Section 85 [as it relates to requirements for the W-2 agency contracts] requires the department to award the W-2 contracts at least six months before statewide implementation. It also specifies that the W-2 contract may only be terminated by the mutual consent of both parties. I am exercising the partial veto in this section to remove both the six month requirement and the restriction on when a W-2 contract may be terminated because the department will need additional flexibility in the implementation of W-2, which will be a challenging and difficult task. The department may need to adjust timeframes as statewide implementation draws closer. I do recognize, however, that the W-2 agencies must be given sufficient time to prepare, especially in those geographical areas where the county has elected to not participate in W-2. I am, therefore, directing the department to come as close as possible to the six month timeframe, reporting to me if this goal is not achievable. In addition, I am partially vetoing the language regarding the need to have the mutual consent of both parties to terminate a contract to allow the department to terminate the contract of a non-performer.
Rulemaking
Sections 85 [as it relates to rulemaking for W-2 contract components], 88, 94 [as it relates to rulemaking regarding refusal to pay certain child care providers], 95 and 99g all require DILJD to promulgate rules for certain W-2 program components. I am exercising the partial veto in these sections to remove the rulemaking requirement. First, I do not believe that it was necessary to put this much programmatic and operational detail either into the statutes or to require the development of administrative rules on almost every component in W-2. The legislature understandably wants to maintain oversight over this program because it is new and radically different than the current welfare system. However, in order for the department to be able to successfully implement W-2 in the timeframe outlined in AB591, it needs a certain amount of flexibility. The department must focus on the development of federal waivers, the W-2 request for proposals and other critical steps in the transition from AFDC to W-2. Having to promulgate rules for so many parts of W-2 will only consume valuable staff resources that are needed elsewhere. The Legislature will be very involved in the W-2 implementation through upcoming s.
13.10 requests, the 1997-99 biennial budget and, more than likely, follow-up legislation. It is not prudent to impede the department's ability to implement W-2 by requiring it to promulgate rules on matters that can be done either in the W-2 contracts or as part of the administrative handbook and policy clarification memos to the W-2 agencies.
Requirements on Employers
Section 85 [as it relates to requirements for written contracts with trial job employer] specifies that the W-2 agency must enter into a written contract with each trial job employer. The contract terms shall include the hourly wage at which the trial job participant is to be paid, which may not be less than minimum wage. I am exercising the partial veto in this section because it is not necessary to include the requirement to have a written contract in the statutes. Without statutory language directing this, written contracts are already used in the on-the-job (OJT) training programs and will also be used in the W-2 program.
Extensions of the 60 Month Lifetime Limit
Section 86 specifies that the W-2 agency may extend the 60 month overall time limit on participation, if warranted by unusual circumstances, only in 12-month increments. In addition, DILJD must approve each extension. I believe that the W-2 agencies should work intensively with each client who needs to receive an extension of the 60 month time limit. To be able to provide only as much service as needed, their cases should be extended only as needed, not in 12-month increments. These extensions should be determined by the W-2 agency, in accordance with rules promulgated by the department, as the W-2 agencies are the most familiar with the client's case history. I do not believe it is necessary that the department review each and every case, but it will retain the right to review any case in any geographical area. I am therefore exercising my partial veto of this section to remove the specific 12-month increment and the requirement that the department review each extension of the 60 month time limit.
Exemption from Work Requirements for Mothers with Young Children
Section 89 specifies the benefit levels for each of the W-2 employment positions. It also specifies that an eligible custodial parent of a child who is 12 weeks or younger is exempt from the work requirement and may receive a monthly grant of $555. This section further specifies that this time period is not counted towards the 60 month time limit in certain circumstances. If the child is born not more than 10 months after the date that the participant first became eligible for either Aid to Families with Dependent Children (AFDC) or W-2, the 60 month "clock" stops for up to 12 weeks. For all other cases except in two situations, the clock does not stop. These two situations are 1) if the baby is the result of sexual assault or 2) if the mother has not participated in AFDC or a W-2 employment position for at least six months and the child was born during that period. I do not believe it is appropriate to stop the clock in the second circumstance. I am therefore exercising the partial veto in this section in order to stop the 60 month clock only when the child was born less than 10 months after the person was first determined eligible for AFDC or a W-2 employment position or if the child was conceived as a result of sexual assault. I believe that this eliminates any incentive for a woman to have an additional child while participating in AFDC or W-2, and at the same time does not punish people who are just coming on to the system or who were victims of sexual assault.
Section 89 also uses the word "tolling" to describe the counting of time under the 60 month time limit. Technically, tolling is defined to mean "to suspend". I am therefore exercising the partial veto because the use of the word "tolling" is incorrect. The partial veto in this section will make the bill technically correct and consistent with legislative intent.
Noncustodial Parents and Employment Positions
A1093
Section 96 specifies what assistance a noncustodial parent is eligible to receive under W-2. The W-2 agency may provide job search assistance and case management designed to enable an eligible noncustodial parent to obtain and retain work. In addition, AB591 would allow a noncustodial parent to participate in an employment position if he or she and the custodial parent meet the financial eligibility criteria, if the custodial parent is not a W-2 employment position participant and if the noncustodial parent is subject to a child support order. I am exercising the partial veto in this section to restrict access to W-2 employment positions to custodial parents. Expanding access to W-2 employment positions for noncustodial parents will increase the cost of W-2. It will also potentially conflict with the Children First program because under these provisions a noncustodial parent only has to be
subject to a child support order, not necessarily making full and timely payments. A person could be in arrears on their child support order and access a paid employment position under W-2 rather than participating in unpaid community work experience as required under Children First.
Eligibility Criteria
Section 86 [as it relates to the participation of more than one individual of a Wisconsin Works group in an employment position] provides that an individual is not eligible for a Wisconsin Works employment position if another individual in the same Wisconsin Works group is participating in an employment position at the time of the determination of eligibility. I am exercising the partial veto in this section because the policy on this issue needs to be very clear. It is our intent that only one adult in a W-2 group may participate in a trial job, community service job or W-2 transition job at any given time. The partial veto removes the reference to the time of eligibility determination. I am, at the same time, directing the department to review this policy and to determine if it creates a disincentive to marriage and to make recommendations, if it is found to do so.
Child Care Eligibility and Co-payment Schedules
Sections 56, 56c, 56d, 56f, 56g, 94 [as it relates to the child care co-payment schedule] and 279 [as it relates to child care eligibility and co-payment schedules] place the new child care eligibility and co-payment schedules in the statutes. The Legislature maintained an overall eligibility for child care assistance of 165% of the federal poverty line, but made the co-payment schedule more generous than originally proposed. In addition, rather than being effective upon passage of the bill, the new co-payment schedule and income limits for current low income child care recipients would be phased in during FY97. I support the changes made by the Legislature in this area. Having access to affordable child care is a critical element for people leaving the welfare system. The Legislature recognized this and reallocated funds from other W-2 components in response. In addition, while the phase-in of the new eligibility and co-payment schedule for the current low income child care recipients will be administratively complex, I understand and support the idea that these changes should be made gradually in order to allow people to make other satisfactory arrangements. While I support these modifications, I do not believe that it is necessary or desirable to have this level of detail specifically laid out in the statutes. Historically, co-payment schedules have not been included in the statutes and I see no reason to change that precedent. In addition, the 14 day passive review process that was established to allow the Joint Committee on Finance (JCF) to unilaterally modify statutes is not an appropriate role for this committee. I am therefore vetoing these provisions and I am directing the Department of Health and Family Services (DHFS) and DILJD to administratively establish the same child care co-payment schedules and the same phase-in process for current low income child care recipients as in AB591.
Regulation of Child Care Providers
Sections 27 and 74 relate to the regulation of child care providers. Section 27 directs DHFS to maintain the current levels of child care regulatory standards for licensed group centers, licensed family day care, Level I and Level II certified providers. Section 74 places current administrative rules regarding training requirements for Level I certified family day care providers in the statutes. To date, this department has effectively regulated child care providers either through administrative rules and/or guidelines. I am vetoing section 27 and exercising the partial veto in section 74 to remove the specific training requirement because it is not necessary to have these provisions specifically included in the statutes.
Health Care Co-payment Schedules
Section 93 [as it relates to the health care co-payment schedule] establishes in the statutes the monthly premium schedule that an individual who qualifies for the Wisconsin Works health plan will pay. As with child care, having access to affordable health care is a critical element for people leaving the welfare system. AB591 assumes that everyone should contribute to the cost of their health care. The co-payment or cost-sharing premium schedule included in AB591 is very reasonable. Again, however, I do not believe that it is necessary or desirable to have this level of specificity laid out in the statutes. Historically, co-payment schedules have not been included in the statutes and I see no reason to change that precedent. In addition, the 14 day passive review process that was established to allow JCF to unilaterally modify statutes is not an appropriate role for this committee. I am therefore vetoing these provisions and am directing DHFS to administratively establish the same health care premium cost-sharing schedule as in AB591.
Health Care Eligibility Determinations
Section 93 [as it relates to eligibility determination] specifies that the W-2 agency shall make the eligibility determination within two working days and that DHFS or the provider shall issue the health plan membership care to an individual within three working days. I am exercising the partial veto in this section because these timelines are too prescriptive. It is certainly this administration's intent that a person's application and membership card be processed as quickly as possible. However, these rigid timelines do not allow flexibility to address unforeseen circumstance that could cause a delay. In addition, these issues can be addressed through contracting.
Asset Test for Pregnant Women and Children
A1094
Section 93 [ as it relates to the asset criteria] specifies the income and asset criteria that a Wisconsin Works group must meet in order to be eligible for the W-2 health care plan. AB591 applies a different asset test to pregnant women and children up to age 12 than to the rest of the W-2 health care plan participants. For this group of people, the W-2 agencies shall exclude all of the resources specified under
42 USC 1382b (a), which is the section of the federal code that enumerates the asset test for the federal Supplemental Security Income (SSI) program. However, the motion made by JCF was to model the asset test after the spousal impoverishment asset test, which is broader than SSI. Even if the spousal impoverishment asset test had been referenced, I believe that it would be confusing and administratively difficult to apply two different asset tests to, in some cases, the same family. I am exercising the partial veto to apply the same asset test to all W-2 health care plan participants.
Health Care Spenddown
Section 93 [as it relates to medically needy individuals] specifies that nonpregnant adults and children ages 12 to 18 years old, who meet the other requirements of the W-2 health care plan, but have income in excess of 165% of the federal poverty level can qualify for the W-2 health care plan if they spend down to 165% of poverty. This group would remain subject to the employer-offered health care rules in AB591. In addition, this section specifies that pregnant women and children under 6 years old with excess income may also spend down to 165% of poverty, but children ages 6 to 12 would have to spend down to 100% of poverty. Neither of these two groups would be subject to the employer-offered health care rules.
Under current law, nonpregnant adults are not eligible under the spenddown program. Children ages 6 to 18 have to spend down to 133.33% of the AFDC grant size, which for a family of three is roughly 65% of poverty. Under the W-2 bill, as it was originally submitted, spenddown was eliminated for all groups. While I understand the Legislature's desire to extend a health care safety net to as many people as possible, especially pregnant women and children, the provisions of AB591 will increase the costs of the W-2 program and go beyond current law eligibility. I am therefore exercising a partial veto of this section to limit spenddown to pregnant women and children up to 12.
Learnfare Sanction Amount
Section 143m specifies that a dependent child in a Wisconsin work group who fails to meet the school attendance requirement under the Learnfare program is subject to a monthly sanction of $50. The sanction amount for the current Learnfare program is determined by the department by rule. I am exercising the partial veto of this section in order to remove the $50 from the statutes because I believe that the department should have additional flexibility in the Learnfare program. I am directing the department to continue to determine the amount of the monthly sanction by rule.
Transportation
Section 275 (4m) (b) requires DILJD to identify significant local and regional employment opportunities and identify the residential locations of current and potential W-2 participants. In addition, no later than September 30, 1996, DILJD shall submit, with assistance from the Department of Transportation (DOT), a report to JCF that recommends options that the W-2 agencies could take to facilitate the transportation of W-2 participants to the employment opportunities. The report may not recommend options that would have an adverse impact on existing public transportation systems. I am exercising the partial veto in this section to remove the date that the report must be submitted and to remove the restriction on what options the report can present. First, submitting the report by September 30, 1996 will make the information less current than it might otherwise be for W-2. I am therefore directing the two departments to submit the report no later than the date by which the department must implement W-2 statewide. Second, I do not believe that the report's options should be limited. It is possible that DOT, DILJD and local communities may develop creative transportation solutions that work outside of the public transportation network.
Advanced Earned Income Tax Credit
Sections 21b, 21c, 219m, 225b, 225d, 225f, 225h, 225j, 225L, 225n and 278 (3g) and (3h) provide a mechanism for an advanced payment of the state earned income tax credit (EITC), if both an employee and employer choose to participate. Employers could reduce the amount owed for individual income tax withholding or, if that is insufficient, from unemployment compensation contributions that are due. DILJD would be required to promptly transfer an equal amount from the general fund to the unemployment trust fund, if unemployment compensation is used. Based on the experience of the federal advanced EITC, where only 1% of the eligible population elect to receive it, participation in the voluntary state advanced payment option is likely to be very low. On the other hand, the cost to the state is likely to be high, both in terms of administration and payments to persons eventually found to be ineligible for the EITC. I am vetoing these provisions because benefits are likely to go to only a few EITC recipients, while the cost to the state is relatively high. I am directing the department to require, as part of the W-2 contract, the financial and employment planners of the W-2 agencies to help W-2 participants sign up for the federal advanced earned income tax credit program. If participation in the federal program increases significantly, I believe it would be appropriate to revisit the idea of an advanced payment program for the state EITC.
Retroactive Benefits for Decisions Overturned
A1095
Section 92 allows an individual to petition a W-2 agency for a review of certain actions. In addition, the department is required to review a W-2 decision regarding the determination of initial eligibility, if requested to do so by either the W-2 agency or the individual. If the department reverses a decision on initial eligibility the individual will receive benefits retroactive to the date of the original decision to deny benefits. The benefits would be computed as if the person had complied with all the requirements of the W-2 employment position into which they most likely would have been placed. I am exercising the partial veto of this section to eliminate the requirement that a person receive retroactive benefits if the department reverses the W-2 agency decision. It would be very difficult to implement this provision. Assessment of where the person most likely would have been placed is likely to lead to additional disputes between the applicant and the W-2 agency. For example, a person may have been able to be placed in an unsubsidized job. In this situation, it is unclear what retroactive benefit amount the person should receive. At the same time, it may be appropriate for a person to receive some level of compensation if the denial is overturned. I am directing the department to determine the best way to accomplish this goal and to report back to me and Legislature.
Report on Homelessness
Section 84 [as it relates to homelessness] requires DILJD to maintain a record detailing statistics on the homelessness of W-2 participants. I am exercising the partial veto of this section to remove this reporting requirement. I do not believe that this requirement was carefully constructed. It is unclear when or for how long this information should be collected. It will not shed any light on the W-2 program if this information is collected as people come into the W-2 office. If the intent was to see if the W-2 program had an impact on homelessness, it is more helpful to look at information from homeless shelters and transitional housing programs. Data are already being collected and compiled on the people using these services by the Department of Administration's Division on Housing. This Division will be able to compile information on the W-2 population as it is implemented.
Emergency Assistance Program
Section 83e continues the current AFDC Emergency Assistance program after W-2 is implemented with one modification. In addition, DILJD would be required to submit a report to the Legislature within 12 months of the implementation of W-2 on the interaction of the this program with the W-2 program. I am exercising the partial veto in this section to remove the reporting requirement as it is administratively burdensome to the department. I am, however, maintaining the emergency assistance program beyond the start of the W-2 program in order to continue to provide assistance to needy families with dependent children in the cases of fire, flood, natural disaster, homelessness or energy crisis.
Kinship Care and Health Insurance
Sections 70d and 70g specify that DHFS, in consultation with DILJD, shall determine whether a kinship care child is eligible for Medical Assistance (MA) only if no other health care insurance is available to the child. DHFS's intent was to make kinship care children immediately eligible for MA as they do for children in foster care. Just as in foster care, the parents of the kinship care child will still be required to initiate or continue health care insurance coverage for the child as part of their child support obligation. I am exercising the partial veto in these sections to ensure that the kinship care provider does not have to bear any costs related to the child's medical care and to ensure that there is no gap in the child's health care coverage if the parent is not complying with the child support order.
Food Stamp Employment and Training Requirements
Section 79 specifies that the maximum number of hours that an individual may be required to participate in the Food Stamp Employment and Training (FSET) program may not exceed the amount of food stamp benefits divided by the federal minimum wage or 40 hours per week, whichever is less. I am exercising a partial veto of this section to remove the language related to the minimum wage calculation. This language will limit the department's ability to require participation in FSET activities. For example, the maximum food stamp benefit for a single adult is $119 per month. Using the minimum wage formula would result in this individual only being required to participate for seven hours per week. This minimal level of participation may not lead to self-sufficiency.
Criminal Background Checks
Sections 71d, 71m [as it relates to the petition process] and 75 require criminal background investigations of kinship care providers, certified day care providers, licensed day care providers and any employees or adult residents who live in the homes of the providers. Also specified is a list of the criminal convictions that an applicant cannot have on his or her record if applying for a kinship care payment or day care certification or license. An individual who is denied a kinship care payment, certification or licensure based on the criminal background investigation may petition DHSS for a review of that denial. I am exercising a partial veto of the provisions related to the petition process. The statutes are very clear and explicit regarding an applicant's conviction record. In addition, current statutes already provide due process rights to all licensure applicants under s.
48.715. Certification applicants may take a grievance to the county department under Chapter
62. In addition, I am directing the Secretary of DHFS to recommend the best method for individuals to make appeals for the entire kinship care program, not just for an appeal regarding the criminal background check. This is a larger issue that is not addressed in the W-2 legislation.
Section 71m [as it relates to employees of a day care center] also specifies that the department must complete a background investigation of each employee and prospective employee of a licensed day care center. This language is substantially different from what I proposed or what was in Senate Substitute Amendment 1 to SB24 which states that the applicant or licensee, with the assistance with the Department of Justice, shall conduct a background investigation of each employee or prospective employee of the applicant or licensee. I am partially vetoing this section in order to require the day care applicant or licensee to perform the background investigation of each employee or prospective employee, not the department. The language as written would impose a significant new workload on the department. This should instead be the responsibility of the licensed day care center as part of their licensure.
Nonstatutory Provision on Administrative Rules for W-2
Section 275 [as it relates to rules for the administration of W-2] directs DILJD to promulgate rules on the qualification criteria for the administration of the Wisconsin Works program without the finding of an emergency. I am partially vetoing the words "qualification criteria" in section 275 (3) (title) because the department needs emergency rulemaking authority for the administration of all of the W-2 program. This is primarily a technical correction.
State Supplemental Security Income (SSI) Supplement
A1096
Sections 175 and 209 create a separate supplemental payment under the state's SSI program for custodial parents who receive SSI and who have dependent children. The supplement was intended to replace the AFDC payment that the child is currently receiving, once W-2 is implemented. The child was to continue to receive Medical Assistance coverage. Unfortunately, these sections do not reflect the Administration's intent. A federal waiver is necessary before the department can make this supplemental SSI payment in lieu of an AFDC payment for the child. I am vetoing these sections because the provision in AB591 would require the department to make this payment beginning July 1, 1996 whether the waiver had been approved or not and whether the dependent child was receiving AFDC or not. I am directing the department to pursue the legislation needed to implement the provision as originally intended.
Medical Savings Accounts (MSAs)
Sections 250, 250m and 279 [as it relates to qualifying coverage definition] include provisions on high cost-share benefit plans that are linked to a tax-preferred savings plan for payment of medical expenses, which are often referred to as medical savings accounts. Under AB591, portability of coverage and guaranteed acceptance rights would be limited for MSAs under certain circumstances. If a person has had a MSA within 60 days of the effective date of his or her new job's health care coverage, and that new coverage includes a choice between a MSA and group health coverage, and the employee chooses to switch to a group health care plan, portability of coverage and guaranteed acceptance rights are not available. I am exercising the partial veto in these sections to remove any reference to high cost-share benefit plans that are linked to a tax-preferred savings plan for payment of medical expenses, including the portability and guaranteed acceptance restrictions for several reasons. First, tax-exempt MSAs have not yet been created at either the federal or state level. AB591 does not create MSAs either; it only provided for a limit on MSA portability and guaranteed acceptance in the event that other legislation is passed that creates the MSAs. I have been involved in discussions at the federal level on this issue and it is not clear to me that the federal legislation creating MSAs will pass in the near future. Furthermore, the state Legislature is currently debating a bill (AB545) that would create MSAs in Wisconsin. Any limits on the portability or guaranteed acceptance of MSAs should be included with the legislation that actually creates the MSAs. I do not believe it is appropriate to retain this language in the statutes in anticipation of the passage of a MSA bill.
I believe that these partial vetoes make a good piece of legislation even better. We can now move forward to implement this pathbreaking welfare reform measure.
Sincerely,
Tommy G. Thompson
Governor
__________________
Communications
State of Wisconsin
Office of the Secretary of State
Madison
To Whom It May Concern:
Acts, Joint Resolutions and Resolutions deposited in this office have been numbered and published as follows:
Bill Number Act Number Publication Date
Assembly Bill 188214April 30, 1996
Assembly Bill 491217April 30, 1996
Assembly Bill 451218April 30, 1996
Assembly Bill 685219April 30, 1996
Assembly Bill 183228May 2, 1996
Assembly Bill 238229May 2, 1996
Assembly Bill 511230May 2, 1996
Assembly Bill 532231May 2, 1996
Assembly Bill 544232May 2, 1996
Assembly Bill 642233May 2, 1996
Assembly Bill 644234May 2, 1996
Assembly Bill 811235May 2, 1996
Assembly Bill 836236May 2, 1996
Assembly Bill 955237May 2, 1996
Assembly Bill 1028237May 2, 1996
Assembly Bill 841249May 2, 1996
Assembly Bill 579250May 2, 1996
Assembly Bill 344251May 2, 1996
Assembly Bill 40252May 2, 1996
Assembly Bill 570253May 2, 1996
Assembly Bill 690254May 2, 1996
Sincerely,
Douglas La Follette
Secretary of State
__________________
State of Wisconsin
Revisor of Statutes Bureau
Madison
May 1, 1996