Scope statements
Employee Trust Funds
The Department of Employee Trust Funds (DETF) gives notice pursuant to s.
227.135, Stats., that it proposes to modify an existing administrative rule, specifically Wis. Admin. Code s.
ETF 20.25 (1) (a) and
(2). This proposed rule corresponds to an emergency rule being promulgated by DETF.
Subject
This proposed rule will affect the annual effective date of post-retirement annuity adjustments, or so-called “annuity dividends," under ss.
40.27 (2) and
40.28 (2), Stats.
Policy Issues
All Wisconsin Retirement System annuities are paid, in part, from the fixed retirement investment trust. Some annuitants also participate in the variable retirement investment trust. There are often great differences between the annual “fixed" and “variable" dividends, but adjustment to both types of annuity are made at the same time each year.
Previously, annuity dividends for both the fixed retirement investment trust and the variable retirement investment trust were effective on April 1 of each year and therefore appeared on the May 1 annuity check. The April 1 date was set by administrative rule. Last year the DETF revised its rule. Clearinghouse Rule #02-049, effective on October 1, 2002, amended s.
ETF 20.25 (1) (a) and
(2) to alter the April 1 date to read “March 1." See the Administrative
Register, September 2002, No. 561.
The change to the earlier effective date for dividends was made at the request of annuitants, who wanted to receive the benefits of dividend increases as soon as possible. The April 1 date was originally the earliest the DETF could make the changes each year. However, due to improved automation of the calculation and distribution of the dividends, it is now administratively feasible to make the adjustments a month earlier than was previously possible. In addition, the change from April 1 to March 1 is more in accord with the timing of the actuary's annual valuations.
The first dividend actually to be affected by the 2002 rule (CR #02-049) would be the dividend payable in early 2003. Projections indicate that, due in large part to the effect of three years of market declines, the fixed division dividend will likely be 0%. The annual change to variable division annuities, which is more volatile because it reflects only the past year's performance, will be negative and in the range of -25 to -30%. This means that the portion of an annuitant's annuity payable from the fixed division will not increase during 2003, while, if the annuitant receives a portion of his or her annuity from the variable annuity division, that portion of the annuity will be reduced.
Annuitants are understandably concerned about cuts to their annuities being made effective earlier this year than in previous years. The intention behind CR #02-049 was to give annuitants their dividends as early as possible. When drafting of the rule began in early 2002, the year-end market earnings were unknown. The DETF, Employee Trust Funds Board, Wisconsin Retirement Board and Teachers Retirement Board are therefore reconsidering CR #02-049 and how its short-term effects may be mitigated.
This scope statement is for a proposed rule that would amend s.
ETF 20.25 (1) (a) and
(2), again. An emergency rule is being promulgated to effectively block implementation of the new March 1 date for this year. Since the emergency rule can remain in effect only for a limited time, either a new permanent rule must be promulgated or, by default, March 1 will be the effective date for future dividends in 2004 and afterwards.
Objectives of the Rule. To avoid additional short-term harm to individual WRS annuitants who will already bear the effects of the market downturn though a zero percent fixed annuity dividend and a double-digit negative variable change.
The proposed rule would not change the new, lower, one-tenth of one percent threshold for prorated fixed dividends created by CR #02-049. For fixed division annuities effective during the immediately preceding year, the full dividend payable to long-term annuitants is prorated, based on the number of full months (out of a possible 12) that the annuity had been in effect. However, no prorated dividend was payable unless it was over a threshold of 1%. Increased automation makes it administratively feasible to adjust annuities by a smaller amount. So, the 2002 rule-making lowered the threshold to payment of a prorated dividend on an annuity from the fixed retirement from the previous 1% to one-tenth of a percent (0.1%). The DETF and Boards are not reconsidering that aspect of CR #02-049, which did not affect variable annuities at all.
Policy Analysis
The proposed rule would restore the status quo ante, with respect to dividend effective dates, so that annuity dividends would be payable on the same schedule as before CR #02-049 was promulgated. The DETF, Employee Trust Funds Board, Wisconsin Retirement Board and Teachers Retirement Board will consider whether the effective repeal of the provisions of CR #02-049 changing “April 1" to “March 1" should be permanent, temporary until some specified future date, or temporary depending on market conditions.
DETF and the Boards are also proceeding with an emergency rule, to which this proposed rule is a companion, to block implementation of the March 1 date during 2003.
Policy Alternatives to the Proposed Rule
The policy alternatives are to:
1. Do nothing and allow future annuity “dividends," whether positive or negative, to become effective March 1, 2004, and thereafter.
2. Change the effective date of the annual dividends from April 1 to March 1 but effective at some other time in the future.
3. Re-establish April 1 as the annual effective date for annuity dividends.
Statutory authority
Staff time required
The Department estimates that state employees will spend 10 hours to develop this rule.
Natural Resources
Subject
Chapter
NR 20 pertaining to fishing regulations on inland waters particularly the establishment of a permit and reporting system for commercial wild bait harvest.
Policy analysis
The Department is beginning the administrative process of developing a permit and reporting system for commercial harvest of wild bait from the waters of Wisconsin.
In fall 1997 concerns were raised by a diverse group of angling interests regarding the Department's wild bait harvest policy. The concerns included: 1) lack of information on wild bait harvest, 2) enforcement concerns, 3) exotic species, 4) incidental catch of gamefish and threatened and endangered species, 5) impact of harvest on fish communities. The Department currently has very little information regarding wild bait harvest and in order to address many of the concerns listed, it is necessary to establish a means to collect information. The method proposed to gather such information is a permit system that requires mandatory reporting. The Department has worked closely with the wild bait industry over the past year on the details of the permitting and reporting system. Along with the Wild Bait industry, other interested parties include the aquaculture industry, angling and sporting groups.
Statutory authority
Staff time required
The Department will need approximately 200 hours to develop the proposed rule.
Natural Resources
Subject
Chapter
NR 25 – Commercial fishing for white perch
Policy analysis
The white perch is a non-indigenous species that has proliferated in Green Bay. Commercial fishers may harvest limited numbers of white perch under contracts for the removal of rough and detrimental fish, but have not done so because until recently PCB concentrations exceeding 2 parts per million made the fish unmarketable under FDA rules. Recent surveys have shown that PCB levels in Green Bay white perch are now, in almost all cases, within the range that would allow legal sale in commercial markets, and some commercial fishers would like to harvest white perch for commercial sale. Under current rules, the harvest would be limited by the terms of the rough and detrimental fish removal contracts.
Department staff would like explore options for allowing increased harvest of white perch. These will include changing the terms of the current contracts and changing the administrative code. Consideration will be given to possible impacts of an enhanced white perch fishery on other species, including yellow perch and walleye.
Statutory authority
Staff time required
This may require 120 person-hours of staff time and will involve personnel from both the Fisheries and Law Enforcement programs.
Transportation
Subject
Objective of the rule. This rule making will create ch.
Trans 202 to implement a Wisconsin Scenic Byways program as specified by s.
84.106, Stats. The rule will establish the administrative process and criteria for eligibility, designation and implementation of certain state trunk highways as Wisconsin scenic byways. The program will allow local units of government to nominate certain state trunk highways for designation as a state scenic byway. A Scenic Byways Advisory Committee will be created to make recommendations to the secretary of the Department of Transportation on designation; the secretary will make the final determination.
The program will include a unique logo on designated routes and publication of a brochure or booklet similar to the Rustic Roads Booklet. It is anticipated that this program will promote tourism and economic development. It is complimentary to other initiatives including the Department's Rustic Roads program; the Department's Great Lakes Circle Tour routes and the Wisconsin Department of Tourism's Heritage Tourism program. Routes designated as state scenic byways may also qualify for discretionary grants from the National Scenic Byways Program of the Federal Highway Administration.
Policy analysis
The purpose of the Wisconsin Scenic Byways program is to identify, designate, promote and enhance a system of state trunk highways recognized for their outstanding scenic views and ability to offer travelers an exceptional travel experience. These byway corridors highlight the best scenic resources along with the natural, historic, archeological, cultural and recreational opportunities available in Wisconsin.
The following qualifications and criteria were developed with the input of a 16 member Scenic Byways Advisory Group which was appointed by the Secretary. It unanimously endorsed the following proposed program structure:
Qualifications for a proposed scenic byway:
• A state trunk highway segment
• Route at least 30-miles long
• Excludes Interstate and other Corridor 2020 backbone routes
