74 Op. Att'y Gen. 169, 184 (1985)
"If a person enters into a contract with a dummy corporation, which is both created and limited by the statutes, he is entitled to rely on the provisions of the statutes." Herro
, 42 Wis. 2d at 118.
74 Op. Att'y Gen. 169, 185 (1985)
If we are going to recognize that... [dummy corporations] are separate and distinct from the state, then it must be determined that the property owned by the dummy corporation is not the state's property.... The legislature, as well as the public, must treat the dummy corporation as a distinct entity.
74 Op. Att'y Gen. 169, 185 (1985)
Herro
, 42 Wis. 2d at 116.
74 Op. Att'y Gen. 169, 185 (1985)
One might well question why the Legislature would allow HEAB, a state agency over which it has complete authority, to contract away its program responsibilities to WHEC, a private corporation over which it has less authority, and then try to regulate WHEC, rather than attempt to achieve the same results by regulating HEAB. Constitutionally, however, the Legislature, in this case at least, has the power to take either course, the proposed regulations being reasonably related to the purpose sought to be achieved and properly drawn to achieve that purpose.
74 Op. Att'y Gen. 169, 185 (1985)
BCL:ESM
74 Op. Att'y Gen. 169, 169 (1985) - Footnote
Destination-63 Subsequent to your request, on July 15, 1985, Assembly Bill 85 was enacted into law as 1985 Wisconsin Act 29. The provisions in question were vetoed. Since the veto is subject to override, this opinion refers to the provisions in question as the "proposed legislation" or the "proposal." References are to the Engrossed Bill, dated June 14, 1985.
74 Op. Att'y Gen. 169, 169 (1985) - Footnote
Destination-64 Arguably, public purpose corporations are already subject to legislative audit, one of the proposed requirements, by operation of section 181.27(2), which allows the state, for good cause, to petition the circuit court for access to the books and records of any chapter 181 corporation.
74 Op. Att'y Gen. 169, 169 (1985) - Footnote
Destination-65 Proposed section 181.79 would be read as an exception to section 181.03 which prohibits the organization under chapter 181 of insurance corporations.
74 Op. Att'y Gen. 169, 169 (1985) - Footnote
Destination-66 Risch
involved a challenge to a legislative classification on equal protection grounds. There is no reason to believe that the principle stated would not apply to classifications challenged under article IV, sections 31 and 32 of the Wisconsin Constitution.
74 Op. Att'y Gen. 169, 169 (1985) - Footnote
Destination-67 To be eligible to participate in the federal program, private guarantors must be nonprofit.
74 Op. Att'y Gen. 169, 169 (1985) - Footnote
Destination-68 American authorities trace their ancestry to the Port of London Authority, which was so named because Lloyd George did not want to use such common names as "commission," "board" or "agency." Having observed that each section of the draft enabling act began "Authority is hereby given...," he suggested the name "Port of London Authority." Cohen, They Builded Better Than They Knew
290 (1946).
74 Op. Att'y Gen. 169, 169 (1985) - Footnote
Destination-69 The Bradley Center Sports and Entertainment Corporation is subject to state audit and has a board of directors appointed by the Governor--two of the regulations the proposed legislation would impose on public purpose corporations.
74 Op. Att'y Gen. 169, 169 (1985) - Footnote
Destination-70 This corporation is subject to state audit and board membership is regulated--two controls sought to be placed upon public purpose corporations. Sec. 39.12, Stats.
74 Op. Att'y Gen. 169, 169 (1985) - Footnote
Destination-71 On the local level, Milwaukee County organized the Milwaukee County Industrial Development Corporation. State ex rel. Bowman v. Barczak
, 34 Wis. 2d 57, 148 N.W.2d 683 (1967).
74 Op. Att'y Gen. 169, 169 (1985) - Footnote
Destination-72 This was prior to the 1871 constitutional amendment creating the prohibitions against specific legislation.
74 Op. Att'y Gen. 169, 169 (1985) - Footnote
Destination-73 WHEC receives other benefits from the state; it enjoys a virtual monopoly by dint of its creation by HEAB.
74 Op. Att'y Gen. 169, 169 (1985) - Footnote
Destination-74 WHEC's Articles of Incorporation state that the corporation's purposes are "primarily to aid governmental programs for promotion of higher education...."
74 Op. Att'y Gen. 169, 169 (1985) - Footnote
Destination-75 This opinion is not the vehicle for judging the propriety of a state agency apparently contracting away the entire operation of a statutory program. Nevertheless, it is appropriate to question whether the Department of Administration's authority to "contract for services which can be performed more economically or efficiently by... contract," section 16.705(1), extends this far. It is also appropriate to raise whether loan servicing is within the scope of WHEC's authority under its Articles of Incorporation, which states as the corporation's purpose, "[t]o maintain, operate and administer a guaranteed student loan program...."
74 Op. Att'y Gen. 169, 169 (1985) - Footnote
Destination-76 What has been stated with respect to the constitutional prohibition against special or private legislation leads to the conclusion that the proposed legislation is also valid under due process and equal protection principles. See
discussion of State ex rel. Risch v. Trustees
at page 174 hereof.
74 Op. Att'y Gen. 169, 169 (1985) - Footnote
The State's authority to regulate public purpose corporations in the manner proposed derives from the police power.
74 Op. Att'y Gen. 169, 169 (1985) - Footnote
The [police] power is not limited to regulations designed to promote public health, public morals or public safety, or to the suppression of what is offensive, disorderly, or unsanitary, but extends to so dealing with conditions which exist as to bring out of them the greatest welfare of the people by promoting public convenience or personal prosperity.
74 Op. Att'y Gen. 169, 169 (1985) - Footnote
Watchmaking Examining Bd. v. Husar
, 49 Wis. 2d 526, 531, 182 N.W.2d 257 (1971). The police power properly can be used "to promote the general prosperity of the state by the regulation of economic conditions." Id.
at 530. In testing the constitutionality of the proposed legislation under the due process and equal protection clauses the question is whether it has "any reasonable basis." Id.
at 530.
74 Op. Att'y Gen. 169, 169 (1985) - Footnote
Almost by definition, corporations performing public purposes are imbued with the public interest. WHEC was created to guarantee loans under the government's guaranteed student loan program. One could argue that the integrity of the program depends upon the responsible administration of the corporation. The proposed "public accountability" measures are all reasonably related to that end.
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