LRB-3275/1
PJK:bjk:rs
2009 - 2010 LEGISLATURE
August 31, 2009 - Introduced by Representatives Grigsby, Jorgensen, Pasch,
Pope-Roberts, Berceau, A. Williams, Fields, Sinicki, Mason, Barca
and
Petrowski, cosponsored by Senators Jauch, Vinehout, Coggs, Darling and
Taylor. Referred to Committee on Children and Families.
AB412,1,3 1An Act to renumber 49.155 (7m); and to create 49.155 (7m) (b) of the statutes;
2relating to: personal liability of officers, directors, and employees of child care
3providers.
Analysis by the Legislative Reference Bureau
Current law specifies that the Department of Children and Families (DCF) may
by rule establish policies and procedures permitting DCF to impose certain penalties
on a child care provider who provides care for children under the Wisconsin Works
child care subsidy program and who submits false, misleading, or irregular
information to DCF or who fails to comply with the terms of the program without
providing a satisfactory explanation for the failure to comply. The penalties that
DCF may impose include recouping or withholding payments from the child care
provider and imposing a forfeiture. This bill provides that if a child care provider is
a corporation or a limited liability company and is unable to satisfy a penalty imposed
by DCF, any officer, director, or employee of the corporation, or any member,
manager, or employee of the limited liability company, who holds at least 20 percent
of the ownership interest of the corporation or limited liability company and who has
control or supervision of or responsibility for operating the child care business may
be held personally liable. The bill provides that the personal liability of any officer,
director, member, manager, or employee is an independent obligation that survives

the dissolution, reorganization, bankruptcy, receivership, or analogous situation of
the corporation or limited liability company.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
AB412, s. 1 1Section 1. 49.155 (7m) of the statutes, as created by 2009 Wisconsin Act 28,
2is renumbered 49.155 (7m) (a).
AB412, s. 2 3Section 2. 49.155 (7m) (b) of the statutes is created to read:
AB412,3,44 49.155 (7m) (b) The penalties under par. (a) may be imposed on any child care
5provider subject to this section. Any officer, director, or employee of a child care
6provider that is a corporation, and any member, manager, or employee of a child care
7provider that is a limited liability company, who holds at least 20 percent of the
8ownership interest of the corporation or limited liability company and who has
9control or supervision of or responsibility for operating the child care business,
10including reporting for and receipt of payments under this section, may be found
11personally liable for such amounts, including overpayments made under this
12section, if the business, corporation, or limited liability company is unable to pay
13such amounts to the department. Ownership interest of a corporation or limited
14liability company includes ownership or control, directly or indirectly, by legally
15enforceable means or otherwise, by the individual, by the individual's spouse or
16child, by the individual's parent if the individual is under age 18, or by a combination
17of 2 or more of them, and such ownership interest of a parent corporation or limited
18liability company of which the corporation or limited liability company unable to pay
19such amounts is a wholly owned subsidiary. The personal liability of the officers,
20directors, and employees of a corporation and of the members, managers, and
21employees of a limited liability company as provided in this paragraph is an

1independent obligation and survives dissolution, reorganization, bankruptcy,
2receivership, assignment for the benefit of creditors, judicially confirmed extension
3or composition, or any analogous situation of the corporation or limited liability
4company.
AB412, s. 3 5Section 3. Initial applicability.
AB412,3,76 (1) This act first applies to penalties imposed on the effective date of this
7subsection.
AB412,3,88 (End)
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