2019 - 2020 LEGISLATURE
August 12, 2019 - Introduced by Representatives Murphy, Kerkman, Nygren,
Felzkowski, Zimmerman, Pronschinske, Ramthun and Knodl, cosponsored by
Senators Cowles, Jacque and Stroebel. Referred to Committee on
Government Accountability and Oversight.
1An Act to renumber and amend
18.01 (4) (intro.), 19.32 (2) and 36.09 (1) (f); 2to amend
18.05 (2), 18.05 (3), 18.06 (8) (am) 2., 18.10 (1), 18.10 (8), 18.10 (9), 3
18.14 (title), 36.115 (1) and 36.17 (1); and to create
18.01 (4) (bm), 18.11, 19.32 4
(2) (c), 19.42 (10) (t), 19.42 (13) (q), 36.09 (1) (f) 1. a., 36.09 (1) (f) 1. b., 36.09 (1) 5
(f) 2., 36.09 (3) (c), 36.11 (59) and 36.115 (9) of the statutes; relating to: state
6debt guaranties; delegations by the Board of Regents of the University of
7Wisconsin System; organizations affiliated with the UW System; and
8standards of conduct for certain UW System employees.
Analysis by the Legislative Reference Bureau
This bill provides that any agreement by the state to guaranty the debt of
another is not a debt of the state and is unenforceable except as expressly provided
otherwise by law. The bill also makes the following changes regarding the University
of Wisconsin System.
Delegations of authority. The bill makes changes to the delegation authority
of the Board of Regents of the UW System. The bill requires the Board of Regents
to make all limited appointments, except for those that current law requires the
president of the UW System to make, and prohibits the Board of Regents from
delegating its authority to make limited appointments. The bill also prohibits the
Board of Regents from delegating its governance powers or duties to the president
of the UW System or a chancellor or other administrative officer of a UW institution.
“Governance powers or duties” is defined as those powers or duties that rise above
duties related to administration or operation and include the power to approve
policies or budgets or to specify the mission of the UW System or a UW institution.
The bill also prohibits the Board of Regents from delegating the authority to enter
into a guaranty, financial agreement, or obligation involving an affiliated
organization. Subject to the foregoing prohibitions, the bill allows the Board of
Regents to adopt policies that explicitly delegate authority it considers appropriate
to a committee of the Board of Regents, an institutional board, a committee of an
institution, or another group.
UW-affiliated organizations. The bill prohibits a chancellor or
administrative officer or other employee of an institution to make a guaranty or enter
into a financial agreement or obligation with a UW-affiliated organization without
the express written consent of the Board of Regents. The bill defines a
“UW-affiliated organization” as an entity that 1) is legally distinct from a UW
institution; 2) is organized and operated for the benefit or in support of a UW
institution; and 3) is either permitted to use a UW institution's name (name
permission) or is provided use of a UW institution's space, resources, or employees
(institutional use). However, excluded from the definition is the UW Hospitals and
Clinics Authority and its affiliated entities. Also excluded is any “state agency,”
which is defined as any office, department, agency, institution of higher education,
association, society, or other body in state government that is 1) created or authorized
to be created by the state's constitution or any law and 2) entitled to expend moneys
appropriated by law. “State agency” is also defined to include any authority, but to
exclude the legislature and the courts.
The bill provides that a violation of the above prohibition is malfeasance and
requires the violator to be dismissed for cause. The bill also provides that a guaranty,
financial agreement, or obligation made or entered into in violation of the prohibition
is void and unenforceable, except the violator is personally liable for any obligation
incurred on behalf of a UW institution in the guaranty, financial agreement, or
The bill imposes other requirements regarding UW-affiliated organizations.
The bill requires UW institutions to annually report to the Board of Regents the
name permission and institutional use provided to UW-affiliated organizations and
the payments made for the name permission and institutional use. The bill defines
“payment” to include any payment in cash, goods, services, or any other thing of
value. The report must also include the difference between the monetary value of
the payments and the fair market value of the name permission and institutional
use. In addition, the report must describe and set forth all payments made by a UW
institution to a UW-affiliated organization. The bill also requires the Board of
Regents to establish requirements for regularly evaluating the relationship between
UW institutions and UW-affiliated organizations.
The bill prohibits an individual employed by a UW institution from being
employed at the same time by a UW-affiliated organization, unless the dual
employment is approved by the Board of Regents and the institution's chancellor.
The prohibition is prospective, as it applies to UW institution employees whose
employment by a UW-affiliated organization commences on the bill's effective date.
If approval is granted for an individual, the bill prohibits the UW institution and
UW-affiliated organization from compensating the individual for the same time
worked. The bill imposes reporting requirements to ensure compliance with that
Ethics and public records. Under the bill, an employee of a UW institution
who is any of the following is considered a state public official subject to the state code
of ethics and required to file an annual statement of economic interests with the
1. A chancellor, dean, or director.
2. Responsible for signing a contract on behalf of the institution.
3. Also an officer or board member of a UW-affiliated organization on an
The bill provides that information provided by a UW-affiliated organization to
a UW institution employee is considered a public record, not including donor
For further information see the state fiscal estimate, which will be printed as
an appendix to this bill.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
18.01 (4) (intro.) of the statutes is renumbered 18.01 (4) (am) (intro.) 2
and amended to read:
(am) (intro.) “Public debt"
means every voluntary, 4
unconditional undertaking by the state, other than an operating note, to repay a sum 5
18.01 (4) (bm) of the statutes is created to read:
(bm) “Public debt” does not include any agreement by the state to 8
guaranty the debt of another.
18.05 (2) of the statutes is amended to read:
The last determination made by the department of revenue of the full 11
market value of all general property of the state liable to taxes pursuant to s. 70.575
shall be the aggregate value of all taxable property in the state. The department of 2
revenue shall certify such value when requested for use in connection with the 3
contracting of state public
18.05 (3) of the statutes is amended to read:
The legislative audit bureau shall annually determine the amounts 6
under sub. (1) (b) 1. and 2. and shall certify such amounts when requested for use in 7
connection with the contracting of state public
debt. It shall use in making such 8
determination the fair market value of all property on hand in the sinking funds of 9
the bond security and redemption fund. It shall take into account any anticipatory 10
contracts under s. 18.10 (1).
18.06 (8) (am) 2. of the statutes is amended to read:
(am) 2. The interest exchange agreement must identify by maturity, 13
bond issue, or bond purpose the public
debt or obligation to which the agreement is 14
related. The determination of the commission included in an interest exchange 15
agreement that such agreement relates to a debt or obligation shall be conclusive.
18.10 (1) of the statutes is amended to read:
18.10 (1) Anticipatory contracts.
After adoption of an authorizing resolution 18
for a purpose which is to be accomplished wholly or in part through performance of 19
an executory contract by some other contracting party, such contract may be entered 20
into prior to the contracting of the public
debt authorized by such resolution with like 21
effect as if the funds necessary for payments on the contract were already available. 22
In such cases the public
debt authorized by such resolution shall be deemed to have 23
been contracted pursuant to such resolution in the amount necessary to make such 24
payments on the date such contract is entered into and the authority of such 25
resolution shall promptly thereafter be exercised.
18.10 (8) of the statutes is amended to read:
18.10 (8) Trustees and fiscal agents.
The commission may appoint one or 3
more trustees and fiscal agents for each issue of bonds or notes. The secretary of 4
administration may be denominated the trustee and the sole fiscal agent or a cofiscal 5
agent for any issue of bonds or notes. Every other such fiscal agent shall be an 6
incorporated bank or trust company authorized by the laws of the United States or 7
of the state in which it is located to do a banking or trust company business. There 8
may be deposited with a trustee, in a special account administered as provided in this 9
chapter, moneys to be used only for the purposes expressly provided in a resolution 10
authorizing the issuance of public
debt or an agreement between the commission and 11
the trustee. The commission may make such other provisions respecting trustees 12
and fiscal agents as it deems necessary or useful and may enter into a contract with 13
any trustee or fiscal agent containing such terms, including compensation, and 14
conditions in regard to the trustee or fiscal agent as it deems necessary or useful.
18.10 (9) of the statutes is amended to read:
18.10 (9) Prepayment.
The commission may authorize public
debt having any 17
provisions for prepayment deemed necessary or useful, including the payment of any 18
18.11 of the statutes is created to read:
2018.11 Guaranty agreements unenforceable.
Unless otherwise expressly 21
provided by law, an agreement by the state to guaranty the debt of another is 22
18.14 (title) of the statutes is amended to read:
(title) Validation of public debt.
19.32 (2) of the statutes is renumbered 19.32 (2) (a) and amended 2
(a) “Record" means any material on which written, drawn, printed, 4
spoken, visual, or electromagnetic information or electronically generated or stored 5
data is recorded or preserved, regardless of physical form or characteristics, that has 6
been created or is being kept by an authority.
“Record" includes, but is not limited to, handwritten, typed, or printed 8
pages, maps, charts, photographs, films, recordings, tapes, optical discs, and any 9
other medium on which electronically generated or stored data is recorded or 10
“Record" does not include drafts, notes, preliminary computations, and like 12
materials prepared for the originator's personal use or prepared by the originator in 13
the name of a person for whom the originator is working; materials that are purely 14
the personal property of the custodian and have no relation to his or her office; donor
15information provided by a UW-affiliated organization, as defined in s. 36.11 (59) (a)
163., to an employee of a University of Wisconsin System institution;
materials to which 17
access is limited by copyright, patent, or bequest; and published materials in the 18
possession of an authority other than a public library that are available for sale, or 19
that are available for inspection at a public library.
19.32 (2) (c) of the statutes is created to read:
(c) “Record” also includes budgets, meeting minutes, and other 22
information provided by a UW-affiliated organization, as defined in s. 36.11 (59) (a) 23
3., to an employee of any University of Wisconsin System institution.
19.42 (10) (t) of the statutes is created to read:
(t) A state public official described under sub. (13) (q).
19.42 (13) (q) of the statutes is created to read:
(q) An employee of a University of Wisconsin System institution who 3
is any of the following:
1. A chancellor, dean, or director.
2. Responsible for signing a contract on behalf of the institution.
3. Also an officer or board member of a UW-affiliated organization, as defined 7
in s. 36.11 (59) (a) 3., on an ongoing basis.
36.09 (1) (f) of the statutes is renumbered 36.09 (1) (f) 1. (intro.) 9
and amended to read:
(f) 1. (intro.) The board shall delegate to each chancellor the necessary 11
authority for the administration and operation of the institution within the policies 12
and guidelines established by the board. The board may also not delegate or rescind
13other authority to chancellors, committees of the board, administrative officers,
14members of the faculty and students or such other groups as it deems appropriate. 15do any of the following:
36.09 (1) (f) 1. a. of the statutes is created to read:
(f) 1. a. Delegate the board's governance powers or duties to the 18
president or a chancellor or administrative officer of an institution. For purposes of 19
this subd. 1. a., “governance powers or duties” mean those powers or duties that rise 20
above duties related to administration or operation, and include the power to 21
approve policies or budgets or to specify the mission of the system or an institution.
36.09 (1) (f) 1. b. of the statutes is created to read:
(f) 1. b. Delegate the authority to enter into a guaranty, financial 24
agreement, or obligation involving a UW-affiliated organization, as defined in s. 25
36.11 (59) (a) 3.
36.09 (1) (f) 2. of the statutes is created to read:
(f) 2. Subject to subd. 1., the board may adopt policies that explicitly 3
delegate authority that the board considers appropriate to a committee of the board, 4
an institutional board, a committee of an institution, or any other group that the 5
board considers appropriate.
36.09 (3) (c) of the statutes is created to read:
(c) A chancellor or administrative officer or other employee of an 8
institution may not make a guaranty or enter into a financial agreement or 9
obligation with a UW-affiliated organization, as defined in s. 36.11 (59) (a) 3. without 10
the express written consent of the board. A violation of this paragraph is 11
malfeasance and a person who commits a violation shall be dismissed for cause. A 12
guaranty, financial agreement, or obligation made or entered into in violation of this 13
paragraph is void and unenforceable, except that the person who made or entered 14
into the guaranty, financial agreement, or obligation is personally liable for any 15
obligation incurred on behalf of an institution in the guaranty, financial agreement, 16
36.11 (59) of the statutes is created to read:
36.11 (59) UW-affiliated organizations.
In this subsection:
1. “Name permission” means permission to use an institution's name or a 20
variation of the name.
2. “Payment” means payment in cash, goods, services, or any other thing of 22
3. “UW-affiliated organization” means an entity, except a state agency, as 24
defined in s. 16.298 (1) (d), and except an authority created under ch. 233 and its 25
affiliated entities, that satisfies all of the following: