LRB-3506/2
KSH:skg:ks
1995 - 1996 LEGISLATURE
February 21, 1996 - Introduced by Representatives Brancel, Porter, Kelso,
Green, Musser, Otte, Olsen, Freese, Hahn, Zukowski, Gronemus, Goetsch,
Baldus, Ladwig, Jensen, Ziegelbauer, Klusman, Vrakas, Ainsworth
and
Albers, cosponsored by Senators Huelsman, Drzewiecki, Panzer,
Rosenzweig, Schultz, Rude, Buettner, Petak
and Welch. Referred to
Committee on Judiciary.
AB929,1,5 1An Act to amend 187.19 (1); and to create subchapter I (title) of chapter 187
2[precedes 187.01], subchapter II (title) of chapter 187 [precedes 187.20] and
3subchapter III of chapter 187 [precedes 187.40] of the statutes; relating to:
4limiting the liability of trustees, directors, officers and volunteers of religious
5organizations.
Analysis by the Legislative Reference Bureau
Current law contains provisions limiting the liability of directors, officers and
volunteers of Roman Catholic churches incorporated under certain state law
provisions. This bill creates parallel provisions limiting the liability of directors,
officers and volunteers of certain other religious organizations.
Under current law, unless the director or officer knew or should have known
that reliance was unwarranted, a director or officer, in discharging his or her duties
to a religious organization, may generally rely on information, opinions, reports or
statements prepared by any of the following: 1) an officer or employe of the Roman
Catholic church whom the director or officer believes in good faith to be reliable and
competent in the matters presented; 2) legal counsel, public accountants or other
professional persons or experts employed by the Roman Catholic church, as to
matters the director or officer believes in good faith are within the person's
professional or expert competence; and 3) in the case of a director, a committee of the
board of directors of which the director is not a member if the director believes in good
faith that the committee merits confidence.
In addition, current law provides that a director or officer is not liable to any
person for damages, settlements, fees, fines, penalties or other monetary liabilities
arising from a breach of, or failure to perform, any duty resulting solely from his or
her status as a director or officer, unless the person asserting liability proves that the
liability arises from: 1) a wilful failure to deal fairly in connection with a matter in

which the director or officer has a material conflict of interest; 2) a violation of
criminal law, unless the director or officer had no reasonable cause to believe his or
her conduct was unlawful; 3) a transaction from which the director or officer derived
an improper personal profit; or 4) wilful misconduct. These protections from liability
do not apply with respect to proceedings brought by a governmental unit or agency,
to proceedings under a statute creating an express private right of action created by
state or federal statute or certain proceedings involving misuse of funds in
connection with the operation of a cemetery.
Current law also limits the liability of volunteers of Roman Catholic churches
incorporated under certain state law provisions. Generally, a volunteer is not liable
to any person for damages, settlements, fees, fines, penalties or other monetary
liabilities arising from any act or omission as a volunteer, unless the act or omission
is: 1) a violation of criminal law, unless the volunteer had no reasonable cause to
believe his or her conduct was unlawful; 2) wilful misconduct; 3) in the case of a
volunteer who is a director or officer of the incorporated Roman Catholic church, an
act or omission within the scope of the volunteer's duties as a director or officer; or
4) an act or omission for which the volunteer received compensation or anything of
substantial value in lieu of compensation. These protections from liability do not
apply with respect to proceedings brought by a governmental unit or agency, to
proceedings under a statute creating an express private right of action created by
state or federal statute, to claims arising from the negligent operation of an
automobile, truck, train, airplane or other vehicle by a volunteer, to a proceeding
against a volunteer who is licensed, certified, permitted or registered under state law
and which is based upon an act or omission within the scope of practice under the
volunteer's license, certificate, permit or registration or to proceedings in which the
volunteer is immune from liability under other state law provisions.
This bill creates parallel provisions limiting the liability of directors, officers
and volunteers of certain other religious organizations. These provisions apply to
associations, conferences, congregations, conventions, committees or other entities
that are organized and operated for religious purposes and that are eligible for an
exemption from the federal income tax and to subunits of these organizations that
are organized and operated for religious purposes. The provisions do not apply to
religious organizations that are organized as nonstock corporations organized under
state law; however, similar provisions under current law apply to these nonstock
corporations.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
AB929, s. 1 1Section 1. Subchapter I (title) of chapter 187 [precedes 187.01] of the statutes
2is created to read:
AB929,2,33 Chapter 187
AB929,3,2
1subchapter I
2 General provisions
AB929, s. 2 3Section 2. 187.19 (1) of the statutes is amended to read:
AB929,3,134 187.19 (1) Bishop may incorporate. The provisions of this chapter, except this
5section and ss. 187.20 to 187.33 subch. II, shall not apply to or in any manner affect
6the Roman Catholic church or denomination, or any society or religious corporation
7now existing or which may be organized in connection therewith. The bishop of each
8diocese, being the only trustee of each Roman Catholic church in his diocese, may
9cause any or all congregations therein to be incorporated by adding four more
10members as trustees as hereinafter provided. The bishop and vicar-general of each
11diocese, the pastor of the congregation to be incorporated, together with two
12laypersons, practical communicants of such congregation (the latter to be chosen
13from and by the congregation), shall be such trustees.
AB929, s. 3 14Section 3. Subchapter II (title) of chapter 187 [precedes 187.20] of the statutes
15is created to read:
AB929,3,1616 Chapter 187
AB929,3,1917 subchapter II
18 LIABILITY AND INDEMNIFICATION;
19 ROMAN CATHOLIC CHURCH
AB929, s. 4 20Section 4. Subchapter III of chapter 187 [precedes 187.40] of the statutes is
21created to read:
AB929,3,2222 Chapter 187
AB929,3,2523 subchapter III
24 LIABILITY; other religious
25 organizations
AB929,4,1
1187.40 Definitions. In this subchapter:
AB929,4,4 2(1) "Director" means an individual who is serving as a trustee or director of a
3religious organization or an individual who is serving in a similar capacity in a
4religious organization.
AB929,4,10 5(2) "Religious organization" means an association, conference, congregation,
6convention, committee or other entity that is organized and operated for a religious
7purpose and that is eligible for an exemption from federal income tax under 26 USC
8501
(c) (3) or (d) and any subunit of such an association, conference, congregation,
9convention, committee or entity that is organized and operated for a religious
10purpose, except that "religious organization" does not include any of the following:
AB929,4,1111 (a) A Roman Catholic church organized under s. 187.19.
AB929,4,1212 (b) A nonstock corporation organized under ch. 181.
AB929,4,15 13(3) "Officer" means an individual who is serving as a president, vice president,
14treasurer or secretary of a religious organization or who is serving in a similar office
15in a religious organization.
AB929,4,21 16187.41 Reliance by directors or officers. Unless the director or officer
17knew or should have known that reliance was unwarranted, a director or officer, in
18discharging his or her duties to a religious organization, may rely on information,
19opinions, reports or statements, any of which may be written or oral, formal or
20informal, including financial statements and other financial data, if prepared or
21presented by any of the following:
AB929,4,23 22(1) An officer or employe of the religious organization whom the director or
23officer believes in good faith to be reliable and competent in the matters presented.
AB929,5,3
1(2) Legal counsel, public accountants or other professional persons or experts
2employed by the religious organization, as to matters the director or officer believes
3in good faith are within the person's professional or expert competence.
AB929,5,6 4(3) In the case of reliance by a director, a committee of the governing body of
5the religious organization of which the director is not a member if the director
6believes in good faith that the committee merits confidence.
AB929,5,14 7187.42 Limited liability of directors and officers. (1) Except as provided
8in sub. (2), a director or officer is not liable to the religious organization, its members
9or creditors, or any person asserting rights on behalf of the religious organization,
10its members or creditors, or any other person, for damages, settlements, fees, fines,
11penalties or other monetary liabilities arising from a breach of, or failure to perform,
12any duty resulting solely from his or her status as a director or officer, unless the
13person asserting liability proves that the breach or failure to perform constitutes any
14of the following:
AB929,5,1715 (a) A wilful failure to deal fairly with the religious organization or its members
16in connection with a matter in which the director or officer has a material conflict of
17interest.
AB929,5,2018 (b) A violation of criminal law, unless the director or officer had reasonable
19cause to believe his or her conduct was lawful or no reasonable cause to believe his
20or her conduct was unlawful.
AB929,5,2221 (c) A transaction from which the director or officer derived an improper
22personal profit.
AB929,5,2323 (d) Wilful misconduct.
AB929,5,25 24(2) (a) Except as provided in par. (b), this section does not apply to any of the
25following:
AB929,6,2
11. A civil or criminal proceeding brought by or on behalf of any governmental
2unit, authority or agency.
AB929,6,53 2. A proceeding brought by any person for a violation of state or federal law
4where the proceeding is brought pursuant to an express private right of action
5created by state or federal statute.
AB929,6,96 3. If the religious organization operates a cemetery, the liability of a director
7or officer arising from a breach of, or failure to perform, any duty relating to the
8receipt, handling, investment or other use of perpetual care funds, maintenance
9funds or other funds held in trust in connection with the operations of the cemetery.
AB929,6,1210 (b) Paragraph (a) 1. and 2. does not apply to a proceeding brought by a
11governmental unit, authority or agency in its capacity as a private party or
12contractor.
AB929,6,15 13187.43 Limited liability of volunteers. (1) In this section, "volunteer"
14means an individual, other than an employe of the religious organization, who
15provides services to or on behalf of the religious organization without compensation.
AB929,6,19 16(2) Except as provided in sub. (3), a volunteer is not liable to any person for
17damages, settlements, fees, fines, penalties or other monetary liabilities arising from
18any act or omission as a volunteer, unless the person asserting liability proves that
19the act or omission constitutes any of the following:
AB929,6,2220 (a) A violation of the criminal law, unless the volunteer had reasonable cause
21to believe his or her conduct was lawful or no reasonable cause to believe his or her
22conduct was unlawful.
AB929,6,2323 (b) Wilful misconduct.
AB929,6,2524 (c) If the volunteer is a director or officer of the religious organization, an act
25or omission within the scope of the volunteer's duties as a director or officer.
AB929,7,2
1(d) An act or omission for which the volunteer received compensation or any
2thing of substantial value in lieu of compensation.
AB929,7,4 3(3) (a) Except as provided in par. (b), this section does not apply to any of the
4following:
AB929,7,65 1. A civil or criminal proceeding brought by or on behalf of any governmental
6unit, authority or agency.
AB929,7,97 2. A proceeding brought by any person for a violation of state or federal law
8where the proceeding is brought pursuant to an express private right of action
9created by state or federal statute.
AB929,7,1110 3. Claims arising from the negligent operation of an automobile, truck, train,
11airplane or other vehicle by a volunteer.
AB929,7,1412 4. A proceeding against a volunteer who is licensed, certified, permitted or
13registered under state law and which is based upon an act or omission within the
14scope of practice under the volunteer's license, certificate, permit or registration.
AB929,7,1715 5. Proceedings based upon a cause of action for which the volunteer is immune
16from liability under s. 146.31 (2) and (3), 146.37, 895.44, 895.48, 895.482, 895.51 or
17895.52.
AB929,7,1918 (b) Paragraph (a) 1. and 2. does not apply to a proceeding brought by or on
19behalf of a governmental unit, authority or agency in its capacity as a contractor.
AB929,7,22 20187.44 Applicability of other liability provisions. This subchapter does
21not affect any powers and privileges granted under s. 187.01 (2) to religious societies
22formed under s. 187.01.
AB929,7,2323 (End)
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