LRB-4690/1
JTK:jlg&kaf:ijs
1997 - 1998 LEGISLATURE
January 27, 1998 - Introduced by Representatives Nass, Jensen, Musser,
Hutchison, F. Lasee, Hahn, Johnsrud, Kedzie, Ladwig, Seratti, Vrakas,
Meyer, Huebsch, Walker, Plale, Staskunas, La Fave and Lazich, cosponsored
by Senators Farrow, Huelsman, Darling, Welch, Rosenzweig and Rude.
Referred to Committee on Mandates.
AB745,1,4
1An Act to create 13.59, 20.765 (2) (c) and chapter 131 of the statutes;
relating
2to: restricting state governmental units from engaging in certain commercial
3activities, state governmental procurement requirements and creating a
4legislative joint committee on public-private partnership.
Analysis by the Legislative Reference Bureau
This bill creates a standing legislative joint committee on public-private
partnership consisting of 3 members of each house of the legislature (including 2
members of the majority party and one member of the minority party in each house),
the secretary of administration or his or her designee and 4 other members appointed
by the governor for 2-year terms, 2 of whom must be appointed to represent specified
portions of the business community and 2 of whom must be appointed to represent
specified portions of the labor community. Any person who is adversely affected by
any action of a state governmental unit that is restricted by any provision of the bill
or by any inaction of a state governmental unit with respect to a matter that requires
action by that governmental unit under the bill may file a statement of objections
with the joint committee, which must provide a hearing to the person. The bill
permits the committee to recommend proposed legislation to the legislature or to
recommend proposed administrative rule changes to any state agency which the
committee considers appropriate to carry out its functions. Under the bill, either
house of the legislature may refer proposed legislation to the committee. The
committee is directed to examine the possibility of creating additional partnerships
between state governmental units and for-profit or nonprofit private enterprises for
the purpose of procurement of services from those enterprises when such action is
appropriate. The committee is further directed to periodically review the
performance of any private sector enterprise which contracts to provide a service to
a state governmental unit to ensure that the enterprise is successfully and
competently completing its contractual obligations. The committee is directed to
advise state agencies in the executive branch concerning issues relating to
public-private partnership. The cochairpersons of the committee may direct any
legislative service agency to provide staffing assistance to the committee.
Under the bill, whenever a state governmental unit engages in a commercial
activity, it must, upon request of a majority of the membership of the joint committee,
also prepare a competitive impact statement concerning that activity, using uniform
accounting principles, which describes the cost of the activity, the availability of the
goods or services resulting from the activity from any for-profit or nonprofit private
enterprise and the competitive impact upon for-profit and nonprofit private
enterprises if the commercial activity is contracted by the state to a single for-profit
or nonprofit private enterprise, and the effect that the creation of a public-private
partnership may have upon employes of a state governmental unit who currently
perform any service associated with the commercial activity. In addition, the bill
requires state governmental units to prepare a competitive impact statement for any
bill that is introduced in the legislature if the bill requires a fiscal estimate and it
proposes to authorize or require a state governmental unit to engage in a commercial
activity. The statement is also required for any such proposal that is contained
within an executive budget bill. The joint committee receives all competitive impact
statements and those concerning bills are printed in the same manner that fiscal
estimates are printed currently.
This bill prohibits all state governmental units, including institutions of higher
education, from engaging in any commercial activity for their own use, for the use
of any other state governmental unit or for public use if the goods or services provided
as a result of the activity can be procured from any for-profit or nonprofit private
enterprise "through ordinary business channels". Under the bill, "commercial
activity" means providing goods or performing services which can practically, in a
cost-effective manner and consistently with state collective bargaining agreements
and rules of the department of administration concerning conflicts of interests by
proposed contractors, be obtained from a for-profit or nonprofit private enterprise.
The prohibition does not apply if: 1) the activity is specifically authorized by law; 2)
the activity is not available from any for-profit or nonprofit private enterprise; 3) the
activity is inherently related to the state's defense; or 4) a state governmental unit
can provide the goods or services resulting from the commercial activity to other state
governmental units at a lower cost than if the goods or services were obtained from
a for-profit or nonprofit private enterprise, using uniform accounting standards to
make the cost comparison; 5) use of a for-profit or nonprofit private enterprise to
engage in the activity would cause an unbearable delay or disruption of an essential
program; 6) use of a for-profit or nonprofit private enterprise would impede the
ability of a state governmental unit to fully comply with any collective bargaining
agreement; or 7) the joint committee on public-private partnerships, taking into
account any applicable competitive impact statement, and the views of private
enterprises, state governmental units, and other affected persons, determines that
the interests of the public are best served by maintaining existing practices used by
a state governmental unit to obtain certain essential goods and services.
The bill provides that, unless otherwise required by law, if a state governmental
unit is authorized by law to engage in a commercial activity, it must impose and
collect a fee for that activity that includes all costs related to engaging in the activity.
Currently, there is no general restriction upon commercial activity by state
governmental units. However, state governmental units are generally not
authorized to engage in any activity unless a law so permits or requires.
Under current law, state governmental units are required to bargain
collectively in good faith with labor organizations representing their employes before
subcontracting any services performed by those employes to a nonstate source. The
bill does not alter that duty.
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:
AB745, s. 1
1Section
1. 13.59 of the statutes is created to read:
AB745,3,4
213.59 Joint committee on public-private partnership.
(1) Creation. 3There is created a joint standing committee on public-private partnership composed
4of the following members:
AB745,3,85
(a) Two majority party senators, one minority party senator, 2 majority party
6representatives to the assembly and one minority party representative to the
7assembly, selected as are the members of standing committees in their respective
8houses.
AB745,3,99
(b) The secretary of administration or his or her designee.
AB745,3,1110
(c) The following members appointed by the governor to serve for 2-year terms
11expiring on December 31 of each even-numbered year:
AB745,4,312
1. Two owners or officers of private enterprises as defined in s. 131.01 (6) or
13members or representatives of trade associations, one of whom shall be an owner or
1officer of a private enterprise having less than $1.5 million in gross annual sales in
2the most recent calendar or fiscal year or a member or representative of a trade
3association that is composed of such enterprises.
AB745,4,54
2. One member or representative of a labor organization that is certified to
5represent state employes under subch. V of ch. 111.
AB745,4,76
3. One member or representative of a labor organization that is recognized or
7certified to represent employes in the private sector.
AB745,4,9
8(2) Limitation on services. (a) No member appointed under sub. (1) (c) may
9serve for more than 5 consecutive full terms.
AB745,4,1110
(b) A member appointed under sub. (1) (c) who ceases to maintain the member's
11status required for membership under that paragraph vacates his or her office.
AB745,4,17
12(3) Officers. The officers of the joint committee shall be a senate chairperson
13and vice chairperson, an assembly chairperson and vice chairperson and a secretary.
14The senate chairperson and vice chairperson shall be selected as are chairpersons
15and vice chairpersons of senate committees. The assembly chairperson and vice
16chairperson shall be appointed by the speaker. The secretary shall be elected by the
17committee from among its nonlegislator members.
AB745,4,19
18(4) Complaints; hearings; recommendations. (a) In this subsection, "state
19governmental unit" has the meaning given in s. 131.01 (8).
AB745,4,2420
(b) Any person who is adversely affected by any action of a state governmental
21unit which is restricted by ch. 131, or by any inaction of a state governmental unit
22with respect to a matter that requires action by a state governmental unit under ch.
23131, may file a written statement of objections with the joint committee stating the
24reasons why the person is adversely affected. Upon receipt of such statement:
AB745,5,2
11. The committee shall immediately transmit a copy of the statement to the
2head of the state governmental unit which is referred to in the statement.
AB745,5,113
2. The head of the state governmental unit which is referred to in the statement
4shall respond to the joint committee in writing within 30 days after receipt of the
5statement and shall, if the action concerns a commercial activity and the state
6governmental unit has not previously submitted a competitive impact statement
7under s. 131.02 (4) with respect to that activity, submit a competitive impact
8statement together with its response. In the response, the head of the state
9governmental unit shall fully address the objections made in the statement and shall
10indicate whether remedial action should be taken to correct the situation that gave
11rise to the objections.
AB745,5,1812
3. The joint committee shall hold a public hearing on the statement where all
13parties are afforded an opportunity to present information unless remedial action
14agreed to be taken by the state governmental unit is acceptable to the person
15submitting the statement and to the joint committee. The hearing shall be held
16within 30 days after receipt of the response under subd. 2. unless the committee
17determines that additional time is needed for negotiations between the state
18governmental unit and the person submitting the statement.
AB745,5,2219
4. Within 30 days after any public hearing under subd. 3., the joint committee
20shall make a recommendation with respect to the matter addressed in the statement
21and provide a copy to the person submitting the statement and to the head of the
22state governmental unit.
AB745,5,24
23(5) Forms. The joint committee shall prescribe forms for the preparation of
24competitive impact statements as defined in s. 131.01 (2).
AB745,6,4
1(6) Legislation; rule changes. The joint committee may recommend proposed
2legislation to the legislature or may recommend changes in administrative rules to
3any agency, as defined in s. 227.01 (1), which the committee considers appropriate
4to carry out its functions.
AB745,6,6
5(7) Referral. Either house may refer proposed legislation to the joint
6committee.
AB745,6,16
7(8) Partnerships for contractual service procurements. The joint committee
8shall examine the possibility of creating additional partnerships between state
9governmental units and for-profit or nonprofit private enterprises for the purpose
10of procurement of services from such enterprises on behalf of the state when such
11action is appropriate. When examining the possibility of creating such partnerships,
12the committee shall consider competitive impact statements submitted to it by state
13governmental units. As a part of its examination, the committee shall also review
14the impact of any such proposed partnerships on collective bargaining agreements
15under subch. I or V of ch. 111 to ensure that state governmental units remain in
16compliance with the agreements.
AB745,6,21
17(9) Performance review. When a public-private partnership is created to
18provide a service, the joint committee shall periodically review the performance of
19the private sector enterprise in providing the service to ensure that the enterprise
20is successfully and competently completing the obligations agreed to in the contract
21between the state and the enterprise.
AB745,6,23
22(10) Advice. The joint committee shall advise state agencies in the executive
23branch concerning issues relating to public-private partnership.
AB745,7,2
24(11) Staff. The cochairpersons of the joint committee may direct any legislative
25service agency, as defined in s. 13.90 (1m), to provide staff assistance to the
1committee. The committee shall pay any employe who is assigned to provide
2assistance to the committee from the appropriation under s. 20.765 (2) (c).
AB745, s. 2
3Section
2. 20.005 (3) (schedule) of the statutes: at the appropriate place, insert
4the following amounts for the purposes indicated:
-
See PDF for table ![PDF](https://docs.legis.wisconsin.gov/assets/image/file_acrobat.gif)
AB745, s. 3
5Section
3. 20.765 (2) (c) of the statutes is created to read:
AB745,7,86
20.765
(2) (c)
Joint committee on public-private partnership. For the joint
7committee on public-private partnership, biennially, the amounts in the schedule to
8carry out the functions of the committee under s. 13.59.
AB745, s. 4
9Section
4. Chapter 131 of the statutes is created to read:
AB745,7,1110
Chapter 131
11
Unfair competition
AB745,7,12
12131.01 Definitions. In this chapter, unless the context otherwise requires:
AB745,7,19
13(1) "Commercial activity" means providing goods or performing services which
14can practically, in a cost-effective manner and consistently with rules of the
15department of administration promulgated under s. 16.705 (5) and applicable
16collective bargaining agreements under subch. I or V of ch. 111, be obtained from a
17for-profit or nonprofit private enterprise, including the manufacturing, processing,
18managing, sale, offering for sale, rental, leasing, delivering, dispensing, distributing
19or advertising of any goods or services.
AB745,8,2
1(2) "Competitive impact statement" means a cost analysis using uniform
2accounting principles to determine:
AB745,8,33
(a) The total cost of a commercial activity.
AB745,8,54
(b) The availability of the goods or services resulting from the commercial
5activity from any for-profit or nonprofit private enterprise.
AB745,8,96
(c) If a state governmental unit is authorized under existing law or under a bill
7to engage in the commercial activity, the competitive impact upon for-profit and
8nonprofit private enterprises if the commercial activity is contracted by the state to
9a single for-profit or nonprofit private enterprise.
AB745,8,1210
(d) The effect that the creation of a public-private partnership may have upon
11employes of a state governmental unit who currently perform any service associated
12with the commercial activity.
AB745,8,14
13(3) "Institution of higher education" means an institution of the University of
14Wisconsin System.
AB745,8,18
15(4) "Invited guest" means any individual who enters onto a campus of an
16institution of higher education for an educational, research, or public service activity
17and not primarily to purchase or receive goods and services not related to the
18educational, research, or public service activity.
AB745,8,20
19(5) "Organization" means every person other than an individual and every
20combination of 2 or more individuals.
AB745,8,24
21(6) "Private enterprise" means a private person engaging in the
22manufacturing, processing, sale, offering for sale, rental, leasing, delivery,
23dispensing, distributing, or advertising of goods or services on a for-profit or
24nonprofit basis.
AB745,9,4
1(7) "Public service" means an activity normally and generally associated with
2colleges and universities and other educational institutions in this state, a purpose
3or significant result of which is not to engage in competition with any for-profit or
4nonprofit private enterprise.
AB745,9,7
5(8) "State governmental unit" means this state, and every subunit or
6instrumentality of this state, including any institution or authority, regardless of
7whether moneys are appropriated to the unit.
AB745,9,9
8(9) "Student" means a person seeking a degree or a certificate from an
9institution of higher education.
AB745,9,13
10(10) "Uniform accounting standards" means a system of accounting for costs
11and expenses which applies accepted accounting practices and customs, including
12those limited to specific industries, to provide a fair and complete total of the direct
13and indirect costs and expenses of or reasonably allocable to any activity, including:
AB745,9,1414
(a) Direct and indirect labor costs and compensatory benefits.
AB745,9,1515
(b) Direct materials costs.
AB745,9,1816
(c) Other allocable indirect costs, including indirect manufacturing or
17operational costs such as costs of utilities, parts and supplies, insurance and
18depreciation on plant and equipment.
AB745,9,1919
(d) Selling, general and administrative expenses.
AB745,9,2220
(e) The imputed cost that represents the fair and complete total of the federal,
21state and local tax obligations, from which the activity is exempt in whole or in part,
22to the extent of such exemption.
AB745,9,25
23131.02 Competition by state governmental units with for-profit or
24nonprofit private enterprises restricted; exceptions. (1) Except as permitted
25in sub. (2) and s. 131.03, no state governmental unit may engage in any commercial
1activity for its own use, for the use of any other state governmental unit or for public
2use if the goods or services provided as a result of that activity can be procured from
3any for-profit or nonprofit private enterprise through ordinary business channels.
AB745,10,5
4(2) A state governmental unit may engage in a commercial activity if any of the
5following applies:
AB745,10,66
(a) The commercial activity is specifically authorized by law.
AB745,10,87
(b) The commercial activity is not available from any for-profit or nonprofit
8private enterprise.
AB745,10,99
(c) The commercial activity is inherently related to the state's defense.
AB745,10,1310
(d) The state governmental unit can provide the goods or services resulting
11from the commercial activity to other state governmental units at a lower total cost
12than if goods or services were obtained from a for-profit or nonprofit private
13enterprise, using uniform accounting standards to make the cost comparison.
AB745,10,1514
(e) Use of a for-profit or nonprofit private enterprise to engage in the activity
15would cause an unbearable delay or disruption of an essential program.
AB745,10,1816
(f) Use of a for-profit or nonprofit private enterprise would impede the ability
17of the state governmental unit to fully comply with any collective bargaining
18agreement under subch. I or V of ch. 111.
AB745,10,2319
(g) The joint committee on public-private partnership, taking into account any
20applicable competitive impact statement, and the views of private enterprises, state
21governmental units, and other affected persons, determines that the interests of the
22public are best served by maintaining existing practices used by the state
23governmental unit to obtain certain essential goods and services.
AB745,11,2
24(3) Unless otherwise required by law, if a state governmental unit is authorized
25by law to engage in a commercial activity, the state governmental unit shall impose
1and collect a fee for that activity which shall include all costs related to engaging in
2the activity by the state governmental unit.
AB745,11,8
3(4) (a) Except as provided in par. (b), if the joint committee on public-private
4partnership determines that a specific program administered by a state
5governmental unit constitutes a restricted commercial activity, the state
6governmental unit shall, upon request of a majority of the membership of the
7committee, submit to the committee a competitive impact statement concerning such
8activity.
AB745,11,139
(b) If a state governmental unit implements a new program under which it
10proposes to engage in a commercial activity, the state governmental unit and the
11department of administration shall jointly, upon request of a majority of the
12membership of the joint committee on public-private partnership, submit a
13competitive impact statement for the program under par. (a).