Feed for /2011/related/proposals/jr1_ab11 PDF
LRB-1426/1
CMH/RAC/TJD:all:all
January 2011 Special Session
2011 - 2012 LEGISLATURE
February 15, 2011 - Introduced by Committee on Assembly Organization, by
request of Governor Scott Walker. Referred to Joint Committee on Finance.
Referred to Joint Survey Committee on Retirement Systems.
AB11,1,4 1An Act relating to: state finances, collective bargaining for public employees,
2compensation and fringe benefits of public employees, the state civil service
3system, the Medical Assistance program, sale of certain facilities, granting
4bonding authority, and making an appropriation.
Analysis by the Legislative Reference Bureau
collective bargaining
Under current law, municipal employees have the right to collectively bargain
over wages, hours, and conditions of employment under the Municipal Employment
Relations Act (MERA), and state employees have the right to collectively bargain
over wages, hours, and conditions of employment under the State Employment
Labor Relations Act (SELRA). This bill changes MERA and SELRA with respect to
all employees except employees who are certain protective occupation participants
under the Wisconsin Retirement System or under a county or city retirement system
(public safety employees). This bill limits the right to collectively bargain for all
employees who are not public safety employees (general employees) to the subject of
base wages. In addition, unless a referendum authorizes a greater increase, any
general employee who is part of a collective bargaining unit is limited to bargaining
over a percentage of total base wages increase that is no greater than the percentage
change in the consumer price index. This bill also prohibits municipal employers
from collectively bargaining with municipal general employees in matters that are
not permitted under MERA.

Under SELRA and MERA, a collective bargaining unit elects a labor
organization as its representative once a majority of the employees in that collective
bargaining unit who are actually voting votes for that labor organization; that labor
organization remains the representative unless a percentage of members of the
collective bargaining unit supports a petition for a new election and subsequently
votes to decertify the representative. This bill requires an annual certification
election of the labor organization that represents each collective bargaining unit
containing general employees. If, at the election, less than 51 percent of the actual
employees in the collective bargaining unit vote for a representative, then, at the
expiration of the current collective bargaining agreement, the current
representative is decertified and the members of the collective bargaining unit are
nonrepresented and may not be represented for one year. This bill requires an initial
certification election for all represented state and municipal general employees in
April 2011.
Currently, except for an initial collective bargaining agreement, the terms of
collective bargaining agreements are generally two years for state and municipal
employees, and current law does not prohibit collective bargaining agreements from
being extended. This bill limits the term for general employees to one year and
prohibits the extension of collective bargaining agreements.
Current law provides that state and municipal employees who are represented
by a labor organization have the organization dues deducted from their salaries.
Except for salary deductions for public safety employees, this bill prohibits the salary
deductions for labor organization dues. This bill also allows a general employee to
refrain from paying dues and remain a member of a collective bargaining unit.
Under current law, University of Wisconsin (UW) System employees,
employees of the UW Hospitals and Clinics Authority, and certain home care and
child care providers have the right to collectively bargain over wages, hours, and
conditions of employment. This bill eliminates the rights of these employees to
collectively bargain.
Public Sector Retirement systems
Currently, employer and employee required contributions, and the earnings on
these contributions, fund the cost of providing retirement annuities to all public
employees who are covered under the Wisconsin Retirement System (WRS).
Employer required and employee required contribution rates are set on an annual
basis. This bill provides that the employee required contribution rate for general
participating employees and for elected and executive participating employees must
equal one-half of all actuarially required contributions, as determined by the
Employee Trust Funds Board. For protective occupation employees, the bill provides
that the employee required contribution rate must equal the percentage of earnings
paid by general participating employees.
Current law also requires the employer to pay all of the employer required
contributions, but permits the employer to also pay all or part of the employee
required contributions. This bill provides that an employer may not pay any of the
employee required contributions under the WRS or under an employee retirement
system of a first class city or a county having a population of 500,000 or more.

Currently, when a WRS participant terminates employment and becomes
eligible for a retirement annuity, assuming the participant does not receive a money
purchase annuity, the amount of the annuity is determined by multiplying the
participant's final average earnings by the participant's years of creditable service
and by a percentage multiplier. For a protective occupation participant, the
multiplier is either 2 percent or 2.5 percent, depending on whether the person is
covered by social security. For elected officials and executive participating
employees, the multiplier is 2 percent. For all other participants in the WRS, the
multiplier is 1.6 percent. This bill decreases the multiplier for elected officials and
executive participating employees from 2 percent to 1.6 percent for creditable service
that is performed on or after the bill's effective date.
Under current law, state employees become participating employees in the
WRS if they are expected to work at least one-third of what is considered full-time
employment by the Department of Employee Trust Funds (DETF) and have an
expected duration of employment of one year or more. If a state employee becomes
a WRS participating employee, the employee is also entitled to receive health
insurance under the Group Insurance Board (GIB) program. A current group of state
employees are appointed to state positions as limited term appointments in the state
civil service, which are provisional appointments or appointments for less than 1,044
hours per year. This bill prohibits limited term appointments from participating in
the WRS, as well as prohibits these employees from receiving health insurance under
the GIB program.
This bill also requires the secretary of administration, the director of the Office
of State Employee Relations (OSER), and the secretary of employee trust funds to
study the WRS. The study must specifically address establishing a defined
contribution plan as an option for WRS participating employees; establishing
different vesting periods for employer contributions and eligibility for WRS
retirement benefits; modifying the supplemental health insurance premium credit
program for state employees; and permitting participating employees to not make
employee required contributions under the WRS and limiting retirement benefits for
these employees to a money purchase annuity. Under the bill, no later than June 30,
2012, the secretary of administration, the director of OSER, and the secretary of
employee trust funds must report their findings and recommendations to the
governor.
Public sector group insurance
Currently, state employees, as well as employees of public authorities created
by the state, receive health care coverage under plans offered by GIB, which plans
are assigned to one of three tiers depending on the employee's premium costs. The
employer share of premium costs for employees who work more than 1,565 hours a
year is an amount not less than 80 percent of the average premium costs under the
various health care coverage plans. The amount for represented employees is subject
to collective bargaining and the amount for nonrepresented employees is established
in various compensation plans.
This bill provides that the employer may not pay more than 88 percent of the
average premium cost of plans offered in the tier with the lowest employee premium

cost. For employees who work less than 1,566 hours a year, with exceptions, the
employer must pay an amount determined by the director of OSER. Under the bill,
the actual employer and employee share of premium costs is established on an
annual basis by the director of OSER.
For the remainder of 2011, however, beginning in April 2011, the bill provides
that state employees, as well as employees of public authorities created by the state,
who work more than 1,565 hours a year shall pay $84 a month for individual coverage
and $208 a month for family coverage for health care coverage under any plan offered
in the tier with the lowest employee premium cost; $122 a month for individual
coverage and $307 a month for family coverage for health care coverage under any
plan offered in the tier with the next lowest employee premium cost; and $226 a
month for individual coverage and $567 a month for family coverage for health care
coverage under any plan offered in the tier with the highest employee premium cost.
UW System graduate assistants and teaching assistants must pay half of these
amounts. Employees who work less than 1,566 hours a year are required to pay the
same amount for health care coverage during 2011 that they were required to pay
before the bill's effective date.
The bill further provides that a local government employer who participates in
the local government health insurance plan offered by GIB may not participate in the
plan if it intends to pay more than 88 percent of the average premium cost of plans
offered in any tier with the lowest employee premium cost.
This bill requires the director of OSER and the secretary of employee trust
funds to study the feasibility of offering to employees eligible to receive health care
coverage under the GIB plans, beginning on January 1, 2013, the option of receiving
health care coverage through either a low-cost health care coverage plan or through
a high-deductible health plan and the establishment of a health savings account, as
described under federal law. The study must also examine the feasibility of requiring
state employees to receive health care coverage through a health benefits exchange
established pursuant to the federal law and creating a health care insurance
purchasing pool for all public employees and individuals receiving health care
coverage under the Medical Assistance program. No later than June 30, 2012, the
director and secretary shall report their findings and recommendations to the
governor.
Current law also provides that GIB may not enter into agreements to modify
or expand group insurance coverage in a manner that conflicts with applicable
statutes, or DETF rules, or that materially affects the level of premiums required to
be paid by the state or its employees or the level of benefits provided under any group
insurance coverage. This bill provides that this restriction does not prevent GIB
from encouraging participation in wellness or disease management programs under
any of its group insurance coverage plans. In addition, the bill provides that this
prohibition does not apply to GIB agreements relating to group insurance coverage
for the 2012 and 2013 calendar years.
This bill requires GIB to design health care coverage plans for the 2012
calendar year that, after adjusting for any inflationary increase in health benefit
costs, reduces the average premium cost of plans offered in the tier with the lowest

employee premium cost by at least 5 percent from the cost of such plans offered
during the 2011 calendar year. GIB must include copayments in the health care
coverage plans for the 2012 calendar year and may require health risk assessments
for state employees and participation in wellness or disease management programs.
This bill requires the secretary of employee trust funds to allocate $28,000,000,
from reserve accounts established in the public employee trust fund for group health
and pharmacy benefits for state employees, to reduce employer costs for providing
group health insurance for state employees for the period beginning on July 1, 2011,
and ending on December 31, 2011.
Current law permits GIB to contract with the Department of Health Services
(DHS) and other public or private entities for data collection and analysis services
related to health maintenance organizations and insurance companies that provide
health insurance to state employees. This bill permits GIB to contract for any other
consulting services related to plans it offers.
Currently, the attorney general, or his or her designee, serves on GIB. This bill
requires that the attorney general designee on GIB must be an attorney.
This bill provides that if DETF determines that an audit of its employee benefit
programs is necessary during the 2011-12 fiscal year, for the purpose of verifying the
eligibility of dependents covered under the programs, DETF must submit a written
request to the secretary of administration to expend an amount not exceeding
$700,000 to conduct the audit.
State Government
State civil service system
Under current law, the governor may declare a state of emergency if he or she
determines that an emergency exists resulting from a disaster or the imminent
threat of a disaster. This bill authorizes a state agency to discharge any state
employee who fails to report to work as scheduled for any three unexcused working
days during a state of emergency or who participates in a strike, work stoppage,
sit-down, stay-in, slowdown, or other concerted activities to interrupt the of
operations or services of state government, including specifically purported mass
resignations or sick calls. Under the bill, engaging in any of these actions constitutes
just cause for discharge.
Currently, the director of OSER has promulgated rules to establish a career
executive program. The program provides state agencies with highly qualified
executive candidates, provides outstanding administrative employees a broad
opportunity for career advancement, and provides for the mobility of such employees
among state agencies for the most advantageous use of their managerial and
administrative skills. Under current administrative rules, an appointing authority
may reassign a career executive employee from one career executive position to
another career executive position within the same state agency. This bill permits an
appointing authority to reassign an employee in a career executive position to a
career executive position in any state agency if the appointing authority in the state
agency to which the employee is to be reassigned approves of the reassignment.
This bill increases the number of unclassified division administrators by 35
FTE positions, decreases 36 FTE positions in executive branch agencies, which

positions are to be determined by the secretary of administration, expands the
definition of "division administrator" to include other managerial positions, and
permits the director of OSER to appoint either a deputy director or an executive
assistant in the unclassified service.
State finance
This bill increases the amount of state public debt that may be contracted to
refund any unpaid indebtedness used to finance tax-supported or self-amortizing
facilities from $309,000,000 to $474,000,000. Such refunded debt must be contracted
before July 1, 2011.
This bill reduces executive branch agency lapses and transfers to the general
fund for the 2009-11 fiscal biennium that were required under 2007 Wisconsin Act
20
from $200,000,000 to $121,000,000, as well as reduces the expenditure authority
of the Joint Committee on Finance (JCF) during the 2010-11 fiscal year by
$4,590,400 from its general purpose revenue supplemental appropriation.
This bill requires the secretary of administration, before July 1, 2011, to lapse
to the general fund, from executive branch appropriations, an amount equal to
$27,891,400; requires the cochairpersons of the Joint Committee on Legislative
Organization to lapse to the general fund, from appropriations to the legislature, an
amount equal to $717,700; requires the governor to lapse to the general fund, from
appropriations to the office of the governor, an amount equal to $37,500; and requires
the chief justice of the supreme court to lapse to the general fund, from
appropriations to the judicial branch, an amount equal to $1,153,400. The lapses
seek to capture employer savings resulting from increases in state employee
payments for health insurance and retirement contributions.
Other state government
Currently, this state owns and operates numerous heating, cooling, and power
plants that were constructed by the state to provide heating, cooling, and power to
state facilities. The Department of Administration (DOA) determines the method of
operation of these plants and may delegate this authority to any other state agency
that has managing authority for a plant. This bill permits DOA to sell or contract
for the operation of any such plant. The bill exempts such sales and contracts from
the requirement for approval of the Public Service Commission (PSC) that may
otherwise apply under current law. The bill provides that the net proceeds of any
sale, after retirement of any outstanding state debt and any necessary repayment of
federal financial assistance, is deposited in the budget stabilization fund. The bill
also allows DOA, at any time, to petition the PSC to regulate as a public utility any
person who purchases or contracts for the operation of any plant under the bill.
Under current law, the PSC has regulatory authority over public utilities, including
the authority to set rates for utility service.
health and human services
Medical Assistance
Under current law, DHS administers the Medical Assistance (MA) program,
which is a joint federal and state program that provides health services to
individuals who have limited resources. Some services are provided through

programs that operate under a waiver of federal laws related to medical assistance
(MA waiver programs). This bill requires DHS to study potential changes to the MA
state plan and to waivers of federal law relating to medical assistance for certain
purposes, including increasing the cost effectiveness and efficiency of care for the MA
program and MA waiver programs and improving the health status of individuals
who receive benefits under the MA program or an MA waiver program. If DHS
determines, as a result of the study, that revision of existing statutes or rules would
be necessary to advance any of the purposes for which the study was conducted, DHS
may promulgate rules to implement certain changes, including making certain
requirements, modifying benefits, revising provider reimbursement models,
developing standards and methodologies for eligibility, and reducing income levels
for purposes of determining eligibility. Before promulgating a rule, DHS must
submit the proposed rule and any plan developed as a result of the study to JCF for
review. DHS must submit an amendment to the state MA plan or request a waiver
of federal laws related to medical assistance, if necessary, to the extent necessary to
implement any proposal. If the federal Department of Health and Human Services
does not allow the amendment or does not grant the waiver, DHS may not put the
rule into effect or implement the proposal. To reduce the eligibility income levels to
a certain amount, DHS must request a waiver from the secretary of the federal
Department of Health and Human Services to permit DHS to have in effect eligibility
standards, methodologies, and procedures that are more restrictive than those in
place on March 23, 2010. If DHS does not receive approval for the waiver, DHS must
reduce the eligibility income levels for MA programs and MA waiver programs to 133
percent of the federal poverty line for adults who are not pregnant and not disabled,
as allowed under federal law. DHS may promulgate the rules as emergency rules.
Other health and human services
This bill eliminates the UW Hospitals and Clinics Board, a state agency
assigned the single duty to enter into a contractual services agreement with the UW
Hospitals and Clinics Authority to provide the services of state employees who are
in clerical, blue collar and nonbuilding trades, building trades crafts, security and
public safety, and technical collective bargaining units. The bill also transfers all
employees of the UW Hospitals and Clinics Board to the UW Hospitals and Clinics
Authority.
Public assistance
Reflecting the receipt of emergency contingency funds under the Temporary
Assistance for Needy Families (TANF) block grant program, this bill increases by
$37,000,000 the amount of TANF moneys allocated for the earned income tax credit.
Loading...
Loading...