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2023 - 2024 LEGISLATURE
2023 ASSEMBLY BILL 1090
February 16, 2024 - Introduced by Representatives DALLMAN, SCHUTT, BODDEN,
BRANDTJEN, DITTRICH, DUCHOW, GUNDRUM, MAXEY, MOSES, MURPHY, NEDWESKI,
O'CONNOR, PENTERMAN, RETTINGER, SCHMIDT and STEFFEN, cosponsored by
Senators TESTIN, WANGGAARD and NASS. Referred to Committee on State
Affairs.
***AUTHORS SUBJECT TO CHANGE***
AN ACT to create 20.933 of the statutes; relating to: prohibiting state
contracting with certain business entities and providing a penalty.
Analysis by the Legislative Reference Bureau
This bill prohibits any state agency or other body in Wisconsin state
government, including the legislature and the courts (state agency), from
contracting with certain prohibited business entities. Specifically, the bill prohibits
state agencies from contracting with any organization or enterprise operated for
profit that is organized under the laws or rules of a country of concern or that is
directly or indirectly owned or controlled by the government of a country of concern
or by a business entity organized under the laws or rules of a country of concern. The
bill defines “country of concern” to mean each of the following:
1. The People's Republic of China.
2. Russia.
3. Cuba.
4. Iran.
5. North Korea.
6. Venezuela.
Additionally, the bill provides that no contract between any person and a state
agency shall be valid, binding, and enforceable unless the person provides prior
written certification to the state agency that the person is not a prohibited business
entity and that the person has made every effort to ensure that the goods or services
provided under the contract did not originate with a prohibited business entity.
Moreover, if any person contracting with a state agency becomes a prohibited
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business entity, the person is for that reason considered to be in breach of contract,
and the person must provide written notification of the breach to the state agency.
The state agency may then terminate the contract and may pursue all appropriate
legal remedies for the breach.
The bill charges the Department of Administration with receiving and
investigating complaints of alleged violations of the bill's contracting requirements.
If DOA determines that a person has violated the bill's requirements, all of the
following apply:
1. The person is liable for a forfeiture equal to the greater of $250,000, an
amount equal to twice the amount of the value of the relevant contract, o an amount
equal to the total amount of all pecuniary losses suffered by any state as a result of
the violation.
2. The person is ineligible to contract with a state agency for five years following
the date of the DOA's determination of a violation.
Finally, the bill authorizes the Attorney General to enforce the bill's
requirements in court.
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:
SECTION 1. 20.933 of the statutes is created to read:
20.933 Prohibiting state contracting with certain business entities. (1)
DEFINITIONS. In this section:
(a) “Business entity” means any organization or enterprise engaged in
commerce, whether or not operated for profit, including all wholly owned
subsidiaries, majority-owned subsidiaries, parent companies, or affiliates.
(b) “Contract" means to become a party to any agreement for the acquisition
by purchase, lease, or barter of property, goods, or services for the direct benefit or
use of any of the parties.
(c) “Country of concern” means the People's Republic of China, including the
Hong Kong and Macau Special Administrative Regions, Russia, Cuba, Iran, North
Korea, or Venezuela.
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(d) “Department” means the department of administration.
(e) “Prohibited business entity” means a business entity that is organized
under the laws or rules of a country of concern or that is directly or indirectly owned
or controlled by the government of a country of concern or by a business entity
organized under the laws or rules of a country of concern.
(f) “State agency" means an association, authority, board, department,
commission, independent agency, institution, office, society, system, or other body in
state government created or authorized to be created by the constitution or any law,
including the legislature and the courts.
(2) PROHIBITED CONTRACTS. (a) No state agency may contract with a prohibited
business entity.
(b) No contract between any person and a state agency shall be valid, binding,
and enforceable unless the person provides prior written certification to the state
agency that the person is not a prohibited business entity and that the person has
made every effort to ensure that the goods or services being contracted for do not
originate from a prohibited business entity. A state agency may rely on such
certification without further investigation.
(c) If any person contracting with a state agency becomes a prohibited business
entity, the person shall be considered for that reason to have breached the contract,
and the person shall without delay provide written notification of the breach to the
state agency. The state agency may terminate the contract and may pursue all
appropriate legal remedies for the breach.
(3) EXEMPTION. Subsection (2) does not prohibit a contract to which all of the
following apply:
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(a) The goods or services offered under the contract are not obtainable by the
state agency by other reasonable means.
(b) The harm to the state in failing to execute the contract outweighs the public
interests served by the prohibition under sub. (2).
(c) The contract is approved by the department.
(4) COMPLAINTS; FORFEITURES. Any person may file a complaint with the
department alleging a violation of sub. (2) on a form prescribed by the department.
The department shall investigate each complaint. If upon investigation the
department determines a person has violated sub. (2), all of the following apply:
(a) The person shall be liable for a forfeiture equal to the greater of the
following, as determined by the department:
1. $250,000.
2. An amount equal to twice the amount of the value of the contract on which
the person submitted a bid or proposal.
3. An amount equal to the total amount of all pecuniary losses suffered by any
state as a result of such violation.
(b) The person is ineligible to contract with a state agency for 5 years following
the date of the department's determination of a violation.
(5) ENFORCEMENT. The attorney general may bring an action in any court of
competent jurisdiction to enforce this section.
(END)
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