of online sales taxes collected and certified by DOR.
Senate Bill 886, with one amendment, codifies certain provisions related to public assistance programs and agencies’ federal waivers. The Senate passed the bill 18-15, along party lines. Again, Novak was the only Republican to vote no in the Assembly.
SB 886 originally required legislative oversight when state agencies submit requests to federal agencies for waivers and/or amendments to waivers. Senate Am. 2 narrows the legislative oversight of waivers to apply to the Department of Health Services (DHS) only.
The bill also requires by statute DHS to implement the BadgerCare reform waiver as approved by the federal government in October by placing certain provisions of the waiver into statute. DHS must implement the wavier by Nov. 1, 2019.
Despite pushback from the health care industry, the bill also passed changes to the state’s Medical Assistance program. The bill requires a 14-day JFC passive review process if DHS seeks an amendment to the state’s Medical Assistance plan or a change to the reimbursement rate for making a supplemental payment to a provider under the Medical Assistance program with an expected fiscal effect of more than $7,500,000 from all revenue sources over a 12-month period.
SB 886 further incorporates into statute DHS rules requiring drug screening, testing, and treatment requirements under the FoodShare employment and training program.
The bill requires the Office of the Commissioner of Insurance to implement the approved waiver request for the Wisconsin Health Care Stability Plan, a $200 million state-based reinsurance program for health carriers.
The bill eliminates the authority of the Department of Children and Families (DCF) secretary to approve DCF plans to reallocate funds from federal moneys received under the Temporary Assistance for Needy Families (TANF) block grant program. Instead, JFC must approve the reallocation of TANF funds.
SB 886 eliminates the Department of Workforce Development’s (DWD) authority to establish waivers from work search and registration requirements for eligibility for unemployment insurance and codifies the current waivers contained in DWD’s rules. The bill also codifies the requirement that a claimant provide verification of having complied with work search and registration requirements.
SB 886 also separates the single appropriation for workforce training grants and services (Fast Forward) grants into separate appropriations for each program, including career and technical education grants, apprenticeships, and teacher development, among others. Senate Am. 2 provides that moneys encumbered under the Fast Forward appropriation before the effective date of the bill would not lapse and may be expended pursuant to the terms of the encumbrance.
Finally, early on Wednesday morning, the legislature passed a substitute amendment to SB 884. The bill passed the Senate 17-16 with Sen. Rob Cowles (R-Green Bay) the only Republican voting no. Again, Novak was the only Republican to vote no in the Assembly. The bill includes changes to:
The Senate substitute amendment made several changes to the original bill, removing provisions of the bill including:
- The repeal of the presumption that the agency has complied with all rule-making procedures.
- A requirement that final agency decisions in contested cases be approved by agency heads.
- A requirement that agencies must list a report on all fees with its biennial budget request.
- A requirement for quarterly reports to JFC on agency expenditures.
The substitute amendment kept in place:
- The removal of agency deference, incorporating the 2018 Wisconsin Supreme Court decision Tetra Tech v. Department of Revenue.
- Provisions changing the process for agencies’ issuing guidance documents, as well as agency power to enforce them.
- The requirement that agencies provide citation for any interpretation of laws they provide.
- A provision allowing the Joint Committee on Administrative Rules (JCRAR) to suspend administrative rules multiple times. Under current law, JCRAR may not suspend a rule more than once.
The substitute amendment largely mirrors the original bill and requires JFC approval of any compromise or discontinuance of an action pursued by the Department of Justice (DOJ). (Current law requires approval from the governor.) Settlement plans my not concede the invalidity of a statue unless the Joint Committee on Legislative Organization approves. Actions for injunctive relief or proposed consent decrees are also subject to a 14-day passive review period by JFC. The legislation also removes the attorney general’s authority to expend settlement funds and instead automatically deposits any settlement funds directly into the general fund.
The legislature also may intervene in cases alleging that a state statute is unconstitutional, been preempted by federal law, or the validity of the statute is otherwise challenged.
The substitute amendment made some changes to the original bill, but largely kept in place changes to how board members are appointed to the Wisconsin Economic Development Corporation WEDC). The original bill provided that the chief executive officer of WEDC is appointed by the board of directors instead of the governor. The substitute amendment provides that the board will appoint the first CEO, then the governor will appoint all subsequent CEOs. The substitute amendment also keeps in place a provision from the original bill that eliminates the limit on the number of enterprise zones WEDC may designate.
The substitute amendment does not include the controversial original provision moving the 2020 presidential primary from April to March. The substitute amendment keeps in place provisions in the original bill codifying absentee voting, voter identification, military voting, and overseas voting changes.
The Senate also took up AB 365, related to preexisting conditions, with several amendments. The Alliance of Health Insurers and America’s Health Insurance Plans attempted to address concerns with the flawed bill which passed the Assembly. The Senate amended the bill to partially address some of the concerns, but the bill still had flaws. Ultimately, the bill failed on the floor in a 16-17 vote. Sens. Dave Craig (R-Big Bend) and Chris Kapenga (R-Delafield) joined all Democrats in voting no.