I am vetoing these sections because they are unnecessarily prescriptive. Under current law, the commission has the flexibility to compensate for some or all of the reasonable costs of participation in commission proceedings. With this veto, the commission can continue to ensure only reasonable costs are reimbursed by its intervenor compensation appropriation and prescribe a match as it deems appropriate.
45. Extension of Municipal Water and Sewer Service Appeals Process
Section 1991m
This provision permits a dispute between municipalities concerning the extension of water or sewer service to first be appealed to the Public Service Commission. This provision subsequently permits a municipality involved in a dispute to appeal the decision of the commission to the Department of Natural Resources. The department must provide its decision within 45 days.
I am partially vetoing section 1991m to remove the Department of Natural Resources from the appeals process because it is unnecessary. Municipalities appealing a decision by the Public Service Commission concerning the extension of municipal water or sewer service should follow the existing appeals process for appealing a decision by the commission. Under the existing appeals process, an appeal is made to the circuit court in the county in which the municipality is located.
46. Universal Service Fund Revenues Report
Section 9136 (2u)
This section requires the Public Service Commission to report to the Joint Committee on Finance on causes of unencumbered balances in the universal service fund and changes that could be adopted to reduce future universal service fund balances. The report would be submitted to the Committee for its third quarterly meeting in 2015, and the commission could not revise provider contribution rates unless the report has been approved by the Committee.
I am vetoing this section in its entirety because it is unnecessary. The commission already has the ability to utilize universal service fund revenues when determining telecommunication provider rates for the coming year, as demonstrated in 2012. In addition, this section hinders the commission's statutorily-required duty to establish contribution rates by delaying the revision of rates until after the report is approved the Committee.
47. State Agency Lease Requirements
Sections 356q and 356r
This provision requires the Department of Administration to solicit lease options in counties other than Dane or Milwaukee before signing or renewing any lease. In addition, the department is required to prepare a cost-benefit analysis for each lease or renewal to determine whether there are potential savings to the state from moving the affected agency outside Dane or Milwaukee County. The analysis would be provided to the affected agency head and the Joint Committee on Finance.
I am vetoing this provision because this function is already within the department's current law authority under s. 16.84 (5), and therefore, this type of analysis can be accomplished administratively. However, I am directing the department to further evaluate these processes and to consider opportunities where leases could be made in counties outside of Dane or Milwaukee. 48. Tourism Marketing – Earmark Study
Section 9144 (3j)
This section requires the Department of Tourism to conduct a study of the statewide benefits of current marketing earmarks. The study would also include possible alternative marketing expenditures that could be made with the funds. The department would be required to submit the study to the Joint Committee on Finance by January 1, 2017.
I am vetoing this section because it is administratively burdensome. By removing the study, the department can focus its resources where they will be most effective at increasing tourism in the state.
49. Surplus for Rate-Based and Rate-Regulated Providers
Sections 1471nb, 1471nc, 1471ne, 1471nf, 1471ng, 1471nh, 1471nj, 1471nk, 1471nn, 1471np, 1471nq, 1471nr, 1471ns, 1776n, 1776p, 1777fb, 1777fc, 1777fe, 1777ff, 1777fh, 1777fj, 1777fk, 1777fn, 1777fp, 1777fq, 1777fr, 4250c, 4250e, 4250h, 4250k, 9306 (3u) and 9406 (1v)
These sections modify contracting requirements for rate-based services and rate- regulated services purchased by the departments of Health Services, Children and Families, and Corrections, as well as certain county departments.
I am vetoing these changes to surplus retention limitations for rate-based and rate-regulated service providers in their entirety because the changes may have unintended consequences beyond the original intent. With this veto, changes would not be made to the current surplus retention structure. However, I am instructing the departments to consider the concerns raised by certain provider groups and to explore alternatives that could be presented in future legislation.
50. Ambulatory Surgical Centers Reporting
Section 3483t
This section requires the Department of Health Services to annually submit a report to the Joint Committee on Finance summarizing the following information related to the ambulatory surgical centers assessment: (a) the total amount of revenue collected; (b) the total amount each center paid; (c) the amount any eligible managed care organization received; (d) the total amount each managed care organization paid; and (e) the total amount of revenue returned to eligible centers. The Department of Revenue is required to provide any information requested from the Department of Health Services necessary to complete the report.
I am vetoing this section because I object to the creation of unnecessary reporting requirements. In addition, I object to the infringement on taxpayer privacy created by the requirement to include specific information that is subject to restrictions on disclosure of certain tax-related information.
51. Transfer of Regulation of Food, Lodging and Recreational Establishments
Sections 132m, 9102 (3q) and 9402
These sections relate to the transfer of the regulation of food, lodging and recreational establishments from the Department of Health Services to the Department of Agriculture, Trade and Consumer Protection. The provision prohibits the Department of Agriculture, Trade and Consumer Protection, or local health departments that have been granted agent status, from modifying the fees in effect on the general effective date of the bill that apply to entities regulated under Subchapter II of Chapter 97 of the statutes, as created under the bill, related to food safety. In addition, this provision creates the Food Safety Advisory Council in the Department of Agriculture, Trade and Consumer Protection, requires the secretary of the department to appoint council members and requires the council to meet quarterly. I am vetoing these sections because I object to prohibiting the Department of Agriculture, Trade and Consumer Protection or local health departments from modifying current fees. The department and local health departments require the flexibility to ensure that fees are set at an appropriate level to sufficiently cover costs associated with the program. I also object to the requirement to create the Food Safety Advisory Council in the Department of Agriculture, Trade and Consumer Protection because it is unnecessary. The department already has the flexibility to create a council under current law.
52. Audiologist and Speech Language Pathologist Fees
Section 9138 (6c)
This provision sets speech language pathologist and audiologist credential renewal fees at $75 biennially.
I am vetoing this provision because I object to the practice of singling out certain credential fees in statute. This provision prevents the Department of Safety and Professional Services from setting renewal fees according to the department's administrative and enforcement costs attributable to the regulation of these occupations, as is current practice.
53. Progressive Raffles
Sections 4546m, 4546p, 4546r and 4546t
These sections authorize a charitable organization holding a Class B raffle license to conduct a progressive raffle, which is a raffle in which a series of drawings is held and the money collected in ticket sales is carried over to the succeeding drawing if a winner does not select a prize card from among a set of cards.
I am vetoing these sections in their entirety because I object to the changes to raffles as it could threaten the exclusive rights of the Indian tribes to conduct Class III gaming in return for making revenue-sharing payments to the State, which is reflected in the compacts signed by the tribes and the State. The exclusivity clauses prohibit the State from substantively altering the charitable games authorized under state law.
54. Joint Committee on Finance Approval of Tax Reciprocity Agreements
Sections 2117e, 2226e and 2226em
These sections prohibit any income tax reciprocity agreement from taking effect unless approved by the Joint Committee on Finance under s. 13.101 and explicitly prohibit any new agreement with either the State of Minnesota or the State of Illinois unless approved in this manner. This provision would not apply to current agreements with the states of Kentucky, Illinois, Michigan and Indiana. I am vetoing these sections because I object to reducing the flexibility of the Department of Revenue to manage these agreements.
55. Sales Tax Exemption for Amusement Device Proceeds
Sections 2515m, 2515n, 2524m, 2524n and 9437 (2u)
These sections specify that the taxable sales on the privilege of having access to the use of an amusement device include only the sales of playing time on the device. In addition, these sections specify that the current law provision that imposes the sales tax on the sale of or the right to use specified digital goods and additional digital goods (whether on a permanent or less than permanent basis and regardless of whether the purchaser is required to make additional payments for continued use) does not apply to specified digital goods or additional digital goods used on or as part of a device to the extent that playing time on an amusement device derives from playing specified digital goods or additional digital goods.
These sections further specify that certain playing time on an amusement device is to be excluded from the general taxability under the sales and use tax of admissions to amusement, entertainment or recreational events.
These sections also define "amusement device" as a pool table, video game machine, video gambling machine, dartboard, pinball machine, foosball table, air hockey table, shuffleboard table or jukebox.
I am vetoing these sections because I object to the overly broad exception it creates to the imposition of the sales and use tax on digital goods. Such a broad exception may have unintended administrative and fiscal consequences both in the short term and the long term in our increasingly technology-driven age.
56. Cigarette Tax Manufacturer's Discount
Section 3445p
This section increases the cigarette manufacturer's tax discount, from 0.7 percent to 0.8 percent, which manufacturers, bonded direct marketers and distributors receive on cigarette tax stamp purchases from the state.
I am vetoing this section because I object to this unnecessary adjustment. Wisconsin's cigarette tax discount is sufficiently in line with the discount provided by other states, and consequently, no increase in the discount is merited at this time.
57. Additional Auditor Reporting Comparison Requirements
Section 9137
This provision requires the Department of Revenue to submit an annual report to the Joint Committee on Finance related to the activities of the additional auditing positions provided under the bill. The report requires information on the actual or estimated amount of state tax revenues generated by the full-time additional positions and the expenditures associated with the positions. In addition, the report requires information on the number of audits, and the amount of revenue generated from those audits, that were performed on persons headquartered or residing outside Wisconsin compared to persons headquartered or residing in Wisconsin.
I am partially vetoing section 9137 to remove the requirement to report information on the number of audits and the revenue from those audits performed on persons headquartered or residing outside Wisconsin compared to persons headquartered or residing in Wisconsin. I am partially vetoing this section because release of this information may potentially violate the confidentiality standards to which the department must adhere to safeguard taxpayer privacy.
58. Sales Tax Exemption for Construction Materials
Sections 2524r, 9337 (4c) and 9437 (2c)
This provision creates a sales and use tax exemption for goods sold to construction contractors who, in fulfillment of a real property construction activity, transfer goods to Wisconsin elementary and secondary school districts, municipalities or nonprofit entities if the goods become a component of a facility in Wisconsin that is owned by the entity. This provision becomes effective on January 1, 2016.
I am vetoing this provision because the language as drafted is much broader than the scope of the intended legislation as it would apply to construction materials purchased by a contractor for any project. While I am vetoing this provision because of the broad scope of the provision as drafted, I support the intended provision and encourage separate legislation to enact the intended exemption. As such, I support a sales and use tax exemption for goods sold to a construction contractor, while fulfilling a real property construction activity, when the goods are transferred to Wisconsin elementary and secondary school districts, municipalities or nonprofit entities if such goods will be a part of a facility located within the state.
59. Implementation of Room Tax Modifications
Sections 1990ec, 1990ek and 1990ekf
These provisions change the definition of "tourism entity" to mean a nonprofit organization providing destination marketing staff and services that came into existence before January 1, 2016, except that if no such organization exists in the municipality on January 1, 2016, the municipality may contract with such an organization if one is created in the municipality. Under current law, a "tourism entity" must have come into existence before January 1, 1992.
These provisions also specify that if a municipality is subject to other provisions of the bill that require reductions in the amount of room tax revenue that is permitted to be retained for purposes other than tourism promotion and tourism development, the municipality may continue to utilize room tax revenues to satisfy the terms of a contract provided that contract is entered into before January 1, 2016.
I am partially vetoing the definition of "tourism entity" because I object to the period of time that is provided wherein a new tourism entity may first come into existence that is not created in the municipality. Under my partial veto, a "tourism entity" must either have come into existence before January 1, 1992, consistent with current law, or if no such organization exists in the municipality on January 1, 2016, be an entity that a municipality chooses to contract with that is created in the municipality and which provides destination marketing staff and services. As a result of my partial veto, the period of time wherein new entities that are not necessarily created in the municipality and which could be created to potentially divert funds from legitimate convention and visitor bureaus or chambers of commerce would be eliminated.
I am vetoing the provisions allowing use of room tax revenue for the satisfaction of a contract entered into before January 1, 2016, because I object to the additional time that the provisions allow wherein a municipality may enter into new contracts that utilize room tax revenues for purposes other than tourism promotion and tourism development. This additional time could be used to diminish the intent of the bill to require greater shares of room tax revenue to be devoted to tourism promotion and tourism development.
60. Layoff Procedures for Certain Employees
Section 9132 (3d)
This provision excludes the layoff procedures under s. 230.34 (2) (a) from applying to layoffs relating to education-related positions and science services positions in the Department of Natural Resources funded under certain appropriations during the 2013-15 biennium. The procedures would require the employees to be laid off on the basis of seniority or performance or a combination thereof, or by other factors. I am partially vetoing this provision because I object to the narrow exclusion. The purpose of the provision was to ensure that, during the 2015-17 biennium, the department has maximum flexibility in reassigning or reducing staff without eliminating limited term or temporary employees who are critical to the department's operations. My veto restores the intent of the provision.
61. Unfunded Pension Liability Payments
Sections 293d, 293h and 293p
These sections seek to clarify that the secretary of the Department of Administration may require any state agency, including authorities, to make payments related to debt service payments on pension obligation bonds that were issued to cover unfunded pension liabilities. Section 293p explicitly states that the obligation related to unfunded pension liabilities for former University of Wisconsin Hospital and Clinics Board employees is the responsibility of the University of Wisconsin Hospital and Clinics Authority now that the board has been dissolved.
I am vetoing these sections because I do not believe that current law needs to be clarified. Consistent with the current law payment methodology as administered by the Department of Administration, the University of Wisconsin Hospital and Clinics Authority should continue to honor its legal obligation to pay the board's unfunded pension liability obligation in order to avoid shifting these costs to other state agencies and authorities and therefore, unfairly and disproportionately, to state taxpayers.
62. County and Municipal Levy Limit Adjustment for Transferred Services
Section 1986j
This provision creates a new adjustment under the county and municipal levy limits allowing a municipality or county to make an adjustment to its levy limit authority related to savings realized as the result of a service transfer between political subdivisions. The amount of the adjustment is an increase of up to one-half of the amount of the savings realized, subject to an apportionment of those savings agreed upon by the political subdivisions. This adjustment first applies to levies set in 2015.
I am vetoing this section because I object to allowing counties and municipalities to turn savings from service consolidation into a property tax increase. While I support the objective of savings through service consolidation, those savings should be the incentive for consolidation and a benefit to the residents of the county or municipality, rather than an additional tax burden.
63. Alcoholic Beverage License Modifications
Sections 3432d, 3432e, 3432g, 3432i, 3432k, 3432m, 3432o, 3432q, 3432r, 3432s, 3432t, 3432u and 3432w
These sections permit a municipality that has reached its "Class B" alcohol license quota (for licenses for on-premises sales of liquor) to obtain another license by paying a nonrefundable fee of $10,000 to a contiguous municipality that has not reached its quota. The transferred license would then remain under the jurisdiction of the receiving municipality.
These sections allow, but do not require, municipalities with available licenses to transfer a license. A municipality that has not issued any "Class B" license would be prohibited from transferring a license under these sections.
These sections further specify that the $10,000 fee paid for a reserve "Class B" license may not be rebated or refunded to the recipient of the reserve "Class B" license by the municipality that issued the reserve license.
In addition, these sections delete a current law provision that permits municipalities that have reached their liquor license quota to issue a "Class B" liquor license to a restaurant that seats at least 300 people.
Finally, these sections prohibit a winery from holding a Class "B" alcohol license which permits the on-premises consumption of beer unless it was issued a Class "B" license before the effective date of the bill.
I am vetoing these sections because they will have unintended consequences, including significant negative impacts on many tourist areas across the state. While some of these provisions may have merit, the Legislature should review the impact further and forward legislation when the full impact has been analyzed and such issues have been resolved.
64. Lafayette County Sheriff's Department
This provision appropriates $50,000 PR in each year of the biennium to award a law enforcement grant to the Lafayette County Sheriff's Department.
I am vetoing section 9126 (1q) and partially vetoing section 481 [as it relates to s. 20.455 (2) (kd)] by lining out the amounts under s. 20.455 (2) (kd) and writing in smaller amounts that reduce the appropriation by $50,000 in each year of the biennium because I object to providing a grant to one specific recipient. I encourage the Lafayette County Sheriff to work with the Attorney General to pursue funding to address law enforcement needs in the county.
