LRB-4653/3
RAC:jlg:jf
1997 - 1998 LEGISLATURE
March 17, 1998 - Introduced by Representatives Plale, Jensen, Hanson, Duff,
Grothman, Hebl, Kedzie, Kreuser, F. Lasee, Nass, Porter, Riley, Staskunas,
Walker, Wasserman
and Ziegelbauer, cosponsored by Senators Rude and
Welch. Referred to Joint survey committee on Retirement Systems.
AB916,1,6 1An Act to create 40.41 (6) (g), subchapter X of chapter 40 [precedes 40.98] and
2111.91 (2) (o) of the statutes; relating to: excluding from coverage under the
3federal Social Security Act services performed by part-time, seasonal and
4temporary state employes, establishing an alternative plan with comparable
5benefits to social security for these part-time, seasonal and temporary state
6employes and granting rule-making authority.
Analysis by the Legislative Reference Bureau
Under current law, with certain exceptions, all state employes are included for
coverage under the federal Social Security Act. This bill excludes from social security
coverage those services performed by part-time, temporary and seasonal state
employes, beginning on January 1, 1999, for all part-time, temporary and seasonal
state employes who are not otherwise required to be covered under social security.
The definitions of part-time, temporary and seasonal state employes are those
provided in federal law. Part-time state employes are generally those employes who
work 20 hours or less per week; seasonal state employes are generally those
employes who work on a full-time basis less than 5 months in a year; and temporary
state employes are generally those employes who perform services under a
contractual arrangement with the state for a duration of 2 years or less.
In addition, under the bill, the department of employe trust funds (DETF) is
required to establish an alternate plan for those part-time, temporary and seasonal

state employes that offers comparable benefits to those provided under social
security. Under the plan, each employe is required to have 7.5% of his or her earnings
deducted and contributed to the plan. There is no employer contribution.
Participation in the plan by all part-time, temporary and seasonal state employes
is mandatory, except that these employes may elect coverage under the federal Social
Security Act during one of 2 periods: either no later than 30 days after the employe's
initial date of employment with the state; or during January of the odd-numbered
year. Any part-time, temporary or seasonal state employe who elects coverage under
the federal Social Security Act may not participate in the plan.
Under the plan, DETF is required to contract with an individual or
organization in the private sector for all administrative and investment services
required for the plan. The contract must require the individual or organization to
reimburse DETF for all costs incurred directly or indirectly by DETF in
implementing, administering and monitoring the plan and must require that the
individual or organization indemnify the state and all state employes against all
costs, liabilities and expenses that may result if the individual or organization
violates any applicable provision of the Internal Revenue Code or the federal Social
Security Act.
Finally, the bill provides that exclusion from social security coverage of services
performed by these part-time, temporary and seasonal state employes and
participation in the alternate plan by these employes are prohibited subjects of
collective bargaining under the state employment labor relations act.
This bill will be referred to the joint survey committee on retirement systems
for a detailed analysis, which will be printed as an appendix to this bill.
For further information see the state fiscal estimate, which will be printed as
an appendix to this bill.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
AB916, s. 1 1Section 1. 40.41 (6) (g) of the statutes is created to read:
AB916,2,42 40.41 (6) (g) Services in state employment beginning on January 1, 1999, that
3are performed by part-time, temporary and seasonal state employes who participate
4in the alternative OASDHI plan established in subch. X.
AB916, s. 2 5Section 2. Subchapter X of chapter 40 [precedes 40.98] of the statutes is
6created to read:
AB916,2,77 Chapter 40
AB916,3,4
1Subchapter X
2 ALTERNATIVE OASDHI plan for
3 part-time, temporary and seasonal
4 state employes
AB916,3,6 540.98 Alternative OASDHI plan for part-time, temporary and seasonal
6state employes. (1)
In this subchapter:
AB916,3,87 (a) "Covered employe" means any part-time, temporary or seasonal state
8employe who is not required by federal law to be covered under OASDHI.
AB916,3,109 (b) "Part-time state employe" means a state employe who is a part-time
10employe under 26 CFR 31.3121 (b) (7)-2 (d) (2) (iii) (A).
AB916,3,1111 (c) "Plan" means the alternative OASDHI plan established under sub. (2).
AB916,3,1312 (d) "Seasonal state employe" means a state employe who is a seasonal employe
13under 26 CFR 31.3121 (b) (7)-2 (d) (2) (iii) (B).
AB916,3,1514 (e) "Temporary state employe" means a state employe who is a temporary
15employe under 26 CFR 31.3121 (b) (7)-2 (d) (2) (iii) (C).
AB916,3,21 16(2) The department shall establish by rule an alternative OASDHI plan for
17covered employes. The plan shall comply with all applicable requirements of section
183121 of the Internal Revenue Code relating to plans for state employes that may be
19alternatives to OASDHI. The plan shall provide comparable benefits to those
20provided under OASDHI. The department shall provide coverage under the plan to
21all covered employes beginning on January 1, 1999.
AB916,3,24 22(2m) (a) Participation in the plan by all covered employes shall be mandatory,
23except that covered employes may elect coverage under OASDHI during one of the
24following periods:
AB916,4,2
11. No later than 30 days after the covered employe's initial date of employment
2with the state.
AB916,4,33 2. During January of the odd-numbered year.
AB916,4,54 (b) A covered employe may only elect coverage under OASDHI by notifying the
5department on a form provided by the department.
AB916,4,76 (c) A covered employe who elects coverage under OASDHI may not participate
7in the plan.
AB916,4,13 8(3) Contributions under the plan shall be 7.5% of each payment of earnings of
9the covered employe and shall be paid by the covered employe. The department may
10increase or decrease the contribution rate by rule, but any such increase or decrease
11shall be subject to any applicable requirement of section 3121 of the Internal
12Revenue Code relating to plans for state employes that may be alternatives to
13OASDHI.
AB916,4,16 14(4) The department shall contract with an individual or organization in the
15private sector for all administrative and investment services required under the
16plan.
AB916,4,18 17(5) Any contract entered into by the department under sub. (4) shall do all of
18the following:
AB916,4,2219 (a) Provide that the individual or organization reimburse the department, to
20be credited to the administrative account of the public employe trust fund in s. 40.04
21(2), for any costs incurred directly or indirectly by the department in implementing,
22administering and monitoring the plan.
AB916,5,223 (b) Indemnify the state and all state employes against all costs, liabilities and
24expenses that may result if the individual or organization under contract violates

1any applicable provision of the Internal Revenue Code or the federal Social Security
2Act.
AB916,5,6 3(6) Subject to all applicable requirements of section 3121 of the Internal
4Revenue Code relating to plans for state employes that may be alternatives to
5OASDHI, all funds in the plan may be invested and reinvested in the same manner
6provided for investments under s. 881.01 (1).
AB916, s. 3 7Section 3. 111.91 (2) (o) of the statutes is created to read:
AB916,5,98 111.91 (2) (o) Exclusion from social security coverage under s. 40.41 (6) (g) and
9participation in the plan under subch. X of ch. 40.
AB916, s. 4 10Section 4. Nonstatutory provisions.
AB916,5,1411 (1) Submission of proposed rules to the legislative council staff. The
12department of employe trust funds shall submit in proposed form the rules required
13under section 40.98 (2) of the statutes, as created by this act, to the legislative council
14staff under section 227.15 (1) of the statutes no later than September 1, 1998.
AB916, s. 5 15Section 5. Initial applicability.
AB916,5,2116 (1) Prohibited subjects of collective bargaining under state employment
17labor relations act.
The treatment of section 111.91 (2) (o) of the statutes first
18applies to employes who are affected by a collective bargaining agreement that
19contains provisions inconsistent with that treatment on the day on which the
20collective bargaining agreement expires or is extended, modified or renewed,
21whichever occurs first.
AB916,5,2222 (End)
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