Senate Bill
619
Senate Bill
661
Senate Bill
680
Senate Bill
681
Senate Bill
685
Senate Bill
696
Presented to the Governor on May
23, 2006.
__________________
State of Wisconsin
Senate
May 16, 2006
The Honorable, The Senate:
I respectfully request that the Journal reflect how I would have voted had I been present for session on May 3, 2006.
Passage of Senate Bill 680: No.
Refer Assembly Bill 414 to Committee: No.
Indefinitely postpone Assembly Bill 414: No.
Adoption of Senate Amendment 1 to Assembly Bill 414: Aye.
Nonconcurrence in Assembly Bill 414: No.
Concurrence in Assembly bill 538: Aye.
Adoption of Senate substitute amendment 1 to Assembly Bill 675: Aye.
Nonconcurrence in Assembly bill 675: No.
Concurrence in Assembly Bill 856: No.
Concurrence in Assembly Bill 942: Aye.
Concurrence in Assembly Bill 967: Aye.
Concurrence in in Assembly Bill 1087: No.
Adoption of Senate Amendment 1 to Assembly Bill 1186: No.
Concurrence in Assembly Bill 1186: Aye.
Table Senate Amendment 2 to Assembly Bill 461: Aye.
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Table Senate Amendment 4 to Assembly Bill 461: Aye.
Nonconcurrence in Assembly Bill 461: No.
Concurrence in Assembly Bill 461: Aye.
Withdraw Senate Bill 166 from committee: No.
Sincerely,
GLENN GROTHMAN
State Senator
State of Wisconsin
Legislative Audit Bureau
May 17, 2006
The Honorable, The Legislature:
As requested by the Public Service Commission (PSC), we have completed a financial audit of the Universal Service Fund, which was established to ensure that all state residents receive essential telecommunications services and have access to advanced telecommunications capabilities. It is funded primarily through assessments on telecommunications providers, which totaled $28.3 million in fiscal year (FY) 2004-05. Our audit report contains our unqualified opinion on the Universal Service Fund's financial statements for the fiscal years ending June 30, 2004 and 2005.
The largest program supported by the Universal Service Fund is the Educational Telecommunications Access Program, which is administered by the Department of Administration. This program subsidizes data lines and video links to eligible educational institutions. In FY 2004-05, expenditures for these activities totaled $16.8 million, or 60.3 percent of the Universal Service Fund's total expenditures and transfers. In January 2006, the conversion to a new statewide data and video network began for program participants, as well as for the State and other public-sector users. The conversion to the new network is expected to be completed in August 2006.
Eight of the 13 programs supported by the Universal Service Fund are operated by the PSC. The Legislature limited the amount the PSC could assess telecommunications providers for the PSC-operated programs to $5.0 million in FY 2003-04 and $6.0 million in FY 2004-05 and thereafter. However, increasing expenditures are now presenting budgetary challenges for these programs. In response, the PSC reduced benefits and deferred decisions about certain payment requests to subsequent fiscal years. Based on expenditure projections, the PSC believes it can limit expenditures to its spending authority during FY 2005-06. However, if the growth in program demand and expenditures continues, the Legislature may be asked to reconsider the statutory limits on the PSC's annual assessment levels or to eliminate some programs.
We appreciate the courtesy and cooperation extended to us by staff at the PSC; the departments of Administration and Public Instruction; and the Universal Service Fund's administrator, Wipfli LLP.
Sincerely,
JANICE MUELLER
State Auditor
State of Wisconsin
Department of Health and Family Services
May 17, 2006
The Honorable, The Legislature:
Enclosed is the Department's annual report for the Community Options Program (COP) and the Home and Community-Based Waivers (COP-W/CIP II), as required by s.46.27(11g) and s.
46.277(5m). The attached report describes the persons served, program expenditures, and services delivered through the COP, COP-Waiver and CIP II programs in calendar year 2004. I am pleased to report that the number of individuals receiving community-based long-term care through COP and all waivers continues to grow, reaching 26,923 individuals in 2004.
The Community Options Program provides services to people who are elderly or who have a physical, developmental or mental disability, and is closely coordinated with all of Wisconsin's Medicaid Home and Community-Based Waivers.
As you know, Wisconsin's successful Family Care Waiver has built on the learning and success of COP and CIP waivers. Working together, we will expand Family Care to provide comprehensive and individualized long-term care to individuals, helping keep more people healthy and independent in communities.
Sincerely,
HELENE NELSON
Secretary
Referred to the committee on Health, Children, Families, Aging, and Long-Term Care.
State of Wisconsin
Investment Board
May 18, 2006
The Honorable, The Legislature:
Pursuant to s.
25.17 (14r), Wis. Stats., I have attached a revised copy of SWIB's "Investment Policy, Objectives, and Guidelines," recently amended by the board of Trustees plus a copy that shows the language added or deleted as a result of the changes. In summary, these amendments:
1. Modify the authority to make investments in private equity. These Investments, primarily leveraged buyouts and venture capital, comprise approximately 2.1% of the assets of the Core Trust Fund. In 2005, the Board decided to concentrate on a smaller number of larger purchases, the Board at that time also contracted with a private equity consultant to review all initial prospective investments and confirm that they meet appropriate standards for a prudent investor. The current amendments increase the authority of the Chief Investment Officer-Private Markets to review and approve all proposed buyout fund investments up to $300 million. The old guidelines limited the authority to investments of no more than $200 million. Any proposed buyout investment in excess of $300 must go to the board for approval. The new amendments also define "follow-on funds" and clarify that the portfolio manager is not required to have the outside consultant review proposed follow-on and secondary fund purchases. In addition, the new guidelines no longer require private equity funds that invest more than 50% of capital in emerging markets to secure prior Board approval. The portfolios still are restricted, however, to make no more than 33% of total commitments outside the U.S. and only 15% of their commitments in emerging markets. The emphasis for private equity portfolios to invest in limited partnerships means less risk and volatility in the portfolios, thus justifying the higher limits. The result is that staff has authority and the flexibility to invest in these funds, without having to await the results of Board approval or consultant review. In the current, very competitive marketplace in which partnerships are often oversubscribed, this will allow staff to secure a position in those partnerships that afford the potential to earn the highest return.
2. Incorporate targeted asset allocations for 2006 for the Core Trust Fund adopted by the Board of Trustees. Each year, the Board reviews how the assets are allocated and adjusts the allocation targets when warranted. It also reviews portfolio benchmarks and adopts changes as necessary. The guidelines have been revised to include the benchmark for the REIT portfolio as the portfolio was initiated in mid-2005.
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3. Change the criteria for investing in foreign countries. Investments in emerging market countries have been evaluated using a rating system published by Freedom House, an organization with the stated purpose of promoting democracy. In the latest version of the guidelines, the evaluation of sovereign debt has been distinguished from stocks and corporate bonds. Sovereign debt is evaluated based upon credit ratings issued by recognized rating agencies of Standard & Poors and Moodys. Sovereign debt rated B3/B- or above is eligible for investment. However, investments in unrated debt or debt rated below B3/B- is subject to approval by the Investment Committee based on an analysis presented by portfolio managers. Investment in emerging market debt is limited by the guidelines to sovereign debt of countries included in the JP Morgan Emerging Markets Global Diversified Bond Index.
Corporate bonds and stock issued by companies domiciled in emerging markets continue to be subject to the Freedom House screen. In addition, the Index of Economic Freedom, a screen based on economic factors, will be used to evaluate investments. Bonds and stocks of companies that are organized in countries rated "Not Free" by Freedom House and "Repressed" by the Index of Economic Freedom are not permitted investments. Investments in countries that fail to pass one of the two screens may be permitted based on an evaluation of risk factors and approval by SWIB's Investment Committee.
4. Reduce the current authority of fixed income portfolios to invest in Rule 144A investments from 40 to 20% of the portfolios market value. Rule 144A of the Federal Securities Act makes it easier for institutional investors to buy and sell unregistered securities, which are private debt investments of public issuers that are not available to non-institutional investors. These bonds are frequently registered as a public bond at a later date. The Board and staff decided that the lower number was sufficient.
5. Include the benchmark and guidelines for the newly created Global Bond Index Fund, which is being managed internally. The benchmark is the same as for the actively managed internal Global Bond Portfolio. However, the guidelines are more restrictive as the index fund is intended to replicate the benchmark and all securities held in the portfolio much come from countries in the benchmark.
6. Make minor changes to the State Investment Fund (SIF) guidelines. The new guidelines clarify the statutory language applicable to SIF's investment authority and that maturity, issuer and credit quality limits are applied at the time of investment.
7. Make minor changes to the other smaller funds regarding investment objectives and permissive investments.
8. Include statutory changes that changed the name of the Fixed Fund to the Core Fund and increased from 15% to 20% the funds that may be actively managed by external managers.
9. Incorporate minor amendments to include statute cites, administrative rules, name changes, and rewording of existing guidelines.
SWIB's "Investment Goals, Strategies and Performance Report" was filed in March and provided a more detailed discussion of strategy and investment changes implemented as a result of changes to the Guidelines. Please contact me if you have any questions.
Sincerely,
DAVID C. MILLS
Executive Director
Referred to the committee on Retirement Systems.
State of Wisconsin
Department of Administration
May 1, 2006
The Honorable, The Legislature:
In compliance with Wisconsin statute 16.548, please find the Wisconsin Office of Federal/State Relations quarterly report to be submitted to the Legislature for the first quarter of 2005. This report provides information on the activities of the office and the status of federal legislation of concern to the State of Wisconsin.
Please contact me if you have any questions about this material.
Sincerely,
STEPHEN E. BABLITCH
Secretary
