SB1106: Bill Text

SB1106,,222 (7) Assist workers and communities in creating jobs by supporting cooperative business models including worker-owned cooperatives.

SB1106,,223 (8) Increase available affordable housing options for all residents of this state.

SB1106,,224 (9) Promote sustainable agriculture and address food insecurity, particularly by providing financing to family-owned farms and rural businesses that serve them.

SB1106,,225 (10) Support nonprofit and community-based organizations that work to address the results of racial injustice or to promote women’s economic and social equity or both.

SB1106,,226 (11) Provide economic support to state agencies, local governmental units, and nonprofit organizations, including community development authorities, redevelopment authorities, housing authorities, and community development corporations.

SB1106,,227 (12) Strengthen state-chartered banks, particularly through participatory loan programs.

SB1106,,228 (13) Enable the state to share in the methods of monetary support the federal government provides to commercial banks.

SB1106,,229 (14) Assist students in need of additional low-cost student loans in financing the cost of higher education.

SB1106,,230 239.04 Powers and duties of the Bank, board. (1) (a) Except as provided in par. (e) and as otherwise provided in this chapter, the Public Bank of Wisconsin shall have all the powers of a state bank organized under ch. 221.

SB1106,,231 (b) 1. The Public Bank of Wisconsin may, but is not required to, become a member of the federal reserve system.

SB1106,,232 2. The Public Bank of Wisconsin may, but is not required to, become a member of the federal deposit insurance corporation.

SB1106,,233 3. The Public Bank of Wisconsin may, but is not required to, establish a master account with the federal reserve system to enhance the Bank’s liquidity.

SB1106,,234 (c) The Public Bank of Wisconsin may conduct operations or engage in activities through subsidiaries to the same extent as other state banks organized under ch. 221, but these subsidiaries are subject to any restriction or limitation applicable if the Bank directly conducted the operation or engaged in the activity.

SB1106,,235 (d) The Public Bank of Wisconsin may accept and solicit property, including any gifts, donations, grants, bequests, loans, public funds, or other private contributions, for any of the purposes of this chapter.

SB1106,,236 (e) The Public Bank of Wisconsin may accept public deposits and open deposit accounts only as provided in sub. (7) (d) and s. 34.05 (5). The Public Bank of Wisconsin may not pay interest on deposit accounts.

SB1106,,237 (f) The Public Bank of Wisconsin shall maintain complete records of all banking transactions.

SB1106,,238 (g) The board shall establish technical advisory committees and consult with public and private sector experts in substantive areas related to the Bank’s mission, objectives, and duties.

SB1106,,239 (2) (a) The board shall have all the powers necessary or convenient to carry out the purposes and provisions of this chapter.

SB1106,,240 (b) 1. The board shall operate the Bank to ensure its soundness and sustainability and, subject to subd. 2., to accomplish the Bank’s purposes under this chapter. The board shall adhere to the operating priorities identified in s. 239.035 (1).

SB1106,,241 2. The board may direct the Bank’s annual earnings to be added to the Bank’s capital or distributed to the state, and the board may direct Bank deposits to be invested in the state investment fund under s. 25.14.

SB1106,,242 (c) The board shall regularly review the Bank’s financial statements and other records to ensure that the Bank is in compliance with all applicable laws and regulations and with all reporting requirements under s. 239.08 (1).

SB1106,,243 (d) The board shall keep the board of advisors fully informed of the Bank’s operations and loan portfolio and shall convey the recommendations of the board of advisors to the Bank’s chief executive officer. The board shall hold an annual joint meeting of the board with the board of advisors and the Bank’s chief executive officer. The board chairperson shall preside over this meeting. If requested by a majority of the members of the board of advisors, the board shall schedule and hold additional joint meetings in the same year as the annual joint meeting.

SB1106,,244 (e) In conducting its operations, the Public Bank of Wisconsin shall comply with its business plan under s. 239.05 and further give priority to the following considerations:

SB1106,,245 1. Supporting eligible recipients subject to the historic and current economic inequities experienced by communities in underserved neighborhoods, including enterprises established by residents there, as well as eligible recipients working to remedy those inequities.

SB1106,,246 2. Supporting eligible recipients subject to the historic and current economic inequities experienced by women throughout the state.

SB1106,,247 3. Supporting rural business and farming concerns.

SB1106,,248 4. Supporting businesses with compensation structures that provide a livable wage, establish an equitable ratio between the least-paid and highest-paid members of the business, or otherwise demonstrate a commitment to equitable pay.

SB1106,,249 5. Supporting entities that address the impacts of climate change and the reduction of greenhouse gases.

SB1106,,250 6. Funding the need of municipalities to update and build safe and sustainable infrastructure.

SB1106,,251 7. Supporting the operation of local governmental units, nonprofit organizations, credit unions, local community banks, community development authorities, redevelopment authorities, housing authorities, community development corporations, and state-chartered financial institutions, including by complementing or partnering rather than competing with these entities to strengthen them and to expand affordable financing in the state.

SB1106,,252 8. Seeking participation loan options with the entities under subd. 7., when appropriate, rather than originating or servicing the loan itself.

SB1106,,253 9. Promoting equitable distribution of the Bank’s resources across the state, including ensuring that rural areas are given full and fair consideration and have all necessary support in completing the application process.

SB1106,,254 (3) In addition to all other powers granted the board under this chapter, the board may specifically do any of the following:

SB1106,,255 (a) Adopt, amend, and repeal bylaws, policies, and procedures for the regulation of its affairs and the conduct of its business.

SB1106,,256 (b) Sue and be sued.

SB1106,,257 (c) Establish the Public Bank of Wisconsin’s annual budget and monitor the fiscal management of the Bank.

SB1106,,258 (d) Execute contracts and other instruments required for the operation of the Public Bank of Wisconsin.

SB1106,,259 (e) Make loans and incur debt and other nondeposit liabilities, including money market borrowing, federal reserve borrowing, and capital market borrowing.

SB1106,,260 (f) Procure liability insurance.

SB1106,,261 (g) Employ officers, staff, and agents and determine their qualifications, duties, and compensation.

SB1106,,262 (h) Employ and compensate consultants, advisers, or other professionals to assist the board in carrying out its functions and exercising its authority under this chapter.

SB1106,,263 (4) (a) In this subsection, “labor peace agreement” means an agreement between an eligible recipient and a labor organization, as defined in s. 5.02 (8m), that does all of the following:

SB1106,,264 1. Prohibits labor organizations and its members from engaging in picketing, work stoppages, boycotts, and any other economic interference with persons operating in this state.

SB1106,,265 2. Prohibits the eligible recipient from disrupting the efforts of the labor organization to communicate with and to organize and represent the eligible recipient’s employees.

SB1106,,266 3. Provides the labor organization access at reasonable times to areas in which the eligible recipient’s employees work for the purpose of meeting with employees to discuss their right to representation, employment rights under state law, and terms and conditions of employment.

SB1106,,267 (b) Subject to par. (c), the Public Bank of Wisconsin shall use its powers to extend affordable financing to eligible recipients.

SB1106,,268 (c) The Public Bank of Wisconsin may not extend affordable financing to an eligible recipient unless the eligible recipient does all of the following:

SB1106,,269 1. Certifies to the Bank that the eligible recipient has entered into a labor peace agreement and will abide by the terms of the agreement as a condition of receiving the affordable financing.

SB1106,,270 2. Submits to the Bank a copy of the page of the labor peace agreement that contains the signatures of the labor organization representative and the representative of the eligible recipient.

SB1106,,271 (5) (a) The board may facilitate investment in, and financing of, construction, rehabilitation, replacement, and improvement of new and existing public infrastructure systems.

SB1106,,272 (b) Before initiating operations under par. (a), the board shall submit to the governor and to the chief clerk of each house of the legislature, for distribution to the appropriate standing committees under s. 13.172 (3), an implementation plan, including a proposal for any necessary legislation, that includes all of the following:

SB1106,,273 1. Identification of the public infrastructure systems that the Bank plans to initially target.

SB1106,,274 2. Identification of any existing state programs that the Bank recommends be transferred under its authority, and the steps and timelines for the transitions.

SB1106,,275 3. A description of additional financing products and services the Bank plans to offer, the target markets, and anticipated rates, terms, and conditions.

SB1106,,276 4. A demonstration of how Bank products and services will increase access to capital for public infrastructure systems and complement those of existing public and private sources.

SB1106,,277 5. A demonstration of how the Bank plans to maximize public benefit.

SB1106,,278 (6) (a) The Public Bank of Wisconsin, in partnership with independent community banks, credit unions, or community development corporations, may administer a state guarantee loan program to assist students in need of low-cost student loans and related loan benefits to address educational needs as necessary to support student success, including the refinancing of existing student loan debt.

SB1106,,279 (b) The board shall develop an implementation plan for the program under par. (a). The implementation plan shall include all of the following:

SB1106,,280 1. Identification of the needs and benefits to selected students that the program will initially target.

SB1106,,281 2. The policies and criteria that the Bank will use to balance public benefit and public risk.

SB1106,,282 3. Identification of the ways that the program will address all of the following issues related to loans:

SB1106,,283 a. Qualification criteria for students.

SB1106,,284 b. Obligations and options for loan repayment.

SB1106,,285 c. Requirements for loan guarantees and reserves.

SB1106,,286 d. Establishing criteria for refinancing existing debt.

SB1106,,287 e. Fee and interest rate structures.

SB1106,,288 f. Maximum loan amounts.

SB1106,,289 g. Ensuring student awareness of grants, federal loans, and other financial aid programs.

SB1106,,290 (7) (a) The Public Bank of Wisconsin, in partnership with independent community banks, credit unions, community development authorities, redevelopment authorities, housing authorities, or community development corporations, may do any of the following:

SB1106,,291 1. Leverage at least 30 percent of public deposits as financial capital and resources to provide access to low-cost capital or credit or both to small businesses, minority-owned and women-owned business enterprises, entrepreneurs, start-up businesses, farmers, and communities and individuals of this state having below average income, to further economic growth, create jobs, reduce greenhouse gases, and build and sustain affordable housing for this state’s residents, as provided under this subsection.

SB1106,,292 2. Leverage the Bank’s financial capital and resources to provide access to low-cost capital to bring fiscally sound and financially successful businesses into this state, as provided under this subsection.

SB1106,,293 3. Leverage the Bank’s financial capital and resources to provide access to low-cost capital or credit or both to established businesses in this state for the purpose of providing financial stability for the Bank, as provided under this subsection.

SB1106,,294 (b) The Public Bank of Wisconsin may make loans in the form of participation loans with community banks, credit unions, community development authorities, redevelopment authorities, housing authorities, and community development corporations in this state, to qualified individuals and businesses residing or doing business in this state if the originator of the loan is a financial institution chartered under ch. 186, 214, 215, or 221.

SB1106,,295 (c) The Public Bank of Wisconsin may serve as a banker’s bank for this state’s state-chartered financial institutions by providing correspondent banking services and other related services for these financial institutions in unbanked and underserved communities. The Bank may not compete with this state’s state-chartered financial institutions, particularly in unbanked and underserved communities.

SB1106,,296 (d) The Public Bank of Wisconsin may accept deposits related to transactions under par. (c) from this state’s state-chartered financial institutions.

SB1106,,297 (8) (a) 1. For financial institutions that make the Public Bank of Wisconsin a reserve depository, the Bank may serve as a clearinghouse, including all facilities for providing domestic and foreign exchange, and may rediscount paper, on terms the board provides.

SB1106,,298 2. The Bank may provide corporate trust services for the state, including trustee, escrow agent, paying agent, bond registrar, and transfer agent.

SB1106,,299 3. The Bank may buy and sell federal funds; issue letters of credit for public deposits; and provide a safekeeping service for United States treasury securities, federal agency securities, corporate bonds, tax-free bonds, money market investments, and mortgage-backed securities.

SB1106,,300 (b) The Bank shall provide to the state all reasonable and necessary depository services and may charge its cost of services to the state.

SB1106,,301 (c) The secretary of administration and the board shall together ensure that the Bank maintains at all times cash or demand deposits in an amount needed to meet the operational needs of the state.

SB1106,,302 239.05 Business plan. (1) The Public Bank of Wisconsin shall develop and maintain a business plan that sets forth the Bank’s strategy for accomplishing its statutory directives through safe and sound operation of the Bank. In developing the business plan, the Bank shall give priority to the considerations specified in s. 239.04 (2) (e). The business plan shall include the method of providing security or insurance for the public deposits that the Bank receives. The Bank shall make the business plan available to the public. The business plan shall be updated at least once every 4 years.

SB1106,,303 (2) (a) The chief executive officer of the Bank is responsible for developing the business plan and, upon approval by the board, for implementing the business plan and managing the Bank consistently with the business plan.

SB1106,,304 (b) The chief executive officer shall send a draft of the business plan to the board and, at the same time, to the chairperson of the board of advisors at least 30 days before the board of advisors’ next scheduled quarterly meeting. The board of advisors shall immediately make the draft business plan publicly accessible on the board of advisors’ website and shall publicly announce that the draft is available for public comment through the board of advisors’ comments portal. Within 30 days after the board of advisors’ quarterly meeting, the chairperson of the board of advisors shall combine the comments and suggestions of the members of the board of advisors, along with any public input that the board of advisors considers pertinent, into a concise list of recommended modifications to the business plan and shall distribute those recommendations to the members of the board of advisors and to the board. The board shall promptly convey these recommendations, together with any comments of its own, to the chief executive officer. The chief executive officer shall then prepare a new draft business plan taking these recommendations into account as the chief executive officer sees fit and shall convey the new draft business plan to the board and to the board of advisors within 30 days of the recommendations’ receipt. The board of advisors’ comments and recommendations, together with the public’s input from the board of advisors’ meetings and from the comments portal and the business plan approved under sub. (3), shall be made publicly available on the board of advisors’ website.

SB1106,,305 (3) (a) The board is responsible for reviewing and approving the business plan developed under sub. (2). Notwithstanding s. 239.03 (8), approval of the business plan requires the affirmative vote of at least 8 board members.

SB1106,,306 (b) Within 30 days of receiving the updated draft business plan under sub. (2) (b), the board shall vote upon approval of the business plan at a regularly scheduled or special meeting of the board. In approving the business plan, the board shall ensure that the business plan pays due attention to the recommendations of the Bank’s board of advisors. After approving the business plan, the board shall monitor the Bank’s compliance with the business plan.

SB1106,,307 (c) If the board holds a vote under par. (b) on a draft business plan and the board fails to approve the draft business plan, the process under sub. (2) shall be repeated until the board approves a business plan. Upon the 3rd consecutive failure of the board to approve a draft business plan in a vote under par. (b), the board shall terminate the chief executive officer who developed the failed business plans and hire a new chief executive officer to begin the process again.

SB1106,,308 (4) (a) After the board’s approval of the business plan under sub. (3), the business plan may not be overridden by the board except through a declaration of emergency under par. (b).

SB1106,,309 (b) In the event of a natural or man-made disaster, the board shall declare a state of emergency that requires the chief executive officer to override the business plan in the manner the board considers necessary to address and recover from the disaster. Notwithstanding s. 239.03 (8), the board’s declaration of a state of emergency requires the affirmative vote of at least 9 board members and may only be made after consultation with the chairperson of the board of advisors. The declaration of a state of emergency shall specify the duration of the emergency, which may not exceed one year. Notwithstanding s. 239.03 (8), at the conclusion of this one-year period, the board may extend the declaration of a state of emergency for an additional one-year period upon the affirmative vote of at least 9 board members.

SB1106,,310 (5) In making its examination of the Public Bank of Wisconsin under s. 220.04 (1) (a), the division shall assess the Public Bank of Wisconsin’s compliance with the business plan. Notwithstanding s. 220.06 (3) (a), the division’s assessment of the Public Bank of Wisconsin’s compliance with the business plan shall be made available to the public beginning 6 months after the date on which the examination is concluded.