More (ALEC) American Legislative Exchange Council Bills

Wisconsin ALEC Bills

Tort Reform: Making it Harder for Injured Americans to Sue

Wisconsin Omnibus Tort Act: One of Governor Walker’s first actions upon taking office was to push a package of tort reform measures lifted from the ALEC playbook. Tort reform bills generally make it harder for Americans to sue companies whose products or services result in injury or death. Act 2 was the first bill Walker signed into law on January 27, 2011.
ALEC's "model bills" are not written in legislative language. They are brief, most only a page or two, so they may better be described as drafing memos. When these ideas are translated into legislation, the legislation may be many hundreds of pages longer than the ALEC model.
Such is the case with Wisconsin Act 2 which adopts parts of the ALEC "Punitive Damages Standards Act", limiting the ability to hold corporations accountable for outrageous acts of negligence or recklessness causing injury or death. It draws liberally from the ALEC "Product Liability Act", giving corporations free rein to manufacture defective products or products with insufficient warnings about hazards. A corporation can now escape liability in Wisconsin by showing that the product it manufactured complied with existing regulations, even if the corporation knew the product was dangerous, a standard drawn from the ALEC "Regulatory Compliance Congruity with Liability Act" and "Product Liability Act". Wisconsin Act 2 also draws from elements of the ALEC "Comparative Fault Act" and "Joint and Several Liability Act" in changing the standards for apportioning fault in a product liability lawsuit. The law also extends liability protections to the nursing home industry (which supported him in the election), using ALEC bills such as the "Non-Economic Damage Awards Act", limiting awards in cases involving long term health care providers to $750,000 (an increase from the ALEC $250,000 cap) or the amount awarded in economic damages.  Act 2 also adopts the ALEC "Reliability in Expert Testimony Standards Act", adopting the Daubert standard, making it much harder for people to qualify as experts by adopting federal rules favored by corporations.
Passage of the bill was promptly lauded by ALEC in a press release. Wisconsin is “the first of many states expected to consider such tort reforms as part of job creation packages in 2011,” chirped Amy Kjose, ALEC’s Civil Justice Task Force staff director.
A wide array of firms have an interest in pushing this type of legislation. The law firm Shook, Hardy & Bacon is the corporate co-chair of ALEC’s “Civil Justice Task Force.” The firm represents tobacco companies and big pharmaceutical companies who have a specific interest in suppressing the public’s right to sue. In addition, Bayer, Pfizer, PhRMA, GlaxoSmithKline, R.J. Reynolds tobacco, Altria/Phillip Morris tobacco and Koch Industries serve on ALEC’s corporate Private Enterprise Board. In Wisconsin, pharmaceutical manufacturers and insurance companies lobbied on behalf of the bill, as did Koch Industries. According to the Wisconsin Democracy Campaign, pharmaceutical firms gave Scott Walker $48,710 in 2009-2010, and KochPAC kicked in $43,000 for Walker, along with $1 million from the Republican Governors Association, which was a big player in the Wisconsin race. Not to mention independent expenditures by David Koch’s Americans for Prosperity group, which spent millions in the governor’s race and subsequently in defense of Walker’s agenda.

Telecommunications Deregulation

Telecommunications Modernization Act: On May 23, 2011, Governor Walker signed into law one of the bills he requested, a radical deregulation of the telecommunications industry in Wisconsin. Under the bill, the Wisconsin Public Service Commission (PSC) could no longer set telecommunication rates to keep prices low for consumers, perform audits of providers, or investigate consumer complaints. It is prohibited from regulating data services such as high speed Internet.
The law strips away 50 years of consumer protection for landline telephone subscribers. It guts the PSC’s authority to regulate rates of basic phone service in areas with little or no competition. The Citizens Utility Board, a consumer advocacy group, opposed the action. "We're very worried that customers who have no choice in landline service will see either very high rates for that service or see that service disappear," Charlie Higley, the board's executive director, said in a May 24 Milwaukee Journal-Sentinel article on the manner.
The bill tracks ALEC’s "Regulatory Modernization Act" which prohibits any commission from regulating rates and charges, terms and conditions of services, mergers or acquisitions and more. According to the Wisconsin Democracy Campaign, in 2009 and 2010, the telecommunications industry gave Walker $87,822. B etween 2007-2011, Scott Fitzgerald $12,770 from the Telecom Services & Equipment Industry. Jeff Fitzgerald received $10,419 for the same period.
Walker recently named former state Rep. Phil Montgomery chair of the Public Service Commission. Montgomery was ALEC’s “Legislator of the Year” in 2005 and formerly headed ALEC’s Telecommunication and Information Technology Task Force's Subcommittee on Competition. AT&T serves on ALEC’s corporate “Private Enterprise” governing board and lobbied hard for the bill in Wisconsin, along with other telecommunications firm, such as Verizon, another ALEC member.

Attacking Democracy, Voter Rights and Public Financing

Voter Photo Identification Legislation (AB 7): On May 19, 2011, Wisconsin passed a "Voter ID" law introduced by Republican Rep. Jeff Stone and Sen. Joe Leibham. Stone is an ALEC member who received ALEC travel reimbursements in 2009. The legislation would allow a narrow list of IDs for voting, including drivers licenses and state-issued ID cards. According to a University of Wisconsin-Milwaukee study, about 177,000 Wisconsinites aged 65 and older do not have state-issued IDs. Statewide, only 45 percent of African American males and 51 percent of females have a valid drivers license. Wisconsin Department of Motor Vehicle offices are not in every county and keep irregular hours, creating more barriers to voter participation. The bill makes it particularly burdensome for college students to vote, a group who overwhelmingly supported Obama in 2008. Student IDs have to be issued from an accredited public or private college, include a student's signature and have a two-year expiration date. The 182,000 thousand students in the University of Wisconsin system and 300,000 in state technical colleges currently do not meet this requirement.
After a statewide investigation in 2008, the Republican Wisconsin Attorney General found no evidence of voter fraud. The bill is an effort “to prevent democratic groupings from turning out and everybody knows it,” according to Jay Heck of Wisconsin Common Cause. When the bill passed, Governor Walker tweeted “glad that Photo ID bill passed. I authored that bill 10 years ago!” back when he was an active ALEC member. The Wisconsin bill is a more detailed version of the ALEC "Voter ID Act” of 2009. ALEC provides the blue print for the Voter ID bill, but then disclaims any responsibility when state legislatures use the measure to target troublesome Democrats in their state, such as Wisconsin college students.
Ending Public Financing: To pay for the Voter ID bill, the Wisconsin Joint Finance committee raided the money set aside for the public financing of campaigns. The money raided from the public financing system –- $1.8 million -– is insufficient to pay for the bill, which is anticipated to cost $6 million over the next two years. However, the move would kill a 34-year tradition of public financing for elections in Wisconsin. All public financing for state political races would end.
Wisconsin has provided some degree of public financing for campaigns since the post-Watergate reform era of 1977. Ironically, ALEC opposes public financing for campaigns in part because the laws “have not removed the influence of special interest money” in campaigns. See ALEC’s "Resolution Opposing Taxpayer Financed Political Campaigns".

Defunding Unions and Attacking Collective Bargaining

Wisconsin’s Budget Repair Bill: Wisconsin Governor Scott Walker took a cue from the ALEC corporate wish list and introduced a radical bill in February 2011 to cripple public employee unions. Wisconsin Act 10 inspired months of protests and has been subjected to a series of legal challenges.
Wisconsin’s 1959 collective bargaining law was the first for public employees in the United States, and the first law of any kind that granted teachers the right to organize. Walker’s efforts to undo the law took some creative writing and strong-arm tactics that put 100,000 people in the streets on multiple occasions in the winter of 2011.
There is no ALEC bill that mirrors Walker’s proposal, but the Wisconsin bill does comport with ALEC’s sweeping anti-union agenda, which includes decades of support for "Right to Work" and "Paycheck Protection" legislation, and other measures to disempower and defund unions. On collective bargaining, ALEC’s "Public Employee Freedom Act" declares that “an employee should be able to contract on their own terms” and “mandatory collective bargaining laws violate this freedom.” This ALEC bill and the "Public Employer Payroll Deduction Policy Act" prohibit automatic payroll deductions for union dues, a key aspect of the Walker bill.
These bills are designed to financially cripple the key financial supporter of Democratic candidates just in time for the 2012 presidential election. The co-chair of ALEC's Commerce, Insurance and Economic Development Task Force currently is State Farm Insurance. More interestingly, other committee members include Macquarie Capital and Cintra USA. These foreign firms are critical proponents of the privatization of public services and have rushed to purchase bridges, toll roads, and other public assets of financially stressed state and local governments so they can provide formerly public services on a for-profit basis.
Where is the bottom in ALEC’s race to the bottom? The "Living Wage Mandate Preemption Act" would repeal any local “living wage” ordinance like the ones in Madison and Milwaukee, and prohibit political subdivisions from enacting them in the future. The ALEC "Prevailing Wage Repeal Act" would get rid of all state prevailing wage laws that give workers engaged in public works for highways, street bridges, buildings and the like a higher salary. The ALEC "Starting (Minimum) Wage Repeal Act" would preempt the ability of states and localities to pay a minimum wage higher than the federal level. Some 22 states do this, but ALEC objects to the policy as an "unfunded mandate." Not satisfied by pulling down workers' wages in every imaginable domestic scenario, ALEC also supports a radical free trade agenda that pits U.S. workers against foreign workers making a fraction of their wage, and facilitates the offshoring of U.S. jobs. From China Free Trade in 2000 to Korea Free Trade today, ALEC has supported shipping jobs overseas.

Privatizing Public Schools

In 1993, ALEC gave its “Adam Smith Free Enterprise Award” to billionaire Richard DeVos, a leading proponent and financier of school privatization efforts. For 20 years, a top priority item for ALEC has been the privatization of public schools through a school voucher system. ALEC has dozens of bills related to this topic, along with books, analysis and legal opinions.
Wisconsin was the first state in the nation to implement a voucher program, using public funds to send children to private schools in 1990. Thompson was seen as an innovator, and the role of ALEC was never discussed. The voucher “experiment” was limited to low-income students in the Milwaukee School District. In 2010, voucher students took tests that permitted the comparison of voucher students with their Milwaukee Public School peers for the first time. Although promised to advance academic achievement for minority students, the results showed that the voucher students performed worse in math and reading. Despite these facts, ideological proponents of school privatization are pushing to expand the Milwaukee program to other areas of the state, as well as to families of greater income.
ALEC wants state to introduce lots of school choice bills all at once, something they call a "whack a mole" strategy to make it harder for teachers and citizen's to mobalize to defeat them.


Wisconsin Budget Bill: In his budget bill proposal, Governor Walker first proposed repealing the school voucher enrollment cap for Milwaukee and eliminating income eligibility requirements, while slashing revenue for the Milwaukee Public School system by $8.7 million. The final bill included  devastating cuts, and expanded voucher schools throughout Milwaukee County and to the Racine school district, but only lifted the cap on participation and the income eligibility to 300% of the federal poverty level (rather than blowing the cap altogether). The move was praised by the President of the Friedman Foundation for Educational Choice.
“This is incredible news that I know would make Milton and Rose Friedman smile,” said Robert C. Enlow. “The Friedmans understood the importance of the Milwaukee Parental Choice Program to the cause of educational freedom for all children, and they long hoped it would be expanded to include other cities. Today, thanks to the tremendous leadership of Gov. Walker and the state legislature, that hope is fulfilled.” Many source the idea to privatize public schools to Milton Friedman's early publications on the topic in the 1970's. Further ALEC bills are in the works.


Charter School Reform Bill (AB 51-SB2): This bill, introduced by Republican Rep. Robin Vos, eliminates the limit on the number of pupils who may attend virtual charter schools, and weakens teacher licensure requirements. The proposal draws from a number of ALEC bills. The ALEC “Charter Schools Act” and “Next Generation Charter Schools” includes the idea of an authorizing board, which makes it easier to establish charter schools over the objections of school districts and other school officials. The ALEC “Virtual Public Schools Act” encourages the introduction and expansion of on-line charter schools. At the moment, Wisconsin has a very limited virtual charter school program.
Rep. Vos is the new ALEC “State Chairman” for Wisconsin. The private sector chair of ALEC’s Education Task Force is Connections Academy, a private corporation based in Baltimore that offers free online classes through contracts with charter schools, school districts, or governmental entities. Sylvan Ventures (the venture capital arm of the for-profit Sylvan Learning Systems) started Connections Academy in 2001. These for-profit education companies directly stand to benefit from increased school privatization and a movement away from real teachers and brick and mortar schools to virtual teachers and instruction.


The Milwaukee Parental Choice Program (AB 94):  The bill, introduced by Republican Rep. Howard Marklein, would expand the Milwaukee Parental Choice Program (MPCP) to all private schools in Milwaukee County and eliminate the 22,500 enrollment cap. It also modifies the Milwaukee program to provide direct payments in lump sums to private schools, not as individual payments to parents as is required by current law. Turning over public funds to private religious schools has been a highly litigated issue on the lines of separation of church and state. Included in the drafting file for this Wisconsin bill is a legal memo penned by Dick Komer from the conservative Minnesota think tank, the Koch-funded Institute for Justice, setting out the legal argument for this provision’s constitutionality. Clearly, a stream of public funding to private schools along with no enrollment cap would cripple the Milwaukee public school system, which has already been harmed by the siphoning of funds to current voucher schools. The proposal incorporates elements of ALEC’s “Parental Choice Scholarship Accountability Act” and three different versions of this bill, which alter the eligibility requirements. 

Special Needs Scholarship Program Act (AB 11):  This bill, introduced by Republican Senator Leah Vukmir and Rep. Michelle Litjens, would create a voucher system to enable disabled children to use public funds for private schools, however, there would be no limitation on parental income as there is for the Milwaukee program. Experience shows that most private schools do not provide special needs students with appropriate services. Some educational experts suspect the proposal would lead to segregated voucher schools especially for special needs children –- a proposal that would fly in the face of decades of research and experience that suggests that these children are better off in regular schools, educated with their peers while receiving additional support services. The bill mirrors the ALEC bill of the same name, the “Special Needs Scholarship Program Act.” The Wisconsin Department of Public Education has objected to the bill in the strongest terms: “It strips special education students of due process rights and rights to services. It allows for the segregation of students based on disability. It will devastate funding for public education in select districts. It will result in the largest expansion of private school regulation ever seen in Wisconsin and, at the end of the day, no one will have any data to show if it resulted in a better education.”

Late Night Rolls Vote ALEC Specials into State Budgets

Tax Break for Altria/Phillip Morris: The best way to pass an unpleasant bill is to sneak it into the budget. On May 31, 2011, Republicans Alberta Darling, Luther Olsen, Sheila Harsdorf and Randy Hopper, rolled a motion in the Wisconsin budget bill that gave a big tax break to a big tobacco company. The committee voted to convert the tax on moist tobacco products from a price-based tax to a weight-base tax. Moist tobacco products, like Skoal, Copenhagen and a new product line called “Snus,” will benefit from this tax break. These tax changes will lower the price of the smokeless products that target kids with packaging and candy flavors like cherry, apple and grape, according to Emily Rohloff, a spokeswoman for a statewide coalition of health groups. The Wisconsin Joint Finance Committee also cut funds for the Tobacco Prevention and Control program by some 22 percent.
The amendment she slipped into the budget late one night is identical to ALEC’s “Resolution on the Enhancement of Economic Neutrality, Commercial Efficiency, and Fairness in the Taxation of Moist Smokeless Tobacco (MST) Products” specifically promotes this tax break. ALEC, serving a standard role as a front for tobacco interests, sent a letter to Scott Walker in support of the measure. It will come as no surprise that both Reynolds Tobacco and Altria/Phillip Morris sit on ALEC’s corporate “Private Enterprise” governing board. According to the Wisconsin Democracy Campaign, Darling received $1,000 from Altria in 2010. This bill was too extreme even for Scott Walker, who later vetoed the measure.


Costly "Las Vegas Loophole" Reinstated: Walker’s original budget bill also reopened a corporate tax loophole related to the reporting of corporate income. The “Las Vegas Loophole” was closed by Democratic Governor Jim Doyle in 2009 when Wisconsin instituted a so-called “combined reporting system” to determine the corporate income that should be taxed by the state of Wisconsin. The combined reporting formula prevents multi-state firms from hiding profits of subsidiaries in states with no corporate income tax, like Nevada. The Walker budget modifies that formula to give multi-state firms greater ability to use pre-2009 losses to offset profits for 20 years. It also prohibits the state Department of Revenue from challenging certain business tax avoidance strategies. The changes will cost the state some $46 million per budget cycle.
ALEC promotes “A Resolution in Opposition to Mandatory Unitary Combined Reporting.” ALEC boosters Altria/Phillip Morris and Wal-Mart are just two of the firms that lobbied for combined reporting changes in Wisconsin, along with a diversity of other firms. 

Helping Private Investors Make a Killing: Wisconsin Republicans, led by Rep. Garey Bies, introduced SB 10, which phases out the taxation of capital gains. The action was superseded by the Wisconsin budget bill, which excludes 100% of the capital gains realized on investments in Wisconsin for five years, costing Wisconsin approximately $79 million per year, according to analysis by the AFL-CIO. Additional exclusions from income tax for capital gains will amount to $36 million per budget cycle. Capital gains taxes are applied to profits made off the sale of stocks, bonds, precious metal and property. ALEC has long had a model bill called “The Capital Gains Tax Elimination Act” that advocates for getting rid of the capital gains tax altogether.


Pondering Pension Fund Privatization: Governor Walker’s budget bill includes a mandate for a study that would provide the roadmap for turning Wisconsin’s defined benefit plan (which sets in stone how much you will receive upon retirement) into a defined contribution plan (which leaves your retirement funds to free market forces.) The study must specifically address establishing a defined contribution plan for new and existing employees.


Study after study has shown that Wisconsin’s public retirement system is one of the healthiest and best managed in the nation. But corporations have long wanted to privatize public pension funds, a process that allows big financial service firms to extract millions in fees. The ALEC model bill on pensions, the “Public Employees Portable Retirement Option (PRO) Act," authorizes state and local public sector employers to provide optional portable retirement plans for state and local public-sector employees. In other words, the ALEC bill would allow people to opt-out of the public system for a private system. If enough employees did this, it would make the public system unsustainable. ALEC also formally recommends that defined benefit plans be replaced by defined contributions plans in its “Statement of Principles on State and Local Government Pension and Other Post Employment Benefit Plans.” An ALEC spokesman, Jonathan Williams, defended Walker and raised the specter of Wisconsin’s “unfunded liabilities” in the pension fund in a PBS interview at the height of the protests.
Bounty Hunters in the Budget Bill (AB 40): In June, Wisconsin Rep. Robin Vos, the ALEC State Chairman for Wisconsin, rolled another odd-ball ALEC special into the Wisconsin budget bill that would reintroduce bail bondsmen and bounty hunters to the state, a corruptive practice that has been prohibited since 1979.  Today, Wisconsinites post bond directly to the state. If they flee, they are picked up by the local police. According to Milwaukee County District Attorney John Chisholm, the return of the practice to Wisconsin "will primarily benefit out-of-state interests, the large bail-bond corporations" motivated "purely by financial interests at the expense of public safety.”
The Vos bill finds its roots in ALEC. The "Anti-Crime Secured Release Act" and "Alternative Methods of Court Appearances Act" both require that persons arrested only be released by secured bail bond (or, for the wealthy, by paying 100% of their bail), and other bills create minimum standards for bounty hunters.  The American Bail Coalition’s (ABC) Executive Director is on the Executive Committee of ALEC’s Public Safety and Elections Task Force and the former Chairman of the corporate governing board. ABC is the commercial bail bond industry’s national organization and lobbying wing, and represents large and small bail bond firms as well as individual bail bondsmen. ABC is a registered lobby in Wisconsin and lobbied for these provisions in the Wisconsin budget bill.
Promoting Predatory Lending: Rep. Vos also added into the budget bill provisions relaxing controls on predatory payday lenders and legalizing auto title loans (which former Governor Jim Doyle had outlawed using a veto). Auto title loans are a form of high-interest, short-term lending that many states have recognized as unfair and predatory to low-income consumers. Consumer groups have opposed this type of lending not only because the high interest rates and short-term repayment period can trap consumers in a cycle of debt, but also because they risk losing their cars, which they often need to get to work.
The ALEC "Title Pledge Act" does the same thing. It advances the interest of lending companies by giving short-term, 30-day renewable loans backed by a borrower's car title, loans that usually have high interest rates, which are very difficult for people in tough financial circumstances to keep up with. The bill provides few consumer protections, for example failing to include a private right of action with strong remedies, and requiring that all claims be brought within one year. This provides little deterrence for predatory lenders, and because the budgets of regulatory agencies are limited, the state cannot adequately protect against abuses. The Consumer Federation of America, United States Public Interest Research Group, and the Center for Responsible Lending sent a letter to ALEC opposing "car title pledges" in November 2005, enumerating many examples of predatory title lending and also pointing out the distorting influence of campaign contributors on this sector of sound public policy.

 Making it Harder to Raise Revenue

Super Majority Required to Raise Taxes: ALEC has dozens of bills to make it harder for government to raise revenue and provide quality services. Shrinking government down to size “so we can drown it in a bathtub” was a phrase coined by Grover Norquist, but an agenda actively pursued by ALEC. Wisconsin Act 9, “The Super-Majority Act,” was introduced by the request of Governor Walker and signed into law on February 22, 2011. The law reads “no house of the legislature may pass a bill that increases the rate of the state sales tax or that increases any of the rates of the income tax or franchise tax unless the bill is approved by two-thirds of those members present and voting.”
The bill mirrors the ALEC bill of the same name “Super-Majority Act.” However, the ALEC proposal is for a binding constitutional amendment. If enacted, such a constitutional amendment would be catastrophic for states and result in a California-style “Proposition 13” revenue crisis. The 1978 proposition required a two-thirds majority in both legislative houses for future increases of any state tax rate, including income tax rates. The measure has severely damaged the California school system, which has dropped in national rankings from among the top to among the worst, 48th in many surveys of student achievement.
Wisconsin dodged a bullet when leadership decided to draft the bill as a statute and not a constitutional amendment, because as a state law changes to legislative rules it is not legally enforceable if the legislature chooses not to follow it.

“Tell Us About ALEC”

William Cronon is a professor of history, geography and environmental studies at the University of Wisconsin-Madison. He is not only a public employee, he is the prize-winning author of numerous ground-breaking books and was recently elected the head of the American Historical Association, one of the highest honors in his profession. In the midst of Wisconsin’s long winter of discontent, Cronon became interested in the historical roots of the GOP agenda. On his website “Scholar as Citizen,” he wrote a blog on March 15 regarding his investigations, giving students and interested parties some tips on how to investigative the shadowy groups that he thought might be behind the onslaught of legislation.
Cronon rightly focused in on ALEC. “The most important group, I’m pretty sure, is the American Legislative Exchange Council (ALEC), which was founded in 1973 by Henry Hyde, Louis W. Barnett, and (surprise, surprise) Paul Weyrich. Its goal for the past forty years has been to draft ‘model bills’ that conservative legislators can introduce in the 50 states.” Because Cronon is a respected historian and not known to be particularly political, the piece got around quite a bit. His blog received over half a million hits. Handmade signs quickly popped up at the Wisconsin Capitol saying “Tell Me About ALEC.”
To Cronon’s astonishment, the push back was immediate. Like avenging furies, the Wisconsin GOP filed an open records request demanding all of Cronon’s emails referencing Scott Walker, collective bargaining and a long list of Republican legislators, fruitlessly attempting to prove that Cronon was involved in partisan political activities. This occurred even before Cronon printed a compelling op-ed in the New York Times discussing "Wisconsin's Radical Break" from its long tradition of clean government and moderation.
The history professor’s entrée into the maelstrom of modern American politics was useful. The near-hysterical overreaction from the Wisconsin GOP when they were slammed by reporters across the country for their stunt signaled something important was going on here in the state -- something they did not want inquires about, and something they would fight to suppress.
With our “ALEC Exposed” project, the Center for Media and Democracy hopes that the inquiry is just beginning.