I am vetoing these sections because while requiring agencies to prepare a work plan for capital maintenance funds appropriated in their operating budgets has merit, agency staff have many other responsibilities in maintaining state buildings and their energies are best used for these other functions.
9. State Fair Park Racetrack Projects
Sections 9107 (7tu), 9107 (7tv) and 9145
These provisions require that the State Fair Park Board approve a racetrack seating project before the Building Commission may approve the project. They also require the State Fair Park Board to submit a noise abatement plan to the Joint Committee on Finance, and require approval of a noise abatement plan by the Committee before the Building Commission may approve racetrack improvement projects.
I believe the Building Commission should remain the sole state government body responsible for oversight of building projects. I object to the requirements that these projects also be subject to the review and approval of another legislative committee. Therefore, I am vetoing these provisions.
10. Wausau State Office Facility Study
Section 9107 (8m)
This provision requires a study of the feasibility of constructing a state office facility in the Wausau area.
The Building Commission is fully able to decide if it wishes to conduct a study on the feasibility of constructing a state office facility in the Wausau area. This request in the budget bill is, therefore, unnecessary and I am vetoing it.
11. Grant to Heritage Military Music Foundation
Sections 105e, 105f, 172 [as it relates to s. 20.505 (1) (kw)], 520m, 520n, 527s, 527t and 9401 (7h)
These provisions authorize $85,300 PR in the Department of Administration for building improvements for the Military Music Foundation. The department is required to review a building improvements estimate for the facility currently occupied by the Heritage Military Music Foundation in Watertown, Wisconsin, if requested by the foundation, and is required to provide a grant to the foundation of $85,300 PR upon approval of the estimate.
The grant to be provided under these provisions derives from the revenues deposited in the state Division of Facilities Development from a fee assessed against building projects, including bonded projects. It is, therefore, reasonable to assume that the dollars generated to provide this grant would come from state bond revenue. I am vetoing the provision because it is inappropriate for projects of this nature to be funded from state bond revenue.
12. Design-Build Construction Projects
Sections 1580m, 1641m, 1641no and 1641q
These provisions authorize a design-build construction process and establish minority contracting requirements for certain public works projects undertaken by the Milwaukee Metropolitan Sewage District Commission (MMSD) and one project for Milwaukee County. This MMSD design-build process would only apply to central metropolitan interceptor sewer projects, any projects that are required to implement the Department of Natural Resources approved 2010 facility plan, and watercourse flood control projects for the Kinnickinnic, Menomonee and Root Rivers and Lincoln Creek. The county project is construction of a sheriff's department training academy.
The process established in these provisions would allow the selection of a design-build construction team on bases other than project cost. Moreover, they would effectively permit a sole source procurement and evaluation of a single contractor’s proposal rather than a group of qualified finalists. While the design-build concept is intended to offer economies and efficiencies, I object to the extreme latitude that is permitted here and believe the ultimate result will be higher cost to the tax payer. If used properly, the design-build process can deliver cost savings. However, the evaluation of proposals must be thorough and focus on qualifications, and the selection of the winning qualified contractor must be based on price.
I am partially vetoing these provisions to limit the design-build team approach to only the Milwaukee County Sheriff's Department training academy project. It removes design-build as an option for the sewage district commission. I am uncomfortable with the relaxed statutory procurement process permitted for MMSD public works projects because of the magnitude of the dollars involved. Every project funded from taxpayer dollars should have consideration of multiple qualified contractors and the final decision from among the qualified candidates should be based on lowest price. Decisions should not be made using subjective criteria and estimates. By leaving in place authority for Milwaukee County to proceed with design-build on the training facility, I am expressing my expectation that they will fully observe these same procurement safeguards in their selection of a team.
I believe that design-build construction can bring efficiencies and cost savings in public works projects and I encourage the Legislature to consider legislation making it available to all governmental units in the state.
EMPLOYMENT RELATIONS
13. Division Administrator Appointment Authority
Section 2360m
The biennial budget modifies the statutes to reduce from four to three the total number of unclassified division administrators the secretary of the Department of Employment Relations is authorized to appoint.
I am opposed to this provision because it diminishes the secretary’s statutorily established position appointment authority. Therefore, I am vetoing it.
MILITARY AFFAIRS
14. Number of Level A Regional Emergency Response Teams
Section 2303b
This provision requires the Department of Military Affairs to contract with nine Level A regional emergency response teams and requires that at least one Level A regional emergency response team be located in La Crosse County.
I am partially vetoing this provision to remove the requirement that the department contract with exactly nine teams. I am doing this to permit the Adjutant General flexibility to contract with up to nine teams, at least one of which is to be located in La Crosse County.
15. Civil Air Patrol Infrared Camera Equipment
Section 2301m
This section earmarks funding of $110,000 GPR in fiscal year 1999-2000 to the Department of Military Affairs’ Division of Emergency Management to purchase infrared optical equipment for the Chippewa Squadron of the Civil Air Patrol to search for lost individuals by air in northern Wisconsin.
I object to requiring state funds to purchase equipment to be located in a specific geographic area of the state. This sets an improper precedent resulting in less than optimal distribution of state funds for the purpose of emergency management throughout the state. Therefore, I am vetoing this section and I am requesting the Department of Administration secretary to place $110,000 into unallotted reserve in fiscal year 1999-2000 in appropriation s. 20.465 (3) (a) to lapse to the general fund.
MISCELLANEOUS PROVISIONS
16. Legal Notices in Newspapers
Sections 3242g, 3242i and 3242m
The intent of this provision was to rectify a flaw in the statutes regarding communities that lose their local newspaper and are then forced to place their legal ads in newspapers outside their community. Currently, a newspaper in a 4th class city, town or village must publish for two years and achieve a paid subscription base of 300 before it can compete for legal notice ads. Thus, if a community loses its newspaper and another newspaper starts up there, the new paper must wait two years before being allowed by law to publish the legal ads of that community.
The current law places an undue burden on a community already harmed by the loss of a local newspaper. The law wrongly forces a community that loses its newspaper to spend taxpayer money to place legal ads in a newspaper outside the community and, thus, not widely read by its taxpayers. In fact, the local school board or municipal council will sometimes go to the extra expense of also placing legal ads in the new, upstart community newspaper just to ensure they are read by their taxpayers. Communities should not be put in the position of going to these lengths and expenses to publish their legal ads in a manner so their constituents will read them. School board and city council elected officials should be entrusted with the decision to place legal ads in the newspaper they believe would best serve the constituents of their community. If that is a new newspaper in town this shouldn’t be a problem.
The state’s newspapers, however, are concerned that completely eliminating the two-year standard and the 300 subscription level would place in jeopardy other small newspapers throughout Wisconsin. While I am not persuaded that small Wisconsin community newspapers, which currently enjoy special protections from competition and the free marketplace, would be harmed as a result of this proposed change in law, I am willing to support a compromise.
The Wisconsin Newspapers Association (WNA) has agreed to compromise language that would create an exception to the existing law for a community where the only newspaper ceases to exist and a new newspaper begins publication within that community. The exception would allow a new newspaper in a community that lost its only paper to compete for legal ads after achieving 16 weeks of publication and reaching 300 paid subscribers. The WNA has committed to work with legislators to get the agreed-upon legislation to my desk for signature no later than the spring session of 2000. Therefore, I am agreeing to veto this provision in order to give the parties a chance to pass this compromise.
REGULATION AND LICENSING
17. Effective Dates
Section 9442 (1)
This provision sets the first day of the second month after publication of the bill as the effective date of fee changes for the Department of Regulation and Licensing and, in the case of one provision, October 2, 1999. Due to the delayed passage of the budget any unnecessary additional delay in revenue collections will financially harm department operations. For this reason, I am vetoing the delayed effective date so that higher fees may be collected immediately after publication of the budget. I am also vetoing the October 2, 1999, date because it is unnecessary.
VETERANS AFFAIRS
18. Staff Pay Survey Implementation
Section 9155 (3g)
This provision allows the Department of Veterans Affairs to request additional salary and fringe benefit funding from the Joint Committee on Finance under a 14-day passive review process following a classification survey that may be conducted by the Department of Employe Relations (DER) for central office staff positions who deal with loans and grants.
I am vetoing this provision because surveys should be determined and performed in an objective, systematic manner by DER. The secretary of the Department of Employe Relations should decide which surveys will be undertaken and their timing. If a survey is completed and additional funds are warranted, the Department of Veterans Affairs may seek an appropriate supplement under the normal procedures of s. 13.10 of the statutes.
F. TAX, FINANCE AND LOCAL GOVERNMENT
ADMINISTRATION
1. Public Benefits Program Administration
Sections 109m and 9101 (1zu) (a)
Section 109m describes the duties of the Division of Housing in administering the public benefits programs. Section 9101 establishes a 60-day time limit on the promulgation of rules for the public benefits programs. I object to the extent to which these sections restrict DOA in implementing the newly expanded public benefits programs.
I am partially vetoing the section specifying the duties of the Division of Housing so that DOA may access the resources of the entire department in administering the public benefits programs. Accessing the entire department's resources to administer public benefits programs provides greater assurance the utility public benefits programs will achieve intended objectives. I am also partially vetoing the section requiring DOA to promulgate rules for the public benefits program within 60 days of the effective date of the bill so that the department will have adequate time to promulgate rules pertaining to its expanded role in administering utility public benefits programs.
2. Division of Gaming – Tribal Gaming Computer System
Section 9101 (17x)
This section would require the Department of Administration (DOA) to first obtain approval from the Joint Committee on Finance regarding the costs of a new tribal gaming computer system to receive and process slot machine accounting data prior to expending funds for this purpose.
I am vetoing this section because it places an unnecessary burden on DOA and would likely result in the delayed implementation of the new tribal gaming computer system. The system will allow the department to receive and process slot machine accounting data off-reservation and reduce the amount of on-site review by field auditors.
3. Division of Gaming – Unclaimed Prizes Retained by Racetrack Licensee
Section 481m, 545, 3023j and 9301 (2g)
These provisions would provide that, effective with the 2000 race year, a pari-mutuel racetrack licensee may retain any winnings on a race that are not claimed within 90 days after the end of the race year. Under current law, unclaimed prizes are paid to the state and deposited into the racing general program operations appropriation in the Department of Administration, and the gaming law enforcement appropriation related to racing in the Department of Justice.
I am vetoing these sections because of the adverse impact they would have on the operating budget for racing enforcement.
ALCOHOL AND TOBACCO TAXES AND REGULATION
4. Changes to the Wisconsin Fair Dealership Law
Sections 2166m, 2166s, 9358 (7c) and 9458 (3c)
These sections would expand the definition of "dealership" to include an oral or written contract or agreement, either expressed or implied, by which a wholesaler is granted the right to sell or distribute intoxicating liquor or use a trademark, service mark, logotype, advertising or other symbol related to intoxicating liquor. These provisions would specify that the expanded portion of the definition of dealership would not apply to dealerships in which the grantor of the dealership has not produced more than 200,000 gallons of intoxicating liquor in any year, nor to dealerships in which the dealer's net revenues from the sale of all of the grantor's brands of liquor and of wine, respectively, constitute less than 5% of the dealer's total net revenues from the sale of liquor and of wine, respectively, for the most recent fiscal year preceding a grantor's cancellation or alteration of the dealership. The sections also provide additional protections to wholesalers if either a successor wholesaler succeeds to the ownership or control of a wholesaler's business, or if any asset or activity of a distiller's intoxicating liquor business is transferred to another person. These provisions also specify a retroactive effective date of October 1, 1998.
I am partially vetoing these provisions so that wine will be excluded from treatment under these changes to the Wisconsin Fair Dealership Law because I object to wine being treated the same as intoxicating liquor. I am vetoing the sections making the changes to the Wisconsin Fair Dealership law effective as of October 1, 1998, because I am concerned about the constitutionality of imposing new standards on preexisting contracts. Finally, I am also vetoing the additional protections to wholesalers if either a successor wholesaler succeeds to the ownership or control of a wholesaler's business, or if any assets or activity of a distiller's intoxicating liquor business is transferred to another person. I am concerned about the extent to which these provisions will unfairly disadvantage liquor distillers in establishing contractual relationships with wholesalers. Common law rules of construction shall continue to apply to definitional matters in this statute.
5. Liquor Tax and Members of the Military
Section 2170t
This provision permits a Wisconsin resident returning from active duty in a foreign country to bring 16 liters of wine or liquor into the state without payment of the state occupational tax on intoxicating liquor. Current law permits these same residents to bring 4 liters of wine or liquor into the state without payment of the state occupational tax on intoxicating liquor.
I am partially vetoing this provision to permit a Wisconsin resident returning from active duty in a foreign country to bring 6 liters of wine or liquor into the state without payment of the state occupational tax on intoxicating liquor. I am reducing the number of allowable liters from 16 to 6 liters to reduce the danger of illegal sales of alcoholic beverages by members of the military to other citizens.
6. Distributor Cigarette Discount
Sections 2171p and 9443 (8d)
These provisions increase the discount cigarette manufacturers receive from 1.6% to 2%.
I am vetoing these provisions to maintain the current discount of 1.6%. The discount was reduced to 1.6% from 2% in 1997 Wisconsin Act 27, when the cigarette tax was raised 15 cents per pack, to prevent cigarette manufacturers and distributors from receiving a windfall as a result of an increase in the cigarette tax rate. I am vetoing these provisions based on the fiscal needs of the state. At this time, we can not afford to make this change. The fiscal effect of this veto is to increase GPR revenue by $950,000 in fiscal year 2000-2001.
7. Native American Tax on Tobacco Products
Sections 2178 and 2179
These sections authorize the Department of Revenue (DOR) to enter into agreements with the tribes to provide refunds of up to 50% for the collection of the tobacco products tax.
I am partially vetoing section 2178 to correct for a technical error in the legislation which inconsistently provides for a 70% refund to tribes or tribal councils responsible for the sale of tobacco products on a reservation or trust land. I am also partially vetoing section 2179 to establish a 50% refund for all tribes, instead of a maximum allowable refund of 50% subject to negotiation between DOR and the tribes, of the tax on tobacco products sold on the tribal reservation to persons who are not enrolled members of the tribe residing on the reservation. Granting the authority to refund the same percentage to all tribes would simplify and provide uniformity in the negotiating process.
CORPORATE FRANCHISE AND INCOME TAX
8. Treatment of Corporate Partners and Limited Liability Company (LLC) Members
Sections 1722cd, 1738s, 1753g and 9343 (22t)
These provisions would make corporate partners and members of Wisconsin partnerships in LLCs, respectively, subject to the corporate income and franchise tax if they were doing business in Wisconsin, regardless of the type of interest in the entity. Under current law, the Wisconsin tax treatment of corporate partners and LLC members depends on whether the partnership or LLC is an extension of the corporation's business. If the partnership or LLC is an extension of the corporation's business, the corporation is considered to be doing business in Wisconsin as a result of that ownership interest. On the other hand, if the partnership or LLC is not an extension of the corporation's business, the corporation is not subject to Wisconsin taxation if its only connection to Wisconsin is that ownership interest.
I am vetoing these sections because they were included as part of the proposal to base income apportionment solely on sales, instead of the current method which considers payroll, property and sales. As the single sales factor apportionment was not adopted, these sections should not be enacted. I would have retained these provisions if the single factor method of apportioning corporate income had been adopted. The fiscal effect of this veto is to reduce GPR revenue by $7,500,000 in fiscal year 1999-2000 and by $5,000,000 in fiscal year 2000-2001.
9. Sourcing of Receipts of Sales of Services
Sections 1682, 1736 and 9343 (22fd)
These provisions allow a taxpayer to elect to attribute the receipts from a service received in the state, in proportion to the direct cost of performing such a service.
I am vetoing these provisions because they were part of the proposal to base income apportionment solely on sales, instead of the current method which considers payroll, property and sales. As the single sales factor apportionment was not adopted, these sections should not be enacted.
