AB745: Bill Text

LRB-4690/1

JTK:jlg&kaf:ijs

1997 - 1998 LEGISLATURE

1997 Assembly BILL 745

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 An Act to create 13.59, 20.765 (2) (c) and chapter 131 of the statutes; relating to: restricting state governmental units from engaging in certain commercial activities, state governmental procurement requirements and creating a legislative 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 Section 1. 13.59 of the statutes is created to read:

AB745,3,4 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:

AB745,3,8 (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.

AB745,3,9 (b) The secretary of administration or his or her designee.

AB745,3,11 (c) The following members appointed by the governor to serve for 2-year terms expiring on December 31 of each even-numbered year:

AB745,4,3 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.

AB745,4,5 2. One member or representative of a labor organization that is certified to represent state employes under subch. V of ch. 111.

AB745,4,7 3. One member or representative of a labor organization that is recognized or certified to represent employes in the private sector.

AB745,4,9 (2) Limitation on services. (a) No member appointed under sub. (1) (c) may serve for more than 5 consecutive full terms.

AB745,4,11 (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.

AB745,4,17 (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.

AB745,4,19 (4) Complaints; hearings; recommendations. (a) In this subsection, "state governmental unit" has the meaning given in s. 131.01 (8).

AB745,4,24 (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:

AB745,5,2 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.

AB745,5,11 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.

AB745,5,18 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.

AB745,5,22 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.

AB745,5,24 (5) Forms. The joint committee shall prescribe forms for the preparation of competitive impact statements as defined in s. 131.01 (2).

AB745,6,4 (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.

AB745,6,6 (7) Referral. Either house may refer proposed legislation to the joint committee.

AB745,6,16 (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.

AB745,6,21 (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.

AB745,6,23 (10) Advice. The joint committee shall advise state agencies in the executive branch concerning issues relating to public-private partnership.

AB745,7,2 (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).

AB745, 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

AB745, s. 3 Section 3. 20.765 (2) (c) of the statutes is created to read:

AB745,7,8 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.

AB745, s. 4 Section 4. Chapter 131 of the statutes is created to read:

AB745,7,11 Chapter 131 Unfair competition

AB745,7,12 131.01 Definitions. In this chapter, unless the context otherwise requires:

AB745,7,19 (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.

AB745,8,2 (2) "Competitive impact statement" means a cost analysis using uniform accounting principles to determine:

AB745,8,3 (a) The total cost of a commercial activity.

AB745,8,5 (b) The availability of the goods or services resulting from the commercial activity from any for-profit or nonprofit private enterprise.