Rule-making notices
Notice of Hearing
Insurance
NOTICE IS HEREBY GIVEN that pursuant to the authority granted under s.
601.41 (3), Stats., and the procedures set forth in under s.
227.18, Stats., OCI will hold a public hearing to consider the adoption of the attached proposed rulemaking order affecting s.
Ins 3.39, Wis. Adm. Code, relating to Medicare supplement, replacement, cost-sharing, select, advantage and Medicare D prescription drug plans.
Hearing Information
Date: November 30, 2004
Time: 1:00 p.m., or as soon thereafter as the
matter may be reached
Location: Office of the Commissioner of Insurance
2nd Floor
125 South Webster Street
Madison, Wisconsin
Written comments or comments submitted through the Wisconsin Administrative Rule website at: https:// adminrules.wisconsin.gov on the proposed rule will be considered. The deadline for submitting comments is 4:00 p.m. on the 14th day after the date for the hearing stated in this Notice of Hearing.
Written comments should be sent to:
Julie E. Walsh
Legal Unit - OCI Rule Comment for Rule Ins 3.39
Office of the Commissioner of Insurance
PO Box 7873
Madison WI 53707-7873
Analysis prepared by the Office of the Commissioner of Insurance (OCI)
1. Statutes interpreted: Sections
185.983 (1m),
600.03,
601.01 (2),
609.01 (1g) (b),
625.16,
628.34 (12),
628.38,
631.20 (2),
632.73 (2m),
632.76 (2) (b),
632.81,
632.895 (6) and
(9), Stats.
3. OCI's authority: The Centers For Medicare and Medicaid (CMS) has delegated through the National Association of Insurance Commissioners, (NAIC) the function of regulating insurers offering Medicare supplement, replacement, cost, select and Medicare Part D prescription drug plan insurance products in accordance with NAIC Model laws. This rule replaces the use of the name Medicare + Choice with Medicare Advantage, due to a federal change in the name of the program. The rule implements the requirement that by January 1 2006, Medicare supplemental, replacement, cost-sharing, select and Advantage plans cannot offer a Medicare Part D prescription drug benefit, except as permitted by s.
632.895 (6), Stat., due to the fact that Wisconsin is one of three states that has been granted a waiver from being required to offer the standard plans as described by CMS.
4. Related statutes or rules: The Medicare supplement, replacement, cost-sharing, select plans are currently regulated through s.
Ins 3.39, Wis. Adm. Code including the appendices. This rule modifies s.
Ins 3.39 and several appendices in order to comply with the federal and NAIC requirements related to the MMA to the extent Wisconsin need comply due to the status of being a waiver state. Section
632.895 (6), Stats., requirement for prescription drugs remain a mandated benefit for insurers offering Medicare supplement, replacement, cost-sharing, and select plans since Wisconsin is a waiver state and as such, is permitted to continue requiring this benefit.
5. Plain language analysis and summary: The federal Medicare Prescription Drugs, Improvement and Modernization Act (MMA) of 2003 was signed into law on December 8, 2003. It provided that the National Association of Insurance Commissioners (NAIC) had nine months to make changes to the NAIC Medicare Supplement Model Regulation. The amendments to the NAIC Model Regulation were adopted September 8, 2004.
The MMA created Medicare Part D for outpatient prescription drug coverage and made changes to basic Medicare supplement, Medicare replacement and Medicare select policies (Medigap policies). Medigap policies are policies purchased by Medicare beneficiaries to cover Medicare deductibles and selected services that Medicare does not cover. Medicare establishes eligibility rules, benefits and coverage limits. Medigap policies are designed to supplement only those benefits covered by the Medicare program for Medicare eligible beneficiaries.
The proposed rule incorporates the NAIC Model Regulation to Implement the NAIC Medicare Supplement Insurance Minimum Standards Model Act into Wisconsin's current Medicare supplement rules. The proposed rule would create two high deductible Medicare supplement policies basic Medicare supplement policies and Medicare select policies. It would revise the standards for Medigap policies to eliminate outpatient prescription drug coverage for those who enroll in Medicare Part D; and prohibit the sale of outpatient prescription drug coverage in Medigap policies after December 30, 2005, when Medicare Part D comes into effect, except to the extent required under s.
632.895, Stats.
The proposed rule allows individuals currently covered by Medigap policies that provide outpatient prescription drug coverage the opportunity to maintain their current coverage. However, the federal MMA provides that insured individuals who choose to maintain existing coverage with the drug benefit will be subject to a penalty if they decide to apply for Medicare Part D coverage after January 1, 2006.
Failure to amend the current rule will mean that persons turning 65 or qualifying for Medicare due to disability will not be able to purchase in Wisconsin coverage that supplements payment by Medicare.
In order to meet the deadlines required by the MMA and to implement the requirements of the NAIC Model regulation, the OCI has created a task list of activities necessary to ensure that Wisconsin continues to maintain a competitive Medigap insurance market for its Medicare beneficiaries. In addition to drafting amendments to s.
Ins 3.39, Wis. Adm. Code, and assisting with the timely adoption of these amendments, implementing the proposed rule will require that the OCI review and approve riders and new Medigap policy forms. To assist insurance companies in filing riders and policy forms, the OCI will edit its existing Medigap policy form checklist and publish the revised checklist on its website. The OCI will draft bulletins for insurers explaining the requirements for compliance and policy form approval. The OCI will also publish information in “
WIN" (Wisconsin Insurance Newsletter), its agents' newsletter, and produce periodic additional information for agents as deemed necessary.
To assist Medigap insurance consumers, the OCI will edit its “Wisconsin Guide to Health Insurance for People with Medicare,“ and redraft its “Medicare Supplement Insurance Approved Policies“ booklet to include new policies that meet the requirements of During 2005, the OCI will also develop and publish consumer information, and make presentations to consumers advocacy organizations, insurance agents, trade organizations and insurance companies. The OCI has assigned three insurance examiners and a insurance supervisor with the responsibility for reviewing and approving Medigap policy forms, reviewing advertising materials, for drafting consumer, insurer and agent information, and for making presentations to Medigap consumers, agents, insurers and other interested parties.
6. Summary of and comparison with existing federal regulations: The Medicare program was created in 1965 under the Title XVIII of the Social Security Act. Medicare is the national health insurance program for people age 65 or older, some people under age 65 with disabilities, and people with end-stage renal disease (ESRD).
The Omnibus Budget Reconciliation Act (OBRA) of 1990 required that Medigap policies sold to Medicare beneficiaries conform to 10 standardized benefit packages, identified as Plans A through J. States were required to adopt the federal standards for Medigap policies available to their Medicare beneficiaries
Wisconsin was one of three states that received a waiver from the federal standardization regulations regarding Medicare supplement insurance policies. Wisconsin's Medicare beneficiaries were allowed to purchase Medigap policies that consisted of a basic benefit plan with optional riders.
Federal legislation called the Medicare Prescription Drugs, Improvement and Modernization Act (MMA) of 2003 was signed into law on December 8, 2003. It provides significant changes to the Medicare program, including creating Medicare Part D for outpatient prescription drug coverage and requiring changes to Medicare supplement policies that are regulated by state insurance departments. The MMA also required that the National Association of Insurance Commissioners (NAIC) amend its NAIC Model Regulation to Implement the NAIC Medicare Supplement Insurance Minimum Standards Model Act by September 8, 2004.
Specifically, the MMA required that the NAIC Model Regulation be revised to include the following:
1. Add two new plans called K and L to the standard Medigap plans A through J,
2. Revise the standard H, I and J Medigap plans to eliminate prescription drug coverage for those who enroll in Medicare Part D,
3. Prohibit the sale of outpatient prescription drug coverage in Medigap policies after December 30, 2005, when Medicare Part D becomes comes into effect,
4. Make any other changes to the NAIC Model Regulation that might be required as a result of the federal legislation,
The NAIC Model Regulation to Implement the NAIC Medicare Supplement Insurance Minimum Standards Model Act was adopted by the NAIC on September 8, 2004.
Wisconsin's Medicare supplement rule, s.
Ins 3.39, Wis. Adm. Code, currently requires that Medigap policies include a catastrophic coverage for 80% of outpatient prescription drug charges that exceed $6,250 per calendar year. In addition, three Medigap policies offer an optional outpatient prescription drug rider.
The proposed rule is based on the NAIC Model Regulation as adopted September 8, 2004. The proposed rule:
1. Creates two new high deductible basic Medicare and Medicare select policies,
2. Eliminates outpatient prescription drug coverage under basic Medicare supplement, Medicare replacement, and Medicare select insurance plans,
3. Prohibits the sales of outpatient prescription drug coverage under Medicare supplement, Medicare replacement, and Medicare select insurance plans after December 30, 2004, except to the extent required under s.
632.895, Stats., and
4. Makes other changes to the proposed rule as a result of the federal legislation.
7. Comparison of similar rules in adjacent states:
Iowa: Iowa makes available to its Medicare beneficiaries Medigap policies A through J as required by the Medicare reform provisions under OBRA 1990 and the prior NAIC Model Regulation. Iowa will have to amend its regulations to create new Medigap plans K and L, and to eliminate prescription drug coverage under its standard H, I and J Medigap policies for those who enroll in Medicare Part D. It also will have to amend its regulations to include the prohibitions and other changes under MMA.
Illinois: Illinois makes available to its Medicare beneficiaries Medigap policies A through J as required by the Medicare reform provisions under OBRA 1990, and the prior NAIC Model Regulation. Illinois will have to amend its regulations to create new Medigap plans K and L, and to eliminate prescription drug coverage under its standard H, I and J Medigap policies for those who enroll in Medicare Part D. It also will have to amend its regulations to include the prohibitions and other changes under MMA.
Minnesota: Minnesota, like Wisconsin, received a waiver from the federal standardization regulations. Minnesota makes available to its Medicare beneficiaries two standardized policies (basic and extended basic), both of which may include optional riders to cover prescription drugs. Minnesota will have to amend its Medicare supplement regulations to create two cost-sharing (high deductible) plans, and eliminate the optional riders that cover prescription drugs. It also will have to amend its regulations to include the prohibitions and other changes under MMA.
Michigan: Michigan makes available to its Medicare beneficiaries Medigap policies A through J as required by the Medicare reform provisions under OBRA 1990, and the prior NAIC Model Regulation. Michigan will have to amend its regulations to create new Medigap plans K and L, and to eliminate prescription drug coverage under its standard H, I and J Medigap policies for those who enroll in Medicare Part D. It also will have to amend its regulations to include the prohibitions and other changes under MMA.
8. Factual data and analytical methodologies: The Medicare Prescription Drugs, Improvement and Modernization Act (MMA) of 2003 required that the NAIC amend the NAIC Model Regulation to Implement the NAIC Medicare Supplement Insurance Minimum Standards Model Act.
The NAIC Senior Issues Task Force drafted amendments to the NAIC Model Regulation that were adopted by the NAIC on September 8, 2004. Prior to adoption, the amendments to the NAIC Model Regulation were subject to review and comment by state insurance departments, insurance companies, insurance trade groups, consumer advocates, and the CMS.
The CMS is the federal agency responsible for administering the Medicare program. CMS data indicates that Medicare currently covers 40 million Americans, 806,000 of whom are Wisconsin residents. An estimated 27 percent of Medicare beneficiaries are covered by Medigap policies.
Information collected by the OCI indicates that 40 insurance companies offer basic Medicare supplement, Medicare replacement and Medicare select (Medigap) policies to Wisconsin consumers eligible for Medicare due to age or disability. In addition, there are 25 insurance companies that have Medigap policyholders although the companies no longer market Medigap coverage in Wisconsin. At year end 2003, there were 308,875 Wisconsin Medicare beneficiaries with Medigap policies. The majority of these Wisconsin Medicare beneficiaries have Medigap policies that will be affected by the Medigap reforms under the MMA.
A 2000 report by CMS, Office of Research, Development, and Information, based on 1999 Medicare data indicates that Medicare paid 53% of the health care expenses of persons 65 or over, and private health insurance, including Medicare supplement policies paid 12% of these health care expenses. The report indicated that overall annual medical expenses per Medicare beneficiaries equaled $9,573. The involuntary withdrawal from the Medigap market by insurance companies due to Wisconsin's failure to amend its Medicare supplement rule will significantly affect payment of medical expenses to Wisconsin hospitals and providers.
9. Any analysis and supporting documentation that OCI used in support of OCI's determination of the rule's effect on small businesses under s. 227.114: OCI reviewed financial statements and other reports filed by life, accident and health insurers and determined that none qualify as small businesses.
Wisconsin currently has 40 insurance companies offering basic Medicare supplement, Medicare replacement and Medicare select insurance plans. None of these insurers meet the definition of a small business.
10. Fiscal impact on the private sector: The proposed rule will not significantly impact the private sector. Insurers offering Medigap policies (basic Medicare supplement, Medicare replacement, and Medicare select policies) will incur costs associated with developing new Medigap policies and marketing materials, mailing riders and explanatory materials to existing policyholders and reprogramming claim processing systems. However, these costs are offset by the insurers' ability to continue offering Medigap policies to Wisconsin consumers.
The MMA prohibits insurance companies and insurance agents from marketing in Wisconsin current Medigap policies after December 31, 2005. Failure to amend s.
Ins 3.39, Wis. Adm. Code, will mean that Wisconsin Medicare beneficiaries will not have access to coverage that supplements Medicare benefits.
11. Effect on small business: This rule does not have a significant impact on regulated small businesses as defined in s. 227.114 (1), Wis. Stat. OCI maintains a database of all licensed insurers in Wisconsin. Included with that information required to be submitted to OCI, the database includes information submitted by the companies related to premium revenue and employment. In an examination of this database, OCI identified that 40 insurance companies offer basic Medicare supplement, Medicare replacement and Medicare select (Medigap) policies to Wisconsin consumers eligible for Medicare due to age or disability and none of those companies qualify by definition as a small business. In addition, there are 25 insurance companies that have Medigap policyholders although the companies no longer market Medigap coverage in Wisconsin, again, none of these 25 companies qualify by definition as a small business.
Fiscal Estimate
There will be no state or local government fiscal effect.
Initial Regulatory Flexibility Analysis
This rule does not impose any additional requirements on small businesses.
The OCI small business coordinator is Eileen Mallow and may be reached by phone at (608) 266-7843 or at email address:
Eileen.Mallow@oci.state.wi.us
Copy of Rule and Contact Person
A copy of the full text of the proposed rule changes, analysis and fiscal estimate may be obtained from the WEB sites at:
http://oci.wi.gov/ocirules.htm or by contacting Inger Williams, OCI Services Section; at:
Phone: (608) 264-8110
Address: 125 South Webster St – 2nd Floor
Madison WI 53702
Mail: PO Box 7873, Madison WI 53707-7873
Notice of Hearing
Regulation and Licensing
NOTICE IS HEREBY GIVEN that pursuant to authority vested in the Department of Regulation and Licensing in ss.
227.11 (2),
452.07,
452.10 (4),
452.12 (3),
452.133 and
452.135, Stats., and interpreting ss.
452.12 (3) and
452.135, Stats., the Department of Regulation and Licensing will hold a public hearing at the time and place indicated below to consider an order to repeal ss.
RL 17.02 (1),
(2), and
(4),
17.09,
17.10 and
17.11; to amend ss.
RL 17.04,
17.08 (1) and
17.12 (1); and to create ss.
RL 17.02 (4g) and
(4r),
17.08 (1m) and
(3) to
(5), relating to supervision by real estate brokers.
Hearing Date, Time and Location
Date: December 2, 2004
Time: 10:30 a.m.
Location: 1400 East Washington Avenue
Room 179A
Madison, Wisconsin
Appearances at the Hearing
Interested persons are invited to present information at the hearing. Persons appearing may make an oral presentation but are urged to submit facts, opinions and argument in writing as well. Facts, opinions and argument may also be submitted in writing without a personal appearance by mail addressed to the Department of Regulation and Licensing, Office of Administrative Rules, P.O. Box 8935, Madison, Wisconsin 53708. Written comments must be received by December 13, 2004, to be included in the record of rule-making proceedings. Analysis prepared by the Department of Regulation and Licensing.
Analysis
Statutory authority
Explanation of agency authority:
Section 3608 dp, contained in
2001 Wisconsin Act 16, repealed former Wis. Stats. § 452.12 (3) (b), Stats., which provided that if a broker maintained any branch office in this state, each branch office must be under the direct-full time supervision of a broker. The broker maintaining the branch office was responsible for the acts and conduct of all brokers, salesperson and time-share salesperson employed at the branch office. Section 3608 dm, contained in
2001 Wisconsin Act 16, amended former Wis. Stats. §
452.12 (3) to provide that each broker shall supervise and is responsible for the acts of any broker, salesperson or time-share salesperson employed by the broker. The proposed amendments to Chapter
RL 17 remove rules relating to the supervision of principal offices (s.
RL 17.09), supervision of branch offices (s.
RL 17.10), and supervision outside of principal or branch office (s.
RL 17.11), and replace these sections with a defined “supervising broker" who is responsible for the supervision of licensed employees under s.
RL 17.08. The scope of supervision contained in s.
RL 17.08 is amended to provide for the reasonable review of documents. Additional sections are added to s.
RL 17.08 describing the manner and effect of a delegation of supervision duties to a supervising broker.
Plain language analysis:
SECTIONS 1 and 2 repeal definitions which are no longer applicable.
SECTION 3 creates definitions of “reasonable review" and “supervising broker."
SECTION 4 changes the spelling of “employe" to “employee."
SECTION 5 amends the scope of a broker-employer's duty to supervise employees.
SECTION 6 creates s.
RL 17.08 (1m) to require that documents or records related to a transaction shall be reviewed by the supervising broker prior to the closing of a transaction.
SECTION 7 creates s.
RL 17.08 (3) to require that a broker-employer that is a business entity shall delegate the duty to supervise licensed employees to a supervising broker. Section
RL 17.08 (4) is created to provide that a broker-employer who is not a business entity will be deemed to be the supervising broker in the absence of a delegation of the duty to supervise licensed employees to another supervising broker. And s.
RL 17.08 (5) is created to set forth the requirements of a broker-employer's delegation of the duty to supervise licensed employees to a supervising broker.
SECTION 8 repeals sections related to the supervision of principal and branch offices and the supervision of licensed employees outside of principal or branch offices.
SECTION 9 changes the spelling of “employe" to “employee."
Comparison with adjacent states:
Minnesota Rules Chapter 2805
2805.1000 RESPONSIBILITIES OF BROKERS.
Subpart 1. Supervision of personnel. Brokers shall adequately supervise the activities of their salespersons and employees. Supervision includes the ongoing monitoring of listing agreements, purchase agreements, other real estate-related documents which are prepared or drafted by the broker's salespersons or employees or which are otherwise received by the broker's office, and the review of all trust account books and records. If an individual broker maintains more than one place of business, each place of business shall be under the broker's direction and supervision. If a partnership or corporate broker maintains more than one place of business, each place of business shall be under the direction and supervision of an individual broker licensed to act on behalf of the partnership or corporation. The primary broker shall maintain records specifying the name of each broker responsible for the direction and supervision of each place of business. If an individual broker, who may be the primary broker, is responsible for supervising more than one place of business, the primary broker shall, upon written request of the commissioner, file a written statement specifying the procedures which have been established to assure that all salespersons and employees are adequately supervised. Designation of another broker to supervise a place of business does not relieve the primary broker of the ultimate responsibility for the actions of licensees.
Illinois Administrative Code
Title 68, Section 1450.125 Managing Broker Responsibilities
a) The sponsoring broker shall inform OBRE in writing of the name and certificate number of all managing brokers employed by the sponsoring broker and the office or branch offices each managing broker is responsible for managing. Each managing broker shall have an active license as a broker.
b) The sponsoring broker shall be responsible for issuing sponsor cards. However, the sponsoring broker may delegate that responsibility to one or more managing brokers.
c) Upon written request within 15 days after the loss of a managing broker, OBRE shall issue a written authorization to allow the continuing operation of a licensed office or branch office, provided that the sponsoring broker or representative under a duly executed power of attorney assumes responsibility, in writing, for the operation of the office and agrees to personally supervise the operations. No authorization shall be valid for more than 60 days unless extended by OBRE for good cause and upon written request by the sponsoring broker. Good cause includes circumstances as sales under contract pending closing, loss of livelihood for sales associates, and undue hardship caused to sellers.
d) When a managing broker receives a renewal application from OBRE for a licensee supervised by the managing broker or employed by the sponsoring broker of the manager, he shall notify the licensee of the receipt, personally within 7 days or by certified or registered mail or other signature restricted delivery service within 10 days. The notice shall also inform the licensee that any unprocessed renewal form will be returned to OBRE by the manager broker. When a managing broker receives a renewal application from OBRE for a licensee not supervised by the managing broker or employed by the sponsoring broker of the managing broker, the renewal form shall immediately be returned to OBRE.
e) All managing brokers shall notify OBRE on business letterhead of any change of business address of the offices they manage within 24 hours of any change. Change of address is required for all offices and branch offices. A license returned to OBRE for the reason described in this subsection shall remain in good standing until the new licenses are issued and in the possession of the licensee.
f) OBRE will honor the Order of a court of competent jurisdiction appointing a legal representative for the sole purpose of closing out the affairs of a deceased broker or a broker who has been adjudicated disabled, who was a sole proprietor, until the real estate brokerage is closed but not to actively engage in the brokerage business as defined in Section 1-10 of the Act.
Section 1450.130 Supervision
a) A managing broker shall exercise reasonable supervision over the activities of licensees and unlicensed assistants working in those offices managed by the managing broker. This would include:
1) the implementation of office policies and procedures established by the sponsoring broker;
2) training of licensees or unlicensed assistants;
3) assisting licensees as necessary in real estate transactions;
4) supervising those special (escrow) accounts over which the sponsoring broker has delegated responsibility to the managing broker in order to ensure compliance with the special (escrow) account provisions of the Act and this Part;
5) supervising all advertising of any service for which a license is required;
6) familiarizing sponsored licensees with the requirements of federal and state laws relating to the practice of real estate; and
7) compliance with this Part for licensees and offices under his/her supervision.
b) The sponsoring broker shall remain ultimately responsible for compliance with this Part. The sponsoring broker shall name a managing broker for every office.
Iowa Administrative Code-IAC Real Estate Commission [193E]
193E—7.10(543B) Agency-designated broker responsibilities. The following conditions and circumstances, together with the education and experience of licensed and unlicensed employees and independent contractors, shall be considered when determining whether or not the designated broker has met the supervisory responsibilities as set forth by Iowa Code section 543B.62, subsection (3), paragraph “b."
7.10(1) When making a determination, the commission may consider, but is not limited to consideration of, the following:
a. Availability of the designated broker/designee to assist and advise regarding brokerage related activities;
b. General knowledge of brokerage-related staff activities;
c. Availability of quality training programs and materials to licensed and unlicensed employees and independent contractors;
d. Supervisory policies and practices in the review of competitive market analysis, listing contracts, sales contracts and other contracts or information prepared for clients and customers;
e. Frequency and content of staff meetings;
f. Written company policy manuals for licensed and unlicensed employees and independent contractors;
g. Ratio of supervisors to licensed employees and independent contractors; and
h. Assignment of an experienced licensee to work with new licensees.
7.10(2) The designated broker shall disseminate, in a timely manner, to licensed employees and independent contractors all regulatory information received by the brokerage pertaining to the practice of real estate brokerage.
193E—7.11(543B) Supervision required. An employing or affiliated broker is responsible for providing supervision of any salesperson or broker associate employed by or otherwise associated with the broker as a representative of the broker. The existence of an independent contractor relationship or any other special compensation arrangement between the broker and the salesperson or broker associate shall not relieve either the broker or the salesperson or broker associate of duties, obligations or responsibilities required by law.
7.11(1) Each salesperson and broker associate shall keep the broker fully informed of all activities being conducted on behalf of the broker and any other activities that might impact the broker's responsibilities. However, the failure of the salesperson or broker associate to keep the broker fully informed shall not relieve the broker of duties, obligations or responsibilities required by law.
Michigan – Administrative Rules
R 339.22310 Supervision.
Rule 310. A broker or associate broker shall supervise the work of a licensee. Supervision shall include, at a minimum, all of the following:
(a) Direct communication in person or by radio, telephone, or electronic communication on a regular basis.
(b) Review of the practice of the supervised licensee.
(c) Review of the supervised licensee's reports.
(d) Analyses and guidance of the licensee's performance in regulated activities.
(e) Provision of written operating policies and procedures.
Indiana Administrative Code
876 IAC 1-1-3 Definitions.
Authority: IC 25-34.1-2-5/ IC 25-34.1-2-5.1
Affected: IC 25-34.1-3-2; IC 25-34.1-5
Sec. 3. (a) The definitions in this section apply throughout this title.
(i) “Principal broker" means the individual broker, including the broker designated as representative of a corporation or partnership whom the commission shall hold responsible for the actions of licensees who are assigned to the principal broker.
876 IAC 1-1-18 Supervision of office by licensed broker; branch offices; notice by principal broker.
Authority: IC 25-34.1-2-5
Affected: IC 25-34.1-3-3.1; IC 25-34.1-3-4.1
Sec. 18. Every real estate office or real estate branch office whether operated as a corporation, partnership, or sole proprietorship, shall be directed, supervised, and managed by a licensed real estate broker. The office or branch office shall constitute the managing broker's principal and sole place of real estate business. Said managing broker may be the principal broker in cases where there is only one office. The principal broker must submit to the commission a Branch Office Registration Form prior to the opening of any branch office. Said principal broker shall notify the commission when any licensee associated with said principal broker transfers from one branch office to another branch office within the same association. (Indiana Real Estate Commission; Rule 19; filed Sep 28, 1977, 4:30 pm: Rules and Regs. 1978, p. 799; filed Mar 13, 1980, 2:30 pm: 3 IR 647; filed Dec 11, 1986, 10:40 am: 10 IR 877; readopted filed Jun 29, 29, 2001, 9:56 a.m.: 24 IR 3824)
Anticipated costs incurred by private sector
None.
Effect on small business
These proposed rules will be reviewed by the department through its small business review advisory committee to determine whether there will be a significant economic impact on a substantial number of small businesses, as defined in s.
227.114 (1) (a), Stats.
Agency contact person
Pamela Haack, Paralegal, Department of Regulation and Licensing, 1400 East Washington Avenue, P.O. Box 8935, Madison, WI 53708-8935. Phone: 608-266-0495. E-mail address:
pamela.haack@drl.state.wi.us.
Fiscal estimate
The Department of Regulation and Licensing will incur $500 in costs for staff to print and distribute the rule change.
Copies of this rule are available without cost by making a request to the Department of Regulation and Licensing, Office of Administrative Rules, P.O. Box 8935, Madison, Wisconsin 53708-8935, telephone number 608-266-0495, e-mail address:
pamela.haack@drl.state.wi.us.
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
Date: December 1, 2004
Time: 11:00 a.m.
Location: Transportation District 5
3550 Mormon Coulee Road
Mississippi Conference Room
LaCrosse, Wisconsin
(Parking is available for persons with disabilities)
An interpreter for the hearing impaired will be available on request for this hearing. Please make reservations for a hearing interpreter at least 10 days prior to the hearing.
Analysis Prepared by the Department of Transportation
In the Surface Transportation Assistance Act of 1982 (STAA), the federal government acted under the Commerce clause of the United States Constitution to provide uniform standards on vehicle length applicable in all states. The length provisions of STAA apply to truck tractor-semitrailer combinations and to truck tractor-semitrailer-trailer combinations. (See Jan. 6, 1983, Public Law 97-424, § 411) The uniform standards provide that:
• No state shall impose a limit of less than 48 feet on a semitrailer operating in a truck tractor-semitrailer combination.
• No state shall impose a length limit of less than 28 feet on any semitrailer or trailer operating in a truck tractor-semitrailer-trailer combination.
• No state may limit the length of truck tractors.
• No state shall impose an overall length limitation on commercial vehicles operating in truck tractor-semitrailer or truck tractor-semitrailer-trailer combinations.
• No state shall prohibit operation of truck tractor-semitrailer-trailer combinations.
The vehicles authorized by the STAA may operate on the national system of interstate and defense highways and on those federal aid primary highways designated by regulation of the secretary of the United States Department of Transportation. In 1984 the USDOT adopted
23 CFR Part 658 which in Appendix A lists the highways in each state upon which STAA authorized vehicles may operate. Collectively these highways are known as the National Network. In
1983 Wisconsin Act 78, the legislature enacted §
348.07(4), Stats., which directs the Wisconsin Department of Transportation to adopt a rule designating the highways in Wisconsin on which STAA authorized vehicles may be operated consistent with federal regulations.
The Department of Transportation first adopted ch.
Trans 276 of the Wisconsin Administrative Code in December of 1984. The rule is consistent with
23 CFR Part 658 in that the Wisconsin rule designates all of the highways in Wisconsin that are listed in
23 CFR Part 658 as part of the National Network for STAA authorized vehicles. The federal regulation does not prohibit states from allowing operation of STAA authorized vehicles on additional state highways. The rule making authority granted to the Wisconsin Department of Transportation in §
348.07(4), Stats., allows the DOT to add routes in Wisconsin consistent with public safety. The rule making process also provides a mechanism to review requests from businesses and shipping firms for access to the designated highway system for points of origin and delivery beyond 5 miles from a designated route. A process to review and respond to requests for reasonable access is required by
23 CFR Part 658.
This rule amends s.
Trans 276.07 (6) and creates s.
Trans 276.07 (31g), Wis. Adm. Code, to add four segments of highway to the designated highway system established under s.
348.07 (4), Stats. The actual highway segments that this rule adds to the designated highway system are:
Hwy. From To
STH 27 STH 171 at Mt. Sterling USH 14 S. of
Viroqua
CTH S CTH B 7258 CTH S
CTH B USH 53 CTH S
CTH P USH 2 CTH B
The long trucks to which this 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: A single vehicle with an overall length in excess of 40 feet, a combination of vehicles with an overall length in excess of 65 feet, a semitrailer longer than 48 feet, an automobile haulaway longer than 66 feet plus allowed overhangs, or 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.
The effect of this rule will be to extend the provisions of s.
348.07 (2)(f),
(fm),
(gm) and
(gr), and s.
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.
Note: 1 The 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.
Note: 2 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.
Comparison with Rules in Adjacent States
None of the states adjacent to Wisconsin (Michigan, Minnesota, Illinois and Iowa) have administrative rules relating to long truck routes in their states.
Summary of Factual Data and Analytical Methodologies Used and How the Related Findings Support the Regulatory Approach Chosen
Due to the federal requirement that requests for access to the designated highway system in a state be decided within 90 days of the request, a proposed rule making to add requested routes is initiated without investigation. The public hearing and Department investigation undertaken in preparation for the hearing provide the engineering and economic data needed to make a final decision on whether to withdraw the proposal or proceed to final rule making.
Effect on Small Business and, if applicable, any Analysis and Supporting Documentation used to Determine Effect on Small Businesses
The provisions of this 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. You may contact the Department's small business regulatory coordinator by phone at (608) 267-3703, or via e-mail at the following website:
Fiscal Effect and Anticipated Costs Incurred by Private Sector
The Department estimates that there will be no fiscal impact on the liabilities or revenues of any county, city, village, town, school district, vocational, technical and adult education district, sewerage district, or federally-recognized tribes or bands. The Department estimates that there will be no fiscal impact on state or private sector revenues or liabilities.
Submission of Comments
The public record on this proposed rule making will be held open until close of business the day of the hearing to permit the submission of comments in lieu of public hearing testimony or comments supplementing testimony offered at the hearing. Any such comments should be submitted to Ashwani Sharma, Department of Transportation, Bureau of Highway Operations, Room 501, P. O. Box 7986, Madison, WI 53707-7986. You may also contact Mr. Sharma by phone at (608) 266-1273.
Text of Proposed Rule
Section 1. Trans 276.07 (6) is amended to read:
Route From To
STH 25 Minnesota Line STH 48
STH 26 IH 90 at Janesville USH 151 S.E. of
Waupun
STH 26 USH 151 N.E. of Waupun USH 41 S.W. of
Oshkosh
STH 27 USH 18 in Prairie du Chien STH 171 at Mt.
Sterling USH 14
S. of Viroqua
STH 27 USH 14 S.E. of Viroqua STH 40 in
Radisson
STH 28 STH 33 in Horicon IH 43 in
Sheboygan
STH 29 USH 10 in Prescott STH 35 in
River Falls
STH 29 IH 94 W. of Elk Mound USH 53 at
Chippewa Falls
STH 29 124 S. of Chippewa Falls USH 41 in
Green Bay
STH 29 USH 141 at Bellevue STH 42 in
Kewaunee
Section 2. Trans 276.07 (31g) is created to read:
(31g) DOUGLAS COUNTY:
CTH B USH 53 CTH S
CTH P USH 2 CTH B
CTH S CTH B 7258 CTH S
Notice of Hearing
Veterans Affairs
Notice is hereby given that the Department of Veterans Affairs will hold a public hearing on the 3rd day of December, 2004, at 9:30 a.m., in the 8th floor board room at 30 West Mifflin Street in Madison, Wisconsin.
Analysis Prepared by the Department of Veterans Affairs
Statute interpreted: s.
45.358, Stats.
The proposed rule changes are intended to provide the department flexibility in adjusting burial fees that may be charged dependents, spouses, and surviving spouses as well as assessments made for the provision of burial containers. The proposed rule would permit the department to adjust fees and assessments based up to the current cost of providing the benefit.
There is no current or pending federal regulation that has an impact on this issue. There are no similar rules in adjacent states. However, cemetery fees are set by some states outside of the rulemaking process. This rule has no regulatory aspect to it, has no effect upon small businesses, nor any significant fiscal effect upon the private sector.
Initial Regulatory Flexibility Analysis
This rule is not expected to have any adverse impact upon small businesses.
Fiscal Estimate
The implementation of the rule is expected to result in an increase in revenue in FYE 05 of approximately $38,400.
A copy of the proposed rules and the full fiscal estimate may be obtained by contacting:
John Rosinski
Wisconsin Department of Veterans Affairs
PO Box 7843
Madison, WI 53707-7843
Contact Person
John Rosinski (608) 266-7916
Notice of Hearing
Veterinary Examining Board
NOTICE IS HEREBY GIVEN that pursuant to authority vested in the Veterinary Examining Board in ss.
15.08 (5) (b),
227.11 (2) and
453.03, Stats., and interpreting s.
453.062, Stats., the Veterinary Examining Board will hold a public hearing at the time and place indicated below to consider an order to repeal ss.
VE 10.05 and
10.06; to amend ss.
VE 1.02 (intro.),
7.055 (title), (intro.),
(1) and
(2),
7.06 (22),
9.035 (title), (intro.),
(1) and
(2);
9.05 (12), and
10.01; and to repeal and recreate ss.
VE 10.02,
10.03 and
1.04, relating to renewal, conduct and continuing education for veterinarians and veterinary technicians.
Hearing Date, Time and Location
Date: December 1, 2004
Time: 11:30 A.M.
Location: 1400 East Washington Avenue
Room 179A
Madison, Wisconsin
Appearances at the Hearing
Interested persons are invited to present information at the hearing. Persons appearing may make an oral presentation but are urged to submit facts, opinions and argument in writing as well. Facts, opinions and argument may also be submitted in writing without a personal appearance by mail addressed to the Department of Regulation and Licensing, Office of Administrative Rules, P.O. Box 8935, Madison, Wisconsin 53708, or by e-mail to
pamela.haack@drl.state.wi.us. Written comments must be received by December 13, 2004 to be included in the record of rule-making proceedings.
Analysis prepared by the Department of Regulation and Licensing.
Statutory authority:
Statutes interpreted: s.
453.062, Stats.
Explanation of agency authority
2003 Wisconsin Act 103 created continuing education for veterinarians and veterinary technicians in Wisconsin and granted rule-making authority to the Veterinary Examining Board to require training and continuing education sufficient to assure competency of veterinarians and veterinary technicians in the practice of veterinary medicine.
Plain language analysis
The board herein sets forth requirements for continuing education applicants attesting to continuing education completion on license renewal applications to the Department of Regulation and Licensing, defines program and course approval standards, program and course content prerequisites, and subject matter acceptability requirements. It limits the circumstances under which a continuing education waiver may be granted, describes the consequences resulting from failure to complete the continuing education requirements on time and what is allowed when the department audits continuing education. For course providers, it explains what is required for courses and programs to be approved, validation, monitoring, certification and recordkeeping requirements.
SECTIONS 2 and 3 amend ss.
VE 7.055 and
7.06 (22) to require continuing education to be completed when a veterinarian applies to renew a credential 5 or more years after it expired, and maintains the provision which states that falsely certifying compliance with the pesticide continuing education requirement constitutes unprofessional conduct.
SECTIONS 4 and 5 amend ss.
VE 9.035 and
9.05 (12) to require continuing education to be completed when a veterinary technician applies to renew a credential 5 or more years after it expired, and maintains the provision which states that falsely certifying compliance with the pesticide continuing education requirement constitutes unprofessional conduct.
SECTION 6 sets forth the statutory authority and purpose of new continuing education and certification requirements for veterinarians and veterinary technicians. The current pesticide continuing education rule is repealed and recreated in SECTION 7.
SECTION 7 describes and limits what the continuing education shall relate to, including provisions allowing 5 of the 30 veterinarian and veterinary technician hours on non-scientific topics, 5 hours from an education provider that is not approved under s.
VE 10.03 (4) for veterinarians and 3 hours for veterinary technicians. Also, this section of the rule defines continuing education hour as 50 minutes of contact time and limits a waiver of the continuing education requirements to certain exceptional circumstances. It further limits application of credits to the preceding 2-year licensure or certification period, exempts applicants from having to report for the period prior to the first expiration date after a license is initially issued or renewed, prohibits practice as a veterinarian or veterinary technician when continuing education is not completed by the renewal date, and requires all veterinarians and veterinary technicians to maintain records of continuing education hours for five years from the date the certification is signed. The board may conduct an audit to check for compliance with specified documentation of completion requirements. In addition, the evidence required to verify completion of continuing education hours is spelled out by delineating the criteria a continuing education program or course must meet to be acceptable, including subject matter pertinent to veterinary medicine or veterinary technology, attendance and course completion validations for the program or course sponsor, modalities and methods of delivery. It lists providers in the rule whose approval of programs will be recognized by the board for the 25 hours that must be approved for veterinarians and the 12 hours for veterinary technicians.
Comparison with adjacent states
Based upon the requirements for renewing a credential in Illinois, Minnesota and Iowa, the continuing education requirements set forth in the proposed rules are consistent with the requirements in those states. Veterinarians and veterinary technicians are not required to complete continuing education hours in Michigan. Note that veterinary technicians are not required to be licensed in Minnesota.
Summary and comparison of existing or proposed federal regulation
None. Establishing continuing education requirements and monitoring for compliance for veterinarians is a regulatory activity undertaken by the individual states.
Factual data and analytical methodologies:
The Veterinary Examining Board examined models of continuing education from other Wisconsin regulatory boards, from the American Association of Veterinary State Boards, and from national and state associations. The board received input from the Department of Regulation and Licensing Office of Education and Examinations and members of the public in public meetings. The board considered availability of courses, availability of department and board resources, and impact on the licensee.
The Veterinary Examining Board defined general content requirements, numbers of hours required to be related to scientific topics, and amount of credit to be granted for activities such as authorship of published works. The board established approved provider requirements, necessary documentation requirements, procedures for verification of continuing education upon renewal, and procedures for maintaining documentation to enable audit of compliance with the requirement. The board retained the statutory requirements for continuing education or certification from persons who use or repackage pesticides for use by others.
The regulatory approach chosen for the rule was to describe the requirements for licensees and course providers in a way that would enable the parties to determine on their own whether a particular type of continuing education would be acceptable. The model does not require particular continuing education courses to be approved by the board in advance. One goal of this approach was to accomplish the implementation of the continuing education requirement and resulting maintenance of currency and prevention of public harm without incurring substantial ongoing regulatory management costs for the program.
Private sector fiscal effect
The Department of Regulation and Licensing has determined that this rule has no significant fiscal effect on the private sector.
Agency contact person
Pamela Haack, Paralegal, Department of Regulation and Licensing, 1400 East Washington Avenue, P.O. Box 8935, Madison, WI 53708. Phone 608-266-0495.
Final Regulatory Flexibility Analysis
These proposed rules will have no significant economic impact on a substantial number of small businesses, as defined in s.
227.114 (1) (a), Stats.
Fiscal Estimate
The Department of Regulation and Licensing will $500 in costs for staff to print and distribute the rule change.
Copies of this rule are available without cost by making a request to the Department of Regulation and Licensing, Office of Administrative Rules, P.O. Box 8935, Madison, Wisconsin 53708, telephone number 608-266-0495, e-mail address:
pamela.haack@drl.state.wi.us
Notice of Hearing
Workforce Development
NOTICE IS HEREBY GIVEN that pursuant to Sections
49.161,
49.195, and
227.11, Stats., the Department of Workforce Development proposes to hold a public hearing to consider rules relating to the public assistance overpayment collection and affecting small businesses.
Hearing Information
Monday, November 29, 2004 at 1:30 p.m.
GEF 1 Building, Room B103
201 E. Washington Avenue
Madison
Interested persons are invited to appear at a hearing and will be afforded the opportunity to make an oral presentation of their positions. Persons making oral presentations are requested to submit their facts, views, and suggested rewording in writing.
Visitors to the GEF 1 building are requested to enter through the left East Washington Avenue door and register with the customer service desk. The entrance is accessible via a ramp from the corner of Webster Street and East Washington Avenue. If you have special needs or circumstances that may make communication or accessibility difficult at the hearing, please call (608) 267-9403 at least 10 days prior to the hearing date. Accommodations such as ASL interpreters, English translators, or materials in audiotape format will be made available on request to the fullest extent possible.
Analysis Prepared by the Department of Workforce Development
Explanation of agency authority
•Section
49.195, Stats., directs the Department to promptly recover
all overpayments of the following: (a) benefits under the former Aid to Families with Dependent Children (AFDC) program; (b) subsidized employment benefits and custodial parent of infant grants under the Wisconsin Works (W-2) program; (c) child care benefits; and (d) W-2 transportation assistance. Section
49.195, Stats., directs the Department to create rules to collect overpayments that have not already been collected under ss.
49.161, Stats., and
49.19 (17), Stats., and to implement administrative warrant and execution and levy procedures as an additional method of collecting overpayments.
• Section
49.161, Stats., requires the Department to collect overpayment of benefits paid to trial job, community service job (CSJ), and transitional placement (W-2T) participants. For current CSJ and W-2T participants, the overpayment is collected by reducing the amount of the individual's monthly benefit payment by no more than 10% if the overpayment was due to client error or agency error. For trial job participants, the value of the benefit liable for recovery may not exceed the amount that the Department paid in wage subsidies to that participant while the participant was ineligible to participate. If a benefit overpayment is the result of an intentional program violation of W-2 employment positions, custodial parent of an infant grants, child care benefits, or transportation assistance, the Department may deduct the following from the monthly W-2 employment position benefit: (a) for overpayments of less than $300, 10% of the amount of the monthly benefit payment; (b) for overpayments of at least $300 but less than $1,000, $75; (c) for overpayments of at least $1,000 but less than $2,500, $100; and (d) for overpayments of $2,500 or more, $200.
•Federal regulations require states to collect any AFDC overpayment.
•Federal policy allows only expenses that benefit the program to be charged against a federal grant. This policy requires overpayments of all types to be recovered because overpayments, whether by fraud or error, do not benefit the program.
•Federal policy directs states to recoup AFDC and Temporary Assistance to Needy Families (TANF) overpayments from current TANF benefits.
•An administrative agency generally possesses a common law right to recover erroneous payments of public funds.
See Kenosha County Department of Social Services v. Kenosha National Bank, 95 Wis.2d 275,
290 N.W.2d 693 (1980). An agency may sue to exercise its common law right of recovery or it may administratively reclaim the funds pursuant to a statute or rule. The case
Mack v. Wisconsin Department of Health and Family Services,
231 Wis. 2d 644,
605 N.W.2d 651 (Ct. App. 1999) stands for the proposition that an agency may administratively recoup a benefit overpayment from current benefits based on a properly promulgated administrative rule even if a statute does not specifically provide for recoupment. Based on this authority, the Department proposes to extend the right to recoup overpayments of child care benefits, AFDC, custodial parent of an infant grants, and transportation assistance from current W-2 payments in cases of client error and administrative error, in addition to cases of intentional program violation.
Summary of proposed rule. A county, tribal governing body, W-2 agency, or the Department shall determine whether a public assistance overpayment has been made and if so, the amount of the overpayment. The county, tribal governing body, W-2 agency, or Department shall send notice of the overpayment at the address of a liable person as it appears on the records of the Department. Documentation that a county, tribal governing body, W-2 agency, or the Department properly mailed the notice to the address of the person as it appears on the records of the Department and it was not returned as undeliverable shall be prima facie evidence that notice was delivered and received. The Department shall give the person an opportunity for review following the fact-finding and hearing procedure if the person received the overpayment under the W-2 program or for a hearing under ch.
227, Stats., if the person received an overpayment under the child care or AFDC programs.
Liability shall extend to any parent, nonmarital coparent, or stepparent whose family receives W-2, child care, or AFDC benefits during the period that he or she is a member of the same household, but his or her liability is limited to such period. Liability for repayment of the overpayment shall be joint and several.
The Department currently has authority to recoup overpayments of benefits paid based on participation in a W-2 CSJ or W-2T employment position from a monthly benefit of a current participant, regardless of the reason for the overpayment. In cases of intentional program violation, the Department may also recoup overpayments of custodial parent of an infant grants, child care benefits, or transportation assistance from a monthly W-2 grant. The proposed rule extends the Department's authority to allow recoupment of overpayments of AFDC, custodial parent of an infant grant, child care benefits, and transportation assistance from a current W-2 benefit, regardless of the reason for the overpayment.
A debt shall be considered delinquent if the Department does not receive a debtor's payment by the due date 3 times over the life of the debt. A delinquent debt may be subject to warrant and execution, levy, and tax intercept. A delinquent debt retains delinquent status regardless of any future payment on the debt.
If a debt for repayment of an overpayment is delinquent and no appeal rights are pending, Section
49.195 (3m), Stats., authorizes the Department to issue a warrant that is considered in all respects a final judgment constituting a perfected lien upon the person's right, title, and interest in all real and personal property located in the county in which the warrant is entered. The Department shall provide the debtor with notice and an opportunity for a hearing under ch.
227, Stats, when a warrant has been issued, before property is seized, and before seized property is sold. The debtor may request a hearing under ch.
227, Stats., within 20 days from the date on the notice. The appeal shall be limited to questions of prior payment of the debt that the Department is proceeding against and mistaken identity of the debtor. The Department shall not withdraw the warrant based on a hearing request when a warrant is issued or cease enforcement before property is seized based on a hearing request. If a hearing is requested after property is seized, the seized property may not be sold before the hearing decision is issued or the hearing request is withdrawn. When the amount set forth in the warrant and all costs due the Department have been paid, the Department shall issue a satisfaction of the warrant. Statutory exemption rights in ss.
815.18 (3) and
815.20, Stats., apply to this administrative warrant and execution procedure.
If a debt for repayment of an overpayment is delinquent and no appeal rights are pending, Section
49.195 (3n), Stats., authorizes the Department to levy on personal property belonging to the debtor, including wages due and deposits in a financial institution account. The Department shall first send a notice of intent to levy at least 10 days prior to the levy, personally or be any type of mail service that requires a signature of acceptance. Notice prior to levy is not required for a subsequent levy on any debt of the same debtor within one year of the date of service of the original levy. Next, the Department shall serve the levy upon the debtor and 3
rd party in possession of property to which the debtor has rights. The debtor may appeal the levy proceeding under ch.
227, Stats., within 20 days from the date on the service of levy. The appeal shall be limited to questions of prior payment and mistaken identity of the debtor. The levy is not stayed pending an appeal where property is secured through the levy.
Within 20 days from the service of the levy upon a 3rd party, the 3rd party shall file an answer with the Department stating whether the 3rd party is in possession of or obligated with respect to property or rights to property of the debtor, including a description of the property or the rights to property and the nature and dollar amount of any such obligation. The 3rd party shall, upon demand of the Department, surrender the personal property or rights or discharge the obligation to the Department, except that part of the personal property or rights which is, at the time of the demand, subject to any prior attachment or execution under any judicial process.
If levied personal property that has been surrendered to the Department is not a liquid asset in the form of cash, check, or an equivalent that can be applied to the debt without a sale of the asset, the Department shall provide the debtor with notice and an opportunity for a hearing under ch.
227, Stats., before surrendered property is sold. The debtor may request a hearing under ch.
227, Stats., within 20 days from the date on the notice. The appeal shall be limited to questions of prior payment of the debt that the Department is proceeding against and mistaken identity of the debtor. If a hearing is requested, surrendered property may not be sold before the hearing decision is issued or the hearing request is withdrawn.
The debtor is entitled to an exemption from levy of the greater of a subsistence allowance of 75% of the debtor's disposable earnings then due and owing or a amount equal to 30 times the federal minimum hourly wage for each full week of the debtor's pay period and the first $1,000 of an account in a depository institution.
Any appeal based on a notice received in a warrant and execution or levy proceeding or a notice of intent to certify a debt for set-off against a state tax refund shall be limited to questions of prior payment of the debt that the Department is proceeding against and mistaken identity of the debtor. The minimum amount that must be due before warrant and execution and levy procedures may be commenced is $300. The Department may waive recovery of an overpayment if the Department has made reasonable efforts to recover the overpayment from the debtor and determines it is no longer cost effective to continue overpayment recovery efforts.
The notice and hearing requirements in the warrant and execution and levy sections were designed to comply with s.
49.195 (3s), Stats., which requires a hearing or review (1) after a warrant has been issued and before the warrant has been executed; (2) before property is levied under both the warrant and execution and levy procedures; and (3) after levied property is seized and before it is sold. In addition, Section
49.195 (3), Stats., directs that the Department's collection rules include notification procedures similar to those established for child support collections. According to the Legislative Fiscal Bureau summary for
1999 Wisconsin Act 9 (page 1540), this provision means that notification is required at the following points in the collection process: (a) when the Department first determines that an overpayment has been made; (b) after the Department has issued a warrant that acts as a lien upon the person's right, title and interest in all real and personal property located in the county in which the warrant is entered; (c) after issuing an execution of a warrant or enforcing a levy upon a financial account or other personal property; (d) prior to levy upon real property; and (e) prior to issuing an execution to sell the property.
The child care administration rules are also amended to incorporate the general public assistance overpayment rules affecting parents in s.
DWD 12.23. The proposed rule provides that a child care administrative agency or the Department shall take all reasonable steps necessary to recover from a parent funds when the parent was not eligible for that level of child care benefit and the overpayment benefited the parent by causing the parent to pay less for child care expenses than the parent otherwise would have been required to pay under child care assistance program requirements, regardless of the reason for the overpayment.
An overpayment to a parent includes excess child care funds paid when there was a change in family eligibility circumstances that was significant enough that it would have resulted in a smaller child care benefit or ineligibility for a child care benefit due to any reason, including the parent failed to report a change within 10 days or the parent was absent from an approved activity without good cause, while the child was in the care of the provider. The child care worker shall determine good cause if the approved activity is unsubsidized employment. A parent's absence from unsubsidized employment shall be considered good cause if the parent is using employer-approved sick time, personal time, or vacation time and the child is in care for no more than the hours authorized.
The rule on collecting overpayments from child care providers is clarified to state that the provider is responsible for the overpayment when the overpayment benefited the provider by causing the provider to receive more child care assistance than otherwise would have been paid on the family's behalf under child care assistance program requirements and the overpayment did not benefit the parent by causing the parent to pay less for child care expenses than the family otherwise would have been required to pay under child care assistance program requirements. Overpayments from providers are collected by making an offset from current or future funds under the Department's control that are payable to the provider of no more than 50% per payment.
Summary of related federal law. Federal AFDC regulations require states to collect any overpayment. Federal public assistance overpayment collection policy regarding benefits provided under the Aid to Families and Children program and programs funded by Temporary Assistance to Needy Families block grants is in the U.S. Department of Health and Human Services, Administration for Children and Families, Program Instruction Transmittal No. TANF-ACF-PI-2000-2 (
http://www.acf.dhhs.gov/programs/ofa/pi002.htm).
This memo specifies that the requirement for states to recover all remaining AFDC overpayments remains in place and that AFDC overpayments will be recouped from current TANF benefits if the recipient is still receiving cash assistance or through a cash repayment from former recipients. TANF overpayments are also to be recouped from current recipients or through cash repayment from former recipients.
The state child care assistance program receives funding from TANF and the Child Care Development Fund (CCDF). CCDF regulations specifically provide that states shall recover child care payments that are the result of fraud and the payments shall be recovered from the party responsible for committing the fraud. In addition, CCDF regulations provide that any expenditure not made in accordance with statutory provisions, regulatory provisions, or with the approved plan may be disallowed and must be repaid to the federal government. According to staff at the federal Department of Health and Human Services (DHHS), overpayments are not considered to be expended in accordance with the federal CCDF statute or regulations.
In addition, DHHS staff have informed the Department that a similar provision that applies to all federal grant programs also applies to funds received under the CCDF grant. OMB Circular A-87 on Cost Principles for State and Local Governments provides that only costs that benefit a federal grant program may be charged to that program. All overpayments, whether by fraud or error, are not considered to benefit the program and do not meet the federal cost allowability test.
Comparison with rules in adjacent states. Minnesota. All TANF overpayments are recoverable regardless of the reason for the overpayment. All adults are jointly and individually liable. An appeal based on the fact or amount of an overpayment must occur based on the original notice not in an appeal of a recoupment. Recoupment of AFDC and TANF overpayments from current TANF recipients is specifically authorized. AFDC and TANF overpayments, excluding overpayments based on agency error, become judgments by operation of law 90 days following a properly served notice, with the full power of enforcement of a civil judgment. Child care overpayments are recouped from child care assistance or collected through voluntary repayment or civil court action. Child care overpayments are collected regardless of the reason for the overpayment.
Illinois. Recoupment of AFDC and TANF overpayments from current TANF recipients is specifically authorized. Overpayments are collected regardless of reason for overpayment. Child care overpayments are collected by reductions in future payments or public assistance benefits.
Michigan. Overpayments are recouped from benefits of any adults who were a group member when the overpayment occurred or collected through voluntary repayment agreements or court action. All TANF monthly benefit overpayments must be repaid regardless of the reason for the overpayment. A person who is determined to have received child care benefits as a result of the misrepresentation of his or her circumstances may be required to reimburse the agency for any benefits received for which the person was not eligible. A child care provider who bills the agency for more child care than he or she actually provided may be required to reimburse the agency in cash or from current and future provider payments.
Iowa. Overpayments are collected through voluntary repayment, recoupment, and tax intercept. An appeal is allowed based only on the first notice of overpayment. Overpayments are collected regardless of the reason for the overpayment.
Summary of factual data and analytical methodologies. The warrant and execution and levy procedures are outlined in statute and were developed to be similar to the warrant and execution and levy procedures used by the Unemployment Insurance program to collect UI benefit overpayments and delinquent unemployment insurance taxes. The proposed rule adds the required hearings and sets the threshold for use of the procedure. As of September 30, 2004, the total receivables that will be subject to warrant and execution and levy procedures is $25 million, with approximately $20.4 million in AFDC receivables, $1.5 million in general W-2 receivables, and $3.7 million in child care receivables.
The proposed rule provides authority for the Department to recoup AFDC overpayments from a current W-2 participant's grant. Federal policy directs states to collect overpayments in this manner where an AFDC debt is owed by a current TANF recipient. The case Mack v. Department of Health and Family Services also supports the Department's authority to promulgate a rule to allow recoupment even if a statute does not specifically provide for recoupment. Overpayment recovery by recouping from current benefits is the most efficient method of collection. With the implementation of authority to recoup AFDC overpayments from current W-2 participants, $500,000 in receivables will be subject to recoupment.
The proposed rule also provides clear authority for the Department to recoup child care overpayments from a W-2 participant's grant, regardless of the reason for the overpayment. Section
49.161, Stats., currently allows recoupment when the overpayment was caused by intentional program violation. The current s.
DWD 56.04 (5)(a) states that a child care administrative agency shall take all reasonable steps necessary to recoup or recover from a parent any child care assistance that the parent was not eligible to receive. The proposed rule clarifies that the recoupment will be from a W-2 participant's monthly grant and not from the child care subsidy payments that are sent to the child care providers.
The Department does not recoup child care overpayments owed by a parent from the subsidy payments sent to the child care provider because collection of the debt that had been owed by the parent to the Department would become the responsibility of the provider to collect from the parent. Recouping debts owed by parents from checks to providers may make providers less willing to care for children of families who receive assistance through the child care program. Approximately 20% of recipients of child care assistance receive a W-2 grant. With implementation of authority to recoup child care overpayments from W-2 grants, $740,000 will be subject to recoupment. Child care overpayments owed by parents who are not receiving a W-2 grant will be collected by voluntary repayment agreements, tax intercept, warrant and execution, and levy.
The proposed rule must require that all overpayments be collected regardless of whether they were caused by administrative error, client error, or intentional program violation because s.
49.195 (3), Stats., directs the Department to collect
all public assistance overpayments. An amendment to
1999 Wisconsin Act 9 that would have prohibited the Department from collecting overpayments based on agency error was vetoed by the Governor. In addition, federal policy provides that expenditures not in accordance with program requirements may not be charged against a federal grant.
The proposed rule specifically states that liability for an overpayment extends to any parent, nonmarital coparent, or stepparent during the period that he or she is a member of the household. This provision clarifies that
Richland County Department of Social Services v. McHone,
95 Wis.2d 108,
288 N.W.2d 879 (Ct. App. 1980) applies only to recovery of aid when an individual receives a windfall under s.
49.195 (1), Stats. The one sentence note following s.
49.195, Stats., that summarizes the case states that “recovery may be had only from a parent who immediately received aid" or the parent whose name was on the benefit check. A reading of the case shows that this holding was based only on the language in sub. (1) that starts “if any parent at the time of receiving aid." This language does not appear in the overpayment collection sections of s.
49.195, Stats., or the proposed rule. Under the proposed rule, in general a parent whose income must be included in determining financial eligibility is jointly and severally liable for an overpayment.
Effect on small business. The proposed rule will affect small businesses that are a third party in possession of or obligated with respect to property or rights to property of a debtor. Generally, this will be an employer served with a levy to garnish a debtor's wages. Section
49.195 (3n) (t), Stats., provides that a third party is entitled to a levy fee of $5 for each levy in any case where property is secured through the levy.
Except as employers of debtors, private W-2 agencies will not be affected by the rule because the additional warrant and execution and levy and recoupment collection procedures in the rule will be implemented by the Department and not W-2 agencies.
The rule adds clarifying language on collecting overpayments from child care providers but the additional language is based on current policy.
Anticipated costs incurred by private sector. The proposed rule will not have a significant fiscal effect on the private sector.
Fiscal Effect
I. Subsection
(3) of s.
49.195 of the Statutes directs DWD to promptly recover all overpayments made under the AFDC and W-2 programs, including child-care subsidies available to low-income working parents as well as W-2 participants. In part, this rule more completely implements the portion of s.49.195 (3) directing DWD to promulgate rules to implement that subsection and to include in the rule, “notification procedures similar to those established for child support collections." It is assumed that any increased cost of these notification procedures provided for by this rule is not significantly different than the costs of procedures currently in effect. No separate fiscal effect on revenues received is attributed solely to portions of the rule relating to the basic direction to recover overpayments under these programs, since DWD is already doing that, pursuant to authority in statute, administrative rule, common law, and the conditions of acceptance of the federal funds used for these programs. Much of this rule merely updates and clarifies existing policies, procedures and administrative rules, particular those portions revising DWD 56.04 (5) pertaining to recovery of child-care assistance overpayments (which is the fastest-growing category of collections) and portions of the repeal and recreation of DWD 12.23 relating to recoveries from current W-2 recipients.
II. Section
49.195 also provides DWD authority to 1) create administrative liens against real and personal property that may be executed at the county level by sheriff's sale and, 2) collect public assistance debts and the expenses of their collection by levy against certain assets of a debtor which are in the possession of a third party, typically an employer in a position to withhold them from wages otherwise payable to the debtor. These statutory provisions are not subject to a specific rulemaking requirement except that s.
49.195 (3s) states that DWD shall specify by rule when requests for reviews, hearings, and appeals under the section may be made and describes points in the processes when hearing or review opportunities must be addressed by the rule. Since these lien and levy provisions of the Statutes have not yet been implemented, the costs associated with such requests are unknown. However, also since the lien and levy provisions have not yet been implemented, the fiscal effect of this rule with respect to overpayments collected is assumed to be identical to the revenues associated with implementing the underlying statutory provisions as projected in DWD's 05-07 biennial budget recommendations.
There are two general collection trends for overpayment receivables: AFDC collections are still the largest program category of receivables, but a declining revenue source. This rule will decrease the rate of decline or temporarily increase collections, after which they will eventually taper off. Alternatively, child-care overpayment recoveries have been growing, reflecting growth in appropriations for the subsidy program. As child care collections become a larger proportion of recoveries, the lien and levy collection processes outlined in this rule will become more important because the majority of child-care subsidy recipients are working but not receiving other department-administered funds that could be offset to recover overpayments.
III. In its 2005-07 biennial budget recommendations, DWD estimated that the “gross" additional collections (for all affected programs) attributable to lien and levy implementation would be $375,000 in 2005-06 and $1,000,000 in 2006-07. However, this would be reduced to $357,273 in 2005-06 and $952,727 in 2006-07 without a statutory change to reduce the need to “write off" the amount of reduced recoveries attributable to a current-law provision allowing 3rd parties to retain $5 from the proceeds of a levy. The fiscal effect estimated for this rule uses the lower amount because, unlike the 2005-07 recommendations, it does not include the effect of the proposed statutory change.
IV. While implementation of the lien and levy provisions is planned for November 2005, the gross revenues assumed for 2005-06 are lower than those assumed for 2006-07 due to the assumption that it may be necessary for staff to gain familiarity with the new procedures before their full impact is seen. Therefore, the $952,727 is taken as the starting point for calculating the annualized impact at full implementation for purposes of this estimate. 61% of gross collections was assumed to be AFDC ($581,163) and the remaining 39% ($371,564) W-2 or child-care related. While the majority of the latter is likely to be child-care related, this difference is not important for purposes of this fiscal note because the state retains 100% of the W-2 and child-care recoveries crediting them to the appropriation for federal block-grant aids for re-expenditure on these programs. AFDC recoveries, on the other hand, are split three ways: The federal government receives a share of these revenues paid directly to it. Counties and tribes are allowed by statute to retain 15% of the AFDC overpayments they recover that were not due to administrative error. Those revenues are paid directly to them from the non-federal share of collections, and the net state share, approximately 26% of gross AFDC recoveries, is credited to the program-revenue appropriation at s.20.445 (3) (L): $581,163 X 26% = $151,100 in additional revenue for this appropriation. Neither the county share of AFDC revenues ($581,163 X 15% = $87,200) nor the federal share is reflected as a state revenue or expenditure; only the net state share is reflected as state revenues.
V. W-2 and child-care recoveries do not truly represent “additional" state revenues since they do not increase the block grants Wisconsin receives for these purposes; however, since they are often attributable to expenditures in a previous biennium, they may represent revenues in addition to the block grant amounts budgeted within a particular fiscal year or biennium. Therefore, this fiscal note portrays the annualized fiscal effect as including additional federal revenues. DWD's 2005-07 budget request proposes to recognize that aspect by creating a new appropriation.
VI. Counties are the only level of local government affected by this rule. Clerks of circuit courts may experience increased costs to the extent DWD increases its use of liens, and county sheriffs may experience increased costs to the extent the department proceeds to execute lien warrants by selling real or personal property located within a county. However, s.49.195 (3m) of the Statutes provides for clerks of courts to submit fee amounts to DWD to be added to the amount of the warrant, which should minimize any net cost to a county. In addition, since counties receive 15% of most AFDC collections, they may receive additional offsetting revenues to the extent that this rule increases AFDC collections.
VII. No increased administrative costs are associated with the portion of this rule that merely updates, or places in rule, existing DWD collections policies and procedures. The department has not prepared estimates of the one-time or ongoing increased costs of lien and levy implementation. Since the would be paid from existing appropriations for administration of TANF programs and program revenue from the state share of AFDC collections, it is assumed for purposes of this estimate that the primary net effect is to increase state and county revenues compared to the revenue trends that would occur absent the provisions of this rule.
Contact Information
The proposed rules are available at the web site
http://adminrules.wisconsin.gov by typing “public assistance overpayment" in the search engine. This site allows you to view documents associated with this rule's promulgation, register to receive email notification whenever the Department posts new information about this rulemaking order, and submit comments and view comments by others during the public comment period. You may receive a paper copy of the rule by contacting:
Elaine Pridgen
Office of Legal Counsel
Dept. of Workforce Development
201 E. Washington Avenue
P.O. Box 7946
Madison, WI 53707-7946
(608) 267-9403
Written Comments
Written comments on the proposed rules received at the above address, email, or through the
http://adminrules.wisconsin.gov web site no later than December 1, 2004, will be given the same consideration as testimony presented at the hearing.
Small Business Regulatory Coordinator
Jennifer Jirschele
(608) 266-1023
