LRB-3122/4
ARG:cjs:nwn
2007 - 2008 LEGISLATURE
December 11, 2007 - Introduced by Representatives Newcomer, Vos, Zepnick,
Hahn, Petrowski, A. Ott, Cullen
and Albers, cosponsored by Senators
Sullivan, Darling, Lassa, Risser, Olsen, Wirch, Taylor, Schultz, Breske and
Roessler. Referred to Committee on Financial Institutions.
AB623,1,3 1An Act to amend 25.15 (2) (intro.) and 25.15 (2) (a); and to create 25.17 (2) (g)
2and 25.182 of the statutes; relating to: investments and operations of the State
3of Wisconsin Investment Board.
Analysis by the Legislative Reference Bureau
Under current law, the State of Wisconsin Investment Board (SWIB) has
authority to manage and invest Wisconsin Retirement System contributions, which
comprise the public employee trust fund. A core retirement investment trust (core
trust) and a variable retirement investment trust (variable trust) are maintained in
the public employee trust fund. SWIB may invest assets of the core trust and the
variable trust in specific classes of investments enumerated by statute (authorized
lists).
Under this bill, instead of its investment authority being limited to the
authorized lists, SWIB may manage the money and property of the core trust and the
variable trust in any manner that does not violate SWIB's standard of responsibility.
However, SWIB must continue to invest assets of the variable trust primarily in
equity securities. SWIB's standard of responsibility is: (1) to manage the money and
property with the care, skill, prudence, and diligence under the circumstances then
prevailing that a prudent person acting in a similar capacity, with the same
resources, and familiar with like matters, exercises in the conduct of an enterprise
of a like character with like aims; (2) to diversify investments in order to minimize
the risk of large losses, unless under the circumstances it is clearly prudent not to
do so, considering each trust's or fund's portfolio as a whole at any point in time; and

(3) to administer assets of each trust or fund solely for the purpose of ensuring the
fulfillment of the purpose of each trust or fund at a reasonable cost and not for any
other purpose.
The bill also makes minor modifications to SWIB's statutory standard of
responsibility with respect to terminology and interaction with other statutory
provisions. In so doing, the bill clarifies two exceptions when the standard of
responsibility described above does not apply to SWIB.
Under current law, the building commission may direct that moneys resulting
from certain public debt be deposited in funds or accounts created or designated by
a building commission resolution. Moneys deposited or held in these funds or
accounts may be invested in any obligations specified by a building commission
resolution. This bill explicitly authorizes SWIB to manage these funds and specifies
that SWIB must invest these funds as provided by the building commission
resolution and, in doing so, is relieved of its statutory standard of responsibility.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
AB623, s. 1 1Section 1. 25.15 (2) (intro.) of the statutes is amended to read:
AB623,2,42 25.15 (2) Standard of responsibility. (intro.) Except as provided in s. 25.17
3(2) (f) and (3) (c), the standard of responsibility applied to the board when it invests
4manages money or and property shall be all of the following:
AB623, s. 2 5Section 2. 25.15 (2) (a) of the statutes is amended to read:
AB623,2,106 25.15 (2) (a) To invest, sell, reinvest and collect income and rents manage the
7money and property
with the care, skill, prudence and diligence under the
8circumstances then prevailing that a prudent person acting in a similar capacity,
9with the same resources, and familiar with like matters exercises in the conduct of
10an enterprise of a like character with like aims.
AB623, s. 3 11Section 3. 25.17 (2) (g) of the statutes is created to read:
AB623,3,312 25.17 (2) (g) Notwithstanding any other provision of this chapter, invest any
13funds that the building commission directs the board to invest by resolution under
14s. 18.04 (6) (c) as specified by such resolution. In making investments under this

1paragraph, the board shall accept the terms and conditions specified in the
2resolution and is relieved of any obligations relevant to prudent investment of the
3fund, including those set forth under s. 25.15 (2).
AB623, s. 4 4Section 4. 25.182 of the statutes is created to read:
AB623,3,11 525.182 Management authority for certain funds. In addition to the
6management authority provided under any other provision of law, and
7notwithstanding any limitation on the board's management authority provided
8under any other provision of law, the board shall have authority to manage the
9money and property of the core retirement investment trust and, subject to s. 25.17
10(5), the variable retirement investment trust in any manner that does not violate the
11standard of responsibility specified in s. 25.15 (2).
AB623,3,1212 (End)
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