75 Op. Att'y Gen. 182, 182 (1986)
Historic Sites Foundation, Inc.; Historical Society, State; Public Purpose Doctrine; It was constitutional for the Legislature to extend indemnity and other liability protections to the corporation and its agents and employes who manage and operate a state-owned circus museum. OAG 36-86

October 8, 1986

75 Op. Att'y Gen. 182, 182 (1986)
TIM CULLEN, Chairperson
  Senate Organization Committee

75 Op. Att'y Gen. 182, 182 (1986)
  You have requested, on behalf of the Senate Organization Committee, my opinion on the following question:

75 Op. Att'y Gen. 182, 182 (1986)
Does the inclusion of officers, directors, employees and agents of the Historic Sites Foundation, Inc., within the state's risk management program as provided by 1985 Wisconsin Acts 29 and 66, creating Wisconsin Statute section 895.46(1)(e), violate any constitutional provision?

75 Op. Att'y Gen. 182, 182 (1986)
BACKGROUND

75 Op. Att'y Gen. 182, 182 (1986)
  It is necessary to understand the relationship between the State Historical Society (Society), the Historic Sites Foundation, Inc. (Foundation), and the Circus World Museum (Museum) at Baraboo, Wisconsin.

75 Op. Att'y Gen. 182, 182 (1986)
  The Society is a state agency. OAG 11-85. It is empowered to "enter into a lease agreement with the [Foundation] for the purpose of operating [the Museum], located at Baraboo, Wisconsin." Sec. 44.16(1), Stats., created by 1985 Wisconsin Act 29, sec. 755.

75 Op. Att'y Gen. 182, 182 (1986)
  The Society acquired the Museum by gift in 1959. The Society owns the Museum entirely, including all real and personal property.

75 Op. Att'y Gen. 182, 182 (1986)
  The Museum provides live demonstrations for public viewing. These include demonstrations on circus animal training; loading wagons on circus trains in the manner done from 1872 to 1956; a 55-minute big top performance with acts chosen for historic merit, including acts of elephants, horses, dogs, and clowns and aerial artists; a high wire walk; a clown show of the 1820-1830 vintage; a recreation of an 1830 circus street parade; an elephant playtime swim in the Baraboo River; tiger feeding and lecture; and a unique instruments concert with instruments dating back to the 1920's. A library of circus history adjoins these grounds.

75 Op. Att'y Gen. 182, 183 (1986)
  In concluding that the Museum is not subject to a sales tax on admission charges, the Wisconsin Tax Appeals Commission said the Museum's primary objective is "the collection, preservation and dissemination of the history of the Wisconsin circus heritage." Historic Sites Foundation, Inc. v. Wisconsin Department of Revenue, No. S-10066 (Jan. 21, 1986) (decision slip op. at 17). The Society is charged with the duty to promote the collection, advancement, and dissemination of knowledge of the history of Wisconsin and the West. Sec. 44.02(15), Stats. "The purpose of the [Society's] owning the [Museum] site is to let people know one aspect of the rich history and heritage of Wisconsin." Historic Sites Foundation, Inc., at 17-18. The Museum "is a fun way to learn about circus history." Id. at 20.

75 Op. Att'y Gen. 182, 183 (1986)
  The Foundation is a private corporation created in 1960 under chapter 181, Stats., to operate the Museum. The articles of incorporation provide that the Foundation is organized "exclusively for educational, scientific and literary purposes... all for the benefit of" the Society. In fact, its sole function consists in operating the Museum. It has twelve directors: an appointee of the Governor, subject to senate confirmation, see sec. 44.16(2), Stats., as created by 1985 Wisconsin Act 29; the Mayor of Baraboo; the chair of the Sauk County Board; two curators of the Society; and a legislator. The remainder are appointed by the Society's Board of Curators.

75 Op. Att'y Gen. 182, 183 (1986)
  The lease and management agreement recites that the Society retains the Foundation as the "manager, operator and promoter" of the Museum. The Society leases all its Museum property, real and personal, to the Foundation. The Foundation's duties include:

75 Op. Att'y Gen. 182, 183 (1986)
[G]athering, collecting and properly displaying printed manuscript materials and artifacts; establishing, maintaining and operating a circus museum and library; sponsoring or conducting research in circus history and publishing the results; encouraging in every possible way an appreciation of the role of the circus in American life through a combination of activities which educate, inform and entertain the public both on the property of the Museum and elsewhere as the Foundation shall determine.

75 Op. Att'y Gen. 182, 183-184 (1986)
  Lease, para. 2. Section 44.16(1), provides that the lease between the Society and the Foundation "shall not include any provision for the payment of a percentage of gross admissions income at Circus World Museum to the historical society." By the terms of the lease, the Foundation must insure the Society's property; the Foundation supplies the Society with minutes of meetings of its directors and committees, as well as financial statements; and all Foundation publications and stationery must clearly identify the Museum as the property, of the Society. Further, the Society must approve all long-range Foundation planning, all additions of real property and all accessions. Any property acquired by the Foundation must be transferred to the Society. State procedures must be followed in selling personal property. All general purpose state funding must be used to reduce admission fees. The Foundation's board must comply with the open meetings law, and its corporate records are open to inspection the same as with any state agency. The Foundation must follow state affirmative action and equal opportunity policies, and the directors and employes must comport themselves under the ethical standards applicable to state officials and employes. On dissolution, the articles of incorporation require distribution of the Foundation's assets to the Society.

75 Op. Att'y Gen. 182, 184 (1986)
  The legislation I am asked to opine on, 1985 Wisconsin Act 29 as amended by 1985 Wisconsin Act 66 ("Act"), has the effect of giving the Foundation and its directors, officers, employes, and agents the same liability protections as are enjoyed by state officers, employes and agents. The consequence is that no action may be brought against them unless, within 120 days of the event complained of, notice is given to the attorney general as required by section 893.82; no compensatory damages in excess of $250,000 may be recovered against any one defendant; no punitive damages may be recovered; the attorney general will provide legal representation; and the state will indemnify the defendant for judgments and costs rendered. More specifically yet, the Act extends this treatment to the individuals and to "any nonprofit corporation operating a museum under a lease agreement with" the Society. The Foundation is treated as a department of state for purposes of requesting representation by the attorney general. See sec. 165.25(8), Stats., as created.

75 Op. Att'y Gen. 182, 184 (1986)
PUBLIC PURPOSE

75 Op. Att'y Gen. 182, 184-185 (1986)
  The first issue is whether the Act furthers a statewide public purpose. Although the public purpose doctrine is not found in the state constitution in express terms, the rule that public funds must be expended only for a public purpose is a well-established constitutional tenet. Wisconsin Solid Waste Recycling Auth. v. Earl, 70 Wis. 2d 464, 478, 235 N.W.2d 648 (1975). Additionally, state funds may be spent only if the purpose is of statewide concern. State ex rel. La Follette v. Reuter, 33 Wis. 2d 384, 397, 147 N.W.2d 304 (1967). It is for the Legislature in the first instance to determine what constitutes a public purpose. The court will sustain the Legislature's determination if any public purpose rationally can be conceived. The challenger's burden is to show there can be no benefit to the public from the expenditure. Hopper v. Madison, 79 Wis. 2d 120, 128-30, 256 N.W.2d 139 (1977). The public purpose depends essentially on what the people want and expect. It is a fluid concept; yesterday's hope is today's entitlement. State ex rel. Warren v. Reuter, 44 Wis. 2d 201, 213, 170 N.W.2d 790 (1969).