The rulemaking procedures under ch. 227, Stats. are being implemented for the purpose of effectuating the Division's annual review of the Rules of the Division of Securities. The Division's annual rule revision process for 2002 is conducted for the following purposes: (1) Adopting new rules or amending existing rules, relating to the securities broker-dealer, agent, investment adviser, and investment adviser representative licensing provisions, to thereby effectively regulate new securities licensing developments that have occurred in the securities industry and marketplace that require regulatory treatment; (2) Repealing certain now-outdated interim rule provisions (or sections thereof) promulgated in 2001 that, at the time, established deadlines for filing initial and renewal license applications with the Division by investment advisers and investment adviser representatives using the national, electronic database of the Investment Adviser Registration Depository; and (3) Adding several recent or newly-amended North American Securities Administrators Association (“NASAA") securities registration policies to the current list of NASAA securities registration policies contained in existing rule s. DFI-Sec 3.03 (4), because the disclosure related provisions of such policies may be used by the Division for purposes of reviewing the adequacy of prospectus disclosures in securities registration applications filed with the Division.

A summary of the subject matter and nature of the more significant of the rule revisions follows:

1. Providing for the electronic filing procedure for licensure in Wisconsin of investment adviser representatives using the national, electronic database of the Central Registration Depository made available for use by all states as of March 2002.

2. Creating new subsections under the Licensing Period rules in s. DFI-Sec 4.07 (2) for securities agents and in s. DFI-Sec 5.07 (2) for securities agents qualified to perform the functions of an investment adviser representative, relating to the failure to comply with continuing education requirements recently adopted by the National Association of Securities Dealers (“NASD") and national securities exchanges, to provide that a license is not effective if the person's status with the NASD or a national securities exchange is deficient for failure to meet continuing education requirements.

3. Amending the language in a number of existing licensing procedure rules to clarify that initial and renewal licenses of investment advisers remain subject to filing under the Investment Adviser Registration Depository.

4. Repealing certain now-outdated interim rule provisions (or sections thereof) promulgated in 2001 that, at the time, established deadlines for filing initial and renewal license applications with the Division by investment advisers and investment adviser representatives using the national, electronic database of the Investment Adviser Registration Depository.

5. Adding to the current list of NASAA securities registration policies contained in existing rule s. DFI-Sec 3.03 (4), Wis. Adm. Code, that may be used by the Division for purposes of reviewing the adequacy of prospectus disclosures in securities registration applications filed with the Division, the NASAA Statements of Registration Policy relating to Mortgage Program Guidelines, Omnibus Guidelines, General Obligation Financing by Religious Denominations/Church Extension Fund Guidelines, and the amended version of the NASAA Statement of Policy Regarding Church Bonds as adopted by the NASAA membership in April, 2002.

Each Section that adopts, amends or repeals a rule is followed by a separate Analysis which discusses the nature of the revision as well as the reason for it.

A copy of the entirety of the proposed rule revisions to be considered may be obtained upon request to the Division of Securities, Department of Financial Institutions, 345 West Washington Avenue, 4th Floor, P.O. Box 1768, Madison, Wisconsin 53701. Additionally, the full text of the proposed rule revisions is available on-line at the DFI Website: www.wdfi.org/securities&franchising.

Types of small businesses that could be affected by certain of the rule revisions are:

Broker-dealer and investment adviser licensees under the Wisconsin Uniform Securities Law with fewer than 25 full-time employees who meet the other criteria of s. 227.114 (l) (a), Stats. The proposed revisions to the securities broker-dealer and investment adviser Rules of Conduct provisions are applicable equally to all broker-dealers and investment advisers because the requirements involved are for the protection and benefit of Wisconsin customers of those firms. All Wisconsin customers of securities broker-dealers and investment advisers are entitled to the public investor protection benefits of the licensing Rules of Conduct requirements, irrespective of the size of the firm providing the securities services. Under the rule revision procedure of the Division of Securities, a copy of the proposed rule revisions is mailed to each broker-dealer licensed in Wisconsin, as well as to each investment adviser licensed or notice-filed in Wisconsin, notifying them of the proposed revisions and soliciting written comments or attendance at the public hearing regarding the proposed rules.

A summary of the fiscal effects of the proposed rule revisions is as follows: (i) No one-time revenue fluctuations; (ii) No annual fiscal effects; (iii) No long-range fiscal implications; (iv) No fiscal effect on local units of government.

1. Types of small businesses that could be affected by certain of the rule revisions are:

Broker-dealer and investment adviser licensees under the Wisconsin Uniform Securities Law with fewer than 25 full-time employees who meet the other criteria of s. 227.114 (l) (a), Stats. The proposed revisions to the securities broker-dealer and investment adviser Rules of Conduct provisions are applicable equally to all broker-dealers and investment advisers because the requirements involved are for the protection and benefit of Wisconsin customers of those firms. All Wisconsin customers of securities broker-dealers and investment advisers are entitled to the public investor protection benefits of the licensing Rules of Conduct requirements, irrespective of the size of the firm providing the securities services. Under the rule revision procedure of the Division of Securities, a copy of the proposed rule revisions is mailed to each broker-dealer licensed in Wisconsin, as well as to each investment adviser licensed or notice-filed in Wisconsin, notifying them of the proposed revisions and soliciting written comments or attendance at the public hearing regarding the proposed rules.

2. Reporting, bookkeeping and other procedures required for compliance with the rules.

No reporting, bookkeeping, or other procedures applicable to broker-dealers or investment advisers were added in this rulemaking package. In contrast, certain existing investment adviser reporting requirements (relating to filing with the Division copies of an investment adviser's federal Form ADV) were repealed.

A copy of the full text of the proposed rule revisions and fiscal estimate may be obtained from:

Randall E. Schumann - (608) 266-3414

Legal Counsel for the Division of Securities

Department of Financial Institutions

345 West Washington Avenue, 4th Floor

P. O. Box 1768

Madison, WI 53701

Additionally, the full text of the proposed rule revisions is available on-line at the DFI Website:
www.wdfi.org/securities&franchising.

NOTICE IS HEREBY GIVEN That pursuant to ss. 115.996, 118.30 (2) (b) 2., and 227.11 (2) (a), Stats., and interpreting subch. VII of ch. 115 and 22. 118.30 and 121.02 (1) (r), Stats., the Department of Public Instruction will hold a public hearing as follows to consider the repeal of chs. PI 13 and 16 and recreation of ch. PI 13, relating to limited-English proficient pupils. The hearing will be held as follows:

July 30, 2002   Madison

4:00 - 5:00 p.m.   GEF 3 Building

125 South Webster St.

Room 041

The hearing site is fully accessible to people with disabilities. If you require reasonable accommodation to access this meeting, please call Timothy Boals, Education Consultant, Bilingual/ESL programs, at (608) 267-1290 or leave a message with the Teletypewriter (TTY) at (608) 267-2427 at least 10 days prior to the hearing date. Reasonable accommodation includes materials prepared in an alternative format, as provided under the Americans with Disabilities Act.

The administrative rule is available on the internet at http://www.dpi.state.wi.us/dpi/dfm/pb/leprule.html. A copy of the proposed rule and the fiscal estimate may be obtained by sending an email request to lori.slauson@dpi.state.wi.us or by writing to:

Lori Slauson, Administrative Rules and Federal Grants Coordinator

Department of Public Instruction

125 South Webster Street

P.O. Box 7841

Madison, WI 53707

Written comments on the proposed rules received by Ms. Slauson at the above address no later than August 2, 2002, will be given the same consideration as testimony presented at the hearing. Comments submitted via email will not be accepted as formal testimony.

On June 12, 2001, the department submitted modifications to Chapter PI 16, Wis. Admin. Code, relating to testing of pupils with limited-English proficiencies and disabilities (CHR 01-069). However, as a result of on-going negotiations with the U. S. Department of Education, the department is now making germane modifications to CHR 01-069. The following paragraphs describe the original rule proposal (CHR 01-069) and the modifications made to CHR 01-069:

Original Rule Proposal (CHR 01-069):
Under s. 118.30, Stats., the state superintendent must adopt or approve examinations designed to measure pupil attainment of knowledge and concepts in the 4th, 8th, and 10th grades. Currently, the rules establish criteria and procedures to determine whether a pupil with limited-English proficiency (LEP) or a pupil having an exceptional educational need or EEN (now referred to as child with a disability) may be exempt from taking a test under s. 118.30, Stats.

The proposed rules:

• Repeal the criteria and procedures relating to testing children with disabilities. In 1998, the legislature made sweeping changes to the statutes regarding special education for children with disabilities. The legislature also repealed most state rules regarding special education contained in ch. PI 11, Wis. Adm. Code. The reduction in state rules was intended to eliminate conflicts between the rules and the new state statute and federal law. In addition, in an effort to reduce regulatory complexity and potential incongruence between state rule and federal law, the department eliminated rules in areas adequately addressed by state statute or federal law. Because the provisions in the current rule under ch. PI 16 conflict with provisions in state statute and federal law, the proposed rule repeals the subchapter relating to testing children with disabilities. New rule language in this area is not necessary because testing and assessment issues relating to children with disabilities are already comprehensively addressed in state and federal special education statutes and regulations.

• Ensure that all LEP pupils participate in the Wisconsin Knowledge and Concept Examinations (WKCE) unless it is determined, on a case by case basis, that such tests would not be a valid and reliable indicator of the pupil's academic knowledge and skills. The statutes require the state superintendent to set criteria by rule, regarding the testing of LEP pupils. The current rules conflict with federal regulations under the Elementary and Secondary Education Act because the rules automatically exempt LEP pupils at lower English proficiency levels from taking any of the Wisconsin Knowledge and Concept Examinations (WKCE).

• Ensure that LEP pupils who do not participate in the WKCE are provided with a department-approved alternate assessment.

• Clarify that exempting a pupil from taking the WKCE may not be used as the sole criterion in determining grade promotion, eligibility for courses or programs, eligibility for graduation or eligibility for postsecondary education opportunities. Current rule language could be interpreted to require school districts to promote or graduate an LEP pupil if the pupil is exempt from taking a standardized test.

• Clarify that the criteria under this chapter also apply to the 4th grade test administered under s. 118.30, Stats. At the time the rules were originally developed, only the 8th and 10th grade tests were being administered under s. 118.30, Stats. Since that time, the 4th grade test was added to the WKCE administered under s. 118.30, Stats., and the rules should be changed accordingly.

• Change the term “limited-English speaking" to “limited-English proficient" to be consistent with statutory terminology under s. 115.955 (7), Stats.

Modifications to CHR 01-069:

In December 2000, the department received correspondence from the U. S. Department of Education relating to certain aspects of Wisconsin's assessment system that “must be addressed in order for Wisconsin to remain eligible to receive Title I funds." Wisconsin receives more than $130 million annually in Title I funds. The following is a summary of the department's plan, in part, to fully implement the assessment and accountability provisions under Title I through a timeline waiver agreement with the U.S. Department of Education:

• The department will work with school districts to increase the number of LEP pupils participating in the state assessment system (WKCE and WRCT).

• All students will be included in the assessment system, either by participation in the state assessments (with or without accommodations) or by participation in alternate assessments, with results incorporated into school and district accountability determinations.

• Additional accommodations will be provided, and administrative rules will be modified to ensure that all LEP pupils are appropriately assessed.

• Alternate assessments will be provided for LEP pupils who are not able to demonstrate at least some of the knowledge and skills on the WKCE. Guidance as to who should participate in these assessments will be provided to districts.

In an effort to comply with U. S. Department of Education's timeline waiver agreement and to organize school district requirements relating to LEP pupils, the germane modifications to CHR 01-069 include:

• Repealing chs. PI 13 and 16 and recreating and reorganizing the provisions under these chapters into a new ch. PI 13. The intent is to have all LEP pupil information under one chapter, rather than two chapters, making it easier for schools to find relevant information. The original modifications to ch. PI 13 proposed under CHR 01-069 remain intact but are now reorganized. Also, the provisions under ch. PI 16 for the most part remain intact except for the following:

  -The definitions used in determining the English proficiency level of an LEP pupil have been modified and a new definition, level 6 - formerly LEP now fully English proficient, has been added.

  -School boards are required to use a department-approved assessment in determining the English proficiency level of an LEP pupil.

  -Ensuring that all LEP pupils participate in the Wisconsin Reading Comprehension Test (WRCT) required under s. 121.02 (1) (r), Stats., unless it is determined, on a case by case basis, that such tests would not be a valid and reliable indicator of the pupil's academic knowledge and skills. Although the department does not have specific statutory authority to set criteria by rule regarding the testing of LEP pupils for the WRCT as it does with the WKCE, criteria for administering this test to LEP pupils are included for the following reasons:

  -For consistency, criteria should be the same when determining whether or not to administer any statutorily required test to an LEP pupil.

  -Under the federal No Child Left Behind Act (which reauthorized Title I), schools must annually assess math and reading skills in grades 3 through 8, and testing criteria for LEP pupils must be specified. To meet the provisions under the Act, the department will administer the WRCT in the 3rd grade and LEP pupils will continue to be included in that testing as specified in this rule.

  -Requiring certain information and assurances that were formerly required under chs. PI 13 and 16 to now be required in a school board's policy.

Chapter PI 16 establishes criteria relating to the testing of limited-English proficient (LEP) pupils in the 4th, 8th, and 10th grade assessments under s. 118.30, Stats. Currently, the state administrative rules exempt LEP pupils at lower proficiency levels from taking these tests. The proposed rules eliminate the automatic exemption of such pupils and require that all LEP pupils be tested unless it has been determined, on a case by case basis, that such tests would not be a valid and reliable indicator of the pupil's academic knowledge and skills. School districts may incur new costs if a translator is used to administer a standardized test to a pupil who is currently exempt. Additional costs will vary within each district depending on its decisions about whether to administer standardized tests and on its population of LEP pupils. However, since most school districts already offer these services to LEP pupils who are taking tests, as well as other services, these new costs are not expected to be significant.

Districts that meet the criteria under subch. VII of ch. 115, Stats., are eligible to be partially reimbursed by state bilingual-bicultural aids for costs resulting from implementing LEP programs. It is important to note that if the exemption of LEP pupils at lower English proficiency levels continues, the State of Wisconsin could lose more than $130 million in federal Title I funds because the U.S. Department of Education has found this practice to be out of compliance with federal regulations.

These proposed rules are not expected to result in new costs for the department.

The proposed rules are not anticipated to have a fiscal effect on small businesses as defined under s. 227.114 (1) (a), Stats.

NOTICE IS HEREBY GIVEN that pursuant to s. 86.196 (2), Stats., and interpreting s. 86.196 (2), Stats., the Department of Transportation will hold a public hearing in Room 144-B of the Hill Farms State Transportation Building, 4802 Sheboygan Avenue, Madison, Wisconsin on the 30th day of July, 2002, at 1:00 p.m. to consider the amendment of ch. Trans 200, Wis. Adm. Code, relating to tourist-oriented directional signs.

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.

The public record on this proposed rule making will be held open until close of business August 2, 2002, to permit the submission of written comments from persons unable to attend the public hearing or who wish to supplement testimony offered at the hearing. Any such comments should be submitted to John Noll, Department of Transportation, Bureau of Highway Operations, Room 501, P. O. Box 7986, Madison, WI 53707-7986.

Parking for persons with disabilities and an accessible entrance are available on the north and south sides of the Hill Farms State Transportation Building.

Statutory Authority: 86.196 (2), Stats.

Statute Interpreted: 86.196 (2), Stats.

This proposed rulemaking will amend ch. Trans 200, relating to Tourist-Oriented Directional Signs (TODS), to include agricultural produce stands and Christmas tree farms in the TODS program qualifications as “seasonal attractions." The proposed amendments will establish criteria for signing the seasonal attraction types of businesses and provide minimum criteria for the advisory council for uniform evaluation and assessment of applications to make their recommendations to the Department to approve or deny applications.

Currently there is nothing covering “seasonal attractions" for the TODS program as far as agricultural produce stands and Christmas tree farms. The rule does cover seasonal tourist attractions but they must be open 3 consecutive months to qualify. The agricultural produce stands and Christmas tree farms would only be open less than 60 consecutive days. The Department of Agriculture would like the Department to help the people who have produce stands along the highway on premises to be able to put up some sort of temporary or permanent signage.

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 revenues or liabilities.