North Central Technical College
1000 W. Campus Drive
April 24, 2003 from 3:30 - 5:30 p.m.
19601 W. Bluemound Road
The hearing sites are fully accessible to people with disabilities. If you require reasonable accommodation to access a meeting, please call Merry Larsen, School Administration Consultant, at (608) 266-2146 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.
Copies of Rule and Contact Person
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 May 7, 2003, will be given the same consideration as testimony presented at the hearing. Comments submitted via email will not be accepted as formal testimony.
Analysis by the Department of Public Instruction
The proposed rule clarifies current law relating to procedures school districts must follow in offering parent contracts for transportation to ensure greater consistency among school districts in the application of the law under ss. 121.55 (1) (b)
, Stats. The proposed rule clarifies the difference between the two types of parent contracts available for use by school districts and assists districts in calculating the amount of compensation to be provided in parent contracts.
Section 121.55 (1) (b)
, Stats., allows a school board to provide transportation to a public or private school pupil by contracting with that pupil's parent or guardian to provide the transportation. The rules and present practice require the amount of compensation to be mutually agreed upon by the school board and the parent or guardian.
Section 121.55 (3)
, Stats., allows a school board to provide transportation to a private school pupil by contracting with that pupil's parent or guardian to provide the transportation if the estimated cost of transporting that pupil is more than 1.5 times the school district's average cost per pupil for bus transportation in the previous year, exclusive of transportation for kindergarten pupils during the noon hour and for pupils with disabilities. The rules provide a uniform worksheet for school districts to use in calculating their average cost per pupil for bus transportation. Currently, the method of calculating average cost per pupil for bus transportation varies from district to district.
The impetus for this rule is an on-going circuit court case involving a school district and the parent of a private school pupil living in that district. After the circuit court judge ordered the Department of Public Instruction to determine the amount of compensation provided in the parent contracts in question, the department held an administrative hearing in March, 2002. Both the circuit court judge and the administrative law judge expressed the opinion that the department should promulgate rules to assist school districts in applying the provisions of s. 121.55
, Wis. Stats., relating to parent contracts for pupil transportation.
The proposed rules establish procedures for school districts to follow when offering parent contracts for pupil transportation. The rules apply only to contracts to transport a pupil to and from school for the purpose of attending curricular programs or activities. The rules will ensure greater consistency among school districts in applying the law under ss. 121.55 (1) (b)
Section 121.55 (1) (b)
, Stats., allows a school board to provide transportation to a public or private school pupil by contracting with that pupil's parent or guardian to provide the transportation. The rules and present practice require the amount of compensation to be mutually agreed upon by the school board and the parent or guardian. Therefore, the rules should not have a fiscal effect on a school district or the department.
Section 121.55 (3)
, Stats., allows a school board to provide transportation to a private school pupil by contracting with that pupil's parent or guardian to provide the transportation if the estimated cost of transporting that pupil is more than 1.5 times the school district's average cost per pupil for bus transportation in the previous year, exclusive of transportation for kindergarten pupils during the noon hour and for pupils with disabilities. The rules provide a uniform worksheet for school districts to use in calculating their average cost per pupil for bus transportation. Currently, the method of calculating average cost per pupil for transportation varies from district to district. Providing a standardized method for calculating the average cost per pupil may increase or decrease a school district's cost depending on how that district currently calculates its average cost per pupil for bus transportation. However, these costs are indeterminate. The rules should not have a fiscal effect on the department.
Initial Regulatory Flexibility Analysis
The proposed rules are not anticipated to have a fiscal effect on small businesses as defined under s. 227.114 (1) (a), Stats.
Notice of Hearings
(Economic Support, Chs. DWD 11
NOTICE IS HEREBY GIVEN that pursuant to ss. 49.22 (9)
, Stats., the Department of Workforce Development proposes to hold three public hearings to consider changes to ch. DWD 40
, relating to the child support guidelines.
March 17, 2003 at 1:00 p.m.
GEF 1 Building, Room D203
201 E. Washington Avenue
March 25, 2003 at 1:00 p.m.
State Office Building, Room 45
819 North 6th Street
March 27, 2003 at 1:00 p.m.
Portage County Public Library
1001 Main Street
Stevens Point, WI
Interested persons are invited to appear at the hearings and will be afforded the opportunity to make an oral presentation of their positions. Persons making oral presentations are requested to submit their facts, views, and suggested rewording in writing. If you have special needs or circumstances that may make communication or accessibility difficult at the hearings, please call (608) 267-9403 at least 10 days prior to the hearing date. Accommodations such as ASL interpreters, English translators, or materials in audiotape format will be made available on request to the fullest extent possible.
Analysis Prepared by the Department of Workforce Development
Statutes interpreted: Sections 49.22
Section 49.22 (9)
, Stats., requires the department to adopt standards for courts to use in determining a child support obligation under s. 767.25
, Stats. Chapter DWD 40
establishes these standards based on a percentage of income of either or both parents. Chapter DWD 40
also contains special provisions that a court may use in determining the child support obligations for a serial payer, a split-custody payer, and shared-placement parents. The percentage standards and special circumstance provisions are based on the principle that a child's standard of living should not be adversely affected because his or her parents are not living together.
In spring 2001, with input from members of the legislature, the DWD Secretary appointed an advisory committee to provide guidance to the department on revisions to ch. DWD 40
. The advisory committee included members of the courts, state bar, community-based organizations, county child support agencies, citizens, and the department. The committee recommended changes to the provision affecting shared-placement parents and new special provisions for high-income payers and low-income payers.
Shared-placement parents. The concept behind the special provision for shared-placement parents is that the shared-placement order is smaller than a full percentage order because the parent has significant placement and is covering the child's basic support expenses while with that parent. The current threshold for application of the shared-placement provision is placement of at least 30%. If a parent's placement falls between 30% and 40%, that parent pays the other parent a child support amount that is less than the full percentage standards but there is no determination or offset of any obligation of the other parent. If the period of placement with the parent with less time is above 40%, the current rule reduces the child support obligation of the parent with less time and requires the determination and offset of the obligation of the parent with more time. Because the current formula does not proportionately reduce the paying parent's share of support at the same rate as the increase in placement, it creates a cliff effect that encourages litigation between the parties.
The proposed shared-placement provision is based on the premise that when both parents have significant periods of placement the formula should take into account the duplicated costs of child rearing in both households and both parents' incomes as a more realistic and equitable basis to set child support. The court may apply the proposed formula when both parents have a court-ordered period of placement of at least 25% overnights or the equivalent and each parent is ordered to assume the child's basic support costs in proportion to the time that the parent has placement of the child. Basic support costs are defined as food, shelter, clothing, transportation, personal care, and incidental recreational costs.
The first step in calculating the child support obligations of shared-placement parents is determining each parent's obligation under the percentage standards. In determining whether to impute income based on earning capacity for an unemployed parent or a parent employed less than full time, the court shall consider the benefit to the child of having a parent remain in the home during periods of placement and the additional variable day care costs that would be incurred if the parent worked more. The next steps are multiplying the obligation under the percentage standards for each parent by 150% to account for household maintenance expenditures duplicated by both parents, such as a bedroom, clothes, and personal items; multiplying that amount for each parent by the proportion of time that the child spends with the other parent; and offsetting resulting amounts against each other. The shared-placement payer will pay the lesser of the amount determined under the shared-placement formula or the straight percentage standards. If the shared-placement payer is also a low-income payer, the parent will pay the lesser of the amount determined under the shared-placement formula or the low-income schedule.
High-income payers. The proposed special provision for high-income payers is based on the premise that above certain income levels, parents share a smaller percentage of their income with their children. The payer's full monthly income is considered in determining the child support obligation. The standard percentages of 17% for 1 child, 25% for 2 children, 29% for 3 children, 31% for 4 children, and 34% for 5 or more children apply to a payer's income less than $150,000 per year. The court may apply approximately 80% of the full percentage standards to the portion of a payer's annual income that is greater than or equal to $150,000 and less than or equal to $198,000. These percentages are 14% for 1 child, 20% for 2 children, 23% for 3 children, 25% for 4 children, and 27% for 5 or more children. The court may apply approximately 60% of the full percentage standards to the portion of the payer's annual income that is above $198,000. These percentages are 10% for 1 child, 15% for 2 children, 17% for 3 children, 19% for 4 children, 20% for 5 or more children.
Low-income payers. The proposed special provision for low-income payers is based on the premise that many low-income payers have insufficient income to pay current ordered amounts. Lower support levels for low-income payers may enable them to pay current support and accrue fewer arrears. Lower support levels may also increase their emotional and financial investment in their children.
Under the proposed low-income provision, the court may determine a low-income payer's obligation by referring to a special schedule. The schedule provides a minimum monthly support amount for payers with income below approximately 70% of the federal poverty level. For monthly income between approximately 70% and 150% of the federal poverty level, the schedule provides graduated percentage rates that result in a child support obligation that is between the minimum monthly support amounts and the child support determined by applying the full percentage standards. For one child, the graduated rates range from 4.25% or $21/month to 17% or $183/month. The court may deviate from the support amounts in the schedule based on the factors listed in s. 767.25 (1m)
, Stats., or the total economic circumstances of the low-income payer, including any in-kind benefits such as food and shelter, that are available to the low-income payer and impact his or her ability to pay child support. The department will revise the schedule every four years based on changes in the federal poverty level since the schedule was last revised. This coincides with the federal requirement at 42 USC 667
(a) that states review their child support guidelines at least once every 4 years.
Miscellaneous. The department proposes the following additional changes:
•Assigning responsibility for payment of variable costs. The court shall assign responsibility for payment of the child's variable costs in proportion to each parent's share of physical placement, with due consideration to a disparity in the parents' incomes. The court shall direct the manner of payment to be either between the parties or from a party to a third-party service provider and not to the department or the department's designee. Variable costs are reasonable costs above basic support costs, including child care, tuition, a child's special needs, and other activities that involve substantial cost.
•Income imputed based on earning capacity. In determining a parent's ability to earn, the court shall consider a parent's earnings during previous periods and physical and mental health, in addition to the current factors of education, training and work experience, and availability of work in or near the parent's community. A requirement is added that evidence must be presented that due diligence has been exercised to ascertain information on the parent's actual income or ability to earn and that information is unavailable before the court may impute income at 40 times the federal minimum hourly wage.
•Shared-placement order with serial families. The concept behind the special provision for shared-placement parents is that the order is smaller than a full percentage order because the parent has significant placement and is covering the child's basic support expenses while with that parent. A shared-placement parent with one child is spending approximately 17% of his or her income on the child even though the child support order may be substantially less than that amount if the parents' placement periods and incomes are similar. The concept behind the special provision for serial families is to give credit for the amount spent on the first family before determining the order for children in the next family. The current serial family provision only gives credit for the amount of the order and does not consider the special situation of shared-placement parents with serial families. The proposed provision on shared-placement orders in serial families gives credit for the full percentage standard.
• Social Security disability insurance. The court may include social security benefits received by a child based on a parent's entitlement to federal disability insurance in the parent's gross income and may adjust the parent's child support obligation by subtracting the amount of the child's social security benefit. In no case may this adjustment require the payee to reimburse the payer for any portion of the child's benefit.
• Maintenance. If a payer will have obligations for both child support and maintenance in a particular case, the court shall determine the payer's child support obligation before the maintenance obligation.
Effect of rule change. A modification of any provision of ch. DWD 4
0 shall not be considered a substantial change in circumstances sufficient to justify a revision of a judgment or order under s. 767.3
•Trust. The court may create a trust for the child if the payer's child support obligation exceeds the amount necessary to maintain the standard of living the child would have if the child were living with both parents.
•Undistributed income of a closely held corporation. Further detail is proposed to clarify when to include undistributed corporate income in gross income. The rule currently provides that undistributed income is included if the payer has ownership interest sufficient to individually exercise control or access the business earnings. The proposed rule defines undistributed income as federal taxable income of the closely held corporation, partnership, or other entity plus depreciation claimed on the entity's federal income tax return less a reasonable allowance for economic depreciation using the straight line method. The court may adjust gross income to include undistributed income not determined reasonably necessary for the growth of the business.
- "Monthly income available for child support" is the proposed term to refer to the monthly income at which the child support obligation is determined. It includes gross income, or if applicable, income modified for business expenses; income imputed based on earning capacity; and income imputed from assets. "Monthly income available for child support" is similar to the current term "base," except "base" does not include income imputed based on earning capacity. A support obligation based on earning capacity is a separate calculation under the current rule.
- The proposed rule uses the term "split-placement" in place of "split-custody," which is incorrectly used in the current rule.
- The split-placement subsection is rewritten because the current rule refers to the payer and payee at the beginning of the calculation before it can be accurately known who will be the payer or payee.
Initial Regulatory Flexibility Analysis
The proposed rule changes do not affect small business.
The proposed rule changes do not have a fiscal effect on state or local government.
A paper copy may be obtained at no charge by contacting:
Office of Legal Counsel
Dept. of Workforce Development
201 E. Washington Avenue
P.O. Box 7946
Madison, WI 53707-7946
Written comments on the proposed rules received at the above address no later than March 31, 2003, will be given the same consideration as testimony presented at the hearing.