SB444: Bill Text

SB444,43 Section 43 . Chapter 239 of the statutes is created to read:

SB444,25,21 Chapter 239

SB444,25,23 Wisconsin Student Loan REFINANCING Authority

SB444,25,24 239.01 Definitions. In this chapter:

SB444,25,25 (1) “Authority" means the Wisconsin Student Loan Refinancing Authority.

SB444,26,1 (2) “Board" means the governing board of the authority.

SB444,26,2 (3) “Qualified education loan" has the meaning given in 26 USC 221 (d).

SB444,26,6 239.02 Creation and organization of authority. (1) (a) There is created an authority, which is a public body corporate and politic, to be known as the “Wisconsin Student Loan Refinancing Authority." The members of the board shall consist of all of the following:

SB444,26,7 1. One member of the majority party in each house of the legislature.

SB444,26,8 2. One member of the minority party in each house of the legislature.

SB444,26,11 3. One undergraduate student enrolled at least half-time and in good academic standing at an institution within the University of Wisconsin System who is at least 18 years old and a resident of this state.

SB444,26,13 4. One student enrolled at least half-time and in good academic standing at a technical college who is at least 18 years old and a resident of this state.

SB444,26,16 5. One undergraduate student enrolled at least half-time and in good academic standing at a private, nonprofit institution of higher education located in this state who is at least 18 years old and a resident of this state.

SB444,26,22 6. Two members who have at least 10 years experience in making qualified education loans or loan refinancing, but any person having a financial interest in or whose employer is primarily engaged in the business of making qualified education loans is not eligible for appointment under this subdivision, and any member appointed under this subdivision who acquires such an interest while serving as a member shall resign from the board.

SB444,26,24 (b) 1. The members specified in par. (a) 1. and 2. shall be appointed as are the members of standing committees in their respective houses.

SB444,27,2 2. The members specified in par. (a) 3. to 5. shall be nominated by the governor, and with the advice and consent of the senate appointed, for 2-year terms.

SB444,27,4 3. The members specified in par. (a) 6. shall be nominated by the governor, and with the advice and consent of the senate appointed, for 3-year terms.

SB444,27,10 (2) If a student member of the board appointed under sub. (1) (a) 3. to 5. loses his or her student status upon which the appointment was based, he or she ceases to be a member of the board upon the appointment of a qualified successor to the board. A student member who loses his or her student status solely because he or she graduates from an institution of higher education may complete his or her current term on the board.

SB444,27,16 (3) The members of the board shall annually elect a chairperson and may elect other officers as they consider appropriate. A majority of the members of the board constitutes a quorum for the purpose of conducting its business and exercising its powers and for all other purposes, notwithstanding the existence of any vacancies. Action may be taken by the board upon a vote of a majority of the voting members present.

SB444,27,19 (4) A member of the board may not be compensated for his or her services but shall be reimbursed for actual and necessary expenses, including travel expenses, incurred in the performance of his or her duties.

SB444,27,23 (5) No cause of action of any nature may arise against and no civil liability may be imposed upon a member of the board for any act or omission in the performance of his or her powers and duties under this chapter, unless the person asserting liability proves that the act or omission constitutes willful misconduct.

SB444,28,9 (6) The board shall appoint a chief executive officer who shall not be a member of the board and who shall serve at the pleasure of the board. The chief executive officer shall receive such compensation as the board fixes. The chief executive officer or other person designated by resolution of the board shall keep a record of the proceedings of the authority and shall be custodian of all books, documents, and papers filed with the authority, the minute book or journal of the authority, and its official seal. The chief executive officer or other person may cause copies to be made of all minutes and other records and documents of the authority and may give certificates under the official seal of the authority to the effect that such copies are true copies, and all persons dealing with the authority may rely upon such certificates.

SB444,28,12 239.03 Powers of board. The board shall have all the powers necessary or convenient to carry out the purposes and provisions of this chapter. In addition to all other powers granted the board under this chapter, the board may specifically:

SB444,28,14 (1) Adopt, amend, and repeal any bylaws, policies, and procedures for the regulation of its affairs and the conduct of its business.

SB444,28,15 (2) Have a seal and alter the seal at pleasure.

SB444,28,16 (3) Maintain an office.

SB444,28,17 (4) Sue and be sued.

SB444,28,19 (5) Accept gifts, grants, loans, or other contributions from private or public sources.

SB444,28,21 (6) Establish the authority's annual budget and monitor the fiscal management of the authority.

SB444,28,23 (7) Execute contracts and other instruments required for the operation of the authority.

SB444,28,25 (8) Employ any officers, agents, and employees that it may require and determine their qualifications, duties, and compensation.

SB444,29,1 (9) Issue notes, bonds, and any other obligations.

SB444,29,2 (10) Make loans and provide grants.

SB444,29,3 (11) Incur debt.

SB444,29,4 (12) Procure liability insurance.

SB444,29,7 239.04 Duties of board. The board shall develop and implement a program under which state residents may refinance qualified education loans. The board shall develop the program to include all of the following:

SB444,29,9 (1) The authority shall provide a loan to an eligible individual to pay all or part of the individual's qualified education loans.

SB444,29,11 (2) The authority may only issue loans under the program that satisfy the exception to discharge under 11 USC 523 (a) (8).

SB444,29,13 (3) The authority shall establish eligibility criteria to participate in the program.

SB444,29,16 (4) The board shall set the interest rate on loans made under the program to be as low as possible but still sufficient to fully pay all expenses of the program and to provide necessary reserves, as determined by the board.

SB444,29,18 (5) The authority shall establish policies governing the ability of borrowers to defer loan payments or to enter into forbearances.

SB444,29,21 239.05 Issuance of bonds. (1) The authority may issue bonds for any corporate purpose. All bonds are negotiable for all purposes, notwithstanding their payment from a limited source.

SB444,29,25 (2) Except as otherwise expressly provided by the authority, every issue of its notes or bonds shall be general obligations of the authority payable out of any revenues or moneys of the authority, subject only to any agreements with the holders of particular notes or bonds pledging any particular receipts or revenues.

SB444,30,2 (3) All bonds issued by the authority are negotiable investment securities under ch. 408.

SB444,30,13 (4) The authority may not issue bonds unless the issuance is first authorized by a bond resolution. Bonds shall bear the dates, mature at the times not exceeding 50 years from their dates of issue, bear interest at the rates, be payable at the times, be in the denominations, be in the form, carry the registration and conversion privileges, be executed in the manner, be payable in lawful money of the United States at the places, and be subject to the terms of redemption, that the bond resolution provides. The bonds shall be executed by the manual or facsimile signatures of the officers of the authority designated by the board. The bonds may be sold at public or private sale at the price, in the manner, and at the time determined by the board. Pending preparation of definitive bonds, the authority may issue interim receipts or certificates that shall be exchanged for the definitive bonds.

SB444,30,16 (5) The board may include in bond resolution provisions, which shall be a part of the contract with the holders of the bonds that are authorized by the bond resolution, any of the following:

SB444,30,17 (a) Pledging or assigning specified assets or revenues of the authority.

SB444,30,19 (b) Setting aside reserves or sinking funds, and the regulation, investment, and disposition of these funds.

SB444,30,21 (c) Limitations on the purpose to which or the investments in which the proceeds of the sale of any issue of bonds may be applied.

SB444,30,24 (d) Limitations on the issuance of additional bonds, the terms upon which additional bonds may be issued and secured, and the terms upon which additional bonds may rank on a parity with, or be subordinate or superior to, other bonds.

SB444,30,25 (e) Funding, refunding, advance refunding, or purchasing outstanding bonds.

SB444,31,3 (f) Procedures, if any, by which the terms of any contract with bondholders may be amended, the amount of bonds the holders of which must consent to the amendment, and the manner in which this consent may be given.

SB444,31,6 (g) Defining the acts or omissions to act that constitute a default in the duties of the authority to the bondholders, and providing the rights and remedies of the bondholders in the event of a default.

SB444,31,7 (h) Other matters relating to the bonds that the board considers desirable.

SB444,31,11 (6) Neither the members of the board nor any person executing the bonds is liable personally on the bonds or subject to any personal liability or accountability by reason of the issuance of the bonds, unless the personal liability or accountability is the result of willful misconduct.

SB444,31,20 239.06 Bond security. The authority may secure bonds by a trust agreement, trust indenture, indenture of mortgage, or deed of trust by and between the authority and one or more corporate trustees. A bond resolution providing for the issuance of bonds so secured shall mortgage, pledge, assign, or grant security interests in some or all of the revenues to be received by, and property of, the authority and may contain those provisions for protecting and enforcing the rights and remedies of the bondholders that are reasonable and proper and not in violation of law. A bond resolution may contain other provisions determined by the board to be reasonable and proper for the security of the bondholders.

SB444,32,2 239.07 Bonds not public debt. (1) The state is not liable on bonds, and the bonds are not a debt of the state. All bonds shall contain a statement to this effect on the face of the bond. A bond issue does not, directly, indirectly, or contingently, obligate the state or a political subdivision of the state to levy any tax or make any appropriation for payment of the bonds. Nothing in this section prevents the authority from pledging its full faith and credit to the payment of bonds.

SB444,32,12 (2) Nothing in this chapter authorizes the authority to create a debt of the state, and all bonds issued by the authority are payable, and shall state that they are payable, solely from the funds pledged for their payment in accordance with the bond resolution authorizing their issuance or in any trust indenture or mortgage or deed of trust executed as security for the bonds. The state is not liable for the payment of the principal of or interest on a bond or for the performance of any pledge, mortgage, obligation, or agreement that may be undertaken by the authority. The breach of any pledge, mortgage, obligation, or agreement undertaken by the authority does not impose pecuniary liability upon the state or a charge upon its general credit or against its taxing power.

SB444,32,19 239.08 State pledge. The state pledges to and agrees with the bondholders, and persons that enter into contracts with the authority under this chapter, that the state will not limit or alter the rights vested in the authority by this chapter before the authority has fully met and discharged the bonds, and any interest due on the bonds, and has fully performed its contracts, unless adequate provision is made by law for the protection of the bondholders or those entering into contracts with the authority.

SB444,32,23 239.09 Liability limited. Neither the state nor any political subdivision of the state, nor any officer, employee, or agent of the state or a political subdivision of the state who is acting within the scope of employment or agency, is liable for any debt, obligation, act, or omission of the authority.

SB444,33,3 239.10 Annual report. (1) Annually, the board shall submit to the chief clerk of each house of the legislature, for distribution to the legislature under s. 13.172 (2), a report on the activities of the authority, including all of the following:

SB444,33,4 (a) Its operations, accomplishments, goals, and objectives.

SB444,33,5 (b) A statement of income and expenses for the fiscal year.

SB444,33,6 (c) Its assets and liabilities at the end of its fiscal year.

SB444,33,9 (d) A schedule of its bonds and notes outstanding at the end of its fiscal year, together with a statement of the amounts redeemed and incurred during such fiscal year.

SB444,33,15 (2) The authority, annually on January 15, shall file with the department of administration and the joint legislative council a complete and current listing of all forms, reports, and papers required by the authority to be completed by any person, other than a governmental body, as a condition of obtaining the approval of the authority or for any other reason. The authority shall attach a blank copy of each such form, report, or paper to the listing.

SB444,44 Section 44 . Nonstatutory provisions.

SB444,33,22 (1) Staggered terms. Notwithstanding the length of terms specified for the members of the board of the Wisconsin Student Loan Refinancing Authority under s. 239.02, of the 5 members appointed under s. 239.02 (1) (a) 3. to 6., one of the initial members shall be appointed for a term expiring on July 1, 2021, 2 of the initial members shall be appointed for terms expiring on July 1, 2022, and the remaining 2 initial members shall be appointed for terms expiring on July 1, 2023.

SB444,45 Section 45 . Effective dates. This act takes effect on the day after publication, or on the 2nd day after publication of the 2019 biennial budget act, whichever is later, except as follows:

SB444,34,3 (1) Financial aid information. The treatment of ss. 39.28 (7), 39.54, and 224.30 (6) takes effect on the first day of the 7th month beginning after publication, or on the 2nd day after publication of the 2019 biennial budget act, whichever is later.

SB444,34,4 (End)