MR8 AB1: Bill Text

LRB-4268/1

ALL:all:all

March 2008 Special Session

2007 - 2008 LEGISLATURE

Assembly BILL 1

March 12, 2008 - Introduced by Committee on Assembly Organization, by request of Governor James E. Doyle.

AB1,1,11 An Act to repeal 20.435 (4) (gp), 49.45 (5m) (ag) and 146.99; to amend 13.101 (6) (a), 20.866 (1) (u), 25.69, 46.27 (9) (a), 46.27 (10) (a) 1., 46.275 (5) (a), 46.275 (5) (c), 46.283 (5), 46.284 (5) (a), 46.485 (2g) (intro.), 49.45 (2) (a) 17., 49.45 (5m) (am), 49.45 (6m) (ag) (intro.), 49.45 (6v) (b), 49.45 (6x) (a), 49.45 (6y) (a), 49.45 (6y) (am), 49.45 (6z) (a) (intro.), 49.45 (8) (b), 49.45 (24m) (intro.), 49.45 (52), 49.472 (6) (a), 49.472 (6) (b), 49.473 (5), 71.22 (4) (n), 71.22 (4) (o), 71.22 (4) (p), 71.22 (4) (q), 71.22 (4) (r), 71.22 (4) (s), 71.22 (4) (t), 84.013 (2) and 84.014 (2); to repeal and recreate 71.26 (2) (b); and to create 13.101 (18), 20.395 (6) (ac), 20.435 (4) (xc), 20.866 (2) (uut), 25.17 (1) (gs), 25.77 (11), 25.772, 49.45 (58), 50.375, 71.22 (9a), 71.22 (9c), 71.22 (9d), 71.22 (9e) and 84.557 of the statutes; relating to: state finances and appropriations.

Analysis by the Legislative Reference Bureau

education

This bill converts the source for all funding for public library system aid in the 2008-09 fiscal year from the general fund to the universal service fund.

Health and human services

Under current federal and state law, Medical Assistance (MA) is a jointly funded, federal-state program, including BadgerCare Plus, that the Department of Health and Family Services (DHFS) administers to provide health care benefits to eligible individuals with very low incomes and few assets, (generally, pregnant women, certain children, certain parents or caretaker relatives, certain adults under age 21 who were in foster care, migrant workers and their dependents, and elderly or disabled individuals). The state share of MA is paid from a combination of general purpose revenues, program revenues from hospital assessments, and segregated funds under the MA trust fund.

Under current law, DHFS annually assesses hospitals a total of $1,500,000, in proportion to each hospital's respective gross private-pay patient revenues during the hospital's most recent fiscal year. Moneys from the assessments are credited to a program revenue appropriation account, from which is paid a portion of MA program benefits, certain long-term care MA pilot projects, and services under the Family Care Program.

Currently, under MA, DHFS must distribute not more than $2,256,000 in each fiscal year to provide supplemental funds to rural hospitals and to critical access hospitals that have a high utilization of inpatient services by patients whose care is provided from governmental sources.

This bill eliminates the current annual hospital assessment and the associated program revenue appropriation account and, instead, authorizes DHFS to levy, enforce, and collect assessments on the gross patient revenue of hospitals, based on claims information collected by an entity from hospitals under the laws relating to health care information or based on any other source that is approved in the state Medicaid plan. Under the bill, the entire assessment for fiscal year 2007-08 must be paid by June 1, 2008, and thereafter assessments must be paid by September 1, 2008, December 1, 2008, March 1, 2009, and June 1, 2009. DHFS must verify the amount of each hospital's gross patient revenue and determine the amount of the assessment owed by each hospital based on a uniform rate applicable to total gross patient revenue that DHFS estimates will yield $205,532,800 in fiscal year 2007-08 and $214,226,000 in fiscal year 2008-09. DHFS may allow delayed payment by hospitals that are unable to pay by the assessment dates; a DHFS determination that a hospital may not make a delayed payment is not subject to an administrative appeal process. If DHFS determines that any portion of the revenue needed to provide MA program benefits and payment increases for inpatient or outpatient hospital services as fee for service or through health maintenance organizations (HMOs) or to support the MA Program is not eligible for the federal Medicaid share, DHFS must refund that amount to hospitals in proportion to each hospital's assessment payment. The assessments must be deposited into a separate, nonlapsible trust fund, as created in the bill (the hospital assessment fund).

Moneys from the hospital assessments deposited in the hospital assessment fund are, under the bill, appropriated in the amounts of $145,032,800 in fiscal year 2007-08 and $147,726,500 in fiscal year 2008-09 to provide the MA nonfederal share for increased payments, in excess of the aggregate inpatient and outpatient MA hospital payment rates in effect in fiscal year 2006-07, and refunds to hospitals for services provided under MA. They are also transferred to the MA trust fund, less any refunds required to be made, and appropriated to provide $58,500,000 in fiscal year 2007-08 and $65,000,000 in fiscal year 2008-09, for a portion of MA program benefits and to increase (together with federal Medicaid matching moneys) the amount of moneys DHFS must distribute to rural hospitals for fiscal year 2007-08 and each fiscal year thereafter, by $3,000,000. The general program revenue appropriation account for MA program benefits is decreased by $60,000,000 in fiscal year 2007-08 and by $62,500,000 in fiscal year 2008-09. The Joint Committee on Finance (JCF) may not transfer moneys from the hospital assessment fund.

The bill requires HMOs, in connection with the hospital assessment, to pay increased rates to hospitals for inpatient and outpatient services provided to MA recipients. The bill requires DHFS to develop a methodology for HMOs to use in calculating these rate increases. Under the bill, the HMOs must make prospective monthly payments to hospitals for the rate increases, then must adjust the payment amounts based on actual utilization of hospital services by MA recipients enrolled in the HMO. The bill provides that if an HMO and hospital cannot agree on the amount of a payment adjustment, DHFS must, upon the request of either the HMO or hospital, determine the amount. The DHFS determination is subject to administrative review.

Under the bill, DHFS must report, by December 31, 2008, and by December 31, 2009, to JCF all of the following information for the immediately previous state fiscal year: (1) the total amount of hospital assessments collected; (2) the total amount of assessments collected from each hospital; (3) the total amounts that DHFS determines were paid to HMOs for increased MA payments to hospitals; (4) the total amount of these payments made to each hospital by HMOs; (5) the total amount of these payments made to each hospital and the portion of the capitated payments made to HMOs for inpatient and outpatient hospital services from general purpose revenues; (6) the total amounts, including amounts under (3), that DHFS determines were paid to HMOs for MA payments to hospitals; and (7) the results of any audits conducted by DHFS concerning these payments to HMOs and any actions taken by DHFS as the result of such an audit.

On November 23, 1998, Wisconsin and other states agreed to a settlement of lawsuits brought against the major U.S. tobacco product manufacturers. Under the tobacco settlement agreement, the state was to receive annual payments from the U.S. tobacco product manufacturers in perpetuity. 2001 Wisconsin Act 16 authorized the secretary of administration to sell the state's right to receive payments under the tobacco settlement agreement. Moneys received from the sale were required to be deposited into the permanent endowment fund, a fund created in 2001. Currently, the first $50,000,000 of moneys deposited into the fund is transferred to the Medical Assistance trust fund in each fiscal year.

The bill increases the amount that is transferred from the permanent endowment fund to the MA trust fund to $65,000,000 in each fiscal year and also reduces general purpose revenue funding for the MA program by $15,000,000 in each year of the 2007-09 fiscal biennium.

State Government

Under current law, after enactment of the biennial budget act, if the secretary of administration determines that authorized expenditures will exceed revenues in the current or forthcoming fiscal year by more than 0.5 percent of estimated general purpose revenue appropriations for that fiscal year, the governor must submit a bill making recommendations for correcting the imbalance between projected revenues and authorized expenditures. This bill increases the threshold during the remainder of the 2007-09 fiscal biennium to 2 percent of estimated general purpose revenue appropriations for a fiscal year.

Currently, in any fiscal year, the secretary of administration may temporarily reallocate moneys to the general fund from other state funds in an amount not to exceed, at any one time, 5 percent of the total general purpose revenue appropriations for that fiscal year. This bill increases that amount to 10 percent during the 2007-09 fiscal biennium.

2007 Wisconsin Act 20 required the secretary of administration to lapse or transfer to the general fund from appropriations to almost all executive branch state agencies, other than sum sufficient appropriations and appropriations of federal revenues, an amount equal to $200,000,000 during the 2007-09 fiscal biennium and $200,000,000 during the 2009-11 fiscal biennium.

The bill requires the secretary of administration to make additional lapses or transfers to the general fund from appropriations to all executive branch state agencies, other than sum sufficient appropriations and appropriations of federal revenues, in an amount equal to $330,400,000 during the 2007-09 fiscal biennium and $330,400,000 during the 2009-11 fiscal biennium.

The bill, however, provides that not more than a total of $293,000,000 may be lapsed or transferred, under this act and 2007 Wisconsin Act 20, to the general fund from appropriations to the Department of Transportation (DOT) during the 2007-09 fiscal biennium.

Current statutes contain a rule of proceeding governing legislative action on certain bills. Generally, the rule provides that no bill may be adopted by the legislature if the bill would cause general purpose revenue expenditures in a fiscal year, less amounts transferred to the budget stabilization fund in that fiscal year, to exceed the sum of taxes and departmental revenues deposited in the general fund in that fiscal year. This bill includes the balance of the budget stabilization fund for the purpose of calculating the cap for general purpose revenue expenditures during each fiscal year of the 2007-09 fiscal biennium.

Under current law, certain excess general purpose revenues, net proceeds from the sale of state buildings, structures, or land, and net proceeds from the sale of state surplus property are deposited into the budget stabilization fund. This bill provides that, if the projected balance of the general fund on June 30, 2008, or June 30, 2009, is less than $65,000,000, the secretary of administration may transfer any amount of moneys from the budget stabilization fund to the general fund.

Taxation

This bill disallows certain deductions, for income and franchise tax purposes, for amounts paid to a real estate investment trust and for amounts paid to a regulated investment company.

transportation

This bill requires the secretary of administration to transfer $5,000,000 from the transportation fund to the general fund in fiscal year 2007-08.

This bill also prohibits JCF from supplementing any DOT appropriation in fiscal year 2007-08, for purposes relating to implementation of the federal REAL ID Act of 2005, unless after the supplement there remains unexpended in the JCF appropriation, for fiscal year 2007-08, at least $5,000,000 of the estimated expenditures in this appropriation relating to implementation of the federal REAL ID Act of 2005.

Current law authorizes the state to contract public debt (issue general obligation bonds) for purposes of funding major highway projects, southeast Wisconsin freeway rehabilitation projects, and state highway rehabilitation projects, subject to specified limitations. On some of this debt, principal and interest costs incurred in financing the debt (debt service) is paid from the general fund, and on some of this debt the debt service is paid from the transportation fund.

This bill authorizes the state to contract up to an additional $190,000,000 in public debt for purposes of funding major highway projects, southeast Wisconsin freeway rehabilitation projects, and state highway rehabilitation projects. Debt service on this additional debt is paid from the general fund.

This bill decreases DOT state funds appropriations for major highway projects, southeast Wisconsin freeway rehabilitation projects, and state highway rehabilitation projects. The bill also requires the secretary of administration and DOT to increase revenue estimates for certain other appropriations, and for available general obligation bond proceeds, for major highway projects, southeast Wisconsin freeway rehabilitation projects, and state highway rehabilitation projects. The appropriation decreases are not included in establishing DOT's appropriation base level for the respective appropriations when DOT submits its 2009-11 biennial budget request.

For further information see the state and local fiscal estimate, which will be printed as an appendix to this bill.

The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:

AB1, s. 1 Section 1. 13.101 (6) (a) of the statutes is amended to read:

AB1,6,17 13.101 (6) (a) As an emergency measure necessitated by decreased state revenues and to prevent the necessity for a state tax on general property, the committee may reduce any appropriation made to any board, commission, department, or the University of Wisconsin System, or to any other state agency or activity, by such amount as it deems feasible, not exceeding 25% of the appropriations, except appropriations made by ss. 20.255 (2) (ac), (bc), (bh), (cg), and (cr), 20.395 (1), (2) (cq), (eq) to (ex) and (gq) to (gx), (3), (4) (aq) to (ax), and (6) (ac), (af), (aq), (ar), and (au), 20.435 (6) (a) and (7) (da), and 20.445 (3) (a) and (dz) or for forestry purposes under s. 20.370 (1), or any other moneys distributed to any county, city, village, town, or school district. Appropriations of receipts and of a sum sufficient shall for the purposes of this section be regarded as equivalent to the amounts expended under such appropriations in the prior fiscal year which ended June 30. All functions of said state agencies shall be continued in an efficient manner, but because of the uncertainties of the existing situation no public funds should be expended or obligations incurred unless there shall be adequate revenues to meet the expenditures therefor. For such reason the committee may make reductions of such appropriations as in its judgment will secure sound financial operations of the administration for said state agencies and at the same time interfere least with their services and activities.

AB1, s. 2 Section 2. 13.101 (18) of the statutes is created to read:

AB1,6,21 13.101 (18) Notwithstanding sub. (4), the committee may not transfer moneys from the appropriation account under s. 20.435 (4) (xc) to another appropriation account.

AB1, s. 3 Section 3. 20.005 (3) (schedule) of the statutes: at the appropriate place, insert the following amounts for the purposes indicated: - See PDF for table

AB1, s. 4 Section 4. 20.395 (6) (ac) of the statutes is created to read:

AB1,7,9 20.395 (6) (ac) Principal repayment and interest, major highway projects and southeast Wisconsin freeway and state highway rehabilitation projects, state funds. From the general fund, a sum sufficient to reimburse s. 20.866 (1) (u) for the payment of principal and interest costs incurred in financing major highway projects, southeast Wisconsin freeway rehabilitation projects, and state highway rehabilitation projects, as provided under ss. 20.866 (2) (uut) and 84.557, and to make payments under an agreement or ancillary arrangement entered into under s. 18.06 (8) (a).

AB1, s. 5 Section 5. 20.435 (4) (gp) of the statutes is repealed.

AB1, s. 6 Section 6. 20.435 (4) (xc) of the statutes is created to read:

AB1,8,2 20.435 (4) (xc) Hospital assessment fund; hospital payments and refunds. Biennially, from the medical assessment trust fund, the amounts in the schedule for increased payments and refunds to hospitals and for higher capitated payment rates under s. 49.45 (58) (a), as the Medical Assistance nonfederal share, in order to increase payment rates in excess of the aggregate inpatient and outpatient hospital payment rates in effect in fiscal year 2006-07 for services provided by hospitals under the Medical Assistance program administered under subch. IV of ch. 49.

AB1, s. 7 Section 7. 20.866 (1) (u) of the statutes, as affected by 2007 Wisconsin Act 20, is amended to read: