SB414: Bill Text

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:

SB414, s. 1 Section 1. 13.59 of the statutes is created to read:

SB414,3,4 13.59 Joint committee on public-private partnership. (1) Creation. There is created a joint standing committee on public-private partnership composed of the following members:

SB414,3,8 (a) Two majority party senators, one minority party senator, 2 majority party representatives to the assembly and one minority party representative to the assembly, selected as are the members of standing committees in their respective houses.

SB414,3,9 (b) The secretary of administration or his or her designee.

SB414,3,11 (c) The following members appointed by the governor to serve for 2-year terms expiring on December 31 of each even-numbered year:

SB414,4,3 1. Two owners or officers of private enterprises as defined in s. 131.01 (6) or members or representatives of trade associations, one of whom shall be an owner or officer of a private enterprise having less than $1.5 million in gross annual sales in the most recent calendar or fiscal year or a member or representative of a trade association that is composed of such enterprises.

SB414,4,5 2. One member or representative of a labor organization that is certified to represent state employes under subch. V of ch. 111.

SB414,4,7 3. One member or representative of a labor organization that is recognized or certified to represent employes in the private sector.

SB414,4,9 (2) Limitation on services. (a) No member appointed under sub. (1) (c) may serve for more than 5 consecutive full terms.

SB414,4,11 (b) A member appointed under sub. (1) (c) who ceases to maintain the member's status required for membership under that paragraph vacates his or her office.

SB414,4,17 (3) Officers. The officers of the joint committee shall be a senate chairperson and vice chairperson, an assembly chairperson and vice chairperson and a secretary. The senate chairperson and vice chairperson shall be selected as are chairpersons and vice chairpersons of senate committees. The assembly chairperson and vice chairperson shall be appointed by the speaker. The secretary shall be elected by the committee from among its nonlegislator members.

SB414,4,19 (4) Complaints; hearings; recommendations. (a) In this subsection, "state governmental unit" has the meaning given in s. 131.01 (8).

SB414,4,24 (b) Any person who is adversely affected by any action of a state governmental unit which is restricted by ch. 131, or by any inaction of a state governmental unit with respect to a matter that requires action by a state governmental unit under ch. 131, may file a written statement of objections with the joint committee stating the reasons why the person is adversely affected. Upon receipt of such statement:

SB414,5,2 1. The committee shall immediately transmit a copy of the statement to the head of the state governmental unit which is referred to in the statement.

SB414,5,11 2. The head of the state governmental unit which is referred to in the statement shall respond to the joint committee in writing within 30 days after receipt of the statement and shall, if the action concerns a commercial activity and the state governmental unit has not previously submitted a competitive impact statement under s. 131.02 (4) with respect to that activity, submit a competitive impact statement together with its response. In the response, the head of the state governmental unit shall fully address the objections made in the statement and shall indicate whether remedial action should be taken to correct the situation that gave rise to the objections.

SB414,5,18 3. The joint committee shall hold a public hearing on the statement where all parties are afforded an opportunity to present information unless remedial action agreed to be taken by the state governmental unit is acceptable to the person submitting the statement and to the joint committee. The hearing shall be held within 30 days after receipt of the response under subd. 2. unless the committee determines that additional time is needed for negotiations between the state governmental unit and the person submitting the statement.

SB414,5,22 4. Within 30 days after any public hearing under subd. 3., the joint committee shall make a recommendation with respect to the matter addressed in the statement and provide a copy to the person submitting the statement and to the head of the state governmental unit.

SB414,5,24 (5) Forms. The joint committee shall prescribe forms for the preparation of competitive impact statements as defined in s. 131.01 (2).

SB414,6,4 (6) Legislation; rule changes. The joint committee may recommend proposed legislation to the legislature or may recommend changes in administrative rules to any agency, as defined in s. 227.01 (1), which the committee considers appropriate to carry out its functions.

SB414,6,6 (7) Referral. Either house may refer proposed legislation to the joint committee.

SB414,6,16 (8) Partnerships for contractual service procurements. The joint committee shall 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 such enterprises on behalf of the state when such action is appropriate. When examining the possibility of creating such partnerships, the committee shall consider competitive impact statements submitted to it by state governmental units. As a part of its examination, the committee shall also review the impact of any such proposed partnerships on collective bargaining agreements under subch. I or V of ch. 111 to ensure that state governmental units remain in compliance with the agreements.

SB414,6,21 (9) Performance review. When a public-private partnership is created to provide a service, the joint committee shall periodically review the performance of the private sector enterprise in providing the service to ensure that the enterprise is successfully and competently completing the obligations agreed to in the contract between the state and the enterprise.

SB414,6,23 (10) Advice. The joint committee shall advise state agencies in the executive branch concerning issues relating to public-private partnership.

SB414,7,2 (11) Staff. The cochairpersons of the joint committee may direct any legislative service agency, as defined in s. 13.90 (1m), to provide staff assistance to the committee. The committee shall pay any employe who is assigned to provide assistance to the committee from the appropriation under s. 20.765 (2) (c).

SB414, s. 2 Section 2. 20.005 (3) (schedule) of the statutes: at the appropriate place, insert the following amounts for the purposes indicated: - See PDF for table

SB414, s. 3 Section 3. 20.765 (2) (c) of the statutes is created to read:

SB414,7,8 20.765 (2) (c) Joint committee on public-private partnership. For the joint committee on public-private partnership, biennially, the amounts in the schedule to carry out the functions of the committee under s. 13.59.

SB414, s. 4 Section 4. Chapter 131 of the statutes is created to read:

SB414,7,11 Chapter 131 Unfair competition

SB414,7,12 131.01 Definitions. In this chapter, unless the context otherwise requires:

SB414,7,19 (1) "Commercial activity" means providing goods or performing services which can practically, in a cost-effective manner and consistently with rules of the department of administration promulgated under s. 16.705 (5) and applicable collective bargaining agreements under subch. I or V of ch. 111, be obtained from a for-profit or nonprofit private enterprise, including the manufacturing, processing, managing, sale, offering for sale, rental, leasing, delivering, dispensing, distributing or advertising of any goods or services.

SB414,8,2 (2) "Competitive impact statement" means a cost analysis using uniform accounting principles to determine:

SB414,8,3 (a) The total cost of a commercial activity.

SB414,8,5 (b) The availability of the goods or services resulting from the commercial activity from any for-profit or nonprofit private enterprise.

SB414,8,9 (c) If a state governmental unit is authorized under existing law or under a bill to engage in the commercial activity, 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.

SB414,8,12 (d) 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.

SB414,8,14 (3) "Institution of higher education" means an institution of the University of Wisconsin System.

SB414,8,18 (4) "Invited guest" means any individual who enters onto a campus of an institution of higher education for an educational, research, or public service activity and not primarily to purchase or receive goods and services not related to the educational, research, or public service activity.

SB414,8,20 (5) "Organization" means every person other than an individual and every combination of 2 or more individuals.

SB414,8,24 (6) "Private enterprise" means a private person engaging in the manufacturing, processing, sale, offering for sale, rental, leasing, delivery, dispensing, distributing, or advertising of goods or services on a for-profit or nonprofit basis.

SB414,9,4 (7) "Public service" means an activity normally and generally associated with colleges and universities and other educational institutions in this state, a purpose or significant result of which is not to engage in competition with any for-profit or nonprofit private enterprise.

SB414,9,7 (8) "State governmental unit" means this state, and every subunit or instrumentality of this state, including any institution or authority, regardless of whether moneys are appropriated to the unit.

SB414,9,9 (9) "Student" means a person seeking a degree or a certificate from an institution of higher education.

SB414,9,13 (10) "Uniform accounting standards" means a system of accounting for costs and expenses which applies accepted accounting practices and customs, including those limited to specific industries, to provide a fair and complete total of the direct and indirect costs and expenses of or reasonably allocable to any activity, including:

SB414,9,14 (a) Direct and indirect labor costs and compensatory benefits.

SB414,9,15 (b) Direct materials costs.

SB414,9,18 (c) Other allocable indirect costs, including indirect manufacturing or operational costs such as costs of utilities, parts and supplies, insurance and depreciation on plant and equipment.

SB414,9,19 (d) Selling, general and administrative expenses.

SB414,9,22 (e) The imputed cost that represents the fair and complete total of the federal, state and local tax obligations, from which the activity is exempt in whole or in part, to the extent of such exemption.

SB414,9,25 131.02 Competition by state governmental units with for-profit or nonprofit private enterprises restricted; exceptions. (1) Except as permitted in sub. (2) and s. 131.03, no state governmental unit may engage in any commercial activity for its 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 that activity can be procured from any for-profit or nonprofit private enterprise through ordinary business channels.

SB414,10,5 (2) A state governmental unit may engage in a commercial activity if any of the following applies:

SB414,10,6 (a) The commercial activity is specifically authorized by law.

SB414,10,8 (b) The commercial activity is not available from any for-profit or nonprofit private enterprise.

SB414,10,9 (c) The commercial activity is inherently related to the state's defense.

SB414,10,13 (d) The state governmental unit can provide the goods or services resulting from the commercial activity to other state governmental units at a lower total cost than if goods or services were obtained from a for-profit or nonprofit private enterprise, using uniform accounting standards to make the cost comparison.

SB414,10,15 (e) 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.

SB414,10,18 (f) Use of a for-profit or nonprofit private enterprise would impede the ability of the state governmental unit to fully comply with any collective bargaining agreement under subch. I or V of ch. 111.

SB414,10,23 (g) The joint committee on public-private partnership, 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 the state governmental unit to obtain certain essential goods and services.

SB414,11,2 (3) Unless otherwise required by law, if a state governmental unit is authorized by law to engage in a commercial activity, the state governmental unit shall impose and collect a fee for that activity which shall include all costs related to engaging in the activity by the state governmental unit.

SB414,11,8 (4) (a) Except as provided in par. (b), if the joint committee on public-private partnership determines that a specific program administered by a state governmental unit constitutes a restricted commercial activity, the state governmental unit shall, upon request of a majority of the membership of the committee, submit to the committee a competitive impact statement concerning such activity.

SB414,11,13 (b) If a state governmental unit implements a new program under which it proposes to engage in a commercial activity, the state governmental unit and the department of administration shall jointly, upon request of a majority of the membership of the joint committee on public-private partnership, submit a competitive impact statement for the program under par. (a).

SB414,11,24 (5) Whenever any bill for which a fiscal estimate is required under s. 13.093 (2) (a) or any executive budget bill under s. 16.47 (1) is introduced, the legislative reference bureau shall promptly send a copy of the bill to the department of administration. The department shall then determine whether the bill proposes to authorize or require any state governmental unit to engage in a commercial activity. If the bill so proposes, the department shall prepare or direct one or more appropriate state governmental units to prepare, and submit to the joint committee on public-private partnership, the competitive impact statement concerning such activity. The statement shall be printed with the fiscal estimate, if any, or in the case of the executive budget bill, shall be printed as an appendix to the bill in the same manner as amendments to the bill are printed.

SB414,12,3 131.03 Competition by institutions of higher education with for-profit or nonprofit private enterprises restricted; exceptions. (1) No institution of higher education may, unless specifically authorized by law:

SB414,12,6 (a) Engage in any commercial activity for students, faculty, staff, invited guests or the general public that can be procured from any for-profit or nonprofit private enterprise through ordinary business channels, unless the commercial activity:

SB414,12,7 1. Is authorized under s. 131.02 (2);

SB414,12,9 2. Requires the participation of students as part of an educational program in order to obtain a degree or certificate;

SB414,12,11 3. Is a recognized and integral part of a teaching, educational or research program leading to a degree or certificate;

SB414,12,13 4. Is considered by the joint committee on public-private partnership to be essential to providing affordable education to the students of the institution; or

SB414,12,14 5. Consists of on-campus activities, including any of the following:

SB414,12,15 a. Food service.

SB414,12,16 b. Student housing.

SB414,12,17 c. Sponsoring cultural and athletic events.

SB414,12,18 d. Providing facilities for recreation to students, faculty and staff.

SB414,12,20 e. Sales of course books and course-related supplies, excluding electronic equipment or devices and peripherals and software.

SB414,12,22 f. Sale of personal items bearing the institution's insignia that are incidental to the sale of textbooks and other items permitted in this subdivision.

SB414,12,24 (b) Engage in any commercial activity for or through another institution of higher education or state governmental unit.

SB414,13,4 (c) Provide for the disposal by sale of goods or services that are part of research or instruction conducted by students and faculty of the institution of higher education and leading to a student degree or certificate unless all of the following apply:

SB414,13,5 1. The sale is an integral part of the research or instruction.

SB414,13,6 2. There is no other practical way of disposing of the goods.

SB414,13,8 3. The goods or services are sold at their market value utilizing uniform accounting standards.

SB414,13,11 (2) In determining whether a commercial activity is directly related to a teaching, educational or research program leading to a degree or certificate, an institution of higher education shall consider the following: