The Safety and Buildings Division is responsible for administering and enforcing the current rules for gas systems. The proposed rules do not contain any changes in the Division's fees charged for administering and enforcing those rules. Any additional workload as the result of adding gaseous hydrogen and liquefied hydrogen will be handled by existing staff. It is estimated that 2 plans for hydrogen systems will be submitted for review on an annual basis. This will result in a revenue increase of $480 per year, assuming 4 hours per plan for review at $60 per hour. Therefore, the proposed rules will not have a significant fiscal effect on the Division.

Local municipalities may voluntarily enforce the rules for gas systems, and they have the authority to offset any costs by charging appropriate fees.

The proposed rules will not have a significant fiscal effect on the private sector. The anticipated costs that will be incurred by the private sector are the plan review and site inspection fees as the result of adding gaseous hydrogen and liquefied hydrogen to chapter Comm 40.

Notice is hereby given that the Department has considered the environmental impact of the proposed rules. In accordance with chapter Comm 1, the proposed rules are a Type III action. A Type III action normally does not have the potential to cause significant environmental effects and normally does not involve unresolved conflicts in the use of available resources. The Department has reviewed these rules and finds no reason to believe that any unusual conditions exist. At this time, the Department has issued this notice to serve as a finding of no significant impact.

The proposed rules and an analysis of the proposed rules are available on the Internet at the Safety and Buildings Division Web site at www.commerce.wi.gov/SB/. Paper copies may be obtained without cost from Roberta Ward, at the Department of Commerce, Program Development Bureau, P.O. Box 2689, Madison, WI 53701-2689, or Email at rward@commerce.state.wi.us, or at telephone (608) 266-8741 or (608) 264-8777 (TTY). Copies will also be available at the public hearing.

NOTICE IS HEREBY GIVEN that pursuant to section 551.63 (1) and (2), Stats., the Division of Securities of the Department of Financial Institutions will hold a public hearing at 345 West Washington Avenue, 4th Floor Conference Room, at 3:00 PM. on Wednesday, August 11, 2004 to consider the repeal and recreation and the amendment of certain Wisconsin Securities Law investment adviser licensing rules relating to custody of customer funds and/or securities.

Statutes Interpreted: s. 551.33 (6) & (8), Stats.

Statutory Authority: ss. 551.32 (1s), 551.33 (6) & (8), and 551.63 (1) and (2), Stats.

Explanation of agency authority:

The agency has authority to license and regulate the business conduct of securities investment advisers doing business with Wisconsin customers. That authority includes the ability to establish rules for the conduct of business by investment advisers [551.33(6)], and to cooperate with the securities administrators of other states as well as the U.S. Securities & Exchange Commission (“SEC") to achieve uniformity in regulatory requirements [551.32(1s) and 551.63(2)].

Related statute or rule: DFI-Sec 5.035, Wis. Adm. Code.

Plain language analysis

The rulemaking procedures under Chapter 227 of the Wisconsin Statutes are being implemented for the purpose of replacing Wisconsin's existing Securities Law rule requirements applicable to Wisconsin-licensed investment advisers that have custody of customer funds and/or securities, with amended Model Rules on that subject recently developed and adopted by the North American Securities Administrators Association (“NASAA").

Current rule DFI-Sec 5.035, Wis. Adm. Code, under the Wisconsin Securities Law sets forth the regulatory requirements for state-licensed investment advisers who have custody of customer funds or securities. In 1999, NASAA previously developed Model.

Investment Adviser Custody Rules that could be used by any state jurisdiction in connection with their regulation of state-licensed investment advisers. (Wisconsin's current rule DFI-Sec 5.035, amended most recently in 2000, incorporated some of the elements of the NASAA Model Rules.)

Summary of, and comparison with existing or proposed federal regulations:

Recently, the U.S. Securities & Exchange Commission adopted for effectiveness on September 25, 2003, amendments to the federal custody rule under the Investment Advisers Act of 1940 applicable to federally-registered investment advisers. However, pursuant to the National Securities Markets Improvement Act of 1996, such federal changes are not applicable to investment advisers licensed solely in state jurisdictions.

The amended SEC rules for the first time define “custody" and require federally-registered advisers having “custody" to maintain client funds or securities with a "qualified custodian." Because the prior NASAA Model Rules were drafted based on the predecessor federal rules that did not contain a definition of custody, the September 2003 federal custody rule changes necessitated changes in the NASAA Model rules to provide needed uniformity on that issue between the regulation of federal-registered and non-federal registered investment advisers, as well as to provide equivalent levels of investor protection.

Accordingly, the NASAA Investment Adviser Regulatory Policy and Review Project Group was charged with developing amendments to the NASAA Custody Rules to bring them into alignment with the September 2003 federal custody rule. That Project Group completed its development of needed amendments to the NASAA Custody Rules, and those amendments were adopted by vote of the NASAA state member jurisdictions at the 2004 NASAA Spring Conference in Washington D.C. on April 18, 2004.

Comparison with rules in adjacent states:

Similar to Wisconsin, the adjacent states of Iowa, Illinois and Minnesota have existing regulatory requirements for state licensed investment advisers that have custody over customer funds and/or securities based on the NASAA Model Custody Rules as they existed prior to the recent April 2004 amendments. Michigan does not have any custody rules because their regulations prohibit investment advisers from having custody of customer assets. Among the Midwest states in this region, Wisconsin is the first state to commence adoption of the newly-amended NASAA Custody Rules.

Summary of factual data and analytical methodologies:

No factual data or analytical methodologies were used because the proposed rules are revisions/amendments to existing Wisconsin Securities Law regulatory requirements applicable to Wisconsin-licensed investment advisers having custody of customer assets, and are necessary to reflect parallel changes recently made at the federal level to federally-regulated investment advisers.

Analysis and supporting documentation used to determine effect on small business:

Because the proposed rules are revisions/amendments to existing Wisconsin Securities Law regulatory requirements applicable solely to Wisconsin-licensed investment advisers having custody of customer assets -- which requirements those licensees should already be in compliance with -- the proposed rules will not have an effect on "small-business" in general (outside the investment advisory business). Also, see the Initial Regulatory Flexibility Analysis below.

A summary of the proposed rules follows:

1. The NASAA Project Group determined that amendments were required to five NASAA Model Rules pertaining to Custody. Accordingly, substantive amendments were made to the Asset Audit Rule [Rule 102(e)(1)-1], a books and records-related rule [Rule 203(a)2], and to the Minimum Financial Requirements for Investment Advisers rule [Rule 202(d)-1]. Less substantive amendments were made to a separate rule regarding bonding requirements [Rule 202(e)-1, and an Unethical Practices provision [Rule 102(a)(4)-1]. The April 2004 amended NASAA Model Custody Rules incorporate the changes to all five of those rules and will be included in a repealed and re-created rule DFI-Sec 5.035, Wis. Adm. Code.

2. The existing Wisconsin rule defining “custody" in DFI-Sec 1.02 (17), Wis. Adm. Code, will be amended.

3. The existing Wisconsin net capital rule in DFI-Sec 5.02 (2), Wis. Adm. Code, applicable to investment advisers having custody of customer assets will be amended.

4. The existing Wisconsin rule in DFI-Sec 5.03 (2), Wis. Adm. Code, prescribing certain books and recordkeeping requirements for investment advisers having custody of customer assets will be repealed and re-created.

5. The existing Wisconsin business practices rule in DFI-Sec 5.06 (12), Wis. Adm. Code, applicable to investment advisers having custody of customer assets will be amended.

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

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

Also, repeating what was stated in a preceding section, because the proposed rules are revisions/amendments to existing Wisconsin Securities Law regulatory requirements applicable solely to Wisconsin-licensed investment advisers having custody of customer assets -- which requirements those licensees should already be in compliance with -- the proposed rules will not have an effect on "small-business" in general (outside the investment advisory business).

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

See numbered Item 4 of the Summary above.

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.

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

[e-mail randall.schumann@dfi.state.wi.us]

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

Place where comments are to be submitted and deadline for submission:

Written comments in lieu of public hearing testimony may be submitted which must be received no later than the hearing date and should be addressed to the Administrator of the Division of Securities, 345 West Washington Avenue, PO Box 1768, Madison Wisconsin, 53701.

Notice is hereby given that pursuant to ss. 227.16 (1), 227.17, 227.18, and 227.24 (4), Stats., the Department of Health and Family Services will hold public hearings to consider the proposed permanent rules and emergency rules amending s. HFS 107.13 (2) (c) 5., and (4) (c) 4., and creating ch. HFS 36, ss. HFS 105.257 and 107.13 (6) (b) 4., and (7), relating to standards for certification and criteria for determining the need for psychosocial rehabilitation services, and other conditions of coverage of community-based psychosocial rehabilitation services under the medical assistance program.

The Department anticipates that the emergency rules will take effect on July 1, 2004.

The public hearings will be held:

The hearing sites are fully accessible to people with disabilities. If you are hearing or visually impaired, do not speak English, or have circumstances that might make communication at a hearing difficult and if you, therefore, require an interpreter or a non-English, large print or taped version of the hearing document, contact the person at the address or phone number given above at least 10 days before the hearing. With less than 10 days notice, an interpreter may not be available.

Written comments, on both the proposed permanent rules and the emergency rules, may be submitted in lieu of attending a public hearing, by regular mail or email to the contact person listed below. Written comments for the proposed permanent rules and the emergency rules may also be submitted using the Wisconsin Administrative Rules website at the web address listed below.

The deadline for submitting comments on both the proposed permanent rules and the emergency rules is 4:30 p.m., July 13, 2004.

The Department proposes to establish the scope of community-based psychosocial rehabilitation services programs, standards for certification and criteria for determining the need for psychosocial rehabilitation services, and other conditions of coverage of community-based psychosocial rehabilitation services under the medical assistance program as authorized by ss. 49.45 (30e) and 51.42 (7) (b), Stats. The Department anticipates that the rules created will complement services provided by existing community support programs under s. 51.421, Stats., by making a fuller array of mental health and substance-use and addiction disorder services potentially available to those in need in each county or tribe. The Department further anticipates that the rules will allow for the creation of a broad range of flexible, consumer-centered, recovery-oriented psychosocial rehabilitation services to both minors and adults, including elders, whose psychosocial needs require more than outpatient therapy, but less than the level of services provided by existing community support programs. Certified community-based psychosocial rehabilitation services programs that meet the requirements of s. 49.45 (30e), Stats., and the proposed ch. HFS 36 and applicable requirements or chs. HFS 105 and 107 may be fully or partially funded by medical assistance with county or tribal match. These programs may also coordinate with other existing funding sources.

Statutory Authority: Sections 49.45 (30e) (b), 51.42 (7) (b), and 227.11 (2) (a), Stats.

Statutes Interpreted: Sections 49.45 (30e), 49.46 (2) (b) 6. Lm, 51.04, 51.42 (7) (b), and 51.61, Stats.

This order implements a new mental health program created under s. 49.45 (30e) (b), Stats., by 1997 Wisconsin Act 27. The Act 27 provision allows counties to receive federal Medical Assistance (MA) funding for services to individuals with mental health problems that require more than outpatient services and less than Community Support Program services. Counties receive the federal funding if they supply the state match funding. These individuals with mental health problems are now being served by counties under case management services, which provide limited reimbursement from MA, with the state match provided by county and state Community Aids. Many of the case management clients require additional treatment and rehabilitation services that are not covered under the targeted case management provisions of MA. This new mental health program will allow coverage by the MA program for these services if the county elects to allocate the funding. The net effect should be an increase in federal revenue to the State and counties for providing services that are presently funded completely by Community Aids and county tax levy.

The Bureau of Quality Assurance (BQA) with the Division of Health Care Financing certifies, licenses and surveys approximately 46 kinds of health care and residential programs in the State of Wisconsin. BQA has identified the following workload and cost increases related to the implementation of this rule. Since this is a new program, BQA Program Certification staff would be required to certify county community-based psychosocial service programs to receive this new MA reimbursement. BQA estimates that an additional 72 surveys (taking 14 hours to complete) and 5 complaint surveys (taking 6.5 hours to complete), would entail an additional 1.00 FTE's worth of work at a total cost of $60,200 all funds. The costs would be split funded 25% PRO ($15,100) and 75% FED ($45,100), since certifying, licensing and surveying are considered MA-billable functions. Also, given the current number of county programs, BQA estimates that 6 counties (at most) would see a $50 fee increase. Since the Department intends to absorb the additional workload related to the implementation of this rule, this rule will not affect revenues or expenditures beyond what was already assumed in Act 27.

There will be no adverse affect on small businesses. If psychosocial rehabilitation services currently are being provided, then the individual consumer or the county of responsibility is paying for the cost of the services. This rule will permit the county of responsibility to use their existing funds that are being expended for these services as the required match to the federal portion of Medicaid funding (federal financial participation or FFP). The increase in available funding may result in an increase in revenues for a local small business if the county and the consumer select the business as a provider of a component of the psychosocial rehabilitation services for the consumer.

A copy of the full text of the rules and the full text of the fiscal estimate, and other documents associated with this rulemaking may be obtained, at no charge, from the Wisconsin Administrative Rules website at http://adminrules.wisconsin.gov. At this website you can also register to receive email notification whenever the Department posts new information about this rulemaking and, during the public comment period, you can submit comments on the rulemaking order electronically and view comments that others have submitted about the rule.