Section 123m
This section provides that the Department of Administration shall not require the Board of Regents of the University of Wisconsin System to acquire moveable equipment for the University of Wisconsin-Center System under a master lease.
I am vetoing the provision because it is too restrictive and because it is unnecessary, since full funding for moveable equipment was provided in the 1997-99 biennial budget for the UW-Center System. The veto allows the UW-Center System to utilize master lease as an option when bonding is not appropriate or available.
13. Surety Bonds for Public Works Contracts
Sections 5163e and 5163m
These provisions allow state or local units of government to waive bond requirements for projects between $10,000 and $25,000, if the state or local government unit has developed written criteria as to what projects would require a bond to be submitted and the state or local government unit guarantees payment to any subcontractors on the project and all those who have claims for labor on the project. A bond would be required for state and local projects in excess of $25,000. Bond requirements would not apply to the contract for the direct purchase of material by the state or local unit of government.
I am partially vetoing the requirement of a bond for projects in excess of $25,000 because the state can potentially save millions of dollars from very large projects where it has the authority to waive bonds. Since I took office, the state has paid $14,200,000 for surety bonds. During the same time frame, the state has recovered less than $100,000 in settlement payments. In addition, a veto provides the Building Commission with the flexibility to determine the type of security necessary given the specific needs of each project. The decision to obtain surety bonds for local projects should be a local decision and not mandated by the state. The requirement that written standards be established provides the department, boards, and bodies the assurance that adequate guarantees are in place to successfully complete the projects.
OFFICE OF THE
LIEUTENANT GOVERNOR
14. Elimination of Certain State Government Boards, Councils and Commissions
• Metallic Mining Council
Sections 67q; 3636m; 3636p; 3730m; and 3730p.
• Council on Affirmative Action
Sections 59m; 695n; 3290p; and 3316e.
• Depository Selection Board
Sections 26m; 50m; 744e; 744m; 744s; 747m; 840m; 1150c; 1150g; 1150L; 1150p; 1150t; 1150x; 4291t; 4677m; and 9101(13m).
The Legislature adopted most of the recommendations made by the Lieutenant Governor to eliminate unnecessary government bodies. Repealing 50 councils, boards or commissions is a significant achievement and, with three exceptions, I support these actions.
The Metallic Mining Council, the Council on Affirmative Action, and the Depository Selection Board are making what I consider to be relevant contributions and should be retained. By my veto I am removing these three entities from the list of government bodies being repealed.
Department of
employment relations
15. Investigations Relating to Code of Ethics Violations
Section 3308m
This section requires the Administrator of the Division of Merit Recruitment and Selection in the Department of Employment Relations to establish, by rule, procedures that state agencies should follow in the investigation of alleged violations of the code of ethics. The department would further assume investigatory and disciplinary responsibilities if it were determined that a state agency was not following the prescribed rule.
I object to this change because I believe that existing laws and agency compliance with them are adequate. These additional requirements will not improve the quality of investigations of agency or employe misconduct or of the corrective actions being taken. I am therefore vetoing this provision.
16. Audit of Public Employe Training Functions
Section 9132 (1g)
A355
This section requests the Joint Legislative Audit Committee to perform a financial and performance audit of the public employe training functions in the Department of Employment Relations.
The Audit Committee is fully able to decide which agency programs it wishes to review. This request in the budget bill is therefore unnecessary and I am vetoing it.
DISTRICT ATTORNEYS
17. WRS Service Adjustments to Milwaukee County District Attorneys
Sections 169 [as it relates to s.
20.475 (1) (d)], 652z, 1315b, 1315c, 1317m, 2693mm,
5485c, 5485g, 5485n, 5485r, 5485w and 9316 (2q)
The biennial budget grants prior service credit for certain Milwaukee County assistant district attorneys for years earned under the Milwaukee County Retirement System which did not carry over as credit in the Wisconsin Retirement System when these positions became employes of the state. The associated unfunded liability is to be paid off over a ten year period through annual deductions in fringe benefit cost reimbursements to Milwaukee County from the appropriation under s.
20.475(1)(d). The Legislature also appropriated one-time funding of $50,000 GPR each year in this appropriation to help offset the reduction in payments to Milwaukee County.
I object to these provisions because they create an additional burden on the property taxpayers of Milwaukee County without providing an opportunity for them to be heard through the public hearing process. I also object to the use of state funds in the disposition of this matter. Milwaukee County has raised concerns about these provisions. I am therefore vetoing these provisions in their entirety. By lining out the District Attorneys s.
20.475 (1) (d) appropriation and writing in a smaller amount to delete the $50,000 in fiscal years 1997-98 and 1998-99, I am vetoing the part of the bill which funds the one-time subsidy. I am also requesting the Secretary of the Department of Administration not to allot the associated dollars.
retirement research committee
18. Required Reports
Section 9132 (1h) and (4z)
These provisions request the Retirement Research Committee to conduct two studies and make reports on: (1) the feasibility of reopening the variable retirement investment trust to participants in the Wisconsin Retirement System (WRS); and (2) the extent to which participants in WRS are currently receiving both a salary from a participating employer in the WRS and an annuity from the WRS.
I object to these requests being elements of the biennial budget bill. There are other more appropriate legislative avenues available for pursuing these policy issues which will ensure a broader opportunity for input by interested parties. I am therefore vetoing both provisions.
general provisions
19. Delegation of Pension Fund Investment Authority
Section 2198 v and w
These sections permit the Milwaukee public school district to delegate the investment authority over any of its funds not immediately needed and held in trust for its qualified pension plans to an investment manager who meets requirements and qualifications specified in the trust's investment policies and who is registered as an investment adviser under federal code. Such investment of funds is made subject to the "prudent person rule" defined in s.
881.01 of the Wisconsin Statutes.
I object to the way this delegation of authority dilutes the direct responsibility for investment decisions currently vested with the elected Milwaukee Board of School Directors, who are the trustees of their pension fund. I am vetoing these sections in order to preserve this more direct accountability.
REGULATION AND LICENSING
20. Credential Application and Fee Effective Dates
Sections 9442(1) and 9442(1j)
These provisions make new application information requirements and new initial and credential renewal fees effective September 1, 1997 or on the first day of the second month beginning after publication of the budget act, whichever is later.
I am vetoing these provisions because the Department of Regulation and Licensing needs its new fee schedule and application information requirements effective immediately upon publication of this Act. This will enable the department to collect projected revenues and keep application forms consistent with the new initial fee and credential renewal fee schedule. Professions regulated by the department renew their licenses once every two years. While the department has lost a small amount of revenue in the first three months of fiscal year 1997-98 by not being able to charge higher fees established in the new schedule, the loss of revenue in November, 1997, would be significant. By vetoing these provisions, I am making the department's new credential renewal fees effective upon publication of this Act so its new fee schedule will be effective in November 1997 instead of December 1997.
21. Licensing of Certain Dentists
Section 9142
This section requires the Dentistry Examining Board to grant a dentistry license to a person who: (1) is licensed to practice dentistry in another jurisdiction of the United States or Canada; (2) meets dentistry requirements under the Wisconsin Administrative Code which are in effect on the effective date of this section; (3) completed a clinical licensure examination comparable to Wisconsin's at the time the person was granted a license in the other jurisdiction; and (4) applies to the Department of Regulation and Licensing for Wisconsin licensure by July 1, 1998.
A356
I am vetoing this section entirely because the licensing requirements for dentists are established by the Dentistry Examining Board. I do not believe it appropriate to infringe upon the professional judgment and prerogatives of the members of the Dentistry Examining Board in establishing the minimum conditions under which dentists are permitted to practice in this state. However, I also believe that professional licensing laws must not, even inadvertently, serve to deprive the citizens of this state from receiving necessary health care from qualified providers. Accordingly, although it is appropriate to veto this particular licensing provision, I am requesting that the Dentistry Examining Board take all necessary steps to promulgate an emergency rule authorizing the board to waive certain requirements for dentists licensed by other states under reasonable and appropriate circumstances consistent with the needs of Wisconsin consumers. I am also requesting that the Secretary of the Department of Regulation and Licensing provide the board with assistance in promulgating the rule.
__________________
F. Tax, Finance and Local Government
Board of Commissioners of Public Lands
1. Sunken Logs
Sections 169 [as it relates to s.
20.245 (4) (j)], 244e, 693m, 1346e, 3124, 3129c and 9356 (8y)
Section 3124 modified the state's offset value (share) of the revenues from the retrieval of sunken logs from 30% of appraised market value to 20% of the stumpage value of the logs. I am partially vetoing this section to provide for the state to retain 30% of stumpage value as its share of these revenues because the provision as passed by the Legislature would have a significant negative impact on state revenues. The language as vetoed will result in a reduction from current revenues to the state, but I believe it is an equitable compromise.
Sections 169 [as it relates to s.
20.245 (4) (j)], 244e, 693m, 1346e, 3129c and 9356 (8y) provide that all sunken log permit fees and the state's share of sale revenues would be credited to a new continuing PR appropriation under the State Historical Society or to GPR-earned, rather than accruing to the common school fund as they do now. Under these sections, these revenues would be used for the Northern Great Lakes Center and a new grant program related to maritime projects, with any remaining revenue above $400,000 credited to the general fund.
I am partially vetoing these sections to retain the state's share of these revenues in the common school fund because I believe that directing these revenues (specifically unclaimed property revenues) anywhere other than the common school fund is unconstitutional.
2. Expanded Investment Authority
Sections 816c, 816e, 816g, 816j, 816L, 816n, 816p, 816r, 816t and 816v
These sections revise the authority of the Board of Commissioners of Public Lands to invest the assets of the common school fund, the normal school fund and agricultural college funds by authorizing the Board to invest the assets of these funds in a number of newly enumerated types of securities including non-rated securities, private placements and real estate. I am vetoing these sections because I believe there are few, if any, precedents for allowing a fund to establish independent investments outside the state investment fund (SIF). The SIF draws its strength from the diversity of its participants, each with differing cash flow requirements which tend to complement other participants in the fund. Segregating individual funds out of the SIF sets a precedent for weakening the SIF. In addition, I am concerned that the requirements and qualifications for election to the offices from which the Board of Commissioners of Public Lands is comprised do not include investment experience and qualifications comparable to those required for State Investment Board members. I believe the assets of the funds in question will be more appropriately invested by the State Investment Board, which manages the SIF.
Employment Relations
Commission
3. Salary Component of a Qualified Economic Offer (QEO)
Sections 2692tce, 2692tcm, 2692tcr, 9316 (4fg)
These sections require that the amount of funds available under the salary component of a qualified economic offer must be increased by the amount of any savings realized by the school district employer in its fringe benefits package.
I am vetoing this provision in its entirety. This provision applies to collective bargaining agreements that have not yet been settled by the effective date of the bill, but which will cover the 1997-98 and 1998-99 school years when settled. The estimated 30% of school districts that have already settled for this biennium will not be covered by the change. This provision would, therefore, create two different qualified economic offer policies applicable to the same school year. School districts that have not yet reached an agreement would be subject to different rules than those that have. It would be unfair to change the rules in the middle of the year.
I am calling on the Legislature to consider separate legislation in this area. Any legislation that passes should take effect after the end of the current teacher contract period, which ends on June 30, 1999.
General Fund Taxes
4. Supplement to Federal Historic Rehabilitation Credit
Section 2262r, 2277n, 2287mn and 9343 (10ia)
A357
These sections remove the requirement that property be placed into service after June 30, 1989 to receive the federal historic rehabilitation credit. I am vetoing this provision because it is inappropriate to retroactively change the computation of the historic rehabilitation credit for a tax year that is closed.
5. Penalty for Capital Gains on Business Assets Sold to Family Members
Section 2332v
This section provides a penalty for anyone who purchases business or farming assets from a family member and sells those assets within two years. I am partially vetoing this section because I believe the penalty imposed is too harsh. Currently the penalty is equal to the amount of the exclusion allowed under this new law (40% of capital gains) plus that amount again, prorated based on the amount of time the business was held by the purchaser. My veto will reduce the penalty so that it equals only the prorated portion of the penalty.
6. Tax Amnesty
Section 9143 (2mf)
This section requires the Department of Revenue to develop a proposal for a tax amnesty program to be conducted in fiscal year 1997-98. The provision specifies that the department's proposal be developed and presented to the Joint Committee on Finance for its consideration at the committee's fourth quarterly meeting in 1997 under s.
13.10. I am vetoing the portion of the provision that specifies that the amnesty program must be conducted during fiscal year 1997-98 and that a proposal for the program be presented to the Joint Committee on Finance at the committee's fourth quarterly meeting in 1997 under s.
13.10. Due to the delay in passage of the budget, I believe it would be difficult if not impossible for the department to conduct a tax amnesty program during fiscal year 1997-98. With this veto I intend that the department conduct an amnesty program during fiscal year 1998-99.
7. Sales Tax on Prepaid Calling Cards
Sections 2387 and 9443 (13)
These sections apply the sales tax to prepaid calling cards at the point of sale. Phone calls made with these cards would be exempt from the Wisconsin sales tax.
I am vetoing this provision because these cards are similar to gift certificates, which are currently not taxed at the point of sale, and also because this provision would tax calls made with prepaid phone cards differently than calls made with credit cards. Also, additional amounts added to prepaid phone cards are likely to escape taxation, and there would be inequitable taxation in cases where cards were bought in states which don't impose a sales tax on them and then used in Wisconsin.
8. Sales Tax on University Food Contracts
Section 2393nq
This section modifies the current sales tax exemption for meals, food, food products and beverages furnished in accordance with any contract of an institution of higher education by providing that the exemption applies only if these items are furnished to a student enrolled for credit at that institution. In addition, this section provides that the sales tax exemption can not be used for purchases of meals by faculty members or continuing students. In the case of National Football League teams that have training camps at University of Wisconsin campuses, these provisions would first apply to any National Football League team purchasing these items under a contract entered into on or after January 1, 1998.
I am partially vetoing this section to delete the reference to January 1, 1998 because I believe Wisconsin should encourage NFL teams to train in Wisconsin. These teams bring significant tourism and economic development benefits to several areas of our state. I would like to note that implementation of this modification does not affect groups that are otherwise tax exempt such as some summer groups housed at the University for education and training.
9. Sales Tax Exemption for Internet Access
Section 2386j
This section provides that access to the Internet would not be subject to the sales and use tax. I am vetoing this section because it creates different tax treatment of similar communications services. Communications through e-mail, bulletin boards and Internet chat groups would be exempt, while telephone calls and other telecommunications would be taxable. I plan to examine all sales tax exemptions during the upcoming biennium and make recommendations to equalize our tax treatment.
10. Sales Tax on Timeshare Property
