Management: Robert Oyler, Earl Gustafson, James Buchen, Daniel Petersen, Ed Lump
Labor: Red Platz, Dennis Penkalski, Robert Lyons, Michael Bolton
Chair: Greg Frigo
Department staff present: Bruce Hagen, Al Jaloviar, Kim Markham, Richard Tillema, Carol Laudenbach, Mary Anderson, Carla Breber, Len Wroblewski, Michelle Kho, Tom Smith, Teresa Wojick, Lori Netzel, Frances Healy, Tim Haering

Others present: outgoing Council member Al Peck, WCCF’s Bob Anderson, WMC’s John Metcalf, NFIB’s Bill Smith, Les Wakefield of Sen. Reynolds’ office, Mike Mikalsen of Rep. Nass’ office

10:00 p.m. – Frigo welcomed Council, introduced new Legal Affairs assistant director Kim Markham and legal researcher Lori Nitzel, previewed the Al Peck tribute luncheon and outlined incoming DWD Sec. Gassman’s introduction to the department.

Frigo asked for approval of Dec. 17, 2002 Council minutes. Minutes were approved without objection.

Frigo detailed additions to the UIAC Annual Report with respect to lawmakers’ contributions to UI laws. Smith explained the new section. Frigo asked for any additional changes, but none were offered.

Frigo introduced the UI financial outlook by Tillema, discussed the timeline of getting the final report to the Secretary. Tillema highlighted the Secretary’s Report to the Legislature, including a retrospective of the 70’s recession and the Legislature’s response, current economic growth trends and forecasts, scenarios of double-dip recession and potential economic effect of war.

Frigo asked about any UI tax schedule change under the forecast. Tillema noted 2 potential schedule changes. Anderson commented on trust fund balances. Frigo commented on the fund levels which trigger tax schedule changes. Buchen, Anderson, Frigo discussed balance trigger level.

Oyler, Anderson, Tillema discussed the effect of the new tax deferral option on the balance and tax schedule change trigger. Frigo, Anderson discussed a potential tax increase. Oyler asked about a law change to consider a deferred payment to be a "receivable" for fund balance purposes, to avoid a tax schedule change. Buchen, Anderson commented.

Anderson commented on the Legislative Audit Bureau’s review of the UI Division, the division’s first audit under Generally Accepted Accounting Practices (GAAP) standards, touted UI’s financial stability under the new method, previewed the upcoming meeting between employers and DOR to discuss concerns regarding the proposed joint data reporting.

Buchen noted procedural hurdles to accepting joint reporting, asked about the option of withholding final approval until all concerns are resolved. Penkalski asked about a trial period or a sunset date. Buchen, Anderson discussed some details of the reporting procedure. Buchen noted he is looking for leverage to ensure all problems are resolved before full implementation.

Frigo commented on financial aspects, penalty collection under joint reporting. Anderson elaborated on data reporting requirements, cost allocation to DOR, noted Brian Bradley’s work with DOR on cost analysis.

Frigo suggested it is DOR’s duty to develop a statement of fiscal and policy effects of joint reporting, said Council could tentatively approve joint reporting. Buchen asked for regular implementation updates, if the plan proceeds.

Frigo commented on the revised summary of public hearing comments.

Frigo asked Laudenbach about the potential for WSB to trigger ON. Laudenbach noted preliminary December information shows claims not rising to the ON threshold, details Benefit Bureau’s preparations for some kind of federal TEUC extension, noted DWD was preparing a letter to Congress from Gov. Doyle supporting a federal TEUC extension, promised a 2002 year-end benefit claims summary for the next meeting.

DWD asked if Council members had any comments or suggestions regarding the formal DWD 129 rule revision. Buchen moved preliminary approval of the revised rule, Penkalski seconded. Oyler, Gustafson, Buchen, Petersen, Lump, Platz, Penkalski, Lyons and Bolton voted YES.

Frigo commented on pending rules, including work search. Tillema commented on other states’ work search requirements. Platz commented on the effect of work search rules on workers with indefinite layoffs. Buchen noted that lack of a recall date is a continuing problem.

Frigo commented on the 12-week standard for work search waivers where there is a "reasonable expectation" of returning to work. Breber commented further on the "reasonable expectation" standard.

Platz told anecdotes about employers refusing to hire certain indefinitely laid-off workers due to their certainty to return to their previous employer when recalled. Lump expressed some sympathies, concerns about blanket work search exemptions.

Frigo commented on the potential of claimant profiling, noted exemptions could be given only to claimants who are both likely to exhaust benefits and NOT return to their previous employer, offered to prepare some options for Council consideration.

Frigo noted the new maximum benefit rate of $329 effective Jan. 1, 2003. Smith noted new minimum benefit rate of $45. Smith commented on the effective dates of several law changes from the previous UI bill, noted certain pending rule changes.

Smith detailed the Zembrano case, with a barrister’s dash, zeal, vigor and panache, noted the decision affirmed a previous ruling which found UI’s canning exclusion not to violate state or federal law, enthralled the Council by explaining the canning exclusion and the history and origins of the case. Frigo noted US DOL approved the state provision prior to the court challenge.

Frigo noted US DOL finally responded with their concerns about the $50 exclusion to reimburse expenses of volunteers for government and non-profits, said the feds would require all employers to be given such an exclusion, if anyone got it. Anderson, Frigo discussed the fine points of US DOL’s argument. Smith, Anderson discussed IRS expense reporting requirement. Frigo promised further study.

Frigo asked the Council whether they would like to caucus on the labor dispute and work search rules, noted the department’s need for further policy direction. Buchen moved, Lyons seconded closed caucus.

Platz asked about prefiling for federal extended benefits. Laudenbach noted the procedures for notifying eligible claimants who do not file, hinted at complications if the federal law changes eligibility requirements. Jaloviar said the department would find just cause for late filers and would allow benefits. Buchen, Laudenbach discussed retroactive benefits.

Hagen, Frigo commented on federal UI-ES reform, perhaps could be contained in W’s economic stimulus package.

Frigo returned to the closed caucus motion, noted closed caucuses are authorized under state statute 19.85(1). Oyler, Lump, Gustafson, Buchen, Petersen, Platz, Lyons, Penkalski approved the motion to close caucus. Frigo noted the Council would have the Al Peck tribute luncheon after the closed caucus.

(11:20, break for closed caucus. 12:25 returned for luncheon)

Frigo commended retiring Council member, Al Peck, for his 14 years of service on the Council, read and presented a commemorative plaque, extended the Department’s best wishes for his future. Peck thanked the Council and UI staff, said he would miss the debates and appreciated the experience and the opportunity to serve. Frigo asked about, Peck commented on his future plans.

Frigo asked about the next meeting. Members settled on Feb. 17, 2003, at 1 PM. Oyler volunteered to host the meeting at his Harley dealership.

Adjourned.

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