LRBs0415/1
ARG/MES/MPG:kjf
2017 - 2018 LEGISLATURE
SENATE SUBSTITUTE AMENDMENT 2,
TO ASSEMBLY BILL 811
March 20, 2018 - Offered by Senators Shilling, Hansen,
Larson, Schachtner,
Johnson, Vinehout, Carpenter, Erpenbach, Risser, Ringhand and Miller.
AB811-SSA2,2,2
1An Act to amend 13.172 (1), 13.48 (13) (a), 13.62 (2), 13.94 (4) (a) 1., 13.95
2(intro.), 16.002 (2), 16.004 (4), 16.004 (5), 16.004 (12) (a), 16.045 (1) (a), 16.15
3(1) (ab), 16.41 (4), 16.417 (1) (b), 16.52 (7), 16.528 (1) (a), 16.53 (2), 16.54 (9) (a)
41., 16.765 (1), 16.765 (2), 16.765 (5), 16.765 (6), 16.765 (7) (intro.), 16.765 (7) (d),
516.765 (8), 16.85 (2), 16.865 (8), 71.05 (6) (b) 28. (intro.) and h., 71.05 (6) (b) 28.
6am., 77.54 (9a) (a), 100.45 (1) (dm) and 230.03 (3); and
to create 13.94 (1) (dt),
713.94 (1s) (c) 9., 19.42 (10) (t), 19.42 (13) (q), 20.192 (1) (b), 20.195, 39.28 (7),
839.52, 39.54, 39.56, 40.02 (54) (n), 70.11 (38v), 71.05 (6) (b) 28. j., 224.30 (6),
9238.155 and chapter 239 of the statutes;
relating to: student loans, the
10individual income tax subtract modification for tuition and student fees,
11creating an authority to be known as the Wisconsin Student Loan Refinancing
1Authority, talent attraction and retention initiatives, granting rule-making
2authority, and making appropriations.
Analysis by the Legislative Reference Bureau
The Wisconsin Student Loan Refinancing Authority
This substitute amendment creates an authority, which is a public body
corporate and politic, to be known as the Wisconsin Student Loan Refinancing
Authority (WSLRA). The WSLRA is governed by a board that consists of four
members of the legislature, three members who are students of an institution of
higher education, and two members with experience in making student loans. The
five members of the board who are not members of the legislature are nominated by
the governor, and with the advice and consent of the senate appointed, to serve two-
or three-year terms. The board appoints the chief executive officer of WSLRA and
annually elects the chairperson of the board. The board is given all the powers
necessary or convenient to carry out its duties, as well as specific powers to conduct
its corporate business, including the power to issue bonds for any corporate purpose.
Under the substitute amendment, the board must develop and implement a
loan program under which state residents may refinance student loans. Under the
program, WSLRA provides a loan to an individual to pay off some or all of his or her
outstanding student loan debt. To qualify for the program, an individual must satisfy
eligibility requirements established by WSLRA. Under the substitute amendment,
WSLRA must provide loans under the program at the lowest possible interest rate
that is still sufficient to cover the expenses of the program. A loan issued under the
program is not dischargeable in a bankruptcy proceeding.
Financial aid information
This substitute amendment requires the Department of Financial Institutions
to compile data related to private student loans for the purpose of comparing private
lending institutions' student loan interest rates and repayment plans. A “private
student loan" is a loan issued by a private lending institution for the purpose of
paying for or financing higher education expenses, including tuition and fees, books
and supplies, and room and board. DFI must create and maintain a list of private
lending institutions that provide the lowest rates and best repayment options on
student loans. DFI must also compile a list of the top ten best private lending
institutions based on rates and policies that are most favorable to the student
borrower. DFI must place these lists on DFI's Internet site and update the Internet
site monthly to ensure that the student loan information in these lists is current and
accurate. DFI's Internet site must also contain information pertaining to lending
institutions that do not make the top ten list, including identifying those lending
institutions that provide the worst rates and strictest repayment options. DFI may
satisfy its duties under the substitute amendment through a designee or third-party
contractor.
The substitute amendment also requires an institution or college campus
within the University of Wisconsin System, a technical college within the technical
college system, a tribally controlled college, or a private, nonprofit institution of
higher education located in this state (institution of higher education) to provide to
a prospective or newly accepted student and to the student's parents clearly outlined
and easy-to-understand information pertaining to all of the following:
1. The total cost of attendance at the institution of higher education.
2. The approximate or, if known, the actual total amount of financial aid that
the student would receive from the institution of higher education, and the
approximate or, if known, the actual total amount of student loan debt that the
student would accumulate, over the course of four years, if the student were to attend
the institution of higher education for four years (student loan debt).
3. Student loan rates, repayment plans, default rates, and the actual monthly
payment that would be required to pay that student loan debt when the loan becomes
due.
Finally, the substitute amendment requires an institution of higher education
and the Higher Educational Aids Board to create on their Internet sites a link to that
portion of DFI's Internet site containing the lists and other information required
under the substitute amendment.
Student loan counseling
This substitute amendment requires any institution of higher education in this
state that offers an associate degree or higher to provide loan counseling for its
students. Under the substitute amendment, before a student enters into a student
loan agreement, the institution must provide the student with comprehensive
information on the terms and conditions of a loan and the responsibilities the student
has with respect to the loan. A lender may not accept an application for a private
student loan, or assess any fees for the loan, unless the lender has received
certification from the applicant's institution of higher education that the applicant
has received such counseling.
The substitute amendment also requires an institution of higher education to
provide a student with information when the student leaves the institution, whether
through graduation, transfer, or otherwise. The information must include available
loan repayment plans, debt management strategies, options for prepayment of loans,
and the consequences of defaulting on a loan.
Finally, the substitute amendment authorizes an institution of higher
education to assess a lender a reasonable fee of up to $50 to defray the cost of the
student counseling required under the substitute amendment.
Income tax subtraction
Under current law, there is an individual income tax subtraction for amounts
paid by a claimant for tuition expenses and mandatory student fees for a student who
is the claimant or the claimant's dependent under the Internal Revenue Code, to
attend an institution of higher education that is approved by the Educational
Approval Board and that is located in Wisconsin, or to attend certain postsecondary
schools in Minnesota to which the Minnesota-Wisconsin reciprocity agreement
applies. The tuition expenses and fees for which a subtraction may be claimed are
calculated based on the amount of tuition charged by the UW System at four-year
institutions.
Also under current law, the subtraction that a claimant may claim for such
tuition expenses and mandatory student fees is reduced as the claimant's annual
federal adjusted gross income (FAGI) increases until, at a certain point, no
subtraction may be claimed. Currently, the allowable subtraction phases out, for a
single person or a married person filing as a head of household, as the claimant's
FAGI increases from $50,000 to $60,000. Once such a claimant's FAGI exceeds
$60,000, he or she may not claim the subtraction. For a married person filing a joint
return, the phaseout occurs as the married couple's joint FAGI increases from
$80,000 to $100,000, and no subtraction is allowed once the married couple's joint
FAGI exceeds $100,000. The phaseout for a married person filing a separate return
occurs as the claimant's FAGI increases from $40,000 to $50,000, and no subtraction
is allowed once the claimant's FAGI exceeds $50,000.
Under this substitute amendment, the phase-out provisions do not apply to a
taxable year that begins after December 31, 2017.
This substitute amendment also expands the definition of tuition expenses to
include any amount paid by a claimant in the year to which the claim relates on a
student loan, the proceeds of which were used by the claimant to pay the claimant's
expenses for tuition, fees, books, room and board, and educational supplies that were
directly related to the claimant's attendance at an eligible institution. The substitute
amendment defines eligible institution as a regionally accredited, nonprofit,
postsecondary educational institution.
Student loan debt report
Under current law, HEAB administers certain grant and loan programs for
resident students enrolled in institutions of higher education in this state.
This substitute amendment requires HEAB to submit an annual report to the
Joint Committee on Finance regarding student loan debt incurred in the previous
year by resident undergraduate students enrolled in institutions of higher education
located in this state. The report must include that information, together with all of
the following:
1. The statewide average amount of student loan debt incurred in the previous
year by resident undergraduate students enrolled in institutions of higher education
located in this state.
2. A comparison of that statewide average to the national average amount of
student loan debt incurred in the previous year by undergraduate students enrolled
in institutions of higher education in the United States.
3. A comparison of that statewide average to the statewide average amount of
student loan debt incurred in the previous year by undergraduate students in the
state with the lowest ratio of statewide average student loan debt to the lowest
quintile of state per capita income.
Talent attraction and retention
This substitute amendment directs the Wisconsin Economic Development
Corporation to collaborate with state agencies to develop and implement initiatives
for the attraction of talent to and retention of talent in Wisconsin, including by
leveraging the existing programs of state agencies for those purposes.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
AB811-SSA2,1
1Section 1
. 13.172 (1) of the statutes is amended to read:
AB811-SSA2,5,72
13.172
(1) In this section, “agency" means an office, department, agency,
3institution of higher education, association, society, or other body in state
4government created or authorized to be created by the constitution or any law, that
5is entitled to expend moneys appropriated by law, including the legislature and the
6courts, and any authority created in subch. II of ch. 114 or in ch. 231, 233, 234, 238,
7239, or 279.
AB811-SSA2,2
8Section 2
. 13.48 (13) (a) of the statutes is amended to read:
AB811-SSA2,5,219
13.48
(13) (a) Except as provided in par. (b) or (c), every building, structure or
10facility that is constructed for the benefit of or use of the state, any state agency,
11board, commission or department, the University of Wisconsin Hospitals and Clinics
12Authority, the Fox River Navigational System Authority,
the Wisconsin Student
13Loan Refinancing Authority, the Wisconsin Economic Development Corporation, or
14any local professional baseball park district created under subch. III of ch. 229 if the
15construction is undertaken by the department of administration on behalf of the
16district, shall be in compliance with all applicable state laws, rules, codes and
17regulations but the construction is not subject to the ordinances or regulations of the
18municipality in which the construction takes place except zoning, including without
19limitation because of enumeration ordinances or regulations relating to materials
20used, permits, supervision of construction or installation, payment of permit fees, or
21other restrictions.
AB811-SSA2,3
1Section
3. 13.62 (2) of the statutes is amended to read:
AB811-SSA2,6,52
13.62
(2) “Agency" means any board, commission, department, office, society,
3institution of higher education, council, or committee in the state government, or any
4authority created in subch. II of ch. 114 or in ch. 231, 232, 233, 234, 237, 238,
239, 5or 279, except that the term does not include a council or committee of the legislature.
AB811-SSA2,4
6Section 4
. 13.94 (1) (dt) of the statutes is created to read:
AB811-SSA2,6,117
13.94
(1) (dt) Biennially, beginning in 2019, conduct a financial audit of the
8Wisconsin Student Loan Refinancing Authority and a program evaluation audit of
9the programs administered by the Wisconsin Student Loan Refinancing Authority
10under ch. 239. The legislative audit bureau shall file a copy of each audit report
11under this paragraph with the distributees specified in par. (b).
AB811-SSA2,5
12Section 5
. 13.94 (1s) (c) 9. of the statutes is created to read:
AB811-SSA2,6,1413
13.94
(1s) (c) 9. The Wisconsin Student Loan Refinancing Authority for the cost
14of the audit required to be performed under sub. (1) (dt).
AB811-SSA2,6
15Section 6
. 13.94 (4) (a) 1. of the statutes is amended to read:
AB811-SSA2,7,716
13.94
(4) (a) 1. Every state department, board, examining board, affiliated
17credentialing board, commission, independent agency, council or office in the
18executive branch of state government; all bodies created by the legislature in the
19legislative or judicial branch of state government; any public body corporate and
20politic created by the legislature including specifically the Fox River Navigational
21System Authority, the Lower Fox River Remediation Authority, the Wisconsin
22Aerospace Authority,
the Wisconsin Student Loan Refinancing Authority, the
23Wisconsin Economic Development Corporation, a professional baseball park district,
24a local professional football stadium district, a local cultural arts district
, and a
25long-term care district under s. 46.2895; every Wisconsin works agency under subch.
1III of ch. 49; every provider of medical assistance under subch. IV of ch. 49; technical
2college district boards; every county department under s. 51.42 or 51.437; every
3nonprofit corporation or cooperative or unincorporated cooperative association to
4which moneys are specifically appropriated by state law; and every corporation,
5institution, association or other organization which receives more than 50 percent
6of its annual budget from appropriations made by state law, including subgrantee or
7subcontractor recipients of such funds.
AB811-SSA2,7
8Section 7
. 13.95 (intro.) of the statutes is amended to read:
AB811-SSA2,7,21
913.95 Legislative fiscal bureau. (intro.) There is created a bureau to be
10known as the “Legislative Fiscal Bureau" headed by a director. The fiscal bureau
11shall be strictly nonpartisan and shall at all times observe the confidential nature
12of the research requests received by it; however, with the prior approval of the
13requester in each instance, the bureau may duplicate the results of its research for
14distribution. Subject to s. 230.35 (4) (a) and (f), the director or the director's
15designated employees shall at all times, with or without notice, have access to all
16state agencies, the University of Wisconsin Hospitals and Clinics Authority, the
17Wisconsin Aerospace Authority, the Lower Fox River Remediation Authority,
the
18Wisconsin Student Loan Refinancing Authority, the Wisconsin Economic
19Development Corporation, and the Fox River Navigational System Authority, and to
20any books, records, or other documents maintained by such agencies or authorities
21and relating to their expenditures, revenues, operations, and structure.
