SB708: Bill Text

LRB-4710/2

PK/TK/MS/PG/GM:cjs:md

2009 - 2010 LEGISLATURE

2009 Senate BILL 708

April 22, 2010 - Introduced by Senator Grothman, cosponsored by Representative LeMahieu. Referred to Committee on Children and Families and Workforce Development.

SB708,2,10 An Act to repeal 49.148 (4), 49.79 (1) (a), 49.79 (5) and 119.23 (2) (a) 1.; to amend 16.27 (5) (intro.), 39.435 (4) (a), 39.44 (3) (a), 49.155 (5), 49.155 (6g) (a) 2., 49.155 (6g) (a) 3., 49.795 (8) (a) (intro.), 49.795 (8) (b) (intro.), 49.795 (8) (c), 71.05 (23) (b) 2., 234.03 (intro.), 234.04 (1), 234.04 (2), 234.04 (3), 234.06 (1), 234.06 (3), 234.49 (2) (a) (intro.), 234.59 (2) (intro.), 234.592 (2) (intro.), 560.9803 (1) (a) and 560.9806 (2) (a); and to create 16.27 (5m), 36.11 (56), 39.435 (4) (b), 49.155 (6g) (a) 5., 49.471 (11c), 49.79 (7m), 49.79 (10), 49.795 (6m), 49.795 (8) (g), 49.842, 66.1204, 71.07 (9e) (h), 234.038, 560.9803 (2m), 560.9805 (2) (d) and 560.9806 (2) (c) of the statutes; relating to: authorized foods under the food stamp program; a deductible and coinsurance under BadgerCare Plus; a minimum copayment and maximum child care hours under Wisconsin Shares; drug testing for eligibility for public assistance; eliminating income eligibility requirements for enrollment in a private school participating in the Milwaukee Parental Choice Program; changing eligibility requirements for persons or families of low and moderate income to receive, directly or indirectly, certain housing, housing assistance, grants, loans, or benefits from the Wisconsin Housing and Economic Development Authority, the Department of Commerce, and local housing authorities; consideration of the income and assets of a person for purposes of receiving low-income energy assistance; consideration of the income and assets of both parents of a student under 22 years of age for purposes of awarding a grant or scholarship to such a student; prohibiting new claims under the earned income tax credit; increasing the individual income tax personal exemption for dependents; granting rule-making authority; and providing a penalty.

Analysis by the Legislative Reference Bureau

This bill makes a number of changes with respect to benefits for which low-income state residents are eligible.

BadgerCare Plus

BadgerCare Plus (BC+) is a Medical Assistance (MA) program, administered by DHS, that provides health care benefits under two different plans, depending on the basis for a recipient's eligibility, to recipients who satisfy financial and nonfinancial eligibility criteria. The first plan provides the same benefits that are provided, and requires the same cost sharing that is required, under regular MA. The second plan, called the Benchmark Plan, provides specified benefits with specified cost sharing requirements. The bill requires recipients under both plans to pay an annual deductible of $500 and coinsurance of five percent of costs exceeding the deductible. DHS must request a waiver from the secretary of the federal Department of Health and Human Services if DHS determines that it needs a waiver to implement the new cost sharing.

Food stamp program

Under current law, DHS administers the federal food stamp program, now known as the Supplemental Nutrition Assistance Program (SNAP), which assists eligible low-income individuals to purchase food. The bill requires DHS to promulgate rules that specify the foods that an individual may purchase under the program. DHS is prohibited from allowing soft drinks and snack foods, such as potato chips, to be purchased under the program and must require individuals to purchase a lower-priced brand of a food item that is available in both lower-priced and higher-priced brands. In addition, the bill makes it a Class A misdemeanor (punishable by a fine of up to $10,000 or imprisonment for up to nine months, or both) for a person to spend the night in the house of a member of a household that is eligible for food stamps if the person's income is not considered in determining the eligibility of the household for food stamps. These changes will not be implemented, however, if DHS determines that a waiver is needed, unless federal law allows a waiver to be requested and a waiver is granted.

Wisconsin Shares

The Wisconsin Works (W-2) program under current law, which is administered by the Department of Children and Families (DCF), provides work experience and benefits for low-income custodial parents who are at least 18 years old, as well as a child care subsidy program, known as Wisconsin Shares, under which an individual who is the parent of a child under the age of 13 or, if the child is disabled, under the age of 19, and who satisfies other eligibility criteria may receive a child care subsidy for child care services that the individual needs to participate in various educational or work activities. Current law provides that no more than 12, or in some cases up to 16, hours of subsidized child care may be authorized per child per day. The bill imposes a limit on the amount of child care for which a subsidy may be provided of 40 hours per week per child. Also under current law, a child care subsidy recipient must pay a copayment for child care that is a percentage of the cost specified by DCF in a copayment schedule. The bill sets a minimum copayment of $2 per hour per child.

Drug testing for public assistance

Under current law, as a condition of eligibility for a W-2 employment position, an individual must state in writing whether he or she has been convicted in any state or federal court of a felony that has as an element possession, use, or distribution of a controlled substance. Also under current law, if an individual in a W-2 community service job or transitional placement was convicted after a specified date in any state or federal court of a felony that has as an element possession, use, or distribution of a controlled substance, the individual must submit to a test for use of a controlled substance. If the test results are positive, the individual's benefit is reduced for at least 12 months, and the W-2 agency may require the individual to participate in a drug abuse evaluation, assessment, and treatment program.

Also under current law, an applicant for or recipient under the food stamp program must state in writing whether he or she or any member of his or her household has been convicted in any state or federal court of a felony that has as an element possession, use, or distribution of a controlled substance. If an applicant or recipient or household member was convicted after a specified date in any state or federal court of a felony that has as an element possession, use, or distribution of a controlled substance, the applicant, recipient, or household member must submit to a test for use of a controlled substance for continued eligibility. If the test results are positive, DHS may not consider that individual's needs in determining the household's eligibility for food stamps for at least 12 months but must consider that individual's income and resources to be available to the household.

This bill eliminates those controlled substance conviction and testing requirements and replaces them with a requirement that applies to all assistance programs, which are defined in the bill as programs under the public assistance chapter of the statutes under which DCF or DHS provides services, benefits, or other assistance. Under the bill, to the extent permitted under federal law if there are any conflicting provisions, as a condition of eligibility or continued eligibility for any assistance program an individual must submit to a test for the use of a controlled substance. If the test results are positive, the individual is permanently ineligible for any assistance program.

Besides W-2 and the food stamp program, assistance programs include Medical Assistance, including BadgerCare Plus, which provides health care services to disabled, blind, or elderly low-income persons and certain low-income children and families; the program that provides prescription drug assistance for elderly persons (commonly known as SeniorCare); the program that provides eligible persons with assistance in establishing the paternity of a child, establishing or modifying child support obligations, enforcing child support or maintenance (alimony) obligations, and locating persons who owe child support or children taken by parents in violation of court orders; the programs that provide state supplemental payments to persons receiving federal supplemental security income; the program that pays funeral, burial, and cemetery expenses for persons whose estates are insufficient to pay those expenses; and the disease aids program that provides assistance in paying the costs of medical treatment for eligible persons with cystic fibrosis, hemophilia, or chronic renal (kidney) disease.

Milwaukee Parental Choice Program pupil eligibility

Under the Milwaukee Parental Choice Program (MPCP), a pupil who resides in the city of Milwaukee and who is a member of a family that has a total family income that does not exceed 1.75 times the poverty level may attend a private school at state expense under certain conditions. This bill eliminates as a condition for participating in the MPCP the requirement that a pupil be a member of a family with limited family income.

Low-income energy assistance

Under current law, the Department of Administration administers a program that provides low-income energy assistance to eligible households, including households with incomes of less than 60 percent of the statewide median household income and households composed entirely of individuals receiving Aid to Families with Dependent Children or Supplemental Security Income. This bill makes ineligible for low-income energy assistance a household with assets that exceed $2,000 in cash equity value or a vehicle having an equity value of $10,000 or greater.

Wisconsin Housing and Economic Development Authority low-income housing assistance

Under current law, the Wisconsin Housing and Economic Development Authority (WHEDA) administers several programs that provide assistance to persons and families of low and moderate income to obtain housing. Eligibility for the programs is established in both the Wisconsin statutes and under federal law, including the Housing Choice Voucher Program administered by the Federal Department of Housing and Urban Development (HUD). Funding for these programs is provided from a number of sources, including bonds issued by WHEDA under its statutory authority and from the federal government.

This bill requires WHEDA to impose the following limits on eligibility for families and persons of low and moderate income seeking housing assistance directly or indirectly through WHEDA:

1. No person may receive housing assistance from HUD through WHEDA unless the person is disabled or aged 62 or older. The bill defines "disabled" to mean blind as established under federal law or disabled as established under federal law.

2. Persons or families of low and moderate income who receive housing or housing assistance directly or indirectly from WHEDA shall be subject to the following limitations:

a. A person or family of low or moderate income must be restricted to housing in which the square footage is less than 50 percent of the average square footage for a rental unit of average rental value in the county in which the person or family resides. In order to satisfy this requirement, WHEDA may require that more than two unrelated persons or families of low or moderate income be housed in one housing unit.

b. With two exceptions, persons or families of low and moderate income with assets that exceed $2,000 in cash equity value or a vehicle having an equity value of $10,000 or greater may not receive housing or housing assistance from WHEDA. This prohibition does not apply to a person who is disabled or aged 62 or older.

c. No adult may spend the night in the home of any person or family of low and moderate income who receives housing or housing assistance directly or indirectly from WHEDA if the income of that adult was not considered in determining the eligibility of the persons and families to receive housing or housing assistance. The bill defines "adult" as a person who is 18 years of age or older, except that for purposes of investigating or prosecuting a person who is alleged to have violated any state or federal criminal law or any civil law or municipal ordinance, "adult" means a person who has attained 17 years of age. Any person who violates this prohibition is guilty of a Class A misdemeanor.

If WHEDA determines that it may not implement the limitations and prohibitions established under the bill without a waiver of federal law from HUD and that a waiver of federal law is available, WHEDA must apply for and obtain a waiver from HUD before it may implement the limitations and prohibitions.

Department of Commerce low-income housing assistance

Under current law, the Department of Commerce (Commerce) may make grants or loans, directly or through agents designated by the department, to persons or families of low or moderate income to defray housing costs, including utility costs, and may make grants to community-based organizations, organizations operated for profit, or housing authorities to improve the ability of these entities to provide housing opportunities for persons or families of low or moderate income.

This bill requires Commerce to impose limits on eligibility and housing for families and persons of low and moderate income seeking housing assistance directly or indirectly through Commerce. Under the requirement, persons or families of low and moderate income who receive housing or assistance with housing costs, assistance with utility-related costs, grants, or loans from any project or program administered by Commerce as described above must be subject to the following limitations:

1. A person or family of low or moderate income must be restricted to housing in which the square footage is less than 50 percent of the average square footage for a rental unit of average rental value in the county in which the person or family resides. In order to satisfy this requirement, Commerce may require more than two unrelated persons or families of low or moderate income in one housing unit.

2. With two exceptions, persons or families of low and moderate income with assets that exceed $2,000 in cash equity value or a vehicle having an equity value of $10,000 or greater may not receive housing or assistance with housing costs or utility-related costs, from Commerce. This prohibition does not apply to a person who is disabled or aged 62 or older.

3. No adult may spend the night in the home of any person or family of low or moderate income who receives housing or assistance with housing costs or utility-related costs or who benefits from a housing assistance grant or loan made by Commerce if the income of that adult was not considered in determining the eligibility of the person or family to receive housing, assistance, or benefits. Any person who violates this prohibition is guilty of a Class A misdemeanor.

If Commerce determines that it may not implement the limitations and prohibitions established under the bill without a waiver of federal law from HUD and that a waiver of federal law is available, Commerce must apply for and obtain a waiver from HUD before it may implement the limitations and prohibitions.

Higher education grants and scholarships

Under current law, the Higher Educational Aids Board (HEAB) awards certain grants based on financial need. Those grants include Wisconsin higher education grants for students enrolled in public institutions of higher education or tribal colleges in this state, tuition grants for students enrolled in private institutions of higher education in this state, and minority undergraduate grants for minority students enrolled in private institutions of higher education or technical colleges in this state.

Currently, those grants are awarded based on a formula that accounts for expected parental and student contributions and that is consistent with nationally approved needs analysis methodology. Under current federal law setting forth that needs analysis methodology, parental income and assets for a dependent student whose parents are divorced or separated is determined by including only the income and assets of the parent with whom the student resided for the greater portion of the 12-month period preceding the date of the application or, if that criterion does not apply, only the income and assets of the parent who provided the greater support during that 12-month period.

This bill requires HEAB, in determining the expected parental contribution for a student under 22 years of age who is a dependent of his or her parents, to include in the parental income and assets that are available for that contribution the income and assets of both of the student's parents. The bill also prohibits the Board of Regents of the University of Wisconsin System from awarding a scholarship that is based on financial need to a student under 22 years of age who is a dependent of his or her parents unless the calculation of the student's financial need includes consideration of the income and assets of both of the student's parents.

Local housing authorities

Under current law, any city, village, town, or county may create a housing authority, which may acquire, lease, and operate housing projects for persons of low income. A housing authority may accept grants from the federal government for any housing project that the authority undertakes.

This bill requires a local housing authority to impose limits on eligibility for persons of low income that are similar to the limits on eligibility that WHEDA and the Department of Commerce are required to impose under the bill.

Taxation

Under federal law, the earned income tax credit (EITC) is a refundable tax credit for low-income workers. If the amount of the claim exceeds the worker's tax liability, the claimant receives a check for the excess amount from the Internal Revenue Service. The amount of the credit for which a claimant is eligible is based, in part, on whether the claimant has no qualifying children, one qualifying child, or more than one qualifying child.

Under current law, the refundable Wisconsin EITC may be claimed in an amount equal to a certain percentage of the federal basic EITC. To be eligible for the Wisconsin EITC, an individual must have one or more qualifying children. The Wisconsin EITC is equal to 4 percent of the federal credit if the claimant has one qualifying child, 14 percent of the federal credit if the claimant has two qualifying children, and 43 percent of the federal credit if the claimant has three or more qualifying children.

Under this bill, no new claims under the Wisconsin EITC may be filed for a taxable year that begins after December 31, 2010.

Under current law, an individual income tax personal exemption exists in the amount of $700 for each taxpayer who is required to file an income tax return and $700 for the taxpayer's spouse, except if the spouse is filing separately or as a head of household. A taxpayer may also claim a $700 exemption for each dependent for whom he or she is entitled to claim an exemption under the Internal Revenue Code. In general, an additional exemption of $250 may be claimed by a taxpayer, and spouse, who has reached the age of 65 before the close of the taxable year to which his or her tax return relates.

This bill increase the personal exemption for dependents from $700 to $2,200.

Because this bill directly or substantially affects the development, construction, cost or availability of housing in this state, the Department of Commerce, as required by law, will prepare a report to be printed as an appendix to this bill.

Because this bill relates to an exemption from state or local taxes, it may be referred to the Joint Survey Committee on Tax Exemptions for a report to be printed as an appendix to the bill.

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:

SB708, s. 1 Section 1. 16.27 (5) (intro.) of the statutes is amended to read:

SB708,8,4 16.27 (5) Eligibility. (intro.) Subject to the requirements of subs. (4) (b) and (8) and except as provided in sub. (5m), the following shall receive low-income energy assistance under this section:

SB708, s. 2 Section 2. 16.27 (5m) of the statutes is created to read:

SB708,8,9 16.27 (5m) Limitations on eligibility. (a) 1. Except as provided in subd. 2, a household with assets that exceed $2,000 in combined equity value or with a vehicle having an equity value of $10,000 or greater shall not be eligible for low-income energy assistance under this section.

SB708,8,11 2. Subdivision 1. does not apply if any individual member of the household is disabled, as defined in s. 49.468 (1) (a) 1., or is aged 62 or older.

SB708,8,20 (b) If the department of administration determines it may not implement the limitation under par. (a) 1. without a waiver from the federal department of health and human services and that such a waiver may be requested under federal law, the authority shall request a waiver from the secretary of the federal department of health and human services. If a waiver that is consistent with par. (a) 1. is granted and in effect, the department of administration shall implement the limitation on eligibility under par. (a) 1. If a waiver is required, the department of administration may not implement the limitation on eligibility under par. (a) 1. unless a waiver is granted and in effect.

SB708, s. 3 Section 3. 36.11 (56) of the statutes is created to read:

SB708,9,4 36.11 (56) Scholarships. The board may not award a scholarship that is based in whole or in part on financial need to any student under the age of 22 who is a dependent of his or her parents unless the board's calculation of financial need includes consideration of the income and assets of both of the student's parents.

SB708, s. 4 Section 4. 39.435 (4) (a) of the statutes is amended to read:

SB708,9,9 39.435 (4) (a) The board shall award grants under this section based on a formula that accounts for expected parental and student contributions and that, except as provided in par. (b), is consistent with generally accepted definitions and nationally approved needs analysis methodology.

SB708, s. 5 Section 5. 39.435 (4) (b) of the statutes is created to read:

SB708,9,14 39.435 (4) (b) In determining the expected parental contribution for a student under 22 years of age who is a dependent of his or her parents, the board shall include in the parental income and assets that are available for that contribution the income and assets of both of the student's parents.

SB708, s. 6 Section 6. 39.44 (3) (a) of the statutes is amended to read:

SB708,9,18 39.44 (3) (a) Award grants to eligible students on the basis of financial need, as determined by the board, using the needs analysis methodology used under s. 39.435.

SB708, s. 7 Section 7. 49.148 (4) of the statutes, as affected by 2009 Wisconsin Act 28, is repealed.

SB708, s. 8 Section 8. 49.155 (5) of the statutes is amended to read: