LRB-0547/1
RAC&CMH:jld:jf
2007 - 2008 LEGISLATURE
July 10, 2007 - Introduced by Representatives Gottlieb, Nygren, Lothian,
Kramer, Vos, Albers, J. Ott, LeMahieu, Owens, Honadel, A. Ott, Strachota

and Gundrum, cosponsored by Senator Lazich. Referred to Committee on
Urban and Local Affairs.
AB447,1,4 1An Act to amend 111.70 (1) (a), 111.70 (1) (dm) and 111.70 (4) (cm) 5s.; and to
2create
111.70 (4) (p) of the statutes; relating to: mandatory and permissive
3subjects of collective bargaining under the Municipal Employment Relations
4Act.
Analysis by the Legislative Reference Bureau
Currently, a municipal employer's decision to contract out for services that are
performed by its employees is a mandatory subject of collective bargaining under the
Municipal Employment Relations Act (MERA). This bill establishes a process under
which a municipal employer's decision to contract out for such services can become
a permissive subject of collective bargaining under MERA.
The bill provides that a municipal employer may solicit bids to perform services
that are currently performed by its employees if the municipal employer notifies the
labor organization that represents the employees that it intends to solicit the bids
and conducts an internal cost study to determine the total costs incurred by the
municipal employer in having its employees perform the services. The costs
determined by this study are called the "current internal cost." The study must also
determine the percentage of the current internal cost that is attributable to wages
and benefits paid to the employees who perform the services and who are represented
by a labor organization. This percentage is called the "labor cost ratio."
After conducting this study, the municipal employer may then solicit and
receive bids to perform any services that are currently performed by its employees.
These bids are called the "preliminary external bids." No later than 30 days after

receiving the final bid, the municipal employer must select the preliminary external
bid that it considers most advantageous. The sum of the cost of this bid and the
municipal employer's cost in administering any contract resulting from the bid are
called the "selected external cost."
After determining the selected external cost, the municipal employer must then
perform a calculation in which it subtracts the selected external cost from an amount
equal to 90 percent of the current internal cost and must then multiply the result by
the labor cost ratio. The product is called the "required labor savings." The
municipal employer must then notify the labor organization that represents the
employees of the required labor savings. If the required labor savings is an amount
less than or equal to zero, the municipal employer is required to bargain collectively
any decision to enter into contracts for the performance of services. If the required
labor savings is an amount greater than zero, the municipal employer is not required
to bargain collectively any decision to contract for the performance of services, unless
the labor organization notifies the municipal employer that the employees agree to
participate in a nonbinding arbitration process.
Under the nonbinding arbitration process, each party must submit to an
arbitrator a proposal to reduce the current internal cost by an amount at least equal
to the required labor savings. The reductions specified in the proposals must come
entirely from changes to the wages, hours, or conditions of employment of the
employees who are represented by the labor organization. The arbitrator may select
any item from either proposal to reduce the current internal cost by an amount at
least equal to the required labor savings. If the labor organization rejects the
arbitrator's proposal, the municipal employer is not required to bargain collectively
the decision to contract for the performance of the services. If the municipal
employer rejects the arbitrator's proposal, the municipal employer is required to
bargain collectively the decision to contract for the performance of the services.
However, under the bill, if neither party rejects the arbitrator's proposal, the
proposal is final and binding on both parties and must then be incorporated into a
collective bargaining agreement. If the proposal is not rejected and is incorporated
into a collective bargaining agreement, the municipal employer may not solicit and
receive bids to perform the service covered by the arbitrator's proposal for a period
of three years from the date that the arbitrator submits his or her proposal to the
parties.
For further information see the state and local 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:
AB447, s. 1 1Section 1. 111.70 (1) (a) of the statutes is amended to read:
AB447,3,212 111.70 (1) (a) "Collective bargaining" means the performance of the mutual
3obligation of a municipal employer, through its officers and agents, and the

1representative of its municipal employees in a collective bargaining unit, to meet and
2confer at reasonable times, in good faith, with the intention of reaching an
3agreement, or to resolve questions arising under such an agreement, with respect to
4wages, hours and conditions of employment, and with respect to a requirement of the
5municipal employer for a municipal employee to perform law enforcement and fire
6fighting services under s. 61.66, except as provided in sub. (4) (m) and (p) and s. 40.81
7(3) and except that a municipal employer shall not meet and confer with respect to
8any proposal to diminish or abridge the rights guaranteed to municipal employees
9under ch. 164. The duty to bargain, however, does not compel either party to agree
10to a proposal or require the making of a concession. Collective bargaining includes
11the reduction of any agreement reached to a written and signed document. The
12municipal employer shall not be required to bargain on subjects reserved to
13management and direction of the governmental unit except insofar as the manner
14of exercise of such functions affects the wages, hours and conditions of employment
15of the municipal employees in a collective bargaining unit. In creating this
16subchapter the legislature recognizes that the municipal employer must exercise its
17powers and responsibilities to act for the government and good order of the
18jurisdiction which it serves, its commercial benefit and the health, safety and welfare
19of the public to assure orderly operations and functions within its jurisdiction,
20subject to those rights secured to municipal employees by the constitutions of this
21state and of the United States and by this subchapter.
AB447, s. 2 22Section 2. 111.70 (1) (dm) of the statutes is amended to read:
AB447,4,1023 111.70 (1) (dm) "Economic issue" means salaries, overtime pay, sick leave,
24payments in lieu of sick leave usage, vacations, clothing allowances in excess of the
25actual cost of clothing, length-of-service credit, continuing education credit, shift

1premium pay, longevity pay, extra duty pay, performance bonuses, health insurance,
2life insurance, dental insurance, disability insurance, vision insurance, long-term
3care insurance, worker's compensation and unemployment insurance, social
4security benefits, vacation pay, holiday pay, lead worker pay, temporary assignment
5pay, retirement contributions, supplemental retirement benefits, severance or other
6separation pay, hazardous duty pay, certification or license payment, and limitations
7on layoffs that create a new or increased financial liability on the employer and
8contracting or subcontracting of work that would otherwise be performed by
9municipal employees in the collective bargaining unit with which there is a labor
10dispute
.
AB447, s. 3 11Section 3. 111.70 (4) (cm) 5s. of the statutes is amended to read:
AB447,6,212 111.70 (4) (cm) 5s. `Issues subject to arbitration.' In a collective bargaining unit
13consisting of school district professional employees, the municipal employer or the
14labor organization may petition the commission to determine whether the municipal
15employer has submitted a qualified economic offer. The commission shall appoint an
16investigator for that purpose. If the investigator finds that the municipal employer
17has submitted a qualified economic offer, the investigator shall determine whether
18a deadlock exists between the parties with respect to all economic issues. If the
19municipal employer submits a qualified economic offer applicable to any period
20beginning on or after July 1, 1993, no economic issues are subject to interest
21arbitration under subd. 6. for that period, except that only the impact of contracting
22out or subcontracting work that would otherwise be performed by municipal
23employees in the collective bargaining unit is subject to interest arbitration under
24subd. 6
. In such a collective bargaining unit, economic issues concerning the wages,
25hours or conditions of employment of the school district professional employees in the

1unit for any period prior to July 1, 1993, are subject to interest arbitration under
2subd. 6. for that period. In such a collective bargaining unit, noneconomic issues
3applicable to any period on or after July 1, 1993, are subject to interest arbitration
4after the parties have reached agreement and stipulate to agreement on all economic
5issues concerning the wages, hours or conditions of employment of the school district
6professional employees in the unit for that period. In such a collective bargaining
7unit, if the commission's investigator finds that the municipal employer has
8submitted a qualified economic offer and that a deadlock exists between the parties
9with respect to all economic issues, the municipal employer may implement the
10qualified economic offer. On the 90th day prior to expiration of the period included
11within the qualified economic offer, if no agreement exists on that day, the parties are
12deemed to have stipulated to the inclusion in a new or revised collective bargaining
13agreement of all provisions of any predecessor collective bargaining agreement
14concerning economic issues, or of all provisions of any existing collective bargaining
15agreement concerning economic issues if the parties have reopened negotiations
16under an existing agreement, as modified by the terms of the qualified economic offer
17and as otherwise modified by the parties. In such a collective bargaining unit, on and
18after that 90th day, a municipal employer that refuses to bargain collectively with
19respect to the terms of that stipulation, applicable to the 90-day period prior to
20expiration of the period included within the qualified economic offer, does not violate
21sub. (3) (a) 4. Any such unilateral implementation after August 11, 1993, during the
2290-day period prior to expiration of the period included within a qualified economic
23offer, operates as a full, final and complete settlement of all economic issues between
24the parties for the period included within the qualified economic offer. The failure
25of a labor organization to recognize the validity of such a lawful qualified economic

1offer does not affect the obligation of the municipal employer to submit economic
2issues to arbitration under subd. 6.
AB447, s. 4 3Section 4. 111.70 (4) (p) of the statutes is created to read:
AB447,6,84 111.70 (4) (p) Competitive contracting; all municipal employers. 1. A municipal
5employer's decision to enter into contracts with persons who are not employed by the
6municipal employer for the performance of services, as that decision relates to
7mandatory and permissive subjects of collective bargaining under this subchapter,
8is subject to this paragraph.
AB447,6,119 2. A municipal employer may solicit bids from persons who are not employed
10by the municipal employer to perform services that are currently being performed
11by its municipal employees only if the municipal employer does all of the following:
AB447,6,1412 a. Notifies the labor organization that is recognized or certified to represent the
13municipal employees who are currently performing the services that the municipal
14employer intends to solicit the bids.
AB447,6,2315 b. Conducts an internal cost study to determine the total costs incurred by the
16municipal employer in having its municipal employees perform the services. The
17costs determined by this study shall be denominated the "current internal cost." The
18study shall also determine the percentage of the current internal cost that is
19attributable to wages and benefits paid to the municipal employees who perform the
20services and who are represented by the labor organization. This percentage shall
21be denominated the "labor cost ratio" and shall be expressed as a decimal. The
22municipal employer shall keep the study confidential until after all bids solicited
23under subd. 3. have been received by the municipal employer.
AB447,7,424 3. After conducting the study under subd. 2. b., the municipal employer may
25solicit and receive bids from persons who are not employed by the municipal

1employer to perform any services that are currently being performed by its municipal
2employees. These bids shall be denominated the "preliminary external bids" and
3shall provide for services that are at least substantially similar to those currently
4being performed by the municipal employer's employees.
AB447,7,95 4. No later than 30 days after receiving the final bid under subd. 3., the
6municipal employer shall select the preliminary external bid that the municipal
7employer considers the most advantageous to the municipal employer. The sum of
8the cost of this bid and the municipal employer's cost in administering any contract
9entered into pursuant to the bid shall be denominated the "selected external cost."
AB447,7,1810 5. After determining the selected external cost under subd. 4., the municipal
11employer shall subtract that number from an amount equal to 90 percent of the
12current internal cost determined under subd. 2. b. and shall then multiply the result
13by the labor cost ratio determined under subd. 2. b. The product shall be
14denominated the "required labor savings." No later than 5 days after selecting the
15preliminary external bid under subd. 4., the municipal employer shall notify the
16labor organization that represents the municipal employees of the required labor
17savings and shall also provide to the labor organization a copy of the preliminary
18external bid selected under subd. 4.
AB447,7,2419 6. a. If the required labor savings is an amount less than or equal to zero, the
20municipal employer is required to bargain collectively any decision to enter into
21contracts with persons who are not employed by the municipal employer for the
22performance of services for the municipal employer, and the impact of any such
23decision on the wages, hours, and conditions of employment of the municipal
24employees who would otherwise perform those services.
AB447,8,10
1b. If the required labor savings is an amount greater than zero, the municipal
2employer is not required to bargain collectively any decision to enter into contracts
3with persons who are not employed by the municipal employer for the performance
4of services for the municipal employer, or the impact of any such decision on the
5wages, hours, and conditions of employment of the municipal employees who would
6otherwise perform those services, unless the labor organization that represents the
7municipal employees notifies the municipal employer, in writing, that the municipal
8employees agree to be subject to the nonbinding arbitration mechanism under subd.
97. The notification must be received by the municipal employer no later than 15 days
10after the municipal employer selects the preliminary external bid under subd. 4.
AB447,8,2011 7. a. No later than 30 days after the municipal employer receives the
12notification under subd. 6. b., each party shall submit to an arbitrator a proposal to
13reduce the current internal cost determined under subd. 2. b. by an amount at least
14equal to the required labor savings determined under subd. 5. The reductions
15specified in the proposals shall come entirely from changes to the wages, hours, or
16conditions of employment of the municipal employees who are represented by the
17labor organization. The arbitrator shall be selected using the process under par. (cm)
186. am. The arbitrator may select any item from each proposal to reduce the current
19internal cost determined under subd. 2. b. by an amount at least equal to the required
20labor savings determined under subd. 5.
AB447,9,221 b. If the labor organization rejects the arbitrator's proposal, the municipal
22employer is not required to bargain collectively the decision to contract with persons
23who are not employed by the municipal employer for the performance of the services
24for the municipal employer, or the impact of any such decision on the wages, hours,

1and conditions of employment of the municipal employees who would otherwise
2perform those services.
AB447,9,83 c. If the municipal employer rejects the arbitrator's proposal, the municipal
4employer is required to bargain collectively the decision to contract with persons who
5are not employed by the municipal employer for the performance of the services for
6the municipal employer, and the impact of any such decision on the wages, hours, and
7conditions of employment of the municipal employees who would otherwise perform
8those services.
AB447,9,129 d. If neither party rejects the arbitrator's proposal within 10 days after the
10arbitrator presents the proposal to the parties, the proposal shall be final and
11binding on both parties and shall be incorporated into a collective bargaining
12agreement.
AB447,9,1413 e. Any rejection of an arbitrator's proposal under subd. 7. b. or c. shall be made
14no later than 10 days after the arbitrator presents the proposal to the parties.
AB447,9,1915 8. If the arbitrator's proposal is not rejected by either party and is incorporated
16into a collective bargaining agreement, the municipal employer may not solicit and
17receive bids from persons who are not employed by the municipal employer to
18perform the service covered by the arbitrator's proposal for a period of 3 years from
19the date that the arbitrator submits his or her proposal to the parties.
AB447, s. 5 20Section 5. Initial applicability.
AB447,9,2321 (1) This act first applies to collective bargaining agreements under subchapter
22IV of chapter 111 of the statutes for which a notice of commencement of contract
23negotiations has been filed by either party on the effective date of this subsection.
AB447,9,2424 (End)
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