Biennial budget bill reduces certain first-offense motor vehicle convictions to civil offenses, narrows "habitual traffic offender" definition, and more

August 25, 2005

Gov. Jim Doyle signed the 2005 - 07 biennial budget bill (2005 Assembly Bill 100) into law in late July as 2005 Wis. Act 25. Except where specific provisions set separate effective dates, Act 25 became effective July 27. It covers state expenditures from July 1, 2005 through June 30, 2007.

The governor made 139 partial vetoes. The legislature may override any veto with a two-thirds vote of members present in both houses. However, a budget override has not been adopted since the 1980s.

Legislative leaders have questioned the governor's broad use in Act 25 of his partial veto authority. In one case the Governor "cherry picked" words and phrases from whole paragraphs to create new provisions. Another veto would give the Secretary of the Department of Administration the authority to direct the use of millions of dollars in state revenues. Legislators believe this veto usurps the legislature's responsibility for appropriating funds, and are considering a lawsuit to challenge the constitutionality of these vetoes. At the time of this writing, a proposed constitutional amendment has just been introduced to limit the veto powers of future governors. The amendment would prohibit creation of a new sentence by combining parts of two or more sentences in an enrolled bill.

The Biennial Budget (Act 25) now stands as vetoed unless the legislature, through a two-thirds vote, acts to override the governor's action. Time will tell if the nature of the vetoes and the unprecedented redirection of funds to other appropriations results in any other type of Legislative response.

Here is an overview of the provisions in Act 25 that may be of interest to attorneys:

Revocation of Law Licenses For Tax Delinquency

Act 25 will potentially subject attorneys and law license applicants to suspension or denial of their law license for delinquent taxes owed to the State of Wisconsin. However, because of the unique regulatory structure of the legal profession, by an independent and separate branch of government, several modifications to the traditional revocation or suspension procedure were included.

Under current law, occupational licenses may be denied, revoked, or not renewed when the licensee or applicant owes delinquent taxes. When Department of Revenue (DOR) discovers a delinquency, it sends a certificate of delinquency to the occupational licensing agency indicating that the individual's license should be revoked or not renewed or an application for a license denied.

The individual licensee or applicant can request an administrative hearing with DOR. If the DOR hearing examiner affirms the certificate of tax delinquency, the licensing agency must affirm the DOR hearing examiner's finding. The licensing agency's affirmation of the license denial or revocation can be appealed to the Circuit Court. DOR has entered into a number of memoranda of understanding (MOUs) with licensing agencies to administer these provisions.

As a matter of Separation of Powers among the branches of government, the application of the duties and powers on licensing agencies, with respect to the Supreme Court's regulation of the practice of law, is subject to the Supreme Court's consent and agreement. The denial or revocation procedure used by most administrative agencies that requires affirmation of DOR's certificate of delinquency and related license denial, non-renewal, or revocation before the entire hearing process is completed is inconsistent with the Supreme Court's authority over attorney licensure. As a result, DOR and the Supreme Court have not entered into an MOU to apply the license revocation or denial procedure to attorneys.

Act 25 modifies the occupational licenses tax delinquency procedure to require that the hearing process for a law license applicant or attorney owing delinquent taxes be concluded prior to DOR certification to the Supreme Court that such an individual is delinquent.

In addition, the modified procedure for law licenses contained in Act 25 does not require affirmation of license denial, revocation, or non-renewal for attorneys or law license applicants by the Supreme Court before the entire hearing process was completed. At that time, the Supreme Court would decide what action to take. (This issue was previously discussed in the July 2005 issue of Wisconsin Lawyer.)

Reduces certain first-offense operating a motor vehicle after revocation convictions from criminal to civil offenses.

• Under current law, an individual convicted of a first violation of operating a motor vehicle after revocation (OAR) is subject to a fine of not more than $2,500 or imprisonment for not more than one year in the county jail, or both.
• Act 25 creates new Wis. Stat. section. 343.44 (2)(as) that reduces the OAR offense from a criminal to a civil offense, unless: (a) the individual had been convicted of OAR within the preceding five-year period; or (b) the license revocation resulted from an offense of operating under the influence of an intoxicant or other drug, or of operating a commercial motor vehicle with an alcohol concentration between 0.04 and 0.08. The legislature did not approve the Governor's proposal to lower the penalty to $500. Instead, the penalty for a civil offense under Act 25 remains at a forfeiture of not more than $2,500.The changes first apply to violations occurring after the effective date of the bill, July 27, 2005.[1]

Narrows the definition of "habitual traffic offender" to reduce the number of persons whose operating privileges are revoked

• Redefine "habitual traffic offender" to mean any person, resident or nonresident, whose Department of Transportation (DOT) record, showed that the person had accumulated within a five-year period: (a) four or more specified major civil or criminal traffic violations; or (b) 12 or more convictions of violations of Wis. Stat. chapter 346 of the statutes (Rules of the Road). As a result, convictions for operating after suspension or operating after revocation would not be offenses that trigger a finding that an individual is either a "habitual traffic offender" or a "repeat habitual traffic offender."
• Specify that these changes first apply to reports of convictions of violations received by the DOT on July 27, 2005, but does not preclude counting other violations as prior violations for purposes of revocation of operating privileges by the DOT or review by a court.

Provides state funding for the court interpreter program currently funded with expiring federal funds, and provide additional county reimbursement funds to reflect increased demand for court interpreter services

• Under Act 25 the state will continue to provides reimbursement to counties for interpreter services for indigent persons in criminal, delinquency, protective services, chapter 48 (children's code) and chapter 51 (alcohol, drug abuse, developmental disabilities, and mental health act) proceedings.
• As introduced by the governor, Assembly Bill 100 included provisions to require that a court, in all criminal and civil proceedings, provide an interpreter for a party or witness who has limited English proficiency, regardless of indigence. ThelLegislature's Joint Finance Committee deleted those provisions.

Increases surcharges imposed on fines or forfeitures to provide revenues for executive branch programs and the general fund

• Penalty surcharge is increased from 24 to 25 percent of the fine or forfeiture imposed for most violations of state law or municipal or county ordinance.
• Crime Laboratory and Drug Law Enforcement surcharge is increased from the current $7 to $8.

(When a court imposes a sentence, places a person on probation, or imposes a forfeiture for a violation of state law or municipal or county ordinance, a surcharge of $7 is generally imposed.)

• Justice information fee is increased from $9 to $12.
• Crime Victim and Witness Assistance surcharge is increased from $50 to $60 for misdemeanors and from $70 to $85 for felonies.

(The reach of the victim-witness surcharge has been broadened under new Wis. Stats. section 973.043(1m): in addition to crimes, the court shall impose the surcharge if the complaint charged a crime and, as a result of a deferred or suspended prosecution, the defendant paid a forfeiture. The defendant shall pay either the felony or misdemeanor victim-witness fee depending on the crime that was originally charged in the complaint.)

• Drug Abuse Program Improvement surcharge is increased from 50% to 75% of the sum of the fine and penalty surcharge.

A portion of the generated revenue would be used to support an Office of Justice Assistance (OJA) grant program for counties to establish alternatives to incarceration programs for non-violent criminal offenders with identified substance abuse treatment needs.

Note: As passed by the legislature, Assembly Bill 100 would have increased the copy fee charged by the register in probate from $1 per page to $1.25 per page. The governor's partial veto deleted this provision.

Create a number of new surcharges

• Create a $10 drug offender diversion surcharge to be assessed for property crime convictions under chapter 943 of the statutes.

The revenue generated would be used to support an OJA grant program for counties to establish alternatives to incarceration programs for non-violent criminal offenders with identified substance abuse treatment needs.

• Authorize the Department of Corrections to establish by rule an annual sex offender registration fee not to exceed $50 for individuals in its custody or under its supervision. The fee would be used to partially offset the costs of monitoring.

An updated table of circuit court fees, civil forfeitures, criminal fines, and surcharges is available at the court's Web site.

Reduce the terms of probation for certain misdemeanor offenses

Act 25 reduces terms of probation for the following misdemeanors.

Create a subsidized guardianship program.

(Note: In September 2004, Wisconsin received a five-year federal Title IV-E waiver to provide a subsidized guardianship payments program. Under the waiver terms and conditions, the state is allowed to operate a demonstration subsidized guardianship payment program in Milwaukee County, although the program could be expanded to other counties and tribes in Wisconsin, with approval from the U.S. Department of Health and Human Services (DHSS). The waiver requires changes in state law to clarify the nature of guardianship as a permanency outcome and to allow the payment of guardianship subsidies, as well as allowing non-relatives to become guardians. )

• Act 25 makes changes that: (a) allow a non-relative to be appointed as a guardian of a child in need of protection or services; (b) include placement with a guardian as a placement option for children first entering out-of-home care; (c) create a subsidized guardianship payment and allow the Department of Health and Family Services (DHFS) or a county to make the payments to a guardian of a child in need of protection or services; (d) direct DHFS to request a federal waiver to claim reimbursement under Title IV-E for the subsidized guardianship payments; and (e) make changes in the court process for appointing a guardian for a child in need of protection or services.

Create a grant program to provide reintegration services for female nonviolent prisoners from Milwaukee County and their children

• Require DHFS to award grants to an organization or a group of organizations to provide services for female prisoners and offenders from Milwaukee County and their children, if the prisoners or offenders have been convicted of non-violent crimes. Require each grantee to provide at least all of the following for up to six months before a prisoner's release from prison and up to two years after release: (a) screening, assessment, and treatment, including mental health and permanency services, for the prisoners or offenders to assist in their reintegration into the community; and (b) at-risk assessments for all dependent children of female prisoners or offenders who receive services under the program and comprehensive support services. Treatment and support services would be provided to approximately 72 women and their children over the biennium.
• Though not in the bill, the administration has provided the following program details: To be eligible under the program, women would be required to have multiple needs, which could include substance abuse or dependence, mental health, employment, housing, and basic daily living skills. Program participants would receive the following types of services: (a) risk assessment and support services for the children of these women; (b) intensive preparation ("reach-in" services) for these women to reenter the community; (c) institution-based transition activities, such as substance abuse and mental health treatment services, job-readiness, and parenting activities; and (d) community-based support activities, based on a coordinated care plan that identifies the roles and responsibilities of all formal and informal team members.

Create a grant program to provide alternatives to prosecution and incarceration for criminal offenders who abuse alcohol or other drugs

• The legislature added provisions to create a grant program to enable counties to establish and operate programs, including suspended and deferred prosecution programs and programs based on principles of restorative justice, that provide alternatives to prosecution and incarceration for criminal offenders who abuse alcohol or other drugs. Direct that the grant program be administered by the Office of Justice Assistance (OJA), in collaboration with the departments of Corrections and Health and Family Services.
• Grant funding will be provided from program revenue generated from creating a $10 drug offender diversion surcharge to be assessed for property crime convictions under Chapter 943 of the statutes. The Department of Corrections must adopt rules requiring that money be used for reasonable support of an inmate's family or dependents before it is allocated for the drug offender diversion surcharge.
• As passed by the legislature, Assembly Bill 100 requires partnerships, limited liability companies (LLCs), tax-option corporations, and estates or trusts that are treated as pass-through entities for federal income tax purposes and that have Wisconsin income for the tax year that is allocable to a nonresident partner, nonresident member, nonresident shareholder, or nonresident beneficiary to pay withholding taxes, effective with tax year 2005.
• A nonresident is defined as: (a) an individual not domiciled in the state; or (b) a partnership, LLC, or corporation whose commercial domicile is outside the state; or (c) an estate or trust that is nonresident under state law. The amount of withholding is equal to the partner's, member's, shareholder's, or beneficiary's share of income attributable to Wisconsin multiplied by: (a) the highest state individual income tax rate for the taxable year for a single individual (6.75%), if the recipient is an individual, estate, or trust; or (b) the highest corporate tax rate (7.9%) for the taxable year for a partnership, LLC, or tax-option corporation. Members of pass-through entities that are also pass-through entities would be subject to the same withholding requirements. The Governor's partial veto makes a technical correction to these provisions to clarify that the withholding requirements apply to all nonresidents who are members of pass-through entities.

Items Not Included in the Act 25:

Funding for Civil Legal Services

As introduced by the governor, Assembly Bill 100 would have created a civil legal services grant program administered by the Office of Justice Assistance and would have provided $500,000 in GPR funding for legal services in Fiscal Year 2006 - 07. The Legislature's Joint Finance Committee deleted this proposed funding and related provisions.

Consolidation of State Attorneys

As introduced by the governor, Assembly Bill 100 would have transferred all staff attorneys from a large number of different state agencies and consolidated them into a single office in the Department of Administration (DOA). The legislature's Joint Finance Committee deleted this proposed transfer but did direct the Secretary of DOA to delete 13.0 FTE executive branch agency attorney positions, other than those at the U W System, that become vacant before June 30, 2007, and lapse or transfer the associated   salary and fringe benefits amounts to the general fund in 2006 - 07.

Transfer of State Administration of the District Attorney Function

As introduced by the governor, Assembly Bill 100 would have transferred the duties and responsibilities associated with the state administration of the District Attorneys function from the Department of Administration (DOA) to the Department of Justice (DOJ). The Legislature's Joint Finance Committee deleted this proposed transfer.

Transfer of Consumer Protection Staff And Functions

As introduced by the governor, Assembly Bill 100 would have transferred most consumer protection functions from the Department of Agriculture, Trade and Consumer Protection (DATCP) to the Department of Justice (DOJ). The legislature's Joint Finance Committee deleted this proposed transfer.

Streamlined Sales and Use Tax (SSUT) Agreement Provisions

As introduced by the governor, Assembly Bill 100 would have modified state statutes to

conform to the Streamlined Sales and Use Tax (SSUT) Agreement, which is the product of a multi-state initiative intended to establish more uniform sales tax systems among states in order to ease the administrative burden for multi-state retailers. The legislature deleted the SSUT provisions.

[1] As a result of changes to first offense OAR and various surcharge amounts contained in 2005 Wis. Act 25, the biennial budget bill, the Uniform State Bond Book has been revised. The Judicial Conference approved a deposit amount of $100 for first offense OAR. With the new surcharge levels, the total deposit will be $248. The appropriate surcharge changes were made throughout the Bond Book. The updated Bond Book can be found at www.wicourts.gov/about/pubs/index.htm.