The specific accounting issue involves interpretation of the current accounting standard for property tax recognition established by the National Council on Governmental Accounting (“NCGA”) Interpretation 3 “Revenue Recognition--Property Taxes.” The accounting interpretation issue is presented as a result of the interplay of the following two factors: (1) most public school and vocational school districts operate on (and their financial statements are prepared on) a July 1 to June 30 fiscal year; (2) the Wisconsin Statutes authorize the various Wisconsin local units of government to allow the payment of property taxes (which provide the funding for payment of public school and vocational school district debts and obligations) to be made in installments on January 1 and July 31 of a given year (for example 1996) relating to taxes levied (in the 1996 example given) for a school district's fiscal year extending from July 1, 1995 to June 30, 1996.
Because the July 31 date for payment of the second property tax installment is after the June 30 fiscal year for the school districts, the staff of the GASB in communications with representatives of Wisconsin accounting organizations and school district associations on the issue, set forth the GASB staff's view that the July 31 tax installment revenues may not be recognized for purposes for fiscal years ending the preceding June 30. As a result, auditors for Wisconsin public school districts and vocational school districts would need to show in such school districts' financial statements, deferred revenue for the July 31 installment property taxes. Despite requests for reconsideration, the GASB staff has not changed its position.
Such GASB staff interpretation has resulted in property tax revenue and fund balance amounts as shown in most Wisconsin school districts' audit reports being different from that required to be shown in such districts' Annual Reports and budget documents, thus causing confusion as to what a particular district's financial position actually is. The State of Wisconsin Department of Public Instructions believes that the GASB staff interpretation, in the context of the Wisconsin statutes governing the timing of property tax levies and payments, does not result in appropriate school district revenue and fund balance financial statement presentations.
As a consequence, Wisconsin public school and vocational school districts may be requesting that their external auditors prepare their district's audited financials without showing deferred revenue for uncollected property taxes--which may result in the auditor issuing a qualified opinion. The issuance of such a qualified audit opinion would preclude use of the s. 551.22(1)(a), Wis. Stats., registration exemption on a self-executing basis for offers and sales in Wisconsin of the school district's debt securities to the public.
Therefore, in similar fashion to emergency rule-making action taken by the agency in 1982 and 1994, and for the purpose of alleviating disruption that would occur to the near-term borrowing/bonding plans of governmental school district issuers that regularly claim “automatic” exemption status under s. 551.22(1)(a), Wis. Stats., for the offer and sale in Wisconsin of their debt securities, the Division of Securities, in consultation with representatives of school district issuers, bond attorneys and accounting groups, is adopting these emergency rules designating an alternative-to-full-GAAP financial statement provision to deal with this accounting issue to enable school district issuers to continue to use the exemption in s. 551.22(1)(a), Wis. Stats., on a self-executing basis. Also, this rule-making action is warranted because there is no investor protection securities regulatory purpose served by having such school district issuers make a filing with this agency (for a bond offering they otherwise would be making without a filing) solely because of the existence of a one-sentence qualification contained in the auditor's opinion for the issuer's financial statements.
The emergency rule created in s. SEC 2.01(1)(c)5 designates as a permitted alternative accounting guideline for purposes of use of the registration exemption in s. 551.22(1)(a), Wis. Stats., GAAP, but where the auditor's opinion is qualified with respect to the recognition of property tax revenue. The emergency rule created in s. SEC 2.01(1)(d)5 provides that the auditor's opinion with respect to the financial statements of a school district issuer covered by the rule in SEC 2.01(1)(c)5 must contain language corresponding to the qualification language in SEC 2.01(1)(c)5.
Text of Rule
SECTION 1. SEC 2.01(1)(c)5 is created to read:
SEC 2.01(1)(c)5 The issuer's annual general purpose financial statement are prepared according to generally accepted accounting principles as provided in subd. 1, except that the auditor's opinion is qualified with respect to the recognition of property tax revenue.
SECTION 2. SEC 2.01(1)(d)5 is created to read:
SEC 2.01(1)(d)5 With respect to par. (c)5, the financial statements are prepared in accordance with generally accepted accounting principles, except that the auditor's opinion is qualified with respect to the recognition of property tax revenue, or equivalent language.
Initial Regulatory Flexibility Analysis & Fiscal Effect
There is no small business impact to these rules because the rules relate solely to municipal/governmental securities issuers.
The proposed rules will have no fiscal effect on the agency, and a copy of the complete Fiscal Estimate is available upon request to the agency. The proposed rules' effect on local units of government is discussed in detail in the Summary portion of this Rule-Making Hearing Notice.
Contact Person
Questions regarding the proposed rule may be directed to agency General Counsel Randall E. Schumann, 101 East Wilson Street, P.O. Box 1768, Madison, WI 53701; (608) 266-3414.
Notice of Hearing
Transportation
Notice is hereby given that pursuant to ss. 85.16 (1) and 348.07 (4), Stats., interpreting s. 348.07 (4), Stats., the Department of Transportation will hold a public hearing at the following location to consider the amendment of ch. Trans 276, Wis. Adm. Code, relating to allowing the operation of “double bottoms” and certain other vehicles on certain specified highways.
Hearing Information
August 12, 1996 Room 88
Monday Hill Farms State Trans. Bldg.
10:00 A.M. 4802 Sheboygan Ave.
Madison, WI
The hearing location is accessible to people with disabilities.
Written Comments and Contact Person
The public record on this proposed rulemaking will be held open until close of business, August 14, 1996, to permit the submission of written comments from people unable to attend the public hearing or who wish to supplement testimony offered at the hearing. Any such written comments should be submitted to:
Mark Morrison, (608) 266-1675
Traffic & Safety Engineer, Room 601
P. O. Box 7916
Madison, WI 53707-7916
Analysis Prepared by the Wis. Dept. of Transportation
Statutory Authority: ss. 85.16 (1) and 348.07 (4)
Statute Interpreted: s. 348.07 (4)
General Summary of Proposed Rule
This proposed rule amends s. Trans 276.07 (4), Wis. Adm. Code, to add a segment of highway to the designated highway system established under s. 348.07 (4), Stats. The actual highway segment that this proposed rule adds to the designated highway system is:
Hwy. From To
STH USH 12 S. of STH 113
19 Springfield Corners in Waunakee
The proposed rule text often achieves these objectives by consolidating individual segments into contiguous segments with new end points. In order to determine the actual highway segment added, it is necessary to compare the combined old designations with the combined new designation.
The long trucks to which this proposed rule applies are those with 53-foot semitrailers, “double bottoms” and the vehicles which may legally operate on the federal National Network, but which exceed Wisconsin's regular limits on overall length. Generally, no person may operate any of the following vehicles on Wisconsin's highways without a permit:
1) A single vehicle with an overall length in excess of 40 feet;
2) A combination of vehicles with an overall length in excess of 65 feet;
3) A semitrailer longer than 48 feet;
4) An automobile haulaway longer than 66 feet plus allowed overhangs; or
5) A “double bottom”.
Certain exceptions are provided under s. 348.07 (2), Stats., which implements provisions of the federal Surface Transportation Assistance Act in Wisconsin. 45-foot buses are allowed on the National Network and Interstate system by Federal law, Section 4006 (b) of the Intermodal Surface Transportation Efficiency Act of 1991.
The effect of this proposed rule will be to extend the provisions of ss. 348.07 (2) (f), (fm), (gm) and (gr), and 348.08 (1) (e), Stats., to the highway segments listed above. As a result, vehicles which may legally operate on the federal National Network in Wisconsin will also be allowed to operate on the newly-designated highways. Specifically, this means there will be no overall length limitation for a tractor-semitrailer combination, a “double bottom” or an automobile haulaway on the affected highway segments. There also will be no length limitation for a truck tractor or road tractor when operated in a tractor-semitrailer combination or as part of a “double bottom” or an automobile haulaway. “Double bottoms” will be allowed to operate on the affected highway segments provided neither trailer is longer than 28 feet, 6 inches. Semitrailers up to 53 feet long may also be operated on these highway segments provided the kingpin-to-rear axle distance does not exceed 43 feet. This distance is measured from the kingpin to the center of the rear axle or, if the semitrailer has a tandem axle, to a point midway between the first and last axles of the tandem. Otherwise, semitrailers, including semitrailers which are part of an automobile haulaway, are limited to 48 feet in length.
These vehicles and combinations are also allowed to operate on undesignated highways for a distance of 5 miles or less from the designated highway in order to reach fuel, food, maintenance, repair, rest, staging, terminal or vehicle assembly or points of loading or unloading.
Fiscal Estimate
The Department estimates that there will be no fiscal impact on the liabilities or revenues of any county, city, village, town, school district, technical college district or sewerage district.
Initial Regulatory Flexibility Analysis
The provisions of this proposed rule adding highway segments to the designated system have no direct adverse effect on small businesses, and may have a favorable effect on those small businesses which are shippers or carriers using the newly-designated routes.
Copies of Proposed Rule
Copies of this proposed rule are available without cost upon request to the Office of the State Traffic Engineer, P. O. Box 7916, Madison, Wisconsin, 53707, telephone (608) 266-1675. For questions about this rulemaking, please call Mark Morrison, Traffic & Safety Engineer at (608) 266-1675. Hearing-impaired individuals may contact the Department using TDD (608) 266-0396. Alternate formats of the proposed rule will be provided to individuals at their request.
Notice of Submission of Proposed Rules to the Presiding Officer of each House of the Legislature, Under S. 227.19, Stats.
Please check the Bulletin of Proceedings for further information on a particular rule.
Ch. HFS 34 - Relating to standards for emergency mental health service programs.
S. RL 120.02 (intro.) and ch. RL 128 - Relating to education requirements by registered auctioneers.
S. Tax 11.69 - Relating to the Wisconsin sales and use tax treatment of sales and purchases by financial institutions.
Administrative Rules Filed With The
Revisor Of Statutes Bureau
The following administrative rules have been filed with the Revisor of Statutes Bureau and are in the process of being published. The date assigned to each rule is the projected effective date. It is possible that the publication of these rules could be delayed. Contact the Revisor of Statutes Bureau at (608) 266-7275 for updated information on the effective dates for the listed rules.
An order amending ch. DE 12.01 (3), relating to the delegation of the polishing portion of an oral prophylaxis by a dentist to an unlicensed person.
Effective 09-01-96.
An order repealing s. HFS 61.81 and creating ch. HFS 40, relating to mental health day treatment services for children and adolescents.
Effective 09-01-96.
An order creating ch. HFS 38, relating to treatment foster care for children.
Effective 09-01-96.
Health & Family Services
(CR 96-8):
An order affecting s. HFS 124.20 (5), relating to the administration of labor-inducing agents in hospitals.
