ORDER of the DEPARTMENT OF ADMINISTRATION
The Wisconsin Department of Administration proposes an order to repeal ss. Adm 95.03 (6m) and (16); to amend ss. Adm 95.01, 95.02, 95.03 (5), (14), and (20), 95.04 (1), (2) (Note), (3), (4), and (5) (a) to (b), 95.05 (2) (a) and (b), 95.07 (1) (a), (1) (b), (2) (b), and (2) (c), 95.08 (1), 95.09 (2) (b) and (3) (c), and 95.10 (2); to repeal and recreate s. Adm 95.07 (2) (a); and to create ss. 95.03 (4s) and (5m) and 95.07 (2) (d); relating to the Service Award Program.
Rule Analysis prepared by the Department of Administration
1. Citations to statutes interpreted:
2. Citations to statutory authority:
3. Explanation of the agency’s statutory authority to promulgate the rule under the statutes cited:
Section 227.11 (2) (a), Stats., expressly grants authority to the Department to “promulgate rules interpreting the provisions of any statute enforced or administered by the agency, if the agency considers it necessary to effectuate the purpose of the statute,” and s. 16.25 (2), Stats., charges the Department with administering the Service Award Program. The proposed rule interprets the provisions of s. 16.25, Stats., and is necessary to effectuate the purpose of s. 16.25 as amended by 2017 Wisconsin Acts 12 and 59. Section 16.25 (3) (g) to (i), Stats., contain provisions specifically charging the Department to promulgate rules implementing the requirements of those paragraphs, including determining the manner of payment and the amounts to be paid to certain volunteers under the program. The proposed rule carries out these statutory directives.
4. Related statutes or rules:
Section 16.25, Stats., governs the Service Award Program. Chapter Adm 95 sets forth the Department’s rules governing the program. Section 20.505 (4) (er), Stats., provides a sum sufficient appropriation for state matching funds to be paid under s. 16.25 (3) (d), Stats., not to exceed $2,500,000 in a fiscal year. 5. Brief plain language summary of the proposed rule:
Sections 1 through 10 and Section 19 of the proposed rule updates the terminology for certain emergency medical personnel consistent with 2017 Wisconsin Act 12. The proposed rule implements Act 12 by replacing “first responder” with “emergency medical responder” and replacing “emergency medical technician” with “emergency medical services practitioner,” throughout Ch. Adm 95. Also, the definitions in s. Adm 95.03 for “emergency medical responder” and “emergency medical services practitioner” now point directly to the statutory definitions of those terms in s. 16.25 (1) (am) and (at), Stats. Section 10 of the proposed rule updates the contact information in s. Adm 95.04 (2) (Note) to reflect the location of the Service Award Program in the Department of Administration’s Division of Intergovernmental Relations. This section also adds the term “credit” into s. Adm 95.04 (3). This in order to clarify that, when a municipality establishes standards for a volunteer to qualify for an annual contribution, this includes setting the requirements for a volunteer to qualify for credit under the municipality’s program, as provided in the definition of “credit” in s. Adm 95.03 (4). This section also amends s. Adm 95.05 (2) (b) to extend the deadline for municipalities to pay all contributions to program administrators each year, from January 31 to February 15. Section 12 of the proposed rule updates s. Adm 95.07 (1) to reflect the new 15-years-of-service threshold for a volunteer to be fully vested. The proposed rule also clarifies that the volunteer who receives an award under subsection (1) shall receive the “full net asset value” of their account. (“Net Asset Value” is already defined in s. Adm. 95.02 in a manner consistent with what s. 16.25 (3) (g), Stats., authorizes a fully vested volunteer to receive.) The proposed rule also makes editorial changes to use the terminology “elect to receive” instead of “request to receive,” for stylistic consistency with the proposed amendments to s. Adm 95.07 (2), Stats. Sections 13 and 14 of the proposed rule amend s. Adm 95.07 (2) to establish new provisions for vesting, to implement the portion of s. 16.25 (3) (g), Stats., that delegates to the Department the task of determining the amounts payable to volunteers who are not fully vested because they meet one or both of the following criteria: (1) between the ages of 53 and 60 or (2) between 10 and 15 years of service for credit. According to s. 16.25 (3) (f), a vesting period of 10 years is the minimum requirement to receive any length of service award. Based on this provision and on the other applicable provisions of s. 16.25 (3) (g), the Department has determined that a volunteer shall be considered partially vested and may elect to receive a partial length of service award after performing a minimum of 10 years of service and reaching age 53, if the volunteer has discontinued providing eligible service. Unless and until a volunteer makes this election, the volunteer is not eligible for a partial length of service award. As with the existing rule, the proposed rule calculates the amount payable for a partial length of service award based upon the number of years of service. The new formula adjusts the percentages to reflect the fact that a volunteer can now be fully vested with 15 years of service, rather than 20 years. However, the formula is designed so that a volunteer who has 15 or more years of service but is not yet age 60 may not receive more than 95% of the net asset value of the account. This is required by s. 16.25 (3) (g), Stats., which provides that the amount must be less than what is paid to a fully vested volunteer. The proposed rule also provides that the award will be payable in the calendar year following the date of the election.
Section 15 of the proposed rule creates s. Adm 95.07 (2) (d), which clarifies that, as an alternative to electing to receive a partial length of service award under s. Adm 95.07 (2), a volunteer who has discontinued serving after performing 15 years of service may wait until age 60 and elect to receive a full length of service award at that time, under s. Adm 95.07 (1). This clarification is important to emphasize that there is no requirement that a volunteer maintain serving continuously until age 60 in order to become fully vested, provided that the volunteer accumulated at least 15 years of service before discontinuing serving. Sections 16 and 17 of the proposed rule implement the statutory change in s. 16.25 (3) (j), Stats., that doubled the length of time—from 6 months to 12 months—that a volunteer may experience a break in serving without the volunteer’s account being closed. Section 18 proposes changes to the first sentence of s. Adm 95.09 (3) (c) to harmonize the language with the vesting provisions in the proposed revisions to s. Adm. 95.07. In summary, the purpose of the proposed rule is to ensure that Ch. Adm. 95 reflects and implements the statutory changes to s. 16.25, Stats. and effectively carries out the Department’s explicit statutory obligations to administer the program and to promulgate rules implementing the various vesting requirements. 6. Summary of, and preliminary comparison with, any existing or proposed federal regulation that is intended to address the activities to be regulated by the proposed rule:
There are no federal regulations directly regulating the subject matter of the proposed rule, although federal tax regulations do provide special treatment for length of service award programs in section 457 of the Internal Revenue Code, specifically 26 C.F.R. 457 (e) (11) (B). Further, s. 16.25 (2), Stats., requires the Department to “administer the program so as to treat the length-of-service awards as a tax-deferred benefit under the Internal Revenue Code.”
