AB228: Bill Text

LRB-2442/1

MPG&CMH:sac:jm

2013 - 2014 LEGISLATURE

2013 Assembly BILL 228

June 4, 2013 - Introduced by Representatives Kerkman, Tittl, A. Ott, Petryk, Ripp, Mursau, Bernier, Weininger and Ballweg, cosponsored by Senators Cowles, Vinehout, Carpenter, Harsdorf, Petrowski, T. Cullen, Schultz, Kedzie and Miller. Referred to Joint Legislative Audit Committee.

AB228,1,11 An Act to renumber and amend 13.94 (1) (dr); to amend 1.14 (1) (b), 13.92 (1) (b) 1. b., 13.94 (1s) (c) 5., 16.004 (17), 16.52 (6) (a), 16.53 (13) (a), 16.545 (9), 16.70 (1e), 16.765 (1), 16.765 (2), 16.765 (5), 16.765 (6), 16.765 (7) (intro.), 16.765 (7) (d), 16.765 (8), 16.84 (14), 16.847 (2) (a), 16.855 (16) (b) 1., 16.891 (1) (a), 16.967 (1) (a), 16.97 (1m), 19.42 (10) (sm), 19.42 (13) (om), 20.505 (5) (ke), 20.866 (2) (ws), 20.867 (3) (kd), 238.02 (1), 238.03 (2) (c), 238.03 (2) (e) and 250.20 (1) (k); and to create 13.94 (1) (dr) 1., 13.94 (1) (dr) 2., 238.02 (1g), 238.02 (1r), 238.045, 238.07 (2) (am), 238.07 (2) (dm), 238.07 (2) (fm) and 238.07 (2) (gm) of the statutes; relating to: board of directors, powers and duties, including reporting requirements, and financial audits of the Wisconsin Economic Development Corporation.

Analysis by the Legislative Reference Bureau

This bill makes a number of changes to the laws governing the Wisconsin Economic Development Corporation (WEDC), including the following:

1. WEDC administers, develops, and implements economic development programs that have the purpose of encouraging the establishment and growth of businesses in this state. Each year, WEDC submits a report by October l to the Joint Legislative Audit Committee and each house of the legislature that provides information about the progress of WEDC's economic development programs during the previous fiscal year. That report must contain a description of each program, a comparison of expected and actual program outcomes, the number of grants or loans made under each program, the amount of each grant or loan, the recipient of each grant or loan, the sum total of all grants and loans awarded by WEDC under an economic development program, and any recommended changes to each program.

The bill requires WEDC to include all of the following additional information in its annual report:

a. Quantifiable performance measures directly related to the purpose of each economic development program, including an accounting of the location and industry classification, by municipality, of each job created or retained in the state in the previous fiscal year as a result of the program.

b. The amount of tax benefits that WEDC allocated, or verified to the Department of Revenue (DOR), under each program in the previous fiscal year.

c. An identification of each recipient of a tax benefit that WEDC allocated, or verified to DOR, during the previous fiscal year.

d. The total number of recipients of a grant, loan, or tax benefit that satisfied the certain reporting obligations to WEDC and a list identifying each recipient of a grant, loan, or tax benefit that failed to satisfy those obligations.

2. Currently, the board of directors of WEDC includes six members who are nominated by the governor and appointed with the advice and consent of the senate and who serve at the pleasure of the governor; three members appointed by the speaker of the assembly, consisting of one majority and one minority party representative to the assembly and one person employed in the private sector; and three members appointed by the senate majority leader, consisting of one majority and one minority party senator and one person employed in the private sector.

Under the bill, the members of the board nominated by the governor no longer serve at the pleasure of the governor but serve six-year, staggered terms. In addition, the members of the board employed in the private sector and appointed by the speaker of the assembly and senate majority leader no longer serve at the pleasure of the speaker or majority leader but serve six-year terms.

3. Under current law, the governor serves as the chairperson of WEDC's board. Under the bill, the board must also elect one of its public members to serve as the board's lead director for a two-year term. The lead director must have significant corporate management experience. Under the bill, the lead director is to chair meetings of the board in the chairperson's absence, chair the governance committee, described below, serve as a liaison between the chairperson and the other board members, work with the chairperson to ensure adequate committee structure for any committees the board establishes, and carry out other duties as assigned by the board or the governance committee.

4. The bill further requires WEDC's board to establish a governance committee. In addition to the lead director, who serves as chair of the governance committee, the governance committee must include two of the board's public members. The bill directs the governance committee to develop principles for the board's oversight of WEDC, oversee the board's operations, recommend membership for committees the board establishes, assist the chairperson to identify qualified candidates to fill vacancies on the board, and facilitate communication between the members of the board and the chief executive officer of WEDC.

5. Under current law, the Legislative Audit Bureau is required to conduct a financial audit of WEDC every two years and a program evaluation audit of the economic development programs administered by WEDC every two years. The bill requires that the financial audit be conducted annually until June 30, 2019, after which point, the financial audit reverts to being conducted every two years.

6. In addition to other powers specifically enumerated in the statutes, current law grants WEDC all the powers necessary or convenient to carry out its purposes. The bill limits WEDC's power to establish a nonprofit organization by requiring WEDC to submit any plan to establish a nonprofit organization to the Joint Committee on Finance under passive review.

7. Under current law, with certain exceptions, the Department of Administration (DOA) must purchase, or may delegate the authority to purchase, all necessary materials, supplies, equipment, all other permanent personal property and miscellaneous capital, and contractual services for all agencies. DOA, or its delegated agents, may contract for services that can be performed more economically or efficiently by contract. With exceptions, DOA must award orders and contracts to the lowest responsible bidders or most competitive proposal. If the estimated cost of an expenditure exceeds $50,000, DOA must solicit bids or competitive sealed proposals. This bill adds WEDC to the definition of agency for purposes of state procurement so that WEDC is subject to the same laws regulating agency purchasing.

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:

AB228,1 Section 1. 1.14 (1) (b) of the statutes is amended to read:

AB228,3,3 1.14 (1) (b) "State agency" has the meaning given for "agency" under s. 16.70 (1e) 16.97 (1m).

AB228,2 Section 2. 13.92 (1) (b) 1. b. of the statutes is amended to read:

AB228,3,6 13.92 (1) (b) 1. b. Any agency, as defined in s. 16.70 (1e) 16.97 (1m), created under ch. 13, 14, 15, or 758.

AB228,3 Section 3. 13.94 (1) (dr) of the statutes is renumbered 13.94 (1) (dr) 3. and amended to read:

AB228,4,6 13.94 (1) (dr) 3. Biennially, beginning in 2013, conduct a financial audit of the Wisconsin Economic Development Corporation and a program evaluation audit of the economic development programs administered by the Wisconsin Economic Development Corporation under ch. 238.

AB228,4,8 4. The legislative audit bureau shall file a copy of each audit report under this paragraph with the distributees specified in par. (b).

AB228,4 Section 4. 13.94 (1) (dr) 1. of the statutes is created to read:

AB228,4,11 13.94 (1) (dr) 1. Annually, conduct a financial audit of the Wisconsin Economic Development Corporation. This subdivision does not apply after June 30, 2019.

AB228,5 Section 5. 13.94 (1) (dr) 2. of the statutes is created to read:

AB228,4,14 13.94 (1) (dr) 2. Biennially, conduct a financial audit of the Wisconsin Economic Development Corporation. This subdivision applies after June 30, 2019.

AB228,6 Section 6. 13.94 (1s) (c) 5. of the statutes is amended to read:

AB228,4,17 13.94 (1s) (c) 5. The Wisconsin Economic Development Corporation for the cost of the audit audits required to be performed under sub. (1) (dr).

AB228,7 Section 7. 16.004 (17) of the statutes is amended to read:

AB228,4,22 16.004 (17) Business intelligence and data warehousing system. The department may implement an enterprise-wide reporting, data warehousing, and data analysis system applicable to every agency, as defined in s. 16.70 (1e) 16.97 (1m), other than the legislative and judicial branches of state government.

AB228,8 Section 8. 16.52 (6) (a) of the statutes is amended to read:

AB228,5,8 16.52 (6) (a) Except as authorized in s. 16.74, all purchase orders, contracts, or printing orders for any agency, as defined in s. 16.70 (1e) 16.97 (1m), shall, before any liability is incurred thereon, be submitted to the secretary for his or her approval as to legality of purpose and sufficiency of appropriated and allotted funds therefor. In all cases the date of the contract or order governs the fiscal year to which the contract or order is chargeable, unless the secretary determines that the purpose of the contract or order is to prevent lapsing of appropriations or to otherwise circumvent budgetary intent. Upon such approval, the secretary shall immediately encumber all contracts or orders, and indicate the fiscal year to which they are chargeable.

AB228,9 Section 9. 16.53 (13) (a) of the statutes is amended to read:

AB228,5,11 16.53 (13) (a) In this subsection, "agency" has the meaning given in s. 16.70 (1e) 16.97 (1m).

AB228,10 Section 10. 16.545 (9) of the statutes is amended to read:

AB228,5,19 16.545 (9) To initiate contacts with the federal government for the purpose of facilitating participation by agencies, as defined in s. 16.70 (1e) 16.97 (1m), in federal aid programs, to assist those agencies in applying for such aid, and to facilitate influencing the federal government to make policy changes that will be beneficial to this state. The department may assess an agency to which it provides services under this subsection a fee for the expenses incurred by the department in providing those services.

AB228,11 Section 11. 16.70 (1e) of the statutes is amended to read:

AB228,5,25 16.70 (1e) "Agency" means an office, department, agency, institution of higher education, association, society or other body in state government created or authorized to be created by the constitution or any law, which is entitled to expend moneys appropriated by law, including the Wisconsin Economic Development Corporation, the legislature, and the courts, but not including an authority.

AB228,12 Section 12. 16.765 (1) of the statutes is amended to read:

AB228,6,12 16.765 (1) Contracting agencies, the University of Wisconsin Hospitals and Clinics Authority, the Fox River Navigational System Authority, the Wisconsin Aerospace Authority, the Health Insurance Risk-Sharing Plan Authority, the Lower Fox River Remediation Authority, the Wisconsin Economic Development Corporation, and the Bradley Center Sports and Entertainment Corporation shall include in all contracts executed by them a provision obligating the contractor not to discriminate against any employee or applicant for employment because of age, race, religion, color, handicap, sex, physical condition, developmental disability as defined in s. 51.01 (5), sexual orientation as defined in s. 111.32 (13m), or national origin and, except with respect to sexual orientation, obligating the contractor to take affirmative action to ensure equal employment opportunities.

AB228,13 Section 13. 16.765 (2) of the statutes is amended to read:

AB228,7,6 16.765 (2) Contracting agencies, the University of Wisconsin Hospitals and Clinics Authority, the Fox River Navigational System Authority, the Wisconsin Aerospace Authority, the Health Insurance Risk-Sharing Plan Authority, the Lower Fox River Remediation Authority, the Wisconsin Economic Development Corporation, and the Bradley Center Sports and Entertainment Corporation shall include the following provision in every contract executed by them: "In connection with the performance of work under this contract, the contractor agrees not to discriminate against any employee or applicant for employment because of age, race, religion, color, handicap, sex, physical condition, developmental disability as defined in s. 51.01 (5), sexual orientation or national origin. This provision shall include, but not be limited to, the following: employment, upgrading, demotion or transfer; recruitment or recruitment advertising; layoff or termination; rates of pay or other forms of compensation; and selection for training, including apprenticeship. Except with respect to sexual orientation, the contractor further agrees to take affirmative action to ensure equal employment opportunities. The contractor agrees to post in conspicuous places, available for employees and applicants for employment, notices to be provided by the contracting officer setting forth the provisions of the nondiscrimination clause".

AB228,14 Section 14. 16.765 (5) of the statutes is amended to read:

AB228,7,24 16.765 (5) The head of each contracting agency and the boards of directors of the University of Wisconsin Hospitals and Clinics Authority, the Fox River Navigational System Authority, the Wisconsin Aerospace Authority, the Health Insurance Risk-Sharing Plan Authority, the Lower Fox River Remediation Authority, the Wisconsin Economic Development Corporation, and the Bradley Center Sports and Entertainment Corporation shall be primarily responsible for obtaining compliance by any contractor with the nondiscrimination and affirmative action provisions prescribed by this section, according to procedures recommended by the department. The department shall make recommendations to the contracting agencies and the boards of directors of the University of Wisconsin Hospitals and Clinics Authority, the Fox River Navigational System Authority, the Wisconsin Aerospace Authority, the Health Insurance Risk-Sharing Plan Authority, the Lower Fox River Remediation Authority, the Wisconsin Economic Development Corporation, and the Bradley Center Sports and Entertainment Corporation for improving and making more effective the nondiscrimination and affirmative action provisions of contracts. The department shall promulgate such rules as may be necessary for the performance of its functions under this section.

AB228,15 Section 15. 16.765 (6) of the statutes is amended to read:

AB228,8,9 16.765 (6) The department may receive complaints of alleged violations of the nondiscrimination provisions of such contracts. The department shall investigate and determine whether a violation of this section has occurred. The department may delegate this authority to the contracting agency, the University of Wisconsin Hospitals and Clinics Authority, the Fox River Navigational System Authority, the Wisconsin Aerospace Authority, the Health Insurance Risk-Sharing Plan Authority, the Lower Fox River Remediation Authority, the Wisconsin Economic Development Corporation, or the Bradley Center Sports and Entertainment Corporation for processing in accordance with the department's procedures.

AB228,16 Section 16. 16.765 (7) (intro.) of the statutes is amended to read:

AB228,8,21 16.765 (7) (intro.) When a violation of this section has been determined by the department, the contracting agency, the University of Wisconsin Hospitals and Clinics Authority, the Fox River Navigational System Authority, the Wisconsin Aerospace Authority, the Health Insurance Risk-Sharing Plan Authority, the Lower Fox River Remediation Authority, the Wisconsin Economic Development Corporation, or the Bradley Center Sports and Entertainment Corporation, the contracting agency, the University of Wisconsin Hospitals and Clinics Authority, the Fox River Navigational System Authority, the Wisconsin Aerospace Authority, the Health Insurance Risk-Sharing Plan Authority, the Lower Fox River Remediation Authority, the Wisconsin Economic Development Corporation, or the Bradley Center Sports and Entertainment Corporation shall:

AB228,17 Section 17. 16.765 (7) (d) of the statutes is amended to read:

AB228,9,4 16.765 (7) (d) Direct the violating party to take immediate steps to prevent further violations of this section and to report its corrective action to the contracting agency, the University of Wisconsin Hospitals and Clinics Authority, the Fox River Navigational System Authority, the Wisconsin Aerospace Authority, the Health Insurance Risk-Sharing Plan Authority, the Lower Fox River Remediation Authority, the Wisconsin Economic Development Corporation, or the Bradley Center Sports and Entertainment Corporation.

AB228,18 Section 18. 16.765 (8) of the statutes is amended to read:

AB228,9,23 16.765 (8) If further violations of this section are committed during the term of the contract, the contracting agency, the Fox River Navigational System Authority, the Wisconsin Aerospace Authority, the Health Insurance Risk-Sharing Plan Authority, the Lower Fox River Remediation Authority, the Wisconsin Economic Development Corporation, or the Bradley Center Sports and Entertainment Corporation may permit the violating party to complete the contract, after complying with this section, but thereafter the contracting agency, the Fox River Navigational System Authority, the Wisconsin Aerospace Authority, the Health Insurance Risk-Sharing Plan Authority, the Lower Fox River Remediation Authority, the Wisconsin Economic Development Corporation, or the Bradley Center Sports and Entertainment Corporation shall request the department to place the name of the party on the ineligible list for state contracts, or the contracting agency, the Fox River Navigational System Authority, the Wisconsin Aerospace Authority, the Health Insurance Risk-Sharing Plan Authority, the Lower Fox River Remediation Authority, the Wisconsin Economic Development Corporation, or the Bradley Center Sports and Entertainment Corporation may terminate the contract without liability for the uncompleted portion or any materials or services purchased or paid for by the contracting party for use in completing the contract.

AB228,19 Section 19. 16.84 (14) of the statutes is amended to read:

AB228,10,4 16.84 (14) Provide interagency mail delivery service for agencies, as defined in s. 16.70 (1e) 16.97 (1m). The department may charge agencies for this service. Any moneys collected shall be credited to the appropriation account under s. 20.505 (1) (kb).

AB228,20 Section 20. 16.847 (2) (a) of the statutes is amended to read: