Chapter 18

18.84   Schools as bond trustees or fiscal agents; contracts.

18.85   Facilities.

18.852   Procedure.

subch. I of ch. 18 SUBCHAPTER I

STATE DEBT

18.01 18.01 Definitions. In this subchapter unless a different meaning is expressly provided or the context clearly indicates a different meaning:

18.01(1e) (1e) “Aggregate expected debt service and net exchange payments” means the sum of the following:

18.01(1e)(a) (a) The aggregate net payments expected to be made and received under a specified interest exchange agreement under s. 18.06 (8) (a).

18.01(1e)(b) (b) The aggregate debt service expected to be made on bonds related to that agreement.

18.01(1e)(c) (c) The aggregate net payments expected to be made and received under all other interest exchange agreements under s. 18.06 (8) (a) relating to those bonds that are in force at the time of executing the agreement.

18.01(1m) (1m) “Authorizing resolution” means any resolution adopted by the commission pursuant to this subchapter which authorizes the contracting of public debt.

18.01(2) (2) “Commission” means the building commission.

18.01(3) (3) “Evidence of indebtedness” means a bond, a note or any other written promise to pay a public debt.

18.01(4) (4) “Public debt” or “debt” means every voluntary, unconditional undertaking by the state, other than an operating note, to repay a sum certain:

18.01(4)(a) (a) Out of the state treasury, except a loan or advance by any state agency or fund to any other state agency or fund; or

18.01(4)(b) (b) For which any existing asset of the state is pledged, except the pledge of an outstanding evidence of indebtedness without recourse.

18.01 History History: 1973 c. 90 s. 555m (2); 1977 c. 29 s. 1652; 1979 c. 107; 1981 c. 336; 1983 a. 36 s. 96 (4); 1983 a. 189; 1985 a. 6, 29; 1991 a. 39; 2007 a. 20.

18.02 18.02 Scope of subchapter. Public debt may be contracted and evidences of indebtedness issued therefor only to the amounts, for the purposes, by the procedures and with the kinds of evidence of indebtedness specified in this subchapter, except that this subchapter is not applicable:

18.02(1) (1) To public debt, not exceeding in the aggregate $100,000, incurred for the purpose of defraying extraordinary expenditures of the state.

18.02(2) (2) To public debt incurred to repel invasion, suppress insurrection or defend the state in time of war.

18.02 History History: 1977 c. 29 s. 1652.

18.03 18.03 Commission.

18.03(1) (1) Subject to the conditions and limitations contained in this subchapter, the commission shall have supervision over all matters relating to the contracting of public debt and the issuance of evidences of indebtedness therefor.

18.03(2) (2) 

18.03(2)(a) (a) The commission shall have all of the powers necessary to carry out its functions.

18.03(2)(b) (b) The commission may interpret the statutes enforced or administered by it as it considers to be necessary to effectuate the purpose of the statutes. The authority granted by this paragraph shall not exceed the authority granted by s. 227.11 (2) (a).

18.03(2)(c) (c) The commission may prescribe such forms and procedures in connection with statutes to be enforced or administered by it as it considers to be necessary to effectuate the purpose of the statutes, but nothing in this paragraph authorizes the imposition of substantive requirements in connection with such forms or procedures.

18.03(3) (3) The department of administration shall assist the commission to carry out its functions and carry out all directives of the commission.

18.03(4) (4) All actions of the commission shall be taken by resolution. Each authorizing resolution shall be reduced to writing. The secretary of the commission shall maintain a full and correct record of each step or proceeding had or taken in the course of authorizing and contracting every public debt.

18.03(5) (5) Upon request of a state department or agency, the commission shall prepare periodic reports describing the current status of indebtedness relevant to the department’s or agency’s program responsibilities.

18.03(5m) (5m) Upon the request of a local exposition district under subch. II of ch. 229, the commission shall serve as financial consultant to assist and coordinate the issuance of bonds of the district.

18.03(5s) (5s) Upon the request of a local professional baseball park district created under subch. III of ch. 229 or a local professional football stadium district created under subch. IV of ch. 229, the commission may serve as financial consultant to assist and coordinate the issuance of the bonds of a district.

18.03(6) (6) Nothing in this subchapter shall be construed to supersede the authority by statute of any state department or agency in carrying out program responsibilities for which public debt has been authorized by the legislature.

18.03 History History: 1973 c. 90 s. 555m (2); 1977 c. 29 s. 1652; 1983 a. 36; 1985 a. 182 s. 57; 1993 a. 263; 1995 a. 56; 1999 a. 167.

18.04 18.04 Purposes of public debt and amounts.

18.04(1) (1) The commission may authorize public debt to be contracted and evidences of indebtedness to be issued therefor in an amount sufficient to fund or refund, as provided in s. 18.06 (5), or to fund, refund or acquire for any of the purposes set forth in sub. (5) and as provided in s. 18.06 (7), the whole or any part of:

18.04(1)(a) (a) Any public debt contracted pursuant to this subchapter.

18.04(1)(b) (b) Any indebtedness incurred prior to January 1, 1972, by the Wisconsin State Agencies Building Corporation, Wisconsin State Colleges Building Corporation, Wisconsin State Public Building Corporation or Wisconsin University Building Corporation.

18.04(2) (2) The commission shall authorize public debt to be contracted and evidences of indebtedness to be issued for the debt up to the amounts specified by the legislature to acquire, construct, develop, extend, enlarge or improve land, waters, property, highways, buildings, equipment or facilities or to make funds available for veterans housing loans for the classes of public purposes specified by the legislature as the funds are required. The requirements for funds shall be established by that department or agency head having program responsibilities for which public debt has been authorized by the legislature.

18.04(3) (3) Each purpose enumerated in sub. (1) shall be construed to include any premium payable with respect thereto and the expenses of funding, refunding and acquiring public debt. Each purpose specified by the legislature under subs. (1) and (2) shall be construed to include the expenses of contracting public debt.

18.04(5) (5) Public debt may be contracted under sub. (1) for any of the following purposes:

18.04(5)(a) (a) To acquire public debt contracted to make funds available for veterans housing loans under sub. (2).

18.04(5)(b) (b) To fund or refund public debt contracted to make funds available for veterans housing loans under sub. (2).

18.04(5)(d) (d) To acquire public debt contracted for any of the purposes under pars. (a) and (b).

18.04(6) (6) 

18.04(6)(a) (a) Public debt may include public debt contracted to fund interest, accrued or to accrue, on the public debt and to fund reserve funds for the public debt.

18.04(6)(b) (b) The commission may direct that moneys resulting from any public debt contracted under this section be deposited in the funds or accounts created or designated by resolution of the commission, including escrow accounts established under refunding escrow agreements that are authorized by the commission.

18.04(6)(c) (c) Notwithstanding s. 25.17, moneys deposited or held in funds or accounts under par. (b) may be invested in any obligations, either through cash purchase or exchange, as specified by resolution of the commission.

18.04(6)(d) (d) Notwithstanding s. 25.17, moneys deposited or held in funds or accounts under par. (b) may be transferred to other funds or accounts or expended as provided by resolution of the commission, except that moneys resulting from public debt contracted for the purpose set forth in sub. (5) (b) and deposited in an escrow account shall be payable solely for the purposes of the bond security and redemption fund and for costs related to the creation and maintenance of the escrow account.

18.04 History History: 1973 c. 90 s. 555m (2); 1975 c. 26; 1977 c. 29 s. 1652; 1977 c. 317; 1985 a. 6; 1987 a. 27; 1989 a. 31, 46; 2005 a. 22; 2019 a. 9.

18.05 18.05 Limitations on aggregate public debt.

18.05(1) (1) The aggregate public debt contracted in any calendar year for purposes specified by the legislature pursuant to s. 18.04 (2) shall not exceed an amount equal to the lesser of:

18.05(1)(a) (a) Three-fourths of one percent of the aggregate value of all taxable property in the state; or

18.05(1)(b) (b) Five percent of the aggregate value of all taxable property in the state less the sum of:

18.05(1)(b)1. 1. The aggregate public debt contracted pursuant to this subchapter which was outstanding as of January 1 of such calendar year after subtracting therefrom the amount on hand in the bond security and redemption fund and the amounts maintained pursuant to s. 18.09 (3) on January 1 of such calendar year which is applicable exclusively to repayment of such outstanding public debt; and

18.05(1)(b)2. 2. The aggregate net indebtedness outstanding as of January 1 of such calendar year of the Wisconsin State Agencies Building Corporation, Wisconsin State Colleges Building Corporation, Wisconsin State Public Building Corporation and Wisconsin University Building Corporation.

18.05(2) (2) The last determination made by the department of revenue of the full market value of all general property of the state liable to taxes pursuant to s. 70.575 shall be the aggregate value of all taxable property in the state. The department of revenue shall certify such value when requested for use in connection with the contracting of state debt.

18.05(3) (3) The legislative audit bureau shall annually determine the amounts under sub. (1) (b) 1. and 2. and shall certify such amounts when requested for use in connection with the contracting of state debt. It shall use in making such determination the fair market value of all property on hand in the sinking funds of the bond security and redemption fund. It shall take into account any anticipatory contracts under s. 18.10 (1).

18.05 History History: 1977 c. 29 s. 1652; 2009 a. 177.

18.06 18.06 Procedures.

18.06(1) (1) Authorizing resolution. No public debt may be contracted nor evidence of indebtedness issued by the state except pursuant to an authorizing resolution. Each authorizing resolution shall state each purpose of the debt it authorizes, which need not be more specific but shall not be more general than those purposes in or pursuant to law, and the maximum principal amount of debt authorized for each such purpose. The commission may amend at any time any purpose authorized by a resolution if the amendment does not cause the total amount of debt for that purpose to exceed the statutory limit on the issuance of debt for that purpose.

18.06(2) (2) Loan. An authorizing resolution may authorize the negotiation of a loan or loan agreement of any type, upon any terms, with any bank, savings and loan association, savings bank or credit union, or with any agency of the United States.

18.06(3) (3) Notes. An authorizing resolution may authorize the issuance and sale of notes. Such a sale may be public or private as provided in the authorizing resolution.

18.06(4) (4) Bonds. An authorizing resolution may authorize the issuance and sale of bonds. Except as provided in subs. (5), (7) and (9) and except for any bond authorized and issued under this subchapter and designated by the commission under s. 18.82 as a higher education bond, the sale of bonds shall be public and noticed as provided in the authorizing resolution. Any or all bids received may be rejected and the sale canceled, or the sale of all or any part of the bonds negotiated, after bids at public sale have been rejected.

18.06(5) (5) Funding and refunding. An authorizing resolution may authorize, for any one or more of the purposes described in s. 18.04 (1), the issuance and sale of notes as provided in sub. (3) or the issuance and sale of bonds as provided in sub. (4). That sale may be public or private as provided in the authorizing resolution, and public debt may be exchanged in payment of or for the acquisition of other public debt.

18.06(6) (6) Exercise of authority. Public debt may be contracted and evidence of indebtedness issued therefor under one or more authorizing resolutions, unless otherwise provided in the resolution, at any time and from time to time, for any combination of purposes, in any specific amounts, at any rates of interest, at any price or percentage of par value, for any term, payable at any intervals, at any place, in any manner and having any other terms or conditions deemed necessary or useful. A resolution authorizing the contracting of public debt may provide that the public debt bear interest at variable or fixed rates, bear no interest, bear interest payable at any time or bear interest payable only at maturity or upon redemption prior to maturity. Unless sooner exercised and unless a shorter period is provided in such resolution, every authorizing resolution shall expire one year after the date of its adoption.

18.06(7) (7) Special procedures. Notwithstanding subs. (2) to (5), the following procedures apply to public debt contracted for any of the purposes under s. 18.04 (5) or contracted for the purpose of making funds available for veterans housing loans:

18.06(7)(a) (a) The public debt may be sold at public or private sale.

18.06(7)(b) (b) The public debt may be exchanged publicly or privately in payment of or for the acquisition of other public debt.

18.06(7)(c) (c) The public debt may be sold for par value or at a premium or discount from par value.

18.06(7)(d) (d) The public debt may bear interest at variable or fixed rates as provided in or pursuant to the resolution authorizing the contracting of the public debt or, if the resolution so provides, may bear no interest, bear interest payable at any time or bear interest payable only at maturity or upon redemption prior to maturity.

18.06(8) (8) Public debt, agreements.

18.06(8)(a) (a) Subject to pars. (am) and (ar), at the time of, or in anticipation of, contracting public debt and at any time thereafter while the public debt is outstanding, the commission may enter into agreements and ancillary arrangements relating to the public debt, including liquidity facilities, remarketing or dealer agreements, letter of credit agreements, insurance policies, guaranty agreements, reimbursement agreements, indexing agreements, or interest exchange agreements. The commission shall determine all of the following, if applicable, with respect to any such agreement or ancillary arrangement:

18.06(8)(a)1. 1. For any payment to be received with respect to the agreement or ancillary arrangement, whether the payment will be deposited into the bond security and redemption fund or the capital improvement fund.

18.06(8)(a)2. 2. For any payment to be made with respect to the agreement or ancillary arrangement, whether the payment will be made from the bond security and redemption fund or the capital improvement fund and the timing of any transfer of funds.

18.06(8)(am) (am) With respect to any interest exchange agreement or agreements specified in par. (a), all of the following shall apply:

18.06(8)(am)1. 1. The commission shall contract with an independent financial consulting firm to determine if the terms and conditions of the agreement reflect a fair market value, as of the proposed date of the execution of the agreement.

18.06(8)(am)2. 2. The interest exchange agreement must identify by maturity, bond issue, or bond purpose the debt or obligation to which the agreement is related. The determination of the commission included in an interest exchange agreement that such agreement relates to a debt or obligation shall be conclusive.

18.06(8)(am)3. 3. The resolution authorizing the commission to enter into any interest exchange agreement shall require that the terms and conditions of the agreement reflect a fair market value as of the date of execution of the agreement, as reflected by the determination of the independent financial consulting firm under subd. 1., and shall establish guidelines for any such agreement, including the following:

18.06(8)(am)3.a. a. The conditions under which the commission may enter into the agreements.

18.06(8)(am)3.b. b. The form and content of the agreements.

18.06(8)(am)3.c. c. The aspects of risk exposure associated with the agreements.

18.06(8)(am)3.d. d. The standards and procedures for counterparty selection.

18.06(8)(am)3.e. e. The standards for the procurement of, and the setting aside of reserves, if any, in connection with, the agreements.

18.06(8)(am)3.f. f. The provisions, if any, for collateralization or other requirements for securing any counterparty’s obligations under the agreements.

18.06(8)(am)3.g. g. A system for financial monitoring and periodic assessment of the agreements.

18.06(8)(ar) (ar)

18.06(8)(ar)1. 1. Subject to subd. 2., the terms and conditions of an interest exchange agreement under par. (a) shall not be structured so that, as of the trade date of the agreement, both of the following are reasonably expected to occur: