Date of enactment: April 22, 1996
1995 Senate Bill 402 Date of publication*: May 6, 1996
* Section 991.11, Wisconsin Statutes 1993-94: Effective date of acts. "Every act and every portion of an act enacted by the legislature over the governor's partial veto which does not expressly prescribe the time when it takes effect shall take effect on the day after its date of publication as designated" by the secretary of state [the date of publication may not be more than 10 working days after the date of enactment].
1995 WISCONSIN ACT 274
(Vetoed in Part)
An Act to repeal 25.18 (1) (L); to renumber and amend 25.50 (5); to amend 13.94 (1) (df), 13.94 (1s) (c) 3., 15.07 (2) (a), 15.76 (intro.), 19.42 (10) (L) and (13) (k), 25.156 (4), 25.16 (1), 25.16 (2), 25.16 (4), 25.17 (intro.), 25.17 (51), 25.18 (1) (intro.), 25.18 (2) (intro.) and 25.18 (2) (e); to repeal and recreate 25.17 (14m); and to create 15.76 (1r), 25.156 (2m), 25.156 (8), 25.156 (9), 25.165, 25.167, 25.17 (14g), 25.17 (14r), 25.17 (51m), 25.183, 25.50 (5) (a) to (d) and 25.50 (5m) of the statutes; relating to: legislative oversight of the investment board, structure and composition of the investment board, regulation of certain investments by the investment board, granting rule-making authority and making an appropriation.
The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:
274,1 Section 1. 13.94 (1) (df) of the statutes is amended to read:
13.94 (1) (df) Annually, perform a financial audit of the investment board, including an assessment of the fair presentation of the financial statements and an evaluation of accounting controls and accounting records the internal control structure of the board. As part of the financial audit, the bureau shall identify certain statutes and policies and guidelines adopted by the board and shall determine the extent of compliance by the board with the statutes, policies and guidelines. Biennially, the bureau shall conduct a performance evaluation audit of the investment board that includes an audit of the board's policies and management practices.
274,2 Section 2. 13.94 (1s) (c) 3. of the statutes is amended to read:
13.94 (1s) (c) 3. The investment board for the cost of the any audit required to be performed under sub. (1) (df).
274,3m Section 3m. 15.07 (2) (a) of the statutes is amended to read:
15.07 (2) (a) The chairperson and vice chairperson of the investment board shall be designated elected biennially by the governor from among the members who have had at least 10 years of financial experience or 10 years of experience in making investments, except that the secretary of administration, or the secretary's designee, may not serve as the chairperson or vice chairperson of the investment board.
274,5 Section 5. 15.76 (intro.) of the statutes is amended to read:
15.76 Investment board; creation. (intro.) There is created a state of Wisconsin investment board, to be known for statutory purposes as the investment board. The investment board shall consist of 8 members, as follows the following members:
274,6 Section 6. 15.76 (1r) of the statutes is created to read:
15.76 (1r) One member appointed for a 6-year term, who is a representative of a local government that participates in the local government pooled-investment fund under s. 25.50. The member shall be employed by the local government in a finance position and have had at least 10 years of financial experience, but may not be an elected official, an employe of a county with a population greater than 450,000 or an employe of a city, town or village with a population greater than 150,000. If the member appointed under this subsection loses the status upon which the appointment was based, he or she shall cease to be a member of the investment board.
274,7 Section 7. 19.42 (10) (L) and (13) (k) of the statutes are amended to read:
19.42 (10) (L) The executive director, executive assistant to the executive director, internal auditor, chief investment officer and investment directors of the investment board.
(13) (k) The executive director, executive assistant to the executive director, internal auditor, chief investment officer and investment directors of the investment board.
274,8 Section 8. 25.156 (2m) of the statutes is created to read:
25.156 (2m) The investment board shall employe an internal auditor, who shall serve outside the classified service. The board shall fix the compensation of the internal auditor.
274,9 Section 9. 25.156 (4) of the statutes is amended to read:
25.156 (4) The members of the board shall promulgate rules restricting the executive director, internal auditor, chief investment officer, investment directors and employes from having financial interest, directly or indirectly, in firms or corporations providing services to the department and governing the receipt of gifts or favors therefrom, and also governing personal investments of all employes including the executive director, internal auditor, chief investment officer and investment directors to prevent conflicts of interest.
274,10 Section 10. 25.156 (8) of the statutes is created to read:
25.156 (8) The investment board shall keep full minutes of its proceedings.
274,10m Section 10m. 25.156 (9) of the statutes is created to read:
25.156 (9) The chairperson of the investment board shall appear at least annually before any committee established in the senate, whose jurisdiction includes financial institutions, if that committee so requests.
274,11 Section 11. 25.16 (1) of the statutes is amended to read:
25.16 (1) The executive and administrative functions of the investment board, except for the functions performed by the internal auditor under s. 25.165 (2), shall be vested in an executive director, who shall perform the functions of executive director in conformity with the requirements of the members of the board and in accordance with policies, principles and directives determined by the members of the board.
274,12 Section 12. 25.16 (2) of the statutes is amended to read:
25.16 (2) The Subject to authorization under s. 16.505, the executive director may appoint one division administrator and investment directors and shall appoint a chief investment officer and all other employes necessary to carry out the functions of the investment board, except that the investment board shall appoint the internal auditor and shall participate in the selection of the chief investment officer and investment directors and the internal auditor shall appoint his or her staff. The executive director shall appoint all employes outside the classified service, except blue collar and clerical employes. Neither the executive director, the internal auditor, the chief investment officer, any investment director nor any other employe of the board shall have any financial interest, either directly or indirectly, in any firm engaged in the sale or marketing of real estate or investments of any kind, nor shall any of them render investment advice to others for remuneration.
274,13 Section 13. 25.16 (4) of the statutes is amended to read:
25.16 (4) The executive director shall take the official oath and the executive director, chief investment officer and each investment director shall file a bond for the faithful performance of that person's duties in such amount and with such sureties as the members of the board require.
274,14 Section 14. 25.165 of the statutes is created to read:
25.165 Internal auditor. (1) There is created in the investment board an internal audit subunit, under the supervision of the internal auditor. The internal auditor shall report directly to the board and, subject to authorization under s. 16.505, shall appoint all employes necessary to carry out the duties of the internal auditor. The internal auditor shall appoint all employes outside the classified service, except blue collar and clerical employes. The internal auditor shall fix the compensation of all employes appointed by the internal auditor, subject to restrictions set forth in the compensation plan under s. 230.12 or any applicable collective bargaining agreement in the case of employes in the classified service, but the investment board may provide for bonus compensation to employes in the unclassified service as authorized under s. 25.156 (6).
(2) The internal auditor may review any activity, information or investment of the board and have access to records of the board and any external party under contract with the board and shall do all of the following:
(a) Plan and conduct audit activities, risk assessments, research projects and management reviews under the direction of the board and in accordance with policies, principles and directives determined by the board.
(b) Coordinate and assist with external audits and reviews of the board.
(c) Monitor for compliance with applicable legal requirements and with the board's contractual agreements any bank, savings and loan association, savings bank or credit union with which the board has entered into a custodial agreement under s. 25.17 (11); any investment advisers with which the board has contracted to manage and control board assets under s. 25.18 (2) (e); and any other external parties with which the board has contracted to provide investment services to the board.
274,15 Section 15. 25.167 of the statutes is created to read:
25.167 Chief investment officer. Under the supervision of the executive director, the chief investment officer shall do all of the following:
(1) Monitor activities of the investment directors for compliance with the board's investment policies and guidelines in investment decisions and approve unusual transactions, as defined by the board.
(2) Develop and implement operating procedures that are intended to ensure that the investment policies and guidelines of the board are followed.
(3) Ensure that investments are completely and accurately reported on all management and financial reports and that any information requested by the board is provided to the board on a timely basis.
274,16 Section 16. 25.17 (intro.) of the statutes is amended to read:
25.17 Powers and duties of board. (intro.) The "State of Wisconsin Investment Board" shall be a body corporate with power to sue and be sued in said name. The board shall have a seal with the words, "State of Wisconsin Investment Board". The Subject to s. 25.183, the board shall:
274,17 Section 17. 25.17 (14g) of the statutes is created to read:
25.17 (14g) Annually, on or before January 1, submit to the joint legislative audit committee, to the joint committee on finance and to the chief clerk of each house, for distribution to the appropriate standing committees under s. 13.172 (3), a report of the board's annual investment goals and long-term investment strategies. The report shall specify any change in the annual investment goals and long-term investment strategies from those in the previous year.
274,18 Section 18. 25.17 (14m) of the statutes is repealed and recreated to read:
25.17 (14m) Annually, on or before March 31, submit to the joint legislative audit committee, to the joint committee on finance and to the chief clerk of each house, for distribution to the appropriate standing committees under s. 13.172 (3), a report including all of the following:
1. An assessment of the board's progress in meeting its annual investment goals established in the report under sub. (14g).
2. Information on the types of investments held by the board, including the market values of the investments and the degree of risk associated with the investments, the board's use of derivatives, as defined in s. 25.183 (1) (a), any ventures by the board into new markets, any use of new investment instruments by the board and a comparison of the investment performance of the board to that achieved by a peer group of public and private entities that invest similar-sized funds.
3. A discussion of the amounts and categories of investments made within the state, including the amounts and categories of investments described, and progress in meeting the objectives of the plan submitted, under sub. (70).
274,19 Section 19. 25.17 (14r) of the statutes is created to read:
25.17 (14r) Upon adopting any change in the board's investment policies or guidelines, submit to the joint legislative audit committee, to the joint committee on finance and to the chief clerk of each house, for distribution to the appropriate standing committees under s. 13.172 (3), a report summarizing the change in the investment policies or guidelines.
274,20 Section 20. 25.17 (51) of the statutes is amended to read:
25.17 (51) Annually, have the legislative audit bureau conduct a financial audit to include, including an assessment of the fair presentation of the financial statements and an evaluation of accounting controls and accounting records the internal control structure of the board. As part of the financial audit, the legislative audit bureau shall identify certain statutes and policies and guidelines adopted by the board and shall determine the extent of compliance by the board with the statutes, policies and guidelines. The board shall reimburse the legislative audit bureau for the cost of audits required to be performed under this subsection.
274,21 Section 21. 25.17 (51m) of the statutes is created to read:
25.17 (51m) Biennially, have the legislative audit bureau conduct a performance evaluation audit that includes an audit of the board's policies and management practices. The board shall reimburse the legislative audit bureau for the cost of audits required to be performed under this subsection.
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